Tuesday, January 12, 2010

Preparing my Profit and Loss Statement for 2009 - How did Medusa's Muse do?

2009 was a quiet year. Sales were down, but so were costs. Happily, that makes the paperwork easy.

I've been organizing and totaling the receipts for last year, updating my inventory, calculating sales, and figuring royalties, all to prepare my Profit and Loss Statement. Last year at this time I wrote a blog post explaining what a Profit and Loss Statement is and how to create one. Click the link to read that post. There is also an explanation of how to keep the records of your publishing business and how to prepare for tax season in my book, What You Need to Know to be a Pro: The Start-Up Business Guide for Publishers.

How did Medusa's Muse do in 2009?

Laura Fogg's book, Traveling Blind: Life Lessons from Unlikely Teachers, sold 132 copies, 8 in the UK. This brings the number of copies sold since publication (Nov. 2007) to over 700. This kind of dip in yearly sales is to be expected, especially two years after printing, but Laura's book has now paid for itself and continues to steadily sell several copies a month, mostly on Amazon. In small press circles, Laura's book is a success.

My book, however, is another story. What You Need to Know to Be a Pro has sold 45 copies since it's publication in March, 2009. Although these sales numbers are typical for a small press book, it is far lower than I had hoped for (of course). We all know why my book has sold so poorly: no marketing. Selling 45 copies of a poorly marketed book is practically a miracle and I'm grateful for those sales, grateful that my book has been useful to 45 people. But I need to sell 140 copies for the book to pay for itself and start generating income for the press. At this rate, assuming sales remain steady, I'll break even in 3.5 years.

Overall, Medusa's Muse broke even this year, despite low book sales. That's because I kept costs frozen to make up for 2008's overspending (Book Expo was fun, but expensive). Plus, with me being in school full time, I was unable to do much marketing or networking, activities which cost money, but also generate sales.

What can we learn from the numbers for 2009?

First, not spending any money can be good for the bottom line, but it can be a disaster for sales. Without at least a small marketing budget, you cannot generate buzz for people to find and buy your book. You can do a lot on line for free, but for a how-to book like mine, you'll need to spend a little on networking opportunities, such as conferences, which is where I sold the most copies of What You Need to Know.

Secondly, low sales numbers can make your record-keeping easy, which is great when you don't have a lot of time. But the reason your sales are low is because of that lack of time. If you want to grow your business, you need to put in more time/energy/money, which then requires more time/energy/money to keep your business organized. What's my point? Be certain about how much time you realistically have to devote to your business, then work within that. It's all about balance. The more you put in, the more you get back. The more you put in, the more your business will require. Where is your balance point?

Third, look at those sales numbers. You want to know how many copies of a book you can expect to sell from your small press? Those numbers are about average. Most books published by self or small publishers sell less than 150 copies in their entire life in print. Not 150 in a year, 150 copies period. So a book like Traveling Blind is a success, practically a best seller for a small press. A book like What You Need to Know is more the norm.

Fourth, keep careful records all year, or you and your tax preparer will be hating life right about now.


Corrie Howe said...

Wow! Thanks for the information. I'm going to bookmark this to my resource folder.

Between Oct and December I began to set myself up in a L.L.C. for freelance writing. It's going slow. I didn't really have high expectations. I knew I have a huge learning curve. I also am blessed that my husband makes enough for me to loose money for awhile and that my parents believe in me and lent me some "start up." money. (I most asked for a loan to make myself accountable for making and keeping goals).

The hardest part for me is still trying to find a routine which works for me. I'm primarily a stay at home mom with three kids, a teenager, a special needs and a young daughter. I want to continue to advocate for special needs (thus committees) but I want to build up a clientele (thus I joined the local Chamber of Commerce. My mom runs it and my neighbor is the president so I've actually benefited from their community contacts over the years. Now I just need to start marketing myself as a writer and not as the daughter/neighbor.)

Melinda said...

Great information!

I personally think writing a book is a huge accomplishment -- I hope this year brings you more sales and success, Terena.

I am in the process of writing a book. It is a daunting endeavor.

I'm like Corrie, having trouble finding the TIME to write in between raising children, one with special needs. Maybe you'll address this in a blog post soon?? (hint, hint) ;0)