Details, Details - Resolutions - Indie Pub It
This is part of a continuing series on small changes you can make throughout the year, instead of sweeping, scary New Year resolutions that tend to crash and burn long before you read this post.
Each suggested task is a year-long adjustment to your indie business that could reap some very nice rewards.
Indie publishing is a game won by increments. Most of us write in small doses because we don’t have the luxury of full time writing. We squeeze production into our spare time. We don’t hit best seller lists the first month out but (often) end up selling more over the long term than last month’s #1; a copy here, a copy there.
Check the intro post from January for more on this idea, if you haven’t seen it already.
Here’s the on-going list of tasks:
January: Review Your Backlist
February: Strengthen Your Sales Pipeline
March: Improve Your Hourly Word Rate (Prolificacy, Part I)
April: Write More Words This Year Than Last Year (Prolificacy, Part II)
May: Refine Your Production Process
June: Refine Your Production Schedule
July: Schedule Your Promotions
August: Improve Your Product
September: Add More Sales Channels and Formats
October: Measure Your Results the Smart Way
November: Take Care of your Business Affairs
Business Matters Matter.
There is a nice myth out there that hard-nosed business management and creativity don’t mix well. This fiction is what allows many of us creative types to duck business matters we find a pain or even a mystery to us and worse, steals time away from writing.
I’m absolutely positive that by now you’ve heard it said over and over that as an indie author, you are a small business. But this time, don’t gloss over the sentence because it raises uncomfortable feelings (or worse, guilt!). Study it for a minute and let the fact sink in.
You are a small business.
That means you have to deal with taxes, accounting, and legal requirements just like the bodega on the corner of your street does.
Thinking of yourself as a creative (or worse, an artist) doesn’t let you off the hook.
Duck this upleasant fact for too long and it will come back to land on you from a great height. The combined weight of your country’s tax department, government business oversight department, and even more authorities can make life far more uncomfortable for you if you ignore federal, provincial or state requirements.
If you’ve been avoiding thinking about or dealing with business requirements for a long time, or have never dealt with them, it’s still not too late to arrange your affairs and sort out the mess. It’s far, far better to act now than wait and hope that no one notices you. Get things straight, pay off your taxes and/or other debts, straighten out your paperwork, and you’ll sleep better at night. Trust me.
Even better: educate yourself on small business management and finance. Get ahead of the curve, so when the inevitable audit arrives, you’ll sail through the process with a smile.
Basic business management practices will also help you steer your business so it can thrive.
Where You’re Sitting Makes a Difference
Before I begin this discussion, keep three things in mind:
The country you reside in will determine most of the best business practices you should follow. Nothing I say here should be considered expert advice, because I don’t know where you live and what your country’s expectations are.
Get good advice, relevant to your country of residence. Your government’s websites will have a lot of information, and there are thousands of resources for small businesses that will help you, too. Look for your city’s/town’s local business association or chamber of commerce – they will give you additional help.
Lastly, get expert help. Use an accountant, bookkeeping and tax experts just as any other business does. Tap your bank’s experts regarding money management. You spend money to purchase the expert services of cover artists and editors. Hiring business experts should be thought of as just as essential.
I put this first, because everything else is based upon the financial records you keep.
To start, you should be keeping two sets of records: Your business records should be completely separate from your personal records. You should have a separate bank account for your writing, too.
Even if you’re operating as a sole proprietor (that is, you have not registered a business name), and you are publishing under your name, you should still keep separate business records and contain everything as much as possible.
If you can’t afford an audit-proof bookkeeper, educate yourself on the basics and budget time to deal with your “books”. Set up a system that will help you clearly answer any tax department questions, which might be asked years ahead of today.
This is the most basic business function and many of us budget by listing outstanding and recurring expenses, and adding them up. If our monthly revenue is larger, we figure we’re doing okay.
A true budget, though, includes annual expenses, including taxes, and an owner’s draw.
Pay Yourself First
The instinct of most small business owners when contemplating how to divide up their revenue is to a) put money aside for taxes, b) cover expenses and c) pay themselves if there’s anything left.
Often, there’s nothing left for you, but as it’s your business, you take the hit and soldier on.
What you should do is allow for your taxes, and then pay yourself first. Do this before covering any writing expenses, and if you don’t have enough money left to pay expenses, then reduce your expenses.
This simple change in priorities will help ensure your business will be profitable (paying yourself IS profit), and your expenses will stay contained and only grow in proportion to any increases in revenue.
Personal or Business Taxes
This is where paying for expert help saves you money in the long run. They will help you minimize your tax load and (depending on your agreement with them) will help deal with tax departments and other authorities on your behalf.
This is also where good bookkeeping also saves the day. If your records are immaculate, you’ll earn brownie points right out of the gate, and your tax expert may be able to charge you less for their services.
Sales taxes are only going to grow more complicated. You are no longer only liable for taxes within your province or state or county. You are also responsible for VAT taxes in the European Union.
And it is about to become even more complicated, because many countries are looking at the EU model and legislating their own internationally applicable sales taxes, and some of those countries are going to insist that you use local accountants, too.*
Currently, retailers like Amazon are keeping sales records and paying taxes on the writer’s behalf, and the tax comes out of the price of the book before your 75% or 35% is calculated.
It is also possible that in the future, retailers will pass both the record-keeping and the cost on to writers, as international sales tax requirements grow.
If you sell books via your own website, you must take care of this yourself.
You are also responsible for collecting sales taxes and reporting them in your own province or state or region.
Again, good bookkeeping comes to the rescue. So does a good tax accountant. If you do your own taxes make sure you understand all the various requirements! You’ll be losing money if you don’t.
There are a range of “other” business requirements that change depending upon where you live.
There is “doing business as” registration, your city or town’s small business license requirements, incorporation, foreign tax number applications that are affected by various trade agreements and required by many retailers, and much more.
Don’t shrink from dealing with all this irksome red-tape. Find out as much as you can about the requirements as you learn of them, make the best decision you can, and hire expert help if you need it.
Then get back to writing.
* See The VAT MOSS #VATMESS is about to get worse
Columnist: Tracy Cooper-Posey writes paranormal, urban fantasy and science fiction romance, and romantic suspense. She has been nominated for five CAPAs including Favourite Author, and won the Emma Darcy Award. She published 35 titles via legacy publishers before switching to indie publishing in March 2011. She has published over 55 indie titles to date. Her indie books have made her an Amazon #1 Best Selling Author and have been nominated four times for Book of the Year. Byzantine Heartbreak won the title in 2012. Tracy has been a national magazine editor and for a decade she taught romance writing at MacEwan University. An Australian, she lives in Edmonton, Canada with her husband, a former professional wrestler, where she moved in 1996 after meeting him on-line. Her website can be found at http://TracyCooperPosey.com.