The Magic Bakery: Chapter Eight
Success and the future.
Now there are two words that almost every writer I have met can’t fathom or even see when it comes to their own writing and business.
Now granted, some writers give those two words lip service, and in different workshops Kris and I work at getting writers to think ahead. It feels like walking into a brick wall.
Success and future planning when it comes to writing and a publishing business are just not possible for almost every writer to fathom.
And honestly, I understand that. My goal, for a very long time, was to make a living at my writing. I had NO concept what that meant other than the basics of “paying my bills” with my writing income that month.
Notice the thought is making a living, not a career. A living can happen for a year. And a ton of writers in this modern world of indie publishing can make a living for a year or two, as long as the hot-new-trend they stumbled into continues.
You see this a great deal in the writers in Kindle Select. (And three years from the time I write this writers will be asking me “What was Kindle Select?”) This book of blog posts will far, far outlast that blip in the publishing history.
These writers give no thought at all to building a career.
Let me give a quick definition that I use. “Making a Living” is a very short-term goal. “Building a Career” is the ability to make a living every year, year-after-year, over decades.
Everything I teach and everything in this book is aimed at helping writers build careers. If you want the most recent fad, go have fun. Bank the money is my suggestion.
So now, for this chapter, I am going to talk mostly about success.
Selling to Traditional Publishing
Got to deal with this first because to many beginning writers, simply selling to a major publisher is a success.
The sad writers who do this in 2017 (as I write this) are not giving one thought to the future or long-term career building. They are selling all rights to their books for a few thousand dollars and the pat on their heads that tells them that some English major in an office in New York really likes them.
Then for a short time a year-or-two-later their books will be published overpriced, restricted in distribution, and with a great sense of “Is that all there is?”
Soon the book will be pushed to the back and forgotten, just an IP valuation on a corporate balance sheet. But wow is their family proud of them, but wonder why they are still working their day jobs.
To these writers success is measured by a sale to a single editor. That’s it.
That’s their definition of success. Sort of sad, huh?
And by signing the contract they make their future with those books very simple. They no longer own the books, so those books have no future.
Reality of Numbers
Publishing is a very large industry. Very large. And if you know how to manage your magic pies correctly, your work in publishing can extend into many other areas as well. Movies, television, games, to name just some obvious ones.
But writers tend to be focused on how to make an extra sale here, or give something away there, to gain more imaginary numbers on a mailing list. These writers make no plans and have no concept at all of what might happen when it comes to real success and real money.
One question we do in both the online monthly business class and a variation of it in the Strengths Business workshop, is what would happen if you knew suddenly that in three months one hundred thousand dollars would hit your account.
The answers are head-shaking because it is clear no writer we have asked that question to has thought ahead to that kind of small success. (And yes, that is small success in publishing.)
And if you are thinking you would take that small success, I sure understand. But that also illustrates the problem. Your vision, your ability to see a future and real success, is very limited.
A good attorney friend of mine once said that he envied me with my job. He went to work, made great money, and then went home. All the money he could make in a day he made. To keep making money he had to go back to work the next day. But when I got up and went to writing, every day I had a chance of hitting a home run and making millions.
And sometimes that possibility was with a novel I wrote years before.
He saw the publishing profession so much better than most writers.
Sadly, there is nothing I can say to most here in this chapter to convince most anyone. Think about it. Even those who do make the huge money are always called “lucky” or “outliers” by those who can’t imagine doing it themselves.
There is a vested interest in writers as a class to not think about real success or the future.
So What Do You Do to Get Ready for Success?
First, never sell your entire magic pie. For any reason to anyone.
Keep that magic pie, that copyright, firmly planted in your bakery.
That is the basic center of everything. Then your pie, as the future unfolds, can earn you money.
What else can you do?
— Start studying writers who are successful in careers. Not those flash writers chasing the most recent trend. Study writers who have been writing and selling and in a career in one form or another for decades. There are a lot of us.
— Start understanding business and money. Your magic bakery is a business. Start understanding things like cash streams, corporations, tax protections, and so on. For example, that one hundred thousand you get in suddenly. If you understand what I just said, you will keep it all. If you don’t, you will pay over half of it to governments.
— Start learning how stories and novels get outside of publishing. What do you need to do? Learn that.
— Get your work into every market you can around the world and let it build. And keep writing what you love.
— Learn all the ways you can divide up your magic pies.
— Then be patient. You can’t learn any of the above overnight, or even in a year.
You are a writer. Write the next book, the next story, the next blog post as I am doing here.
Then, as I am doing here, after you are finished, see how many ways you can turn slices of the pie you just created into cash streams.
Next chapter will be about thinking about the future. You know, that place beyond Christmas.
Great post. So how do stories and novels “get outside of publishing”? Where do I go to learn that?
Just a process of being aware and networking with other writers and reading blogs and so on and so on. There is no one “agent” or thing like that.
However, the best way early on for anyone is to simply have their books wide around the world in every outlet. And have a clear way for people to find you on your web site. And keep writing and keeping your work active and growing. You do that and you will be stunned at what comes to you. I made a ton of money off an radio/audio play made from one of my short stories, for example. We have more Hollywood stuff coming at us, it gets annoying. Gaming and comics are always looking. It all comes to us because the world can read our work and we have a lot of it to pick from.
That simple and that difficult.
One of Kris’ business posts last year prompted me to do some scenario planning for the future, and I’m so glad I did.
I looked specifically at scenarios for the book I would be releasing soon (and did release this April). I considered:
1) What if the book sells the same as most of my books do?
2) What if the books sells modestly better than usual?
3) What if the book sells significantly better than usual?
