ADVANCED MAGIC BAKERY… Chapter Four
Chapter Four… Starting a Business
Granted, there are a lot of writers, or for this metaphor, bakers, who just make pies and stack them up in their kitchen. Every writer is different. No judgements by me.
But for me, and most other writers, we like to try to get our work out into the public to enjoy. And that is where you take off your baking apron and put on a business suit and step into the business part of your bakery. Granted, not as much fun as baking for most of us, but if you are going to get people to enjoy your work, to come into your bakery, it is needed.
You must learn how to build and tend to your bakery.
Now Robert Heinlein, in a very different time (the Pulp Era), came up with what he called his five business rules. I personally follow those rules the best I can. Extending Bob’s rules into this bakery metaphor, they would go like this:
Dean’s Magic Bakery Business Rules
- 1… You must bake.
- 2… You must finish what you start to bake.
- 3… You must never try to rebake and rebake the same pie.
- 4… You must put the pie out on the market.
- 5… You must leave it on the market to be licensed over and over.
I love how #3 in this metaphor makes it very clear how really stupid the rewriting myth is. (grin)
Those are business rules. And when followed are amazingly successful for most of us.
The problem, of course, is between #3 and #4. How do you get your work on the market?
Yeah, a big problem to learn to do right. At least at first. Seems overwhelming.
I am writing this in 2025 and in this indie world there are a bunch of steps to really get your work available to an international audience.
And remember, your bakery is magic. Anyone from any part of the planet can come though the front door and license a slice of one of your pies, all without traveling or leaving the comfort of their own home. Just one of the wonderful magic parts of your magic bakery.
So how is this transition between #3 and #4 made?
First, the baker must want to do it. They must want to take their pies from their kitchens and display them in their magic bakery. Seems simple, right? Just take the pie through the swinging door from your kitchen into your business with all the empty shelves and put it on display.
And bam, people from all over the world will rush through your front door to sample your one magic pie.
Uh, no, but every new writer thinks it works that way. They have baked heaven’s gift to all pies, the best ever done, so why shouldn’t people flock to their work?
Well, honestly, about a thousand reasons.
Just as with any business set up in a corner shop in any town in the world, it takes time and planning and inventory and an understanding of how to attract customers.
It is not hard, but it does take time and understanding. And a willingness to learn some basic business of indie publishing.
The magic bakery is magic, but sadly it does not attract customers on its own. It has to be built and stocked and your pies have to be put on shelves in a way that they exist at the same time in thousands and thousands of other stores.
That is another of the magic parts of your bakery. If done right, your pie can sit fresh on your shelf in your magic bakery while at the same time being available in thousands, if not hundreds of thousands other stores and locations around the world.
Now that really is magic.
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Side note: I offered four or so months ago to coach writers on how to get their work out into the huge world, how to do it, what to do first, second, third, and so on. The writers who took me up on this I did a plan for each one and from what I can tell they are making progress. It is slow as expected and I check in with them every month and they ask me questions at times. But it seems to have worked. They have started the process and are refining it.
I took any level of business, to starting out to helping with more advanced business techniques.
So right now I have room and the time to set out a coaching plan for a few more writers. The idea is to get you from where you are at now to getting readers finding your work and into your store from around the world. The cost is a one-time fee of $500 and there is no time limit and you can start when you want.
I can only take a few more.
I have been enjoying the heck out of helping writers with this business part and I know Kris has been really enjoying helping writers with the craft side of things. So if interested, write me directly, not through the comments.
11 Comments
Brad D. Sibbersen
I like seeing #3 explained in this way. Makes it VERY clear what Heinlein meant (i.e. exactly what he said). Seems every article or mention of his rules you see fumbles all over #3 and tries to backpedal and explain what he (supposedly) REALLY meant. Funny to watch the mental gymnastics but frustrating to think some might believe the convoluted “explaination” instead of processing what Heinlein was actually saying: Don’t rewrite.
dwsmith
Yup, he said what he meant and meant what he said. Don’t rewrite.
C.E. Petit
I would add step 3.141592[…] in there: Figure out, based on your own circumstances, what kind of bakery you’re intending to run, at least at the beginning. There is no universally correct way to do this. “Just form a supercheap Nevada/Wyoming/Florida LLC” is the kind of advice that an agent would give — and I think we can all guess Dean’s opinion of that source of advice on matters even farther removed from what agents purportedly can do.
This may well require outside help. A lot of that help is available free/inexpensively locally — especially through public libraries in the US — that if provided by someone who knows your area, will avoid a lot of pitfalls. (For example, Californians who are married/in a registered domestic partnership should not use an out-of-state LLC except in very specific circumstances.)
