The Key Components of Your Indie Author Business Foundation
Welcome back to the 4-part series on crafting your indie author business plan. In the last video, we discussed the 3 big pieces of your author business plan: your business framework, your business model, and your release plan. In that article, I kind of gave an overview of what information you may want to include in your author business plan. If you haven’t read that post, you can click here to head over there and read that one first. But in part 2, we are going to dive deep into the key components of that first part - your business foundation.
What's your author business foundation?
I’ve got lots of information to give you and lots of questions for you to ask yourself in this post so let’s get right to it. In respect to your business plan as an indie author, your first stop is your business foundation. This is the high-level of your author business including your legalities, your mission, and your product line up. Let's dig into the pieces of information to include in this section of your business plan:
The key components of your indie author business foundation:
The first component of your indie author business plan is the basics. Here you will want to decide on your publishing name, whether that’s your given name or a pen name; the legal name of your business or company; and the type of business that is - so for example a sole-proprietorship or LLC.
This is going to look very different depending on how you currently structure your business or how you want to. I'm not a lawyer and can't give you legal advice on what is best for your individual business, but I can share how I've structured my own.
To give you an example. For non-fiction and journals here at Thriving Scribes, my publishing hierarchy looks like this:
Publisher: Brit Poe Media, LLC
Pen Name: Brit P. Poe
For my fiction work, my publisher's name is Court of Fantasy, which is a DBA (doing business as) of my umbrella LLC - Brit Poe Media, LLC.
So the structure looks more like this:
Umbrella Company: Brit Poe Media, LLC
Publisher: Court of Fantasy
Pen Name: Brit Poe
In this section, you’ll also want to pinpoint the purpose of your business as well as your mission statement.
The purpose of Court of Fantasy is to publish and market the written work of Brit Poe, associated pen names, and other fantasy authors.
If you’d like to see an example of a mission statement and core values for an indie author, visit britpoe.com/mission-statement to see how I’ve written mine out.
Your Financial Plan
The second key component is your financial plan. Important things to make note of here are the name of your business bank account and cash flow plan.
So if you are just starting out, you may ask yourself - what start-up costs am I to expect?
Costs & Expenses
This could be things like office supplies, book editing costs, cover design fees, launch expenses, the list goes on. You’ll also want to write out what recurring costs you’ll be paying like web hosting, subscription fees, and the likes.
It's true for indie authors that in the beginning, and for the first few years for many, we are mostly investing in the business and trying to make it to the point we are making a profit. So where is the investment money coming from and how will you apply it?
If you really want to be detailed here, you can outline your budgets for each expense, as well.
In addition to the money that goes out of your business, what is the cash flow plan for money coming in? Are you already making a profit or will that money be applied to helping you get out of the red?
Pro tip: Not sure what I mean when I say cash flow? I recommend checking out the book Profit First by Mike Michalowicz. This is my favorite book on cash flow management and apply his concepts to my own indie author business.
Third, comes the market analysis. So first off you are going to want to list:
- What is it that you write?
- What genre, tropes, and themes appear in your books?
- Who is your ideal reader - this is the imaginary person that you are writing this book for. What do they like/dislike? Is it a man, woman, or child?
- What are their interests?
You will also want to look at your competition. Now I use the word competition lightly here because I believe that as an indie author, your competition can actually be your best ally. I almost like the look at my competitor research as who would I like to collaborate with or connect with. But looking what their books and business practices can uncover so many gold nuggets of information as you are planning your own business. Some things you can include here are:
- What are they writing?
- What is their best-seller?
- How is their brand showing up online? Analyze their website, social media profiles, and book design.
- What press/marketing-activities are they engaging in?
- What is their pricing and release strategy?
- What do their reviews say?
After your market analysis, it's time to change your focus back to your own products. By products, know that I do mean your books. But this could also include other products or services.
First off, you'll want to list:
- What books have you already published?
- Which ones are planned?
- And which ones are a possibility?
- Are there any other streams of income that you plan on creating? This can have a lot to do with your business model - which we will talk about in the next part in this series but for now, you can think about this as it relates to your current or future business.
And now on to book production, knowing what that process looks like for you individually is so useful! Once you know your general workflow from idea to launch, you can begin to streamline things and work much more efficiently.
If you are an author who is brand new and you aren't familiar with your personal book development process, you basically start with a guess here, knowing that it will evolve and become more aligned with your preferences the more that you do it.
The third piece of information to note is the formats in which your books will be made available. This is another topic that is so individual based on the genre you write in and what your initial publishing budget is. Your formats could include all or some of these:
A children's book author may stick to illustrated paperbacks while a new fantasy author may start out publishing in ebook format only and then graduate to paperback and other forms as income comes in.
Next, you'll want to ask yourself - where will you distribute your book? The most common question here with indie authors is whether you will go wide to stay exclusive to Amazon.
If you are exclusive to Amazon you can decide here:
- Will you use Kindle Unlimited for ebooks?
- Will you enable extended distribution through KDP?
If you go wide, you'll need to decide where else you'd like your book to be sold.
- Will you sell your books mainly through online avenues?
- Will you try to get your books in main-stream brick-and-mortar book stores?
- Will you reach out to local indie book stores?
- Do you plan to apply your books to libraries?
Finally, here you'll lay out a pricing strategy.
- What will you price your available formats at?
- Will new releases be priced differently than your backlist?
- Do you plan on utilizing any sales prices from time to time?
- If you aren't doing print-on-demand, will you provide a discount for bulk orders? What does that look like?
Lastly, you'll want to write up your marketing overview. These are the high-level views of the specific strategies you'll use to build your audience and sell your books. So your:
- Your visibility strategy - how will you get more eyeballs on and build awareness about your author brand and books? Things like social media, blogging and SEO, events and conventions can be incorporated here.
- Your list building strategy - an email list is extremely valuable for indie authors. So what will you do and value will you provide to get your ideal readers on your list?
- Your launch strategy - these are the steps or activities you will take to launch a new release.
- And finally is your sales strategies - similar to your launch strategy, only this is more for long term sales in between book launches. When you are working on this part of your business plan, considering your sales funnel as a whole can be helpful in understanding what evergreen marketing strategies you want to use.
How to create an author business plan?
Whew! I know this was a lot of information and your head is probably spinning right now but if you've made it this far - congrats! Thanks for sticking with me and if you want to grab this indie author business plan template, sign up below and I'll send it over.
Next up in this series on indie author business plans, we’ll be covering the different types of indie author business models. You’ll find the links to the other posts in this series below once they release.
Part 2 - The Key Components of Your Indie Author Business Foundation
Part 3 - Business Models For Indie Authors (Coming Soon)
Part 4 - Indie Author Release Strategies (Coming Soon)