Jan 14, 2020
In this episode, I release an interview I did with the Nonfiction Authors Association Founder Stephanie Chandler. We shed some light on some financial aspects of both writing and publishing.
So the guest and host tables are turned for this particular episode, which is always a fun twist on a concept!
I’ve provided the complete transcript of our interview instead of “fun nuggets”.
I’ll also provide you with the links to the FREE courses on publishing in my Teachable school:
Make Publishing Profitable and Fun
Make Publishing Fun Summit
I also have an excellent course (priced at $197) with 5x #1 NYT bestselling author Carol Kline for authors writing transformational non-fiction. I highly recommend checking that out if that is your genre.
If you are looking for the report of the author survey which I discuss in this interview, it is contained in both of my free teachable courses on publishing, so I’ve got you covered.
Here is the transcript of our conversation:
Stephanie: Well. Hi everybody. Welcome to the teleseminar series for the Nonfiction Authors Association. We are excited to welcome Kathryn Guylay today and we're going to be talking about the financial side of publishing and understanding what that is all about. I am your host, Stephanie Chandler. Always happy to have you join us. As a reminder, we do have the phone lines muted and this session is recorded. This event will last 30 minutes and recordings are available to authority and VIP members of the Nonfiction Authors Association and if you're new to us, in addition to event recordings, members receive many additional benefits including exclusive templates, checklists, and other content released every week.
Stephanie: Access to our active member forum on LinkedIn, free admission to local chapter meetings across the US, discounts off the Nonfiction Book Awards, The Nonfiction Writers Conference, as well as our online courses and author toolkits and discounts with our partners including Office Depot, PR Newswire, Gabby Press and VSP. For more visit nonfictionauthorsassociation.com to join us. Sorry, I'm fumbling this morning, but now I'm thrilled to introduce our guest.
Stephanie: Kathryn Guylay comes to the publishing industry with a background in management consulting as well as nonprofit management, a numbers girl, she received her MBA in 1995 and went on to work with dozens of multinational corporations across diverse industries. She stumbled into the publishing world many years later after writing her first book, Mountain Mantras, Wellness and Life Lessons from the Slopes. She has since written two children's books and her latest nonfiction book was released just weeks ago and it's called Look Before You Leap: The Smart Authors Guide to Avoiding the Money Pit and Achieving Financial Success in Publishing. Her books have gone on to achieve nine awards and Amazon bestseller status. Kathryn, thanks so much for joining us today.
Kathryn G.: I am so thrilled to be here. I'm a big fan of yours, Stephanie, so thank you so much for all the great work.
Stephanie: Thank you for that. I love that you're helping authors understand the financial side of publishing. I think it's something we certainly don't talk about enough here. So, and you recently put together a survey to gather some information about that. Who is your audience for this survey and what was your goal in creating that?
Kathryn G.: Well, yeah, I think it's important to go back to why I even started to do this project. It took three months and several thousand dollars of my own invested money in terms of some VA time and using some survey tools and advanced survey tools because it was a very in-depth survey. We got some incredible data. So my goal really was, because I'm a numbers gal, I wanted to find out if some of the horror stories that I had heard were true. So I'm part of lots of different author groups and even some masterminds where people have confessed their financial woes to me, I even heard of someone going bankrupt. So it's like really? And then Stephanie, I'm sure you've heard, you hear these get rich quick pitches from people saying, go write a book and get rich quick.
Kathryn G.: So there were these two stories that I was trying to reconcile the horror stories and then the get rich quick. And so I said, you know what? I'm going to collect data that I know is real and I'm going to work with the data. I've done lots of surveys in my work as a management consultant. So that was my goal was to find out what the real truth is, and so you also asked about the audience. The participants in the survey were actually across three groups. So I did a different survey for traditionally published authors for self-published and for hybrid because the questions were a little different in terms of asking about advances and investments into the company for hybrid. And then just out of pocket spends for self-publishing.
Kathryn G.: So it was about 40 authors that bared their souls. I'm deeply grateful to all of them because there was a lot of questions on the survey across eight different sections that they really had to spend sometimes up to an hour going through the survey. And the idea was that I shared all the results with everyone and we all learned a lot. So it was a great process really to get behind these big stories that I was hearing. Were they true? Were they not true?
