Creating a press for a self-pubbed novel?

Tales of the Pack said:

What are the benefits to creating your own press as a self-publisher?

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1. Legal independence and limited liability. Should anyone decide to try to sue you over something you have published, or your business goes bust for whatever reason, your personal assets are not at risk. Furthermore, if a private limited company goes bankrupt, its director and shareholders are not usually held responsible in terms of their personal financial track records. If a sole trader goes bust, the individual and its whole estate is bankrupt. It's not expensive to set up a small company. It is expensive if your hobby bankrupts you because you made a bad decision with money, or because someone has a vendetta or just thought they could make a quick buck.

2. Financial clarity. As a limited company, you can run a separate bank account to keep track of your ingoings and outgoings. This makes keeping tax records easier rather than having your business accounts lumped together with your personal accounts.

3. Running a business and learning the skills involved is a useful and worthwhile life experience in itself.

4. It is simply the professional thing to do. And I personally think if you are going into publishing, whether it's your own books or someone else's, you should approach it in a professional way.

Tales of the Pack said:

Is it just a smoke-screen to trick people into thinking you're traditionally published?

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No, I don't honestly see how anyone with an education and a brain would believe someone was published by a major house simply because their book has a publisher's logo and a publisher's name that ends with Ltd or Inc or so on. There are plenty of disreputable small traditional publishers producing horrible books and operating proper businesses with business names, and nobody thinks they are published by major houses, except maybe their authors.

Tales of the Pack said:

More to the point- when I self-publish, should I create a press?

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I recommend it. Make sure you do lots of research as to what's involved first.

DoctorMandaBenson is right.

And, one goes about becoming a self-publisher in the same way one goes about becoming a publisher who is going to publish the works of strangers.

One of the biggest errors I see among self-publishers is forgetting to include the line-item "pay the author" in their business plan.

If you can't see a way to putting 10-15% of the cover price of each copy sold into your savings account, you aren't ready to self-publish.

Self-publishing is a branch of commercial publication. On a small scale, perhaps, but that is where it falls. Money still has to flow toward the author. It may only be moving from one pocket to another in the same pair of pants, but that's the direction it moves.

Except, at least in the US, this is generally a myth in the context of the types of businesses set up by writers:

Legal independence and limited liability. Should anyone decide to try to sue you over something you have published, or your business goes bust for whatever reason, your personal assets are not at risk.

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For most authors' businesses, it they were to incorporate, there would be only one stockholder and no employees other than the author him/herself. In that case, the corporate form would protect against personal contractual liablity (except that most vendors and lenders would require the person to co-sign any significant contract individually, if the corporation had no tangible assets, so there wouldn't actually be any protection there). The corporate form would NOT protect against tort liability (defamation, etc.) for actions taken by the writer him/herself, but would only protect against vicarious liability for the actions of the corporation's employees (which few start-up writing businesses have).

Not giving individual legal advice here, but recommending that anyone who is planning to invest in incorporating or LLC-ing his/her business should first consult with a local attorney with small-biz experience to find out whether doing so will actually accomplish what he/she intends for it to do.

JanDarby said:

Not giving individual legal advice here, but recommending that anyone who is planning to invest in incorporating or LLC-ing his/her business should first consult with a local attorney with small-biz experience to find out whether doing so will actually accomplish what he/she intends for it to do.

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Definitely. If you look for credit, even paying on completion type things, savvy business people will want some sort of personal guarantee of payment. So the liability protection isn't necessarily there. There are tax benefits, however. But no one should start up a business without getting professional advice on how to do it and what's entailed. In the US, the SBA is a great source.

Jan is absolutely correct. This is, in fact, why for many people just doing a sole proprietorship is equally good to setting up an S corp. The S corp is harder to set up, often costs more, and can create more complex tax issues. Starting a corp is only useful for alleviating debt risk if your debtors allow you to sign for debts using the company name. In my experience, that is rarely true for a startup small business - mostly, you will have to sign your own name, which means you're still liable if the company goes belly up.

Here's my short list of reasons:

1) Required by law. Many states or municipalities require you to register your business, and can levy fines against you if you do not.

2) Legal protection for your trade name use. Some states (like Vermont, where I live) protect your right to use your own name for a business, like "Joe's Diner" or "Larrabee's Auto Shop" or "MacDonald Publishing". Other states don't, and if another company has already registered a name similar to "YourName Press", you can get sued for using it.

3) It's the professional thing to do. Take your work, your profession, your career seriously. Setting up a registered business is a part of taking your work seriously. If it also encourages you, like James mentioned, to take a look at all aspects of your business with a professional eye, so much the better.

JanDarby said:

Except, at least in the US, this is generally a myth in the context of the types of businesses set up by writers:

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Ah, sorry. I'm not in the US and was not aware of this.

James D. Macdonald said:

DoctorMandaBenson is right.

