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View Full Version : The Dreaded "B" Word: Budgets!



kayelle_allen
June 25th, 2007, 08:40 PM
No one wants to talk about this unless it's to dream up the "unlimited budget" a runaway bestseller might bring about. Then it's a favorite topic.

We're going to take a look at receipts first, since that's one of the best places to start. Do you know where your receipts are for what you've spent so far? Good! You'll need them in a little bit. No? If you haven't spent anything yet, that's ok. If you have, but don't know where your receipts are, that's not ok.

You might not want to go hunting right now, but do create a system for yourself, even if it's only a big manila envelope with RECEIPTS written on the outside. Every time you spend a dime, put the receipt there. You'll need them later.

You've seen the organization I have on this site - and what you are actually getting a peek at is my pc organization and my attitude toward writing.

Let me say this bluntly: I am a messy person. I tend to drop clothes and not pick them up, fix dinner and leave food out, drive the car and never put gas in it... etc. My dear husband is a godsend in that he picks up after me and is my shepherd in all things that count. I'm one of those creative types who is top notch at some aspects of life and totally incapable with others. Money is one of my denser spots.

However, this writing thing is *my baby* and that has forced me to make tangibles a priority. When you want something badly enough you will find a way to get it, do it, be it, have it, or make it. Hence, I now understand budgeting. It was a miracle, to be sure, but it happened. You can do it, too.

DEFINITION: A budget is what enables you to use the income your writing generates to create more income. Hey, that's not such a bad concept, right? If you are always spending more than you make, then you will never be able to take it easy and enjoy your labor. Simple statement - heavy truth. Here's a little poem that expresses it well.


If your outgo
Exceeds your income
Then you upkeep
Will be your downfall

I wish I could take credit for thinking up this next bit, but it was taught to me by someone wiser and richer. :) Please take your receipts out sometime between tonight and the next lesson and label each of them with one of these categories:



Business - Paper, ink, software, shipping
Networking - clubs, fees, group charges, memberships
Marketing - ads, promo material
Web - website fee, domain purchase, DSL, web design
Development - books, classes, conferences, seminars


I belong to a coalition of authors whose purpose is to join together to pool resources so we can buy advertising. Although I don't pay dues, I do "buy in" to certain advertisements which allow me to be featured on the group website. Since about 38% of hits on my website come from here, it's a significant source for me.

Do I count that under networking? Advertisement? Web? Marketing? A little of all four? The answer is that it depends on where the money will go (convention, promo material, advertisement, etc). You may need to give this some thought. The key here is to have the **overall** category. Later, we'll break each one down.

How far do you want to go back? Since you won't be turning this in for "credit", pick a date. We're halfway through the year, so why not 1/1/7? Or use 2006, if you have a solid year of data available.

Believe me, this is enough for one night. Tomorrow, we'll give this info a closer look and I'll walk you thru how to use this data to set up a budget over the next two days.

Ok, now go ahead and smile. The number part is over for right now. Time for words again. See? I'm a writer. I understand.

Shirley Jump
June 26th, 2007, 07:00 AM
LOL, Kayelle. Those are words that normally make me want to run screaming from the room. I hate anything left brained but know it's a necessary part of running my business (as my business owner husband constantly reminds me). But he's right. Once I had my business set up that way and kept track of everything, it made everything easier. (I do it on QuickBooks...not happily, but I do it because it's...a necesssary part of business. Not a fun part. :-(

Anyway, now I can run income projections and know if we can afford that trip or know where we will stand next year, etc. We can project out for Christmas, etc. I can schedule in vacations and other things based on where my income will stand.

And best of all, because I've done this for several years now, I know when I can buy a toy like a new monitor or a new digital camera (both of which I bought this month, because I knew it was well within my budget). Now that makes a budget fun :lol:

kayelle_allen
June 26th, 2007, 07:29 PM
LOL, Kayelle. Those are words that normally make me want to run screaming from the room. I hate anything left brained but know it's a necessary part of running my business (as my business owner husband constantly reminds me). But he's right. Once I had my business set up that way and kept track of everything, it made everything easier. (I do it on QuickBooks...not happily, but I do it because it's...a necesssary part of business. Not a fun part. :-(

Anyway, now I can run income projections and know if we can afford that trip or know where we will stand next year, etc. We can project out for Christmas, etc. I can schedule in vacations and other things based on where my income will stand.

