Setting Up Your Author Business is part of the Indie Pub 101 resource. This section outlines important considerations as authors move their writing from hobby to business. Visit the Indie Pub 101 main page here.

The Author Business

Most authors start out working as individuals. You write in your spare time, maybe earn a few bucks on the side, and when it comes time for taxes, you account for it as you would any other hobby. When you start increasing your earnings and expenses, at some point, you will want to create a business—a separate entity that handles all of the money earned and spent for your work.

When it makes sense to do this is based on a number of factors. How expensive or difficult is it to create a business in your part of the world? How much work is it to maintain personal taxes versus business taxes? Do you need the separation of person and business because you want to maintain separation from your pseudonym? These questions are critical for an author deciding whether or not to form a business around their work. We’ll try to point you in the right direction for the research you’ll need to make that decision. Rules vary widely depending on region, and individual circumstances are, of course, going to be very different. Most of this advice applies to writers based in the USA.

LLCs, S-Corps, C-Corps

We’re authors, not accountants, so we’ll just speak generally about types of author businesses in the USA. As an individual entrepreneur, you can simply do business as yourself with no company set up. But choosing that route means you’ll have few protections in the event that your business ends up owing money to someone else. While they’re more work to set up, Limited Liability Companies (LLCs), C-Corps, and S-Corps can offer your personal assets some protection from business losses. Consult with an accountant to choose the best business type for you.

Startup Costs to Consider

There are a number of costs to consider when starting a company, above and beyond the baseline cost of registering the entity. They’re optional, so your decision to spend money on them is a business decision. Costs can range from purchasing custom graphics and a logo, to setting up a business website and the maintenance of physical inventory.

Graphics and Logo

One of the first things you will want to do is purchase custom graphics and a logo if you’re using your business as a marketing entity. They can be as simple or elaborate as you want, but most authors will want to hire these services out. Logos, in particular, are a specialized graphic design skill, and while they may end up looking simple, most authors do not have the required skills to create them. A good starting place is 99designs.com, which can help you find a designer with experience in creating custom logos.

Business Website

Setting up a business website is much the same as setting up your author website. Many authors simply have the one website, but if you are interested in expanding your business’s scope beyond your writing, it might make sense to have a separate website for other services like editing, teaching, and the like. One thing you can do, if you think a separate website might be in your future, is register the domain name and have your provider direct that domain to your author website for the time being. That way you can print business cards with your new company’s website, knowing that right now, it’ll just land readers on your author website, but in the future it will take them to the right place.

There are a few advantages to having a business website. Authors who have difficult-to-spell names can use a much easier-to-remember business name for their URL. Likewise, authors with multiple pen names can use a single landing website for all of their identities.

Big Piles of Books and Other Inventory

There are a lot of reasons to have big piles of books in your garage (BPBG), otherwise known as keeping an inventory of your product: your books. There are also a fair number of pitfalls to the practice.

Pros:

• You’ll need that inventory for selling your work at in-person events. If you’re planning to table a con, that is, to purchase a table at a genre convention, book fair, or similar event, you’ll need BPBG to stock your table. Don’t skimp; you want to have an impressive display that looks like you have plenty of units to move, thus generating an appearance of demand.
• You’ll also need inventory to fulfill direct sales. Say you’ve got your website set up and want to offer autographed copies to readers—you’ll need books on hand to make that happen. And postage supplies.

Cons:

• You’ve decided to update your books, one of the luxuries that indie authors enjoy. Now those thirty copies in the BPBG are outdated. 
• You paid for these copies, and until they sell, you’re carrying that cost.
• Space is required. BPBG can take up a LOT of space. And the more you write, the bigger the BPBG gets. 

Business Cards

Depending on whether your business is simply an entity for doing taxes or a business that you plan on promoting on its own, it may be smart to have various kinds of business cards, bookmarks, or other promotional material printed. The cheapest option is to use simple default designs from online printers like MOO.com, but business cards are one of those expenses that you can upgrade to the level of professionalism you want to project. Custom art, fancy paper, and foil printing will drive up costs. Usually, it’s not worth it to go too fancy, but sometimes there are benefits to standing out.

Other New Business Considerations

Business Bank Account

If you are serious about being a professional author, you should have a separate account at your bank for your business earnings. Shop around, as banks have wildly different criteria for opening new accounts. Some will allow you to have multiple checking and/or saving accounts at no cost if you carry a minimum total balance. Others may require a minimum balance per each individual account.

The important takeaway is that this bank account should only be used for your business; never use personal funds for business purchases. Keeping a clear delineation between your funds makes bookkeeping easier, including tax accounting. Checking the total amount that you spent on your business then becomes as simple as bringing up the balance on your business bank account.

The same goes for a business credit card. It can be valuable to your business (earning miles, hotel nights, rewards, etc), but make sure it’s only used for business expenses.

Paypal Account

Paypal is the lingua franca of publishing, especially among authors and small- to medium-sized publishing houses. While Paypal’s fees may be a little higher than you might be able to get through a “regular” credit card merchant account, its ease of use will likely make it worthwhile for you as an indie author.

Paypal works as a holding account for money paid to you. You can use it much like a bank account, receiving funds and paying bills to/from the account. You can also use it as a “pass-through” account, transferring the money periodically to your main business bank account. At the time of this writing, there is no charge for the transfer unless you ask for a one-day express transfer, but check current Paypal terms.

Once you are connected to Paypal, you can use it to sell books via a plugin on your website, and can also issue invoices and receive funds that way. You can use it to transfer funds to others as well. And you can accept eChecks and credit cards for payment, if you set them up on your Paypal account. Paypal is a great way to pay editors and freelance artists.

Email Newsletter

An indie author truism is that you need to build your newsletter. While a lot of advice changes and morphs over time, this one doesn’t. Sooner is better in the case of working on your newsletter audience. Your books’ back matter should include a call-to-action to join your newsletter, as should your website.

To attract newsletter signups, some authors offer what’s called a reader magnet. That may be a free short story, full novel, character infosheets, book graphics—the sky really is the limit in terms of content readers may enjoy receiving. The general rule of thumb is to offer something.

Your newsletter is one of the only ways you have to directly engage your readers. You can ask them questions, you can suggest specific ways they can support you, and more. Build and nurture your newsletter!

PO Boxes

You may want to set up a PO Box for your author mail/packages, especially if you use a pseudonym and want to keep some distance between your author identity and your personal one.

In addition to the post office, there are a number of private businesses who offer these boxes, and in some cases, they will allow you to list your business/author name with their street address instead of a PO Box. The post office is typically a little cheaper but sometimes has long waits for available boxes, and private businesses may be more conveniently located for you. Ask if there’s a break in cost if you prepay for a year. The post office does not offer one, but some private businesses do.

One good reason to have a PO Box is that by law in many parts of the world, newsletters need to indicate an address as their origin. If you don’t have a PO Box, you may have to use your own home address, which is not recommended for business reasons and for your own security.