101: Writing a Business Book…Why and How? Part 3
A few months ago a feature film producer attending the Los Angeles Times Festival of Books happened by the stall of EC Printing, a firm that prints books for self-publishing authors. There the producer spotted a full-color book of illustrations that Go for Launch Productions of Glendale, AZ had self published to promote its feature film and animation design work. The producer was impressed, contacted the company and that led to a lucrative deal for Go for Launch with Universal Studios. Interestingly, the firm had done an extremely limited run of books — a mere 100 volumes — yet that was sufficient to land it a very important deal.
A book can drive customers to a company or enhance a business person’s credentials. If that’s your primary goal in writing a book, self-publishing may work for you. It is less time-consuming than finding a publisher. Last time I wrote about the arduous process of finding a publisher. Today, let’s look at self-publishing.
John Tantillo, Ph.D. is the CEO of The Marketing Department of America, and bills himself as “The Marketing Doctor.” He has succeeded in making himself into a unique brand. (Take a look at some of his videos HERE) He self-published the book, “People Buy Brands, Not Companies” because, “commercial publishers … are operating with an increasingly creaky business model. Fact is, they don’t really know what sells and, sadly, most of the time they don’t know how to sell very well. With commercial publishing you basically give up control in exchange for them paying you a small amount of money, offering you their ever diminishing prestige. As a marketer, I found that unacceptable because I don’t believe most commercial publishers would be dynamic and aggressive enough to support my book.”
The biggest down side of self-publishing is that you pay all the costs — writing (if you engage a collaborator), design (if you can’t do your own design), printing and promotion. But even with a publisher these days, you are still stuck with the promotional costs, the collaborator costs and, if your book requires illustrations, you have to license them out of the publisher’s advance.
I have the unique experience of having gone both the publishing and self-publishing route with one book. McGraw-Hill published “How to Make the Most of Every Media Appearance” in 2003 and I took back the rights, revised and republished it myself in 2007 as “How to Master the Media.” I did this principally because as the book’s biggest customer — I was buying them to promote business and also as a take-away in my media training workshops — I was subsidizing McGraw-Hill. Each book I bought cost me $8.00 and did not count against my advance. The self-published “How to Master the Media” costs me well under $4.00 a copy. Is it worth it? Well, to quote Dr. Tantillo, the branding expert: “Business people spend a lot of money on knick knacks for potential clients, but there is nothing more memorable than being able to autograph your own book – especially if it’s a book that reinforces your credentials and underscores your grasp of the business. It sets you apart from the competition with relevance and without gimmickry.”
In deciding to take back my book and self-publish it, I enjoyed a number of advantages that other authors might not have. First, McGraw-Hill had already published the book so I had the benefit of the company’s editorial input. True, I revised it extensively, but the skeleton upon which I hung the new muscle had been vetted by a veteran editor. Second, because I had worked in newspapers and studied print layout in journalism school, I was able to design my book myself. A book is not a long essay; creating one requires some layout skills and/or very costly software like QuarkXpress ($500+) or Adobe Indesign ($1,900). Third, I found a reputable printer, EC Printing. Some print houses — usually billing themselves as print on demand firms — charge for printing books and then pay the author a royalty based on book sales. In theory, this enables an author to recoup the printing costs. In actual fact, it rarely does. These companies will print your book and will place it in the listings (albeit not necessarily in the stores) of major chains and with online retailers. But they have a lot of control over your work because they set the sales price, they control the inventory (so you never really know how many books are sold) and they own the ISBN (International Standard Book Number). That means that for all intents and purposes they own the book even if they don’t own the copyright because you need that ISBN to get a bookseller to list your work. Whoever controls the ISBN controls the product. Additionally, POD outfits charge authors a lot more for their own books — usually 70 percent of the list price which they, not you, have set.