And best of all, because I've done this for several years now, I know when I can buy a toy like a new monitor or a new digital camera (both of which I bought this month, because I knew it was well within my budget). Now that makes a budget fun :lol:

I'm so glad you shared this! This is exactly what I'm talking about. I'll be back in a little while with some detail info. :) Good going, Shirley!

kayelle_allen
June 27th, 2007, 12:03 AM
It may surprise you to learn that you can gain a lot of satisfaction from having a budget. It certainly surprised me! In addition, did you know you can measure the intangible feeling of satisfaction in a tangible way?

Here's how. Draw a line, with the number 1 at the far left and the number 10 on the far right. Consider a "rating" of 1 to be least satisfied, and 10 to be most satisfied.

Now, for each of the categories below, rate your *current* level of satisfaction with the direction the expense is going. For example, if the initial outlay of business material and equipment was higher last year than this year, you may be very satisfied with this year's result. If you are taking writing courses this year but didn't last year, you may be very satisfied even though the expense was higher. Does this make sense?



Business - Paper, ink, software, shipping
Networking - clubs, fees, group charges, memberships
Marketing - ads, promo material
Web - website fee, domain purchase, DSL, web design
Development - books, classes, conferences, seminars


In addition, take time to consider whether the trend you see in expenses per category (more/less from the previous time period) is satisfying. Are you content with the way expenses are rising/falling/remaining constant? If changes need to be made, which category needs changing first? What are some specific things you can do to make those changes?

After you've completed this part of the lesson, if you like, share which category you feel provides the most satisfaction, and why.

Sascha_Illyvich
June 27th, 2007, 03:05 PM
Haha, being in real estate as an investor, the numbers make sense. Now what were we talking about? LOL!

S

kayelle_allen
June 27th, 2007, 09:48 PM
Seriously, folks, you don't need lessons from me on how to budget. There are tons of good books out there and even courses you can take online that are geared specifically toward authors. One of the best (IMHBAO) is the Career Checkup (http://authormba.blogspot.com/) from AuthorMBA.

http://authormba.blogspot.com/ is the website, or click the link above.

These folks take you thru the nitty gritty details and give you way more than I could. I skimmed the very top to give you the satisfaction piece that I got when I took their course. Because I respect copyrights, there is material I can't share. I can give you some basic ideas and share insights that occurred to me. Be prepared to solidify your career plan when you take their classes. They will open your eyes to new possibilities and give you a stable platform from which to launch or relaunch as needed.

Tonight we are going to break down some of the numbers we used in the marketing expense category so that you can move forward with your personal plans and budget. I want to talk to you heart to heart about goodies, promo materials, freebies, and giveaways.

Take this information into consideration *before* you order a gross of personalized yo-yos. Um, otherwise (sorry, can't stop myself) you may find your promos are in for some ups and downs. :swoon:

Do you have a way to measure your return on investment? If not, how will you know if the goodie has accomplished what you want it to do - which is bring you name recognition, sales, website awareness, etc? Good question, isn't it? While you're at it, ask yourself what *YOU PERSONALLY* are trying to accomplish.

If you don't know, don't promo. Let that be your mantra. Once you know what you're trying to do, gear your promo material around that purpose. You will accomplish far more. Ok. On to the good stuff. Or... the goodie stuff. :biggrin:

Before you buy, ask:


How you will use your goodies?
Who will get them?
How will you get them there? (shipping costs, etc)
What will they accomplish?
How much hassle is involved?
Will it be worth the trouble? If you are buying enough material to make 100 bookmarks for example, do you have time and expertise to complete them? Will they be the quality you want to represent your name to your reader?


Once you know the answers to these questions, you are well on your way to determining what your budget will need to be. Investigate options. Rather than buying some cool goodies that are on sale and you think your readers will love, think it through. Put this list in your wallet and pull it out before you buy.

Let's turn that mantra around now, and make it one of purpose.
Once you know, promo.

Questions?

Karenne
June 28th, 2007, 06:16 AM
Kayelle!

I have seen tons of new authors go absolutely crazy promoting their first book. I heard from an author the other day who had spent $5,000 on promotions and appearances (airplane tickets and all) on her book and was discouraged that her book didn't do better. Her actually comment to me was...well I thought if I spent more promoting...I would sell more books.