Stephanie: Wow. Interesting. Well, so let's go through some of that data. What were some of the key takeaways you got from the traditionally published authors?
Kathryn G.: So traditionally published authors, I have to say
that was the hardest group of authors to enroll in the survey. It
was pretty evenly spaced, those 40 participants were pretty evenly
spaced, but it was harder to get the traditionally published
authors even though it was completely confidential. It's really
tough to admit to what is happening with advances today. So I was
really surprised to hear that most of the authors are not getting
advances or are getting very small advances.
Kathryn G.: And in general I also ask them happiness or satisfaction questions. And this is really crazy, Stephanie. I wasn't expecting this, but the traditionally published authors were the least satisfied across all three groups. And I would say what I would attribute that to is that, and this is in reading the comments, is that the expectations were really high from the traditionally published authors and what their results were in the end, probably they just weren’t as high as their expectations.
Stephanie: That makes a ton of sense to me that expectations in general for authors are a tricky thing because we all want to be super successful and the reality of publishing is it's so much harder than people realize. How about the self-published authors? What were your findings there?
Kathryn G.: They are the happiest group, isn't that great? I was so happy to hear that or to see that. And actually, I also asked about some time questions but traditionally published authors, I couldn't believe it because they have these huge teams behind them. They spent a whole lot more time on their book and this is across development and the distribution and the whole marketing and publicity side of things. I totaled up all the hours and considerably more hours for the traditionally published authors. So when we were talking about self-published, they're actually a little more efficient, which is amazing because I always think of self-publishing as being very entrepreneurial. And so you think it's going to be this crazy time investment and it is.
Kathryn G.: It was about a thousand hours on average across all three groups. We're talking about a lot of time, but their satisfaction with higher the self-published authors, and here's the downside is that the self-publish author group, as I looked across the data, they didn't save enough money in their budget for marketing and publicity. So the self-published author groups spent the least amount on marketing and publicity and guess what? They sold the fewest amount of books.
Stephanie: Yeah, that makes a lot of sense as well. It reminds me of the school science fair where your hypothesis actually matches the results. Unfortunately, that's the tricky reality of all this. What about the hybrid authors? And by hybrid, what is your definition of hybrid? It's a little different for everybody.
Kathryn G.: So good to ask that first. What do we mean by hybrid because going back to, you said science, you take a red flower and you mix it with a white flower and you get a pink flower. Well, you can't really mix traditional with self and come up with hybrid. It's actually an animal of itself. I like to use publishing services company as a way to describe the hybrid. It just basically means consulting model or an author investing model into a company. And what I saw there with the hybrid group was the biggest dramatic differences.
Kathryn G.: If you looked at a curve, it wasn't normal in terms of happiness factors and things like that. It was really lumpy on one side versus the other. So what I would say about hybrid publishing is that you really need to do your homework before you invest in a hybrid publishing company. There are some excellent ones out there and there were some really great stories and great results in the survey from the hybrid published group. But there are also a couple of horror stories. So it's about doing your homework really in that area.
Stephanie: Did you find that some of those horror stories were with the bigger, I call them the big box publishing firms?
Kathryn G.: I took out all the names of any companies or any coaches or anything that gave away anything. I took those all out of the findings report. But I know when I was doing the survey was when Tate Publishing went out of business and I knew this for a fact because I was in touch with the author, there was one author that she was just empty-handed. She had paid in already to Tate publishing. I don't know if you consider them... They are a big company, but they are financially unstable. They took no money from authors and then authors got nothing out of it.
Kathryn G.: So it was one of those things where you have to really, you do your homework, you talk to people that have used the services before. You make sure that you are investing in the right company and if you can make sure that they're financially stable. And that can be true also of traditionally published authors. And this wasn't necessarily somebody in my survey, I just heard about this as a friend of mine. Their traditional publisher went out of business and so her book was no longer available. So there're all kinds of things with the financial stability of the company itself.
Stephanie: So did you discover any financial traps that maybe authors could avoid?
Kathryn G.: Oh definitely. And I would say at the top of the list would be to be really careful about a contract. And so that's going to be in the case of a traditionally published author or a hybrid. You are typically signing a contract upfront and I would definitely suggest that you get a lawyer and yes, that is an investment. But there was one very, very clear story from the survey where this person was trying to get out of a contract and it was costing her probably a whole lot more than if she had just negotiated an escape clause into the contract in the first place. I'll read a quote from, this is from my traditionally published author group. It says, be careful negotiating the contract. Find out all you can about using a traditional publisher before you sign.