If you’re starting out from scratch, here is how to deal with those issues:
Editorial: Your word processing software may catch misspellings and egregious grammatical errors, but there are far more pitfalls awaiting an author than those. You can hire someone to edit your book for you. A Google search of “free lance book editors” yielded well over 100 entries. A free-lance editor will cost you between $15 and $40 an hour, depending on your needs and the editor’s level of experience. Simple proofreading usually costs about $25/hour. Writing and re-writing charges start at about $45 an hour and can go as high as $100/hour. Many of these editors will negotiate a flat rate for the entire job with you so you have a fixed cost going in. These days, it’s a buyer’s market, since there are so many out-of-work writers and editors.
Design: Most printers offer design services. They already own Adobe Indesign or QuarkXpress and for a fee will design the book for you. Since I did the layout and interior design for “How to Master the Media” EC Books supplied me with the cover design which, I feel, is far more compelling than the cover McGraw-Hill had done.
ISBN: Get your own. A single ISBN and bar code (essential if you’re going to sell through Amazon.com or in bookstores) should cost you under $50. You can learn more HERE.
Another tip: Be aware of copyright laws. If you “write” your book by cutting and pasting together Internet articles or if you pull photos off Google images and plant them in your book, you are inviting a lawsuit. Many images and documents on the “free” Internet are copyrighted and holders of copyrights can be aggressive about protecting their intellectual property.
How much will your book cost you? Dr. Tantillo says, “As long as you are willing to roll up your sleeves and be there every step of the way (and this means doing most of the writing), you should be able to produce the book for between $5,000 to $10,000 (no more than $10,000!)” In my case, I encountered none of those costs, so I paid only for the books printed. The more books you order, the lower the cost per unit. For a 5.5 by 8.5-inch paperback of 150 pages with a gloss laminated full color cover expect to pay about $3.60/unit for 250, $3.10/unit for 500 and $2.30/unit for 1,000. Longer books, like mine (233 pages) cost slightly more. Your other costs depend on how much you do for yourself and how much help you have in preparing your manuscript.
Finally, be aware that sometimes, established publishers will discover a self-published book, be impressed with it, and buy the rights to reprint and distribute it. That’s what happened to networking expert William M. Saleebey, Ph.D, with his book “Study Skills for Success.” After he self-published, Simon & Schuster picked it up and republished it. His second and third books, “Sell Yourself” and the current “Connecting: Beyond the Name Tag,” were self-published. Dr. Saleebey says he’s glad he self-published. “I had 100% artistic and content control and reap all of the profits.”
Dr. Saleebey, a speaker and trainer with expertise in the psychological aspects of personal and business networking, mounted an ambitious promotional campaign to sell “Connecting.” You would expect that chore to fall to a self-publishing author, but even if a major house buys your book, the sales promotion burden is still going to fall on your shoulders.
Next time, selling your book.
Current Best Industries for Business
Filed Under: Trend Report
Tags: Articles of Interest, Business Tips, Trend Report
Looking for the best new business opportunities? Wondering what industries will lead the way for new business filings in the future? Obviously, most business people should be; since these trends will affect their business opportunities as well. Based on a recent article in Inc. Magazine the five top best industries for new business are as follows:
- Environmental Consulting – Going green is no fad – it is a very real and growing industry and is valued at $17.8 billion and is expected to grow by 9 percent per year for the next 5 years. Every business sector can expect to be affected by the green wave. Expertise will be in demand for air, soil and water quality management.
- Translation and Interpretation Services – The old adage that “talk is cheap” does not apply to the new global economy and basically any service that can bridge the communication gap is very valuable. This segment grew at 18 percent last year and is a $2.7 billion industry. Budding segments within this industry would include healthcare, website translation and multi-language marketing materials.
- Home Health Care – Even with the current legislation – this segment is expected to expand by an average of 4.9 percent for the next 4 years. Out of hospital care and less expensive alternatives are very appealing to the growing elderly population in America. Physical therapy fields and non-medical home-care hiring are expected to be the leading segments.
