Business Musings: Sustainability
The big topic among successful indie writers in the last six months of 2017 is the possibility of burnout. Writers are slowly realizing that the pace they’ve maintained through the last few years isn’t sustainable.
Worse, it has become clear through data and anecdotal evidence that the more a writer produces, the more her income rises.
But that fact, coupled with the fact that incomes have fallen for indies in the past year or so, has given rise to something like panic among the successful indies. They’re having to work harder or just as hard to maintain an income that seemed to come easier in 2015.
And you know what? That’s normal.
I know, I know. You didn’t want to hear that. Because indie writers saw their incomes rise and rise and rise in the first three years of the gold rush. It seemed like every single thing the indie did increased her revenue.
And then, in 2016, those things didn’t work any more.
Now, before the comments come in, I am aware of the fact that Amazon changed its Kindle Unlimited payouts during that time. I’m also aware that Amazon changed the algorithms over and over again, so it wasn’t as easy to game those algorithms.
I am also aware that some self-publishing venues, like All Romance eBooks went out of business, taking a lot of writers’ incomes with it. And other venues, like Smashwords, no longer attract new customers the way they used to.
I’m not talking about those changes, although they did have a major impact on a lot of writers’ careers. I’m talking about the changes in income to writers who were not rushing to every new way of doing something, writers who were not gaming algorithms, writers who were producing a lot, interacting professionally with their fans, and doing everything right.
Those writers received major rewards, both in sales and in income, in the early years of indie publishing. Those rewards have diminished, because we are entering into a mature market.
What does that mean, exactly?
In business, markets respond to things in similar ways, whether we’re talking markets for shoes or markets for books.
When something is new, everyone wants it. When something is new, the growth is usually exponential. We see that in all kinds of new markets over the years, from desktop computers twenty-five years ago to smart phones ten years ago. There’s always something cool, and consumers flock to it, sometimes in very large numbers.
In publishing, we went through a shift, from traditional only to anyone-can-do-it indie, because of the rise of the neat-o ereader, the Kindle, from Amazon, which gave that ereader a platform and an ecosystem.
Year to year, the number of people who joined the new ecosystem was huge. Other players created viable ereaders and ebook ecosystems. You didn’t just have to use Amazon to publish a book. You could do it on other platforms.
And the book didn’t have to be an ebook. It could be a print on demand book with little or no upfront cost.
But ebooks were where the money was, and the ebook growth was astonishing from 2007-2012.
To improve matters even more for indie writers, the traditional publishers really messed up their entry into the new market. First, the traditional publishers didn’t take ebooks seriously. I had books on my Kindle from traditional publishers that were simply bad scan jobs. Those books were often unreadable, with incredible scanning errors, like symbols instead of letters, words that the scanning program guessed at and missed, and entire missing pages.
For the honor of reading that terribly scanned book, traditional publishers overcharged, usually double the rate of the mass market paperback—if there was a mass market paperback. Really early on, those publishers charged the same price as a hardcover book for the ebook.
Then, in the States, we learned that the major traditional publishers had conspired with Apple to keep ebook prices high. That caused all kinds of problems for traditionally published writers, but indies reaped the benefits. While the ebooks from big name writers were either overpriced (and badly produced) or completely unavailable, ebook readers took a chance on writers they’d never heard of. Readers bought a lot of ebooks, particularly in romance where the prices were artificially low.
Romance writers have slowly raised their prices in the past few years because the low-low prices were unsustainable and created other issues. But by then, those indie romance writers had developed the same kind of fan base that traditionally published big name writers had.
It happened in other genres as well. But unfortunately a lot of those early ebook writers in non-romance genres got lured by the siren song of traditional publishing. So the writers who were writing in “more acceptable” genres made paper-only deals or sold their books back to traditional publishers, destroying the momentum that the writers had had as indies, and often angering their fan bases (because the prices had risen to the artificially high traditional levels).
For the writers who remained indie and had had early success, their numbers continued to rise, and so did their income.
Until it didn’t.