Kathryn G.: And I know the background story to this author, it turned out that she had signed a contract and they weren't going to distribute her book digitally. So her book really wasn't available anywhere as an ebook and she had to buy the rights back for her book. And so it was just a crazy story from that perspective. So contracts involving a lawyer upfront and then going really back to what I was saying about the self-publishing group, not budgeting ahead of time and not having enough for marketing and publicity. That's just another trap is that you just charge ahead and you don't do a complete budget across all the areas of publishing. And then you run out of money, and in the case of the self-publishing group who sold the least number of books, they also spent by a significant amount, the least amount of money on marketing and publicity.
Stephanie: Yeah. I always think back when I got my first book deal, I got it myself and without an agent and when they sent over the contract, I wanted to literally cry. It was so overwhelming. It was 23 pages and I didn't understand half of it and I didn't know what I could ask for or not ask for. And so I ended up hiring a professional who helped me negotiate by contract. But boy, that is something you definitely don't want to navigate alone. And the same side on the hybrid publishing, you want to make sure that your agreement is cancelable. I've heard this from a number of authors who've gone with firms that even though they've paid five or 10 or even 15000 or $20000 to have their books produce, they're locked into a contract for up to two or three years, that is outrageous. So that should never be allowed in a hybrid contract.
Kathryn G.: Agreed, yes.
Stephanie: Yeah, for sure just great data you uncovered. What are some of the positive results for authors who invest in publishing?
Kathryn G.: Oh, I got so many great stories and most of it is in the quotes and I'll just pick one. I think this is from myself published group and it starts out with go for it. And then she had a couple of other things that she put in here and then she said, "After I published my book, I had been out there promoting it. I started getting calls from people saying we're looking for someone to come speak to our organization, we're looking for the experts. You've authored a book, we want you." So the idea is that really book publishing is it changing people's lives and it's making them the authority. It's making them the experts and those are the inspiring messages that I got from the survey. And again like the science experiment that you expect it, but I wanted to see that happy satisfaction results.
Stephanie: Yeah, that's exactly what we aim for in the nonfiction world here. What about setting a budget for authors who are embarking on self-publishing and traditional publishing and hybrid? Are there different types of budgets for each of those that you recommend?
Kathryn G.: Yes, definitely. And again, this is based on the averages and medians and highs and lows and you're looking at the 25th and the 75th percentile and what it did in terms of book results. But I would say to create a professionally produced book, which is really the goal. If you're going to self publish this yourself, you really need to set aside around $7000 for the book development. And that's everything from logistics to the multiple stages of editing. So developmental editing and copy editing and proofreading, and then really getting a great cover and the interior design, all that needs to be budgeted. And I saw the numbers come out to be about $7000. Now if you want to get a coach that it's not included in that number, so you want to make sure that you include any kind of coaching.
Kathryn G.: And I saw on average about three to $5000 in coaching across the different groups. Mostly, again, this is paid in for hybrid or out of pocket for settle. And so that's just the development side. But then as you look at the marketing and publicity, Stephanie, I know we've talked about this before and how marketing and publicity time-wise can end up being even more by a huge factor than your writing time, and I've heard everything from four times to 10 times should be spent a time-wise on marketing and publicity.
Kathryn G.: Now, if I said that for cost, like you had to spend four to 10 times the budget on marketing and publicity, I think everybody would just completely shut me out because those are huge numbers. But I would say based on what I saw in the results, that if you can set aside another 7000 for the rest of your whole journey, which is your marketing and publicity and you add the website, the blogs, getting on TV, radio, that's where I saw the best results were actually about $7000 there. So we're talking about $14000 in total.
Stephanie: Yeah. And I would think, especially if you're talking about developmental editing, that number could actually be a lot higher because depending on the amount of developmental editing you need, not every author needs a higher level of editing, but I've seen that get pretty expensive. So that's interesting. And the other thing about investing in marketing, I always think this is a tricky part for authors because it's really hard to earn back your investment in marketing because books have such a low-profit margin. And that's why I really encourage the nonfiction authors to think about other ways their book will benefit them. Like that comment you just read about the author who is suddenly invited to speak and got these other opportunities. I just want to call this out and encourage authors to be thinking about the ultimate goal and the bigger picture and can you market beyond your book? Are there other ways you can make it earn money? Where are you hearing from authors that any of them were actually making money? Or are there any earnings reports?
