5 March 2013

Financial Update 2- Production Costs

If you sign up for this blog I'll be letting you in on the closest guarded secrets of the publishing industry.
How much money can I make from publishing?
How much can I earn from my novel?

Watch this space for a day by day financial update!

It's all in the preparation!

Let’s do some calculations. 
‘Whoopee!’ I hear you shout, ‘everyone loves calculations.’
Hold the sarcasm, please. These are about money, so they’re interesting.

Let’s assume I can write 250 words an hour. A novel of 80,000 words would take me about 320 hours, therefore. That’s to first rough draft stage. Then there's all the time spent doing edits and tweaks, rewriting bits, polishing it up, writing a second draft, then a third draft, etc. This all takes at least as much time as writing the damn thing in the first place.
So, I have 640 hours of my time invested in my novel.

Now, how much do you want me to earn? OK, that was probably a bad question. Let’s assume that I'll work for £30,000 per year. That equates to £16 an hour.
640 hours at £16 is £10,240.
If I could complete three novels a year, then I'd get my £30,000 salary. Quite honestly, I struggle to write one, but , hey ho, we’re being accountants here. 

But time isn't all that I've invested. I write with a fountain pen on paper then dictate my words, send off a voice file to a transcription service and receive a word file in return. This costs me about £300 per novel.
Then I need a talented editor. Someone who has affinity with my work, someone with a real desire to make it as good as it can ever be. Good editors don't come cheap. A proper edit, covering structure right through to checking the final proof for typos, costs me £1500.
Now I've got my script I need a cover. Again, cover designers vary from cheap and dull to inspired and professional. You pays your money and takes your choice. My really brilliant cover designer charges me about £400. I could get cheaper but a cover is very important.

Let's do some totting up:
Time                 £10,000
Transcription      £300
Editor               £1500
Cover               £400
Total                £12,200

Now all I have to do is upload it to Amazon and watch it sell.
At £2.99 per copy, I get 70% which is £2.
If I sell more than 6000 copies, I get all my costs back, including my time.
At £0.99 per copy I get 35% which is £0.35
If I sell 6300 at this price, I get my costs back but none of my time is paid for.

There are many authors out there who offer their books free. In this case even if they sell an infinite number they earn nothing at all.

A recent survey revealed that half of all ebooks earned revenues of less than $500.

What I really need now is a good marketing plan.

Next time I'll tell you about that.