- Mobile App Design – It all started with the iPhone and now with the iPad and all the web-enabled devices available – the market for mobile apps has never been greater. Demand will be high for programmers, developers and designers. According to the Dow Jones Venture Source – in the past three years – location based apps have received $656 million.
- Ferryboats and Inland Water Transportation – Yes – believe it or not – the old fashioned ferryboat is making a comeback. Sparked by a rise in urban highway congestion – privately run ferry services as well as tourist excursions are on the increase. A high concentration of success has been found in the Pacific Northwest and the Great Lakes. As part of the 2009 Economic Recovery Act – the production of ferryboats and terminals is expanding. This industry grew about 17 percent last year. One new Coast Guard certified ferryboat that carries 150 passengers costs about $6 million.
While no new business venture is a sure thing – these trends certainly deserve some attention and those who are able to offer complimentary services to these industries are targeting a very real and successful goal. Whatever industry you serve – we at Harvard Business Services, Inc. are happy to serve you!
Announcing Huge Savings on Our Formation Packages
Filed Under: HBS Announcements
Tags: HBS Announcements, News
Harvard Business Services, Inc. is happy to celebrate July as Business Independence Month and we are offering unprecedented savings on all formations in Delaware. Never in our history have we offered such quality and value for such a reduced rate. We want to support the entrepreneurs and business people across America by helping them incorporate in the best state possible – Delaware.
Starting on July 1, 2010 at 9am EST, ALL of our prices on formation packages will be reduced by $30.00! Both the Domestic and International packages are included. Top quality and unsurpassed service have never been cheaper, NOW is the time to file!
- Basic Domestic Service is now $299.00
- Basic International Service is now $420.00
- Standard Domestic Service is now $399.00
- Standard International Service is now $620.00
- Premium Domestic Service is now $569.00
- Premium International Service is now $820.00
To take advantage of these savings online – simply start your order at www.delawareinc.com and enter the discount code “summer” to apply the discount. To apply by phone – just call one of our friendly and knowledgeable incorporation specialists at 800-345-2677 and the discount will be applied to any DE Filing Package. With every filing you will receive the best agent service rate in DE at just $50.00 per year and the best lifetime customer support possible. Please call or visit us online today.
101: Writing a Business Book…Why and How? Part 2
In our series on writing a business book, let’s pick up where we left off last week. I wrote that there are two ways to get your book into print: sell it to a publisher or self-publish. This week, let’s explore finding a publisher. A publisher will pay you an advance against the book’s earnings, edit and print it and distribute your work to bookstores and online booksellers.
In 2002, after two decades of conducting media training workshops, I decided to write a book that expanded on what I taught. I wanted to create a comprehensive take-away for clients that went beyond the 20- to 22-page customized workbook I create for every media training session. Also, I felt a book would validate my expertise to prospective clients and yield more business. Coincidentally, I hoped to create a modest revenue stream. Well, make that a revenue trickle because I knew publishing was growing every more parsimonious. For example, a how-to book on energy saving I co-wrote in the 1970s earned a then-generous $15,000 advance. McGraw-Hill, the nation’s largest business book publisher, bought my proposed media training book in 2003 for a $10,000 advance. Today, just seven years later, that would be considered a generous advance. An agent I interviewed said $5,000 is a typical business book advance now.
Out of the advance, your agent collects a 15 percent commission, up in recent years from the traditional ten percent. And you will need an agent because many publishers no longer accept unsolicited proposals directly from an author. Publishers used to have armies of recent college graduate readers poring through unsolicited material. Today they save money by outsourcing that job agents.)
One way to find an agent is through the web site www.publishersmarketplace.com
There are also some useful books: “2010 Guide to Literary Agents” by Chuck Sambuchino, “Jeff Herman’s Guide to Book Publishers, Editors and Literary Agents 2010” (both $20 on Amazon.com), and “Literary Marketplace, 2010” (this one costs $300 so you might want to look for it in the library). Securing an agent is tough; agents are inundated with proposals and manuscripts. The agent I interviewed requested anonymity because he doesn’t want to receive any more than the 30 proposals he receives every day.