Yes, there were the changes at Amazon. And yes, there were other factors, like Brexit in Europe and a contentious election in the U.S., but that sales decrease would have happened without the rise of ebooks. There are natural ups and downs in the book publishing industry, and those downs were part of a normal trend.
Just like the fact that book sales decline in the summer months (particularly August) and tend to rise in the fall. There’s an annual rhythm to buying patterns in every single retail industry, and it would behoove writers to learn the buying patterns in their little corner of the book-buying world.
However, I’m not talking about the annual ups and downs.
I’m talking about the way that markets develop over time.
First, there’s a gold rush, and everyone thinks they can get rich—because the early folks did get rich. Or at least, they did well. Then more and more people join the marketplace, and even though the revenue grows in that marketplace, its spread over more people.
In the gold rush phase, the growth is truly exponential. It doubles or quadruples or sometimes grows by factors of 100 from year to year.
In a plateau, the growth is still huge—anywhere from 20-50% per year, spread out over more producers of that product.
Then the market matures.
A mature market grows, but not at that astonishing pace. Growth in some sectors is 5-10%. Before the gold rush, traditional publishing as a segment of the overall consumer marketplace grew at about 4% per year.
I am not looking up the statistics to write this piece, so I don’t know the exact number for the growth in the publishing sector right now, but I would guess it’s about 15% or so, if you add in audio and the burgeoning markets in other countries.
That’s amazingly good. But it’s not 200% over the year before.
When you go from a gold rush to a mature market, your income goes down, even though the market share grows.
That change doesn’t happen to everyone, of course. There are some outliers who will experience a greater growth. But there are fewer and fewer of them in a mature market. And usually even the income of an outlier follows a pattern.
But let’s talk about the average writer/publisher business right now. This is indie only. You traditional-only folks don’t factor into this discussion. Your business is in an even greater disruption than the indie world, and your income will decrease farther, faster, if you can sell to your traditional publisher at all.
A standard business has phases. I’m going to use the phases that I used before, earlier this year, in a piece on what was going on after All Romance went under. In that blog post, I quote from a Harvard Business Review article by Neil C. Churchill and Virginia L. Lewis. The following information comes from them.
An individual business goes through five stages. They are:
- Existence. At this point the business comes into being, and will discover if it can actually exist in the marketplace.
- Survival. Can this business survive? Not Just make it day to day. As the article says, at this point, “formal planning is, at best, cash forecasting.” A lot of businesses remain in this position for their entire existence. (Decades, even)
- Success. The business becomes stable and profitable. The owners must then decide if they’re going to expand or remain static. Sounds like an easy decision, but it’s not. Churchill and Lewis break this down even more, but for our purposes, we’re sticking with the above definition.
- Take-Off. The business grows, often exponentially. This is a scary period, because the business had reached stability and now it feels like the business is back in survival mode. In fact, this is the most dangerous place a business can find itself in. Mismanaged, a business will tumble from here to survival or bankruptcy. And that can happen damn near overnight.
- Resource Maturity. The business is established. It can forecast both its profits and its year with some kind of accuracy. It can plan its future (barring unforeseens like meteors falling from the sky or investors tanking the economy a la 2008/9).
The turmoil in the overall publishing industry has settled a bit. Many of the related businesses have hit resource maturity. They can predict their profits and their year somewhat accurately.
Some writers have hit that space too.
But most writers who came in during the gold rush and had success never went past Stage Two: survival. The writers thought they had gone past that stage because they had earned so much money, sometimes tens or hundreds of thousand per month.
Most writers who achieved that goal, however, had never run businesses before, and they made beginner errors. The biggest beginner error there is happens to be financial.
It’s believing that the early months or years of high earnings (usually caused by excitement over something new) can be sustained over years. So if a writer came in, grew her business so that she was earning, say, $20,000 per month, then she believed that $20,000 would come in month after month, year after year.
Some writers were seeing income of $100,000 per month or more. And some writers had a $10,000 average month with spikes of $50,000 on months of new releases.
When you believe that the income is always going to be there, you spend more than you should. Everyone new to business does that. Hell, everyone does that, period. That’s why lottery winners go bankrupt. They think the money will be there forever.
And it isn’t.