4) What if the books sells hugely better than usual?
5) What if the book sells mind-bogglingly better than usual?
I felt a little foolish considering scenarios 4 and 5, but I did it. And it was only at scenario 4 that I came up with: visit my accountant. Only in scenario 5 did I realize I needed to visit my accountant first thing. And then I realized that, really, for scenarios 3 and 4, I would need to visit the accountant first thing also. Considering the unlikely scenarios was important, because I’d left out that necessary accountant thing from the earlier scenarios and didn’t realize it until I pushed the envelope.
Honestly, I hope my career builds slowly, because I can see from your post that I wouldn’t be prepared if a huge chunk of money suddenly landed on me. A slower build would allow me to adjust. In the meantime, I think I should meet with my accountant, even if just briefly, to discuss plans for if there should be a sudden change. Thank you, Dean!
Btw… the new book is currently inhabiting scenario 2: selling modestly better than usual. 😉
I find it interesting that it is selling more copies than the books I released with more promotion and at a lower price in late 2015. Those promotions and sale price were experiments, and I learned from them. That’s why I released this book at full price and didn’t bother with most of the promotional newsletters I tried in 2015. (In retrospect, I can see that the 2015 experiment was a bit foolish. If I’d simply adhered to most of what I’ve learned from you, I would have been wiser. 😉 But sometimes this writer just has to make the mistake and learn that way.)
Dean – I love these Magic Bakery posts. They really make me think outside of my comfort zone. Thank you.
Dean, I took the Business workshop last winter and waited with unholy glee to pose that $100k question to my current accountant during the yearly tax meeting. She squeaked \”A month?!?\” and when I nodded she was unable to form a coherent reply for at least three minutes. Thanks to you and Kris, I\’m at least repositioning myself to handle sudden influxes, even if the reality doesn\’t exceed my modest business plan. As I learned in the workshop, better safe than sorry.
(And thanks for the opportunity to discover what makes CPAs squeak.)
LOL… You ought to have seen our accountant’s face when I walked in and told him a half million might hit our corporate account by transfer and what can we do to shelter most of it. He loves a challenge and we figured it out. Those of you who think this can’t happen to you not only help that negative become a reality, but then if it does, you lose most of it by being simply ignorant of what is even possible.
Best chapter yet, Dean.
“For example, that one hundred thousand you get in suddenly. If you understand what I just said, you will keep it all. If you don’t, you will pay over half of it to governments.”
And the Agent that the writer thinks walks on water and Knows All About Business, and is helping to Nurture their Career, will not make any critically important points — like that the writer should incorporate immediately, unless they want their future to include a blog post explaining how their six-figure advance sublimated into something that looks like a Christmas bonus.
I am thinking small … this morning I was thinking to myself, what would I do if my next book hit it and I suddenly had $10,000 coming? I thought of $100,000 first and then shied away from that. My first thought was to go to my financial planner … second was to think about what I could pay off if I had a windfall. Third was to wonder what I could then do to make it happen again.
I did talk to the financial planner about how although I am not making much money from my writing yet, it does have an unlimited potential ceiling–and that I fully intend to be making enough, sooner or later, that he will get a nice cut of the investments. He just laughed and said he looked forward to the day. Which won’t be this month … though I suppose there are still a couple of weeks left. 🙂
Victoria, Always a question to ask when you are dealing with a “financial planner” is why aren’t they doing it for themselves and getting rich? Instead of taking a cut from what you and others do?
You may have a great one. Everyone who has ever been scammed or given bad advice by a financial planner had a great one. Just caution. That word makes me shudder more than the agent word. (grin)
Financial planners generally just take the money that you have saved and put it in their mutual funds. They get a percentage at the front end, the MER, and the back end when you switch funds. The majority of these funds underperform the index, and your returns will not come near a market index ETF. I have not yet met a financial planner who would bring that to your attention. They also don’t know more about the market, what it will do, or save you from losing money in a crash.
And, going back to Dean’s original point about planning, financial planners don’t give you advice about what you as a self-employed businessperson can plan now so you legally don’t pay tax on $10,000 or $100,000 dollars, because most of them have no idea.
Exactly, Teri. Why the term makes me shudder.
Financial planners must be different in your country. I have had three of them and each one of them would know what to do with a large sum of money coming in. They act like accountants and in fact that is what she is but we call her a financial planner.
Good point, Vera. I think you’re Canadian, too, aren’t you? The person I’m working with has helped others I know get their finances in much better order and does offer advice on business structures in my province–and has definitely told me “go to your accountant” for this, and I’m sure would say “go to a lawyer” for that. (So would my sister, who is just about a newly fledged IP lawyer, though not in writing.)
Right now I’m pretty happy to have some guidance with the basics (of which I have done enough research on my own to know that these ideas are solid; it’s mostly support to actually put things into practice). Once I get a few steps further along, we’ll see. At the moment I’m not paying him anything. 🙂
If you have more than 1 business, a holding MIGHT be something worth looking at taxwise.
Especially if you want to use the profits from one business to invest in the other ones.
A holding basically allows the money to be moved between businesses BEFORE tax.
You only pay tax on the money you take out of the holding (to pay yourself a salary for example – a nifty way to compensate for irregular income by making a personal financial issue become a business issue …)
A holding is nothing more than an umbrella company, but there are several different kinds of holdings with different pros & cons.
It is not difficult but it has some implications–as everything else has, as well.
I actually assume that you and Kris have one, Dean. With WMG, your personal writing businesses, and all these different stores etc.
But then again it might be different in the US…
It is a little different, but not much. We haven’t used the holding company aspect of things yet, but we do have three corporations. But they all run independent.