The time to do this is while the first couple of pies are in the oven, all nicely crimped, and a peek in the oven door shows a beautifully browned crust forming. Don’t form a plan for literary-world domination while you’re still trying to find a pie recipe that works for you, but don’t wait until you’ve got a dozen pies on the counter that need to be sold, either. That said, doing that planning at the wrong time is still better than not doing it at all, if only when the Ides of April approach the next year and in future years. It’s a very circular-argument problem… which is why I said this is step π.
dwsmith
Yup, thanks, CE. I try to talk to writers about this getting set up after they start making money as a dba sole owner, but have gotten little to no interest.
Writers for the most part are not business people and seem to be afraid of it. So my goal is to try to show how important the business is to their writing. So for this metaphor, going to keep it simple. (grin)
Mangala McNamara
I’m interested!
Right now I’m a DBA sole proprietor… but not really making money yet.
What’s a good point to start looking at LLC or other structures?
Over $1000/ year?
Over $10k/ year?
What is “making money” in this context?
Obviously we all have different tax situations, but is there any rule of thumb?
dwsmith
LLC is a structure for most real estate. S-Corps are for other reasons. Writers need a full C-Corp here in the states to get the most out of it. General rules of thumb as to when you need a corporation is when you are paying more than a $1,000 in taxes BECAUSE of your writing income.
Mangala McNamara
Thank you!
C.E. Petit
This is slightly misstated. “S” corporations are, in the way they are organized and regulated in their home states, “C” corporations in just about everything that matters. “S” corporation is a federal tax election for certain eligible “C” corporations that makes the individual shareholders responsible for the taxes/losses on their respective shareholdings — but to the outside world (that is, everyone other than the bankers, accountants, and taxcreatures), it acts exactly like a “C” corporation in terms of assets, liability protection, heritability/devisability (estate planning), changes in control, etc. etc. etc. For example, when a corporation is involved in a lawsuit, the caption designates it as “a corporation” whether it is federally taxed under subchapter S or not; that tax status may never make it into the public record or any papers filed in the lawsuit, or even into chambers/sidebar conversations with the judge.
By having an “S” corporation as the holding/operating entity, a writer has a “full C corp” for all purposes other than which bank account taxes will be paid from/refunds sent to (and maybe not even then, an “S” corporation can have its own accounts, it just gets slightly messy at allocation time with refunds/credits and especially with “deficiencies”). In a few states, the annual registration fees are less but require other paperwork.
The real distinction is between “LLC” and “corporation,” not the tax status of the corporation. Dean and I share a disdain for LLCs as a writer’s sole entity; my skepticism is probably greater than his! One can probably ignore the “benefit corporation” here because they’re not relevant to a writer’s IP/general operational interests (they are perhaps relevant to a cooperative of several writers pooling marketing and resources, but that’s for the super-duper-advanced organic-coop magic bakery discussion, not here; and they’re absolutely not relevant as the owner/holder of intellectual property rights).
dwsmith
Thanks, CE. I agree about the LLC completely. Past that, I think writers need the full straight corporation without the pass-through of expenses and income of an S. But we can differ on that distinction. (grin)
Mangala McNamara
My main Q was mostly about the “when” to upgrade from a Sole Proprietorship, and you answered that!
But I guess I’m curious why you both dislike LLCs. I’ve had 2 of those for other businesses (online retail and science editing), though neither went well enough to really deal with complications.
One of my local author “mentors” has been running as an LLC on advice from her tax professional and is preparing to move to an S of C (not sure which).
My dad has run C corps for his engineering R&D and solar installation businesses.
My understanding was that the different structures have a much to do with liability (presumably low for an author of fiction) as tax or pass-through of earnings.
In the end it comes down to consulting a tax attorney for one’s own situation, of course, but since I assume that local pros are unlikely to be terribly familiar with the concerns of authors…
What’s so bad about LLCs?
What would an author need to inform a tax pro about in advance to get good advice?
dwsmith
LLC and S-Corps here in the States are “pass through” corporations, meaning all income and all expenses pass through to the owner or owners tax returns.
C-Corp here in the States means it is a totally separate entity and all income stops at the corporation level and all expenses stop at the corporation level.
So thinking small, no big deal.
Now imagine getting $750,000 in one wire transfer from a license agreement or a movie getting greenlit or so on.
In a full corporation, there are a thousand ways to shelter that kind of money, from retirement accounts to capital investments and you name it. In the others, you pay over half in taxes.
In other words, this is just part of my campaign to get writers to think about success instead of small-time. I fail all the time at this kind of teaching. Writers believe they will never succeed so why prepare for success? Writers can not imagine success.
On one movie deal on the verge of greenlighting, my accountant and I spent many a fun hour (for both of us) making sure that seven figures that might hit was covered. I have this desire to control my own money legally, not give half or more of it away because I am afraid or stupid.