So, a lot of writers hired a lot of help. I know of one writer who hired ten different employees and put them on real-world payroll. That writer was earning $100,000 per month (that she admitted to and the algorithms confirmed). I knew she was in trouble when I learned that one of her employees on payroll was her lawyer.
Lawyers are great folks, but they work by the billable hour. It’s better to have a variety of lawyers you hire as needed than one lawyer you pay monthly, whether you need his services or not.
Her expenses, just on salary, had to be around $50,000 per month or more. And then she bought a new house, and new cars for everyone, and, and, and…
She’s still writing. Still making money. Had a huge windfall a few years ago, which is probably funding her overspending. But if she hadn’t had that windfall, she’d be hurting.
Because the market has matured.
Some writers have maintained that incredible income from the gold rush period by writing more, faster and shorter and goosing their sales through promotions and a few other gimmicks that will work in the short term.
But you only have two options when income goes down:
- Increase revenue somehow (see above)
- Decrease expenses
Decreasing expenses is the sane and healthy way to deal with a down income year, but that’s hard to do for a variety of reasons. If the expenses are employees, particularly friends and family, laying them off is painful and emotionally costly. If the expenses are a suddenly unaffordable house, then moving and buying new will take time from someone already pressed for time.
And so on and so forth, all of which deserves another blog post.
There’s another barrier to decreasing expenses. It’s admitting that the income has gone down, which is, to some writers, like admitting failure.
When you work for yourself, whether you own a retail business, a law firm, or a writing business, you deal with cash flow. Cash flow is how the money flows into and out of the business.
You might have a business that makes a gross profit of $240,000 per year. Your expenses are $15,000 per month, month in and month out. You figure that you should be making $5,000 per month–$240,000 divided by 12 is $20,000. So $5,000 profit, or an annual profit of $60,000 per year.
Yet it doesn’t seem to work out that way for most businesses, especially ones with an uneven income base.
Running your own business is not like getting paid a salary. Some months, you might bring in $100,000, and the next month, $10,000. If you didn’t handle that $100,000 right, then you could have a cash shortage the very next month.
Because expenses are regular, even when income is not.
So, a $240,000 writing business with $15,000 monthly regular expenses cuts much too close to the bone. Because you won’t have enough cushion to weather the ups and downs of cash flow.
Writers with that kind of income continue to write fast, trying to stay ahead of that ticking clock of expenses. The writers try all kinds of promotional gimmicks, trying to keep the monthly income the same or higher than the month before.
Ultimately, the writer writes harder, faster, more and more and more until…as we saw in last week’s piece…the writer burns out.
And then, the writer usually doesn’t cut expenses fast enough to save the business. Or, in the middle of burnout, cuts too far, and damages themselves further.
Part of the problem here is the writer’s attitude.
The writer has a short-term outlook on a long-term career.
Because of the way most indie writers came into the publishing business—backwards and unprepared, just writing, producing, and publishing—the writers never came up with a game plan or even thought about what they’re doing.
What they have all done, almost to a person, is start a manufacturing business. They make something, and sell it, and then make something else, and sell it.
The problem is that, unlike most manufacturing businesses, writers can’t hire someone else to produce the something—let’s call it by that good old economics term, a widget. The writers can’t get someone else to manufacture widgets. Writers can’t have the assembly line working 24 hours a day, seven days a week, fifty-two weeks per year.
Even if the writer hires someone else to do the actual uploading and publishing and marketing, at some point, the manufacturing model falls apart for writers. Some writers hire ghost writers to pretend to be them, but there are very few excellent ghosts. If the ghost writer is at all inferior, the readers will start leaving the product.
Other writers hire co-writers and are obvious about it. Again, readers won’t buy everything, and many will only buy the books by the original writer (and even then, might start to mistrust that the original writer wrote that book). It’s one way to solve the manufacturing problem. In fact, it’s probably the best way.
It keeps the widgets moving through the algorithm, supplying the need, and maybe even creating a need for the product.
But once a product becomes ubiquitous, a consumer will buy less of it. The consumer will think that product will always be there. Or they’ll move on to other things.