I honestly didn't know what to tell this lady who was spilling her heart and soul to me. :helpsmilie:

kayelle_allen
June 28th, 2007, 06:40 AM
Kayelle!

I have seen tons of new authors go absolutely crazy promoting their first book. I heard from an author the other day who had spent $5,000 on promotions and appearances (airplane tickets and all) on her book and was discouraged that her book didn't do better. Her actually comment to me was...well I thought if I spent more promoting...I would sell more books.

I honestly didn't know what to tell this lady who was spilling her heart and soul to me. :helpsmilie:


Send her over to AuthorMBA and tell her they can help her learn better ways to promote. I'm sure there are are other groups who do this too.

Anyone like to volunteer some sites?

Karenne
June 28th, 2007, 06:42 AM
Thank you!:wub:

kayelle_allen
June 28th, 2007, 06:47 AM
Thank you!:wub:

http://www.carolynhowardjohnson.redenginepress.com/

Here's another great site! The author wrote
THE FRUGAL BOOK PROMOTER: How to Do What Your Publisher Won't
THE FRUGAL EDITOR: Put Your Best Book Forward to Avoid Humiliation and Ensure Success

Shirley Jump
June 28th, 2007, 07:50 AM
Great links! I agree that a lot of people go wild promoting that first book. It can be tempting to do that, and they think that promoting that one book will make them hit the NYT list or something, when they don't know enough to realize a.) they don't have a big enough print run to hit the list or b.) they don't have enough distribution or a solid enough laydown date to really hit a list.

IMO, you need to go into this armed with information so that you can really be effective. Partnering, IMO, with your publisher as much as possible makes your dollar stretch further. Your publisher isn't likely to advertise at all. Chris Anderson (author of The Long Tail) said that only 1% of all books get any marketing budget at all. But knowing what your print run is, how excited booksellers are about your book, what your publisher has done with your book, what position your book is in that month's lineup (lead and second lead get better distribution than the fourth book in the lineup, etc.) can make a difference in where you're putting your efforts.

So communicate :-) I think too often, authors are afraid to ask questions and talk to their editor. Publishers like authors who want to sell their books (just don't be a huge pain about it...don't call every day, for example. A couple calls, a couple conversations, not a hundred :-) because everyone in this game wants to sell books. :-)

kuroisama
June 28th, 2007, 03:00 PM
Kayelle!

I have seen tons of new authors go absolutely crazy promoting their first book. I heard from an author the other day who had spent $5,000 on promotions and appearances (airplane tickets and all) on her book and was discouraged that her book didn't do better. Her actually comment to me was...well I thought if I spent more promoting...I would sell more books.

I honestly didn't know what to tell this lady who was spilling her heart and soul to me. :helpsmilie:
I actually went the other route. I figured all I needed was a business card. Got that made and handed it out. Later, my friend showed me all her "author stuff", promo items she'd gotten from authors over the years. That's when I realized I would need to do a little more than business cards--something with the picture of my cover, for instance.

That's when I ordered postcards--three different types:
- Promo 4x6 postcards with the cover on one side and the pertinent info on the other. I'll be mailing these out to every single address I've got, including addresses on business cards. A co-worker of mine gave me that idea. He said the person who gave me the card put their snail mail address on it, so it's my duty to use it. :) I've started searching for business cards now.

- 5x7 book cover postcards. Just 50 (since that's the number Vista gave me free... love that word "free" has a nice ring to it). It's just something tangible I can sign that has my cover since most people get this blank look when I tell them that my book is electronic and won't be in print until Spring 2008.

- 5x7 postcards that I cut into bookmarks. One of my fellow Samhellions suggested putting the bookmark image side-by-side on the 4x6 or 5x7 postcard template and getting more for your money. I put four on a 5x7 and then do the 50 for free thing. Voila, 200 bookmarks for the cost of image upload and shipping. I invested in a paper trimmer and I'm all ready to send bookmarks off to the bill collectors (that was another idea from a fellow Samhellion. Turn a negative--paying bills--into a postive--advertising to whoever opens it up). I even talked one of my friends into including my bookmarks with her bills. :)

I've essentially spent my advance (maybe a little over, but not much). I wish I had $5000 to spend on advertising. That's not what I'd spend it on, but I wish I had it. ;P