Don’t write your whole book and then go hunting for an agent. It’s better to prepare a proposal; agents and publishers both prefer this. Your proposal should be an essay of up to eight pages explaining the premise of the book, your credentials, a survey of competing books now on the market, and a detailed chapter-by-chapter outline. Also the proposal should have one or two sample chapters; agent and publisher need to know you have the necessary writing skills. Finally describe your promotional campaign for the book: the publicist you intend to hire, the speeches you intend to make, the media you intend to do and the book signings you are going to line up.
Book promotion used to be the publisher’s job, but they’ve outsourced this job, too — to authors. A publisher is much more disposed to buy a book from an author who pledges to hire a competent book publicist than from an author who has no promotional ideas or budget. Publishers and agents can recommend the right publicist, just be aware that a publicist will cost $1,500 to $2,500 a month.
So let’s do the math: Your advance is $5,000. Subtract the agent’s commission of $750 and two months of a publicist at $1,500/month. That leaves you with $1,250. You can’t count on future book sales to change the picture very much. Many books don’t “clear” their advance — that is, they never sell enough copies for the author to earn any royalties over and above the initial advance.
But even with only $1,200, you’re still ahead and you do have a book to drive business to your company or to burnish your image. In effect, the publisher is financing your business promotion effort. Up to a point. It all depends on how many books you’re going to need. In my case I used close to 1,000 over the first two and a half years after publication — some for sales promotion, others as take-aways to participants in training workshops.
Publishers don’t give you an unlimited supply of your own book — you have to buy copies after the first 25 or 50. In my case, McGraw-Hill had a $16.95 price on my media training book and sold me copies at the discounted price of $8.00. Here is how the numbers worked out for me: Advance: $10,000, agent’s commission: $1,500, publicist:$2,000, books purchased: $8,000. I was, in theory, $1,000 in the red. In practice this wasn’t the case because the book yielded new clients and I incorporated the $8.00 book price into my media training fees.
If you have never written a book before, if you don’t really have the time to write one or if you doubt that you have the necessary skills, you may want or need a collaborator (i.e. a ghost writer). Your agent can find one for you. How much will this cost? It varies. Some collaborators take an up-front fee. Some work on a percentage of the advance, some on a percentage of all earnings. In no case should the collaborator receive more than a 50/50 split.
For my media training book, I wrote the proposal and the book myself. I called it “How to Master the Media,” but McGraw-Hill insisted that I re-title it, “How to Make the Most of Every Media Appearance” because they thought my title was too confrontational (It was, by design!). In vain I pointed out that it was impossible to work their mouthful of a title into interviews, while “How to Master the Media” was practically a soundbite in and of itself.
I had three problems with the publisher: the title, which I felt was wimpy, the inability to do running revisions (new behavioral science validated some of my training techniques and I wanted to insert that validation into the book), and the cost of buying my own book. If the book had been selling 500 to 1,000 copies a month in bookstores and on Amazon.com, I would not have been troubled by any of this. But, like most business books, my store, online and e-book sales were modest, so I researched self-publishing. When I discovered that each copy would cost me significantly less than $4.00 and that “print on demand,” meant I could make changes whenever I wanted, I decided to get the rights back from McGraw-Hill, revise the book, put its original title back on it, and self-publish. Next time I’ll write about the self-publishing option.
Raising Capital: Up to $1 Million
Under federal law, any offer of securities must either be registered under the Securities Act of 1933 (the “1933 Act”) or qualify for an exemption from such registration. A registered offering under the 1933 Act is extremely time consuming and expensive, and generally occurs only once a company is thoroughly established. A company’s first registered offering is its initial public offering, or “IPO.” Section 4(2) of the 1933 Act provides an exemption from registration for “transactions by an issuer not involving any public offering.” In order to provide clear guidance on complying with Section 4(2), the Securities and Exchange Commission passed Regulation D under the 1933 Act, which creates three “safe harbors” under Section 4(2). An offering that complies with one of these safe harbors will be deemed not to involve any public offering. Prior to an IPO, companies generally engage in smaller, private offerings using these Regulation D safe harbors.