So, as a manufacturer, you’re always looking for new markets for the widgets, remaining on a never-ending treadmill until you pull a Kris maneuver and fall off. (That’s why I like running outside. I am one of those people who fell backwards off a treadmill. Sigh.)
If you want to sustain your writing and publishing businesses, you have to stop thinking like a manufacturer. You need to start thinking like an artisan. By that I mean, you are “a person or company that makes a high-quality or distinctive product in small quantities, usually by hand or using traditional methods.”
As you can tell, this requires a completely different attitude than the one you had before. You acknowledge that your supply of new product is limited. You plan for the limitation—which is not imposed from the outside (not enough consumers or markets), but from the inside.
I am not saying that you need to stop thinking big. Artisanal businesses can — and often do — become multimillion dollar businesses. You’re familiar with a lot of those businesses, like certain vineyards with their annual yields or microbrews or some fashion designers or restaurantuers or jewelry makers.
The difference between an artisan and a manufacturer, at least in the arts, is the difference between working harder and working smarter.
Most of the writers who are writing so fast they barely have time to eat aren’t thinking about subsidiary rights sales or finding other ways to leverage the products they already have. For the manufacturers, everything has to be new, new, new. They don’t embrace their older product, except to hope that it sells to the same markets they’ve been tapping before.
There are a million ways to make money off your existing product without writing another word. I’ve dealt with a lot of them in various blog posts. Understanding and using copyright properly will help you turn your manufacturing business into an artisanal one. (If you don’t know what I mean, read this post on copyright)
Making the shift from a manufacturing business to an artisanal one requires a shift in thinking and in the way you approach your products, your books.
Changes from how much work can you do to how much work can you sustain year in and year out.
That’s a very different way of approaching your business. You figure out your business plan on a level you can continue to do, not on a level dictated by your expenses (and your level of panic).
You figure out what you want to write, not what the market demands you write. If you want to write what the market (your readers) demands, fine. Do that. But if you don’t, then don’t.
Produce as much as you can while sustaining your health, your family, and a bit of relaxation time.
Open a calendar for the next year and figure out how many writing days you have. Add days for what a friend of mine calls “admin”—uploading, cover design, publishing, blurb writing, marketing. Add in at least one day off per week.
If you have children, factor in time with them every day. Block off your vacations, the workshops you attend, and anything else you might do. If you have a day job, block that out to.
Do this planning by the month.
Every month will look different. Try as I might, I can’t seem to get more than 23 writing days in a month, and I have employees to do the admin. But I also have days off, and meetings so that I can make sure the business(es) run smoothly, and I also do other things, like run workshops and such.
Make sure your writing goals stretch you a little, but are comfortable. Make sure you don’t leave the computer exhausted each and every day.
Calculate how much you can write in those writing days—not at top speed, but on average. If your top speed per day is 5,000 new words, and your lowest speed is 1,000 new words, plan for 3,000 new words per day. Then multiply those words by the available days in a month.
So, for a full-time freelance writer, running her own business, let’s say on average, she has 20 writing days in a month. She writes, on average, 3,000 new words per day. That’s 60,000 new words in a month. For Dean, that’s just over one novel. For me, that’s half to two-thirds of a novel. Or a bunch of short stories. Or short stories and a blog and a quarter of a novel.
Block out your time, then figure out the most pressing projects, and put those projects into the time. Calculate over a year, and you’ll end up with the number of books you can promise your most ardent fans.
You probably won’t hit that every month. So figure you’re going to write 500,000 words that year instead of 720,000 words. (Or some of the words will be marketing or blurbs or other things.) For some of us, that’s five full-size novels. For others, that’s eight or so.
That’s a lot of books and words and writing, without a serious hard push for the writer I described here.
Some writers will do less. Some will do more.
Whatever it is must be enjoyable and sustainable for the writer.
Switching from a manufacturing model to an artisanal model means that you will take a hit in the pocketbook. That’s the hit you manufacturing folks have been trying to stave off by working ever harder for diminishing returns.
At some point that cash flow hit will occur no matter what, particularly if you grind to a complete halt.
So to make the switch, you’re going to need to slowly change your business model.