And, one goes about becoming a self-publisher in the same way one goes about becoming a publisher who is going to publish the works of strangers.

One of the biggest errors I see among self-publishers is forgetting to include the line-item "pay the author" in their business plan.

If you can't see a way to putting 10-15% of the cover price of each copy sold into your savings account, you aren't ready to self-publish.

Self-publishing is a branch of commercial publication. On a small scale, perhaps, but that is where it falls. Money still has to flow toward the author. It may only be moving from one pocket to another in the same pair of pants, but that's the direction it moves.

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Hey Jim,

I agree with the principle that money should always flow to the writer (even if it's from one pocket to another).

However, people who are starting up a business often don't have the luxury of being able to pay themselves out of the cash register. It's a goal, for sure, and you want to get to that point as quickly as possible, but before that, you want to cover your costs.

I could agree with you if you were saying: make a note of your time, your self-publishing business owes you for that. But actually, physically paying yourself, when you are just starting out?

It may be different for someone who snubs a trade deal to self-publish or has some other opportunity cost for their time or writing. But for someone who doesn't have a trade deal as an option, can they really justify actually paying themselves for their time before any money comes in?

If I have shelled out for a cover designer and an editor, I want to replace that money before I even consider dipping into it myself.

Dave

DoctorMandaBenson said:

1. Legal independence and limited liability. Should anyone decide to try to sue you over something you have published, or your business goes bust for whatever reason, your personal assets are not at risk.

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This isn't entirely accurate. It depends on WHERE your company is based and the laws in that country, and also what sort of company you form, and whether you have limited liability or not.

There are cases where people have lost everything when a business of theirs goes bust or they are sued simply because of the type of company they are running. I would check with local officials before hand just to make sure of the situation with your company and your country.

Furthermore, if a private limited company goes bankrupt, its director and shareholders are not usually held responsible in terms of their personal financial track records.

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See above in terms of limited and unlimited liability. Private limited companies are generally more risky than Plcs because of the unlimited nature of many of the investments. Again, check before registering the company.

If a sole trader goes bust, the individual and its whole estate is bankrupt. It's not expensive to set up a small company. It is expensive if your hobby bankrupts you because you made a bad decision with money, or because someone has a vendetta or just thought they could make a quick buck.

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True. Always be careful, think ahead and don't make rash decisions.

2. Financial clarity. As a limited company, you can run a separate bank account to keep track of your ingoings and outgoings. This makes keeping tax records easier rather than having your business accounts lumped together with your personal accounts.

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This. It may seem like hassle at the time, especially if the money is small amounts at first, but it's honestly easier long term, especially when it comes to tax and audits.

3. Running a business and learning the skills involved is a useful and worthwhile life experience in itself.

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There are lots of government schemes here, InvestNI have a Go for It Programme (they used to be LEDU here) to help you set up and run a business, they have lots of training schemes on everything from tax to accounts to stock. And it's all free.

dgaughran said:

Hey Jim,

I agree with the principle that money should always flow to the writer (even if it's from one pocket to another).

However, people who are starting up a business often don't have the luxury of being able to pay themselves out of the cash register.

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That's part of the expenses of a business, and if your business plan hasn't included that - well, then you've got a problem, because you don't have a realistic business plan.

shadowwalker said:

That's part of the expenses of a business, and if your business plan hasn't included that - well, then you've got a problem, because you don't have a realistic business plan.

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I never said anything about what my business plan did or didn't include. All I am saying is that when you start a new business, you don't always have the ability to pay yourself a salary right from the off.

dgaughran said:

All I am saying is that when you start a new business, you don't always have the ability to pay yourself a salary right from the off.

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Not a salary, royalties. Just like every other commercial press on the planet.

If someone else were to offer to publish your book, and when you asked, "What about the royalties?" the guy said, "I'll start paying them after we get on our feet," you'd say ... what?

When you're self-publishing you have to become a bit schizo. Half of you is looking for the best stories to publish. The other half is looking for the best place to publish your stories.

Self-publishing is a subset of commercial publishing. Forget this at your peril.

dgaughran said:

I could agree with you if you were saying: make a note of your time, your self-publishing business owes you for that. But actually, physically paying yourself, when you are just starting out?

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Yes, actually, physically paying yourself.

Authors don't get paid for their time. I get 10-15% of the cover price from my publishers regardless of whether I knocked the book off in a weekend or crafted it for ten years.


Say you're selling your book at Amazon for $0.99 each.

Every time one sells, Amazon sends you $0.35.

You put $0.099 in your savings account, and pay back the expense of the editing, cover design, and whatever else out of the $0.251 remaining.

Thanks for that Jim.

Hi Jim,

Do you pay yourself your share as and when each royalty cheque comes in, or when you tot up the books on a monthly/quarterly basis?

Dave