The Profit and the Loss

Part 7: The Profit and the Loss, sounds like a Russian novel doesn't it?

P&L

The big question for your Book’s P&L is, “How many books are you going to make?” The printer’s quote is driven by the amount of books you are making. The more you make, their efficiency goes up and the cost per book goes down. 

That makes it sound like you should print 100,000 copies of a book, thus getting a good unit cost. But remember, the unit cost goes down but you are still adding to your cart total.

 Remember also, there is the cost of owning the books. Besides having to store them somewhere you also don’t want to spend all of your budget on books and have nothing left to spend on marketing or groceries. If you have all of your money tied up in books your money is unable to work for you in other ways. 

There is a sweet spot for sure. So let’s do some things to find it. 

So how many books should you make? This gets back to Part 1-2 where we talked about who the book is for. If it’s a personal project, then you should definitely do a short run press of the amount of folks you want to give it to plus a posterity copy. Make a list of the people you would like to give it to and total them up. Pretty easy!

We talked about practical books before too. In those cases, you own a business with a team or have a church congregation with indicators of how many people need a book. If you do events you can take the amount of recent attendees and estimate. If it’s a class, take your data on past attendance.  If you have a platform on Social Media or a blog, figure about 10-20% of your readers will buy a book from you. 

Besides the quantity, another factor is time. A book’s lead time is how long it takes to make it.

Find out what your book manufacturer’s lead time is for the book you want to make. Conventional publishers take the book’s lead time, or turn time, and figure the amount of books they will sell in that amount of time for their order.

 If you are self-publishing you need  books to sell at events you are planning to attend and about 1-2 weeks worth of sales since a short run press’s turn time is 7 days or less. You could order more at one time if you want to do the work of ordering less often. 

Of course there are a myriad of approaches to this but the above is a simple take on it. 

Now that you know your quantity you can build your P&L. I would suggest using Excel or Google Sheets and make something like the following. Your main work here is to total up print X’s your unit cost and X’s your MSRP and subtract the cost from the revenue, then divide your gross profit by your revenue.

It’s always a great idea to go a step farther because this really isn’t enough detail. You would be left thinking you had a new laptop coming your way with a wine box subscription with all the money left over! Here are some more costs to consider.

Will you hire an editor? (Yes, you should) $1,500

Will you hire a proofer? (Again, yes, you should) $1,500

Will you hire a designer to do your cover and interior design? (I did my own book cover using Canva, so maybe you can too.) $2,000

You have around $6,000 left. This is of course provided you sell the 500 you are forecasting. Remember, the printer will charge you to ship the books to you, or you can go get them. Ideally, you can ship them to your customers from your printer if they have a fulfillment arm. Which leads to this; you need to determine who will ship the books and who will pay to ship the books. If you sell the books online yourself you need to charge shipping. If you use a platform like Amazon they will handle that part but will take a portion of your profits to do so.

My advice is if it’s possible to have a third party handle the warehousing and shipping of your book, it takes some of your profit but you don’t want to be going to the post office every day either. Trust me, I’ve done it at times in my life. 

I behoove you to think through your project for miscellaneous costs that could come up. It’s much better to know what you are really getting yourself into so you can make good decisions on how to spend on an ad or marketing. And really so you know if you can afford all the models and make up to bring your vision for your Elf War trilogy book cover to life but it might take that $6,000 you have left.