Indie Publishing Finance 101: Budget

by Helen J. Darling
published in Community

Self-publishing is many things: creatively empowering, professionally challenging, fun. One thing it’s not? Free. Okay, through the miracles of modern technology it’s possible to publish a book for virtually nothing, but you won’t produce a product people will want to buy. Remember, self-publishing is a business. If you want success, you’ll have to spend some money. And if you like seeing a return on that investment, you’ve got to maintain a profit-and-loss statement—or in layman’s terms, a budget.

Creatives, fear not. A budget merely tracks your expenses against your revenue (your income). If you have a budget for your household already, you can apply the same principles to your writing business. Estimate your costs, estimate your income, and trim as needed in order to make the income exceed the expenses. When you get familiar with this simple tool, you’ll appreciate how powerful it can be in helping you achieve your publishing goals.

Jane Friedman’s sample P&L is tailored more to traditional publishing, but it’s a very helpful place to start. Combine it with this more indie-focused sample P&L from TCK to create your own custom statement and get a granular understanding of your individual business.

Self Publishing Budget: Production Costs and Business Costs

For indie authors, your heaviest expenditures will be in your book’s production costs.  On the indie spreadsheet, those line items fall under “development costs” and “design costs.” On Friedman’s sheet, it’s under two line items: “Freelance” and “Art/Photo.”

Many articles already exist that describe the costs to self-publish a book. Those costs can vary widely depending on your objectives. Reedsy crunched the numbers and their blog post does a terrific job projecting realistic expenses for the production-related tasks (editing, composition, proofreading, and cover design) their site handles. Editing costs are broken down by genre, so you can see just how much your competition is spending (hint: to be competitive, be prepared to spend similarly). 

Your manufacturing costs (which the indie sheet calls “production costs”) are the costs to actually produce the individual units. If you’re only producing an e-book, those costs might be limited to setup fees, your ISBN, and your copyright registration. If you’re using a print-on-demand service like IngramSpark or Amazon’s KDP to publish a print version as well, you must add print setup costs, additional ISBNs and bar codes, and proof costs. We’ll assume you’re not going to actually conduct a print run and create a personal book warehouse in your garage—there are better ways to do business, trust me—but if you were, those costs would go in this category also.

The indie spreadsheet breaks out marketing costs in a separate category, which is helpful since they’ll consume a sizable chunk of your budget and will need careful attention. However, that document doesn’t include the business-side costs of being a self-publisher (your overhead) such as the fees for your website, utilities for your home office, or any expenses for legal or accounting services. Training courses might also go under your overhead category, but beware. Such courses abound in the indie world, they’re tempting, they’re expensive, and they’re of variable quality. It’s easy to part ways with your wallet unless you adhere to your budget.

Calculate Your Break-Even Cost

Now that you’ve identified your various line-item expenses, it’s time to calculate your break-even cost. Your break-even cost is the amount you must charge for a product in order for revenue to meet expenses. Understanding your break-even cost can quickly inform other business decisions and help you achieve your goals faster. The indie spreadsheet doesn’t quite go far enough to calculate break-even cost, but a quick tutorial on how to do it can be found here. Just remember that your business costs have to be accounted for, too (mostly in the fixed cost category). 

If it seems overwhelming, begin with your production costs and don’t worry about your business-side costs. Once you become more fluent with the math and more accustomed to tracking your expenses, you can refine your calculations. As with everything at DIY MFA, you must iterate, iterate, iterate. The same principles that apply to honing your writing process can also apply to your business process. Be patient with yourself, but be persistent.

Financial Best Practices for Self-Publishers

As you begin to build your business, observe a few best practices in regards to your finances:

  • Don’t go into debt to publish your work. It’s not worth it. The odds of you writing a best-seller and digging your way out of debt are longer than your odds of getting hit by lightning. It’s safer and wiser to start modestly and improve your product over time as money permits.
  • Only spend money you’re willing to lose. Publishing, and business in general, is full of risks. There are no guarantees. Don’t spend money you haven’t made or can’t afford to lose. 
  • Start small. Especially if your budget is modest, start with a limited product offering. An e-book is the cheapest format to produce. Expand to print and audio as your income grows. 
  • Be prepared to lose money until you have multiple books on the market. The costs of production are high, and the fewer products you have, the fewer the opportunities for people to discover you and support you. Many self-published authors employ a loss-leader strategy. They write a short story, novella, or even a full-length novel and give it away for free or for a nominal charge ($0.99) to attract potential readers. Inside the book they link to their sequel or another book they’ve written in the same genre. The second, third, and later books are always charged at full-price. If you’ve calculated your prices strategically, over time you can absorb the costs of your free book in the pricing of your additional books.

Sources of Capital

Need money to get your publishing business started? Here are a few sources that can help you find seed money. 

  • Funds for Writers. This resource-rich website offers information on paying markets, grants, and contests as well as ways to generate income from writing.
  • Consult your state, county, or city arts council to learn if they offer grants or scholarships for writers.
  • Mark Dawson’s SPF Foundation provides scholarships and intensive training to four writers per year to help them launch their self-publishing careers effectively.
  • Sources like Kickstarter or Patreon can help generate income, but pay careful attention to your responsibilities towards your supporters.
  • The simplest way forward? Start a separate savings account for your publishing business, or keep a jar on your desk for the project, and be as disciplined as you can afford to be. Any time you get change from a transaction, dump the change into that jar. Tape a photo of a book or other image that symbolizes your vision on the jar to stop you dipping into the fund. 

Just because you’re a creative doesn’t mean you can’t run a business. By crafting your own budget or P&L statement, you’ll start thinking like a publisher. In turn, you’ll start making smart decisions for your business, selling more books, and realizing your creative vision. 

Helen J. Darling writes contemporary women’s fiction. Her first novel, I’ll Know Me When I Find Me, was self-published in January 2018. You can connect with her at and on Instagram at @itshelendarling.

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