You will probably have to decrease expenses, whatever that means for you.
But let’s just talk income for a moment.
You need to figure out how much money you will need per month to live comfortably. If you’re manufacturing, you might be earning, on a regular basis, much more than your monthly needs.
You need to take that calendar again, and figure out how much money you will need to earn over and above expenses to be able to put a large chunk of it into savings. That chunk will get you through the transition from manufacturing to artisanal.
(Save that money. Don’t put it in risky investments, like stocks. Have it accessible, and as close to cash as you can get. It’s working for you by giving you less risk in your writing. You need liquidity at this point, not a few extra dollars.)
For some of you, particularly those of you living at the very edge of your income and saving nearly nothing, you might have to work the manufacturing model for another year or two. You need to decrease your expenses as you enter into those two years, so that you can put a lot of money you earn in the bank.
Then after you have savings, then you move to the artisanal model I mentioned before. You will write what you want, on a schedule you can maintain.
That’s your goal. That’s how you avoid burnout.
Even if you manufacture for a year or so, having an end-date will also help you avoid burn-out. You know when you can climb off that treadmill.
You’ll need to make a brand-new business plan. Almost everything you see for indie writers is based on the manufacturing model. Produce books at this pace, do that kind of marketing, make sure your newsletter comes out with startling regularity, and you too will earn millions!!!
If you change to a model you can sustain, then change your business plan accordingly. You might need to market differently. Maybe you keep your newsletter frequency up. Or you rebrand old product to keep your books alive in the algorithm.
That’s up to you to figure out.
Or you reduce your income expectations. Live a bit more frugally, and take care of your health.
If you do that, you’ll be surprised at how much money you’re still earning. And writing will slowly become fun again.
I’m assuming your goal in this writing business is the same as mine—to have a lifelong career. That means you need to regulate your pace, take care of your health, spend time with your family, and learn how to rest.
If you want a lifelong career, then you are running a marathon, not a sprint.
It’s okay to sprint every now and then. In fact, that’s a really good challenge. It shows you what you can and can’t do. But don’t sprint every single day.
Lifelong runners learn that rest days are as important as the days you run. It helps the muscles heal from the microtears that running (or any exercise) causes. It helps the runner maintain her sanity and, yes, remember just how much she loves the exercise.
I get itchy if I take two days off in a row on my writing. I like writing too much to take too much time off.
But I’ve had times when I’ve been burned out, when I have had to crawl to the computer just to get a page or two. Then writing is no fun at all, and not worth doing.
To sustain a lifelong writing career, writing must be something you enjoy. It must be. Because it’s too demanding to be done long term if you grow to hate it.
Besides, why do that to yourself?
Making The Change
For a lot of you, this transition will be hard. You’re going to have to alter the way you think about everything. You’re going to have to do some serious analysis of your goals, your desires, your income, and the way you run your business.
You’ll also have to make some hard choices—do you lay off some of your employees? Do you really need that marketing service that charges you $50 per month?
Figure out what’s best for you, not what the gurus say.
Also, locate your sense of panic, and see if it is coming from an unsustainable business model or if it is coming from a desire to meet the needs of every single reader. (You can’t, by the way.)
Start with self-care. Make sure you get the right amount of sleep, and that you eat right, and that you exercise even a little bit every day. Make sure you spend time with friends every week, and family every day.
Stop saying I have to and start saying I want to.
Figure out who you are away from the writing. If you can’t, then you’re either a writer to your core or you’re working too hard or both.
If you can’t do all of this and keep up your writing pace, that should tell you something.
So go cold turkey. Take a one-week vacation without your writing computer. No laptop, maybe a tablet that you can’t write comfortably on. Go to a beach somewhere, get sand between your toes, and start answering these questions.
I guarantee that will give you some clarity.
Then make the changes.
Slowly, and in the way that’s best for you and your family.
I hope I’m still seeing your books ten years from now. Because that means you’ve made the switch.
That means you’re going to have a lifelong career—and you’re going to love it.
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“Business Musings: Sustainability,” copyright © 2017 by Kristine Kathryn Rusch. Image at the top of the blog copyright © 2017 by —-