In this post we discuss the first of the Regulation D safe harbors, Rule 504, which permits an issuer to raise up to $1 million and does not require that investors must meet any net worth or sophistication requirements (“Rule 504”). This post is not intended as legal advice. A company considering raising capital through the sale of securities must contact an attorney to seek guidance. The federal and state securities laws can create enormous liability for improperly conducted offerings, even in the absence of any fraudulent intent on the part of the offeror. The applicable laws and regulations are complicated and often seem arbitrary, so the guidance and assistance of a professional is extremely important.
Who may use Rule 504? Rule 504 is available to any company except one which either has no specific business plan or purpose or has indicated that its business plan is to engage in a merger or acquisition with an unidentified company or companies. The SEC does not want so-called “blank check companies” to use Rule 504.
What conditions must be met in relying on Rule 504? Offerings under Rule 504 generally are subject to very few federally-imposed conditions. The conditions applicable to an offer mainly turn on whether the offer is registered under the laws of the states in which the offering is made. As described below, State registration may give issuers additional freedom or could impose additional restrictions in conducting the offering, depending upon the law of the state(s) at issue. Again, a company must consult with an attorney prior to attempting to conduct an offering to ensure the company is not unduly hampered in its capital raising and to ensure it is complying with applicable law.
State Registered Offerings. If the offering is conducted only in states in which the offering is registered (as discussed below), then there are virtually no federal conditions imposed on the offer. If an offering is registered under state law, however, the permitted offerees and manner of conducting the capital raising activities could be subject to certain substantive limitations and filing requirements that will vary by state. In addition, state law may impose limitations on an investor’s ability to sell or pledge its shares or interests in the company. These state requirements, depending upon the state at issue, could be more onerous or less onerous than the conditions imposed under federal law by non-state registered offerings.
Non-State Registered Offerings. Most states permit a company relying on Rule 504 to conduct its offering largely exempt from state law, subject to certain notice filing requirements. If a company elects to conduct its offering without state registration, the offering of securities cannot be made in that state through any “general solicitation” or “general advertising.” This means that a company cannot seek investors in that state through newspaper or magazine advertisements, television or radio advertisements or other public communications. The best way to avoid general solicitation is to solicit investors with whom the company or its personnel have pre-existing relationships, such as personal or prior business relationships.
How often may a company raise money using Rule 504? A company is not limited to one Rule 504 offering. It can conduct many Rule 504 offerings, or can rely on Rule 504 in one instance and later rely on another Regulation D safe harbor. The general rule is that after a Rule 504 offering is complete, a company cannot begin another round of fundraising in reliance on Rule 504 for six months. A company should consult an attorney, however, to ensure that its offerings are not integrated and treated as one offering, which could cause the company to exceed the $1 million limit imposed on a single Rule 504 offering.
Can investors sell the securities purchased pursuant to a Rule 504 offering? Generally, securities purchased in a private placement are subject to restrictions or limitations on resale. If the offering is registered with one or more states, state law determines how, when and if securities purchased in a Rule 504 offering can be resold. If the offering is not state-registered, the securities are treated as “restricted” securities under the 1933 Act. Resale provisions are available for investors to sell their shares, but such resales are subject to numerous conditions. A company should restrict the ability of investors to resell its securities without the consent of the company in the documents governing the securities’ terms, given that improper resales can cause the company to lose the ability to rely on Rule 504 (or any private offering exemption) and create significant liability for the company.
Our next post will deal with Rule 505 under Regulation D, pursuant to which a company may raise up to $5 million in a single offering.
****Always consult with an attorney before attempting to raise capital.