Kathryn G.: Well, the sad story is that most books do not earn-out. And I have to say, we didn't even talk about the one component which people might be thinking about, and that's also ghostwriting. And so my survey data said that even traditionally published authors are spending around $25000 out of pocket and that's what the traditional deal. So that's another huge component of the budget that one needs to think about if they want to get help there. But no, the answer is that most books are not actually going to earn out on the book sales themselves. But as you teach, Stephanie, and then I hope everybody is learning today, it's all about the back end, it's the products and services that we can sell to our audiences because they really get to know, like and trust us.
Kathryn G.: And that's what a book does. I always encourage people when they're thinking about their book and they get all hung up on the price of a book, I always say, you know what? You're not trying to actually just get somebody to spend $10 or $15 on you. You're trying to get them to spend maybe 10 hours or 15 hours on you to consume your content. That's actually the struggle today, so we just need to get into that mindset of it's about building relationships with our audience for the longterm and the know, like and trust factor.
Stephanie: Well, and I'm thinking about our memoir authors and a lot of times they don't have companion services and things to sell. So in that case and really for everybody that's a time to focus on book sales. Can you sell a thousand books to corporations or non-profits or other large agencies that will distribute or give away your books and maybe you add their company logo to your cover, things like that. Did you happen to cover any of that with your survey?
Kathryn G.: Oh, that would be the specialty sales. That wasn't
in the survey, but you're right, that is whether you want to call
it selling books by the truckload or just those specialty sales
channels. That is really where I'm hearing again, this is more
anecdotally, but then I'm hearing success stories and where people
actually, when you're starting to sell books by the thousands, you
make your money back, for sure.
Stephanie: Yeah. What other insights have we not covered that you gained from publishing this survey?
Kathryn G.: Well, I just think it's important for people when they start out, they just need to, again, I really believe that happiness or satisfaction, whatever you want to call it, it's like an equation. It's the reality minus your expectations. So if you have super high expectations and the reality is not so great, then your satisfaction is going to be low. So it's important to think about your goals, about your why in general, what your writing in your nonfiction project. But it's also important to set out your financial budget and then be visiting it, at least on a monthly basis. So I would suggest people create a spreadsheet and they say, okay, what are the parts of development whether it's coaching and ghostwriting, which are some of the big numbers to logistics and editing, and design and cover copywriting if they were going to do some of that for the back of their book.
Kathryn G.: Some people hire copywriters as well for the back of their book. Just put the numbers in there, take a look at them and make sure you're okay with them. And if you end up spending that, that you're okay. And then for marketing, the website ads it giveaways, awards, review copies. Stephanie, you talk all the time and I think it's so important about, people they need to set aside a number in their budget to have books that they can give people. And that is a cost, it's actually not a soft cost, it's a hard cost. And so from the get-go, having that number in there I think is really important. And the same thing with publicity, just set it out there and you know what? If your book, it just takes off like a rocket and I'm so excited it does. Then you can adjust those numbers up, but at least you have a way to gauge, again that satisfaction equation you've set some expectations.
Stephanie: Yeah. And I know you're not an accountant, but the other thing about all these expenses is that you're really creating a business. So these expenses can largely be written off during tax time.
Kathryn G.: Absolutely. In fact, I think anyone that's writing a book, especially a nonfiction book, they need to be treating this book, this project, their set of books like a business. And that means getting to know the industry. When I was in management consulting, I didn't just start working on a project without really getting to know the industry well. And we always budgeted that into our whole project, and our process was spending time up front, getting to know, and if I was going into the telecommunications industry and I had just been in a manufacturing industry, I needed to know how that new industry that I was entering, how it works. And what some of the success stories are and what are the pitfalls. It's the exact same thing, if we're treating our books like our business, we need to know the industry in which we're operating.
Stephanie: Yeah. And not only that but also just learning some basic fundamentals of starting a business. Because if you aren't already an entrepreneur, which many of our members are, but if you're just starting with your first book, you really are launching a business from the ground up, which has its own pros and cons. Because then you're talking about factoring in writing off utilities and things like that. If you've got a dedicated office space in your home and I think neither of us is an accountant but think that IRS will let you go for, I think it's two or three years before they start to view an unprofitable business as a hobby. So a new business is expected to lose money in the first couple of years. So that really does help to offset some of these expenses. Right, Kathryn?
Kathryn G.: Oh yes. I have been in situations where I needed to do that.
Stephanie: Yeah. I think every new business owner has been there and so, but that also gives you some incentive to make that spend because it is going to help you offset it at tax time and you're tracking those things and maybe you're hiring additional help with a virtual assistant and it's a great time to get a bookkeeper if you're like me and you absolutely hate numbers. Keeping track of all of that is really important. Are there any mistakes that you recommend that authors try to avoid from all of this?
Kathryn G.: Well, gosh, I'm just piggyback off your comment there of finding people to help you. A big mistake is, especially if you're self-publishing is to literally think about it as self. Self-publishing, it's everything but self. Meaning you need a team, you need people to help you. You will be miserable if you try to go this path alone. And I think there is some romantic feeling around getting a cabin in the woods and writing. And we've heard about that, it doesn't work today and whether you want to look at it just like you were saying like, "Oh, I really wanted to find somebody to help me with these tasks."
Kathryn G.: You can look at it in almost as a matrix. I look at things on one axis, like what am I good at? And then high, low, and then what do I love to do? High, low. And I can tell you that if I get a low in terms of I like, I don't like to do it and I get a low in terms of I'm not good at it. That's the thing to outsource, so people, do not go it alone.
Stephanie: Well, not only that, but I just don't think we should be in charge of any of the protection of our own books. As a former bookstore owner, every day, local authors walked in with their books, wanting to get them placed in the store. And honestly, I think that's what led me to the path of becoming a publisher and working with authors. Because I saw so many books with homemade covers and that old saying we judge a book by a cover is completely true. That can repel readers that make it look like an amateur job and then it's skimping on the editing which will show up in reviews. If you haven't had thorough editing, people are going to notice and they're going to put it in reviews, doing your own typesetting.
Stephanie: I met an author a couple of years ago who couldn't wait to show me his book at an event and I literally just flipped through the pages and there were like six different fonts used throughout the book. One paragraph was one font and the next was another font because he thought that looked good and it was so distracting, it was so unprofessional. It was not the way to approach it. So this discussion about the budget is not just a pie in the sky discussion. It's a really important one that if you want the world to take your books seriously, you have to be prepared and maybe start saving now for your future goal of getting your book produced. Would that be a safe piece of advice, Kathryn?
Kathryn G.: Absolutely. And a good interior designer and having a budget line item for that would have saved that person's book. The person that gave you that book could have been saved by an interior designer so easily, so quickly.
Stephanie: For sure. And I always think back, I came from the Silicon Valley, and I had just made a plan that I was going to quit my job and I was going to open this bookstore and it was a crazy plan. I could admit it looking back now, but I spent a year and a half building a business plan, putting money aside, building a budget and planning for that. And if you're listening to this and you're in the middle of writing your book right now, this is the time to start this planning and prepare for getting the best production possible for your book, and hopefully also investing in good marketing. Kathryn, this has been so helpful. Can you remind everyone where they can connect with you and where we can access your survey data?
Kathryn G.: Absolutely. I'll start with the survey data. So that's at my website, makewellnessfun.com and so it's just makewellnessfun.com/authorsurvey and that actually gets you to a 40-page report that summarizes all of the data across this huge survey. And I hope everybody enjoys looking at all the nitty-gritty information there. And then I have a website, makeeverythingfun.com and there, people can access a summit with 27 publishing experts including Stephanie, some great information there and a new podcast called a Positive on Publishing. And then I've got a new course coming out that goes through some of this financial preparation, but just basically industry preparation in general.
Stephanie: Fabulous. Well, thank you so much for being our guest today.
Kathryn G.: Thank you so much for having me. And thank you for your great work.
Stephanie: Thank you. And thanks to everyone listening, we conduct our teleseminars every Wednesday. You can check out the schedule or sign up for the mailing list to get notified about events over at nonfictionauthorsassociation.com I hope you all have a wonderful day.