Money-Making Business Models For Writers

Tonya D. Price

Contents

Introduction

I. The Power of a Business Model

Chapter 1: How will you make money?

Chapter 2: Creating a great business model

Chapter 3: Common revenue streams

Chapter 4: Case study

II. Developing Your Business Model

Chapter 5: The business model for you

Chapter 6: Evaluating your business model

Chapter 7: Your business model timeframe

Chapter 8: Your launch decision

Chapter 9: Your business model story

Chapter 10: A parting warning

Further Reading

Additional Resources

A Word from Tonya

Ways to Reach Tonya

Tonya’s Fiction

About this Book

About the Author

Praise for Money-Making Business Models

Dedication

Acknowledgments

Notes

Introduction

Every year I poll writers to determine what business area is of interest to authors who are not business savvy. I want to write business books that help them achieve their dreams of being full-time writing entrepreneurs.

I’ve been lucky because every year since I’ve started writing the Business Books for Writers series, readers mentioned one topic much more than the others for that year. Last year the answer was nearly the same from every author I interviewed: they wanted to know how to make more money with their writing.

There are a lot of great marketing books written for writers.

I didn’t want to write a marketing book that would cover the same information other authors had already provided. However, when I asked questions, I learned these writers didn’t want to learn marketing, they wanted to learn to sell more books. Many wanted to make more money doing something they were going to do whether their books sold or not.

In the course of these discussions, writers complained to me about receiving enticing emails advertising free webinars, promising to teach them how to sell their books. In the end, they reported finding themselves pressured to sign up for an expensive course or mentorship relationship they couldn’t afford or didn’t have the time to pursue.

The webinar presenters making these offers are usually not trying to take advantage of writers. Many want to share useful information, but as a writing entrepreneur, you have to understand they are charging you to learn the approach they used to make money. An entrepreneur would say, these presenters are sharing their Business Model. Notice I say, “make money” because many of these business models involve earning income in ways besides selling books.

For example, say a portion of their income comes from teaching online courses. The problem that arises is the approach these authors use might not work for you because, as writers, we are all different.

One of the first things I learned from my writing mentor, Dean Wesley Smith,[1] was, “You are responsible for creating your own writing career.” You handle your writing expenses. You market your books. You build your network to increase business opportunities. You decide whether to take advantage of those opportunities when they arise.

It is a daunting task that many authors are not prepared to undertake. We just want to write our novels!

Writers have various skill levels. Some of us write slow. Some of us write fast. Some of us write short stories or novels or non-fiction books. We sell to a variety of age groups, to a wide range of markets, and have bank account balances that range from zero to thousands of dollars.

No single approach for making money from our writing works for all of us. What these successful authors have discovered is that you make money when you have an approach that works for you. Base your approach on where you are on your writer’s journey, how much money you have to reinvest in growing reader awareness of your work, the amount of time you have to put into selling your books, the size of your readership, and the extent of your network.

The key to success is understanding which business model matches where you are in your writing career and what your aspirations are for your business.

You can earn money with your writing with no money in your bank account. Most writers start out this way. But as that bank account grows, you will have the funds to begin to explore additional avenues to make money outside of writing stories. That is assuming you want to! Just because other authors have more than one way to sell their books doesn’t mean you have to use their business model.

The way a new writing entrepreneur makes money is different from the way a long-time writing entrepreneur makes money because a new writer is running a start-up business. They are exploring and testing their business model. Start-up writers need to verify which group or groups of readers will buy their books. They do this by testing their initial assumptions behind selling their book.

For example, they need to determine if their YA novel is most popular among middle school, high school, college students, thirty-somethings, historical readers, or some other, unexpected group of readers.

What you will learn in this book

This is an introduction to the topic of business models. The goal is to provide you with information on the use of business models to gain insight into how to utilize this important tool to create a business that fits your company’s revenue goals.

The Business Books for Writers series is written so that an author can read the books in a weekend because writers, and especially indie publishers, are very busy.

Business models are developed over time. This book will teach you what a business model is, how to create one, and how to use one to make more money from your writing.

We will cover:

- Why successful entrepreneurs have a business plan and a business model.

- Business models you can use.

- New ways to grow your business over time.

- How to spot new business opportunities you were not equipped to handle earlier in your career.

- How to create a unique business model that will make you more money.

REMEMBER:

Technology is constantly changing. The moment you quit fine-tuning your business model is the moment your sales will start to stagnate and decline.

What you will not learn in this book

This book is not about how to write a business plan. Many articles use business plan and business model as if they were the same thing. They are not. If you do not have a business plan, or are unfamiliar with them, I recommend you get The Writer’s Business Plan [2] which gives you step by step instructions for creating a customized business plan for your business in a weekend.

A business plan defines what you want your business to be and the goals you have for your business.

A business model is the strategy you will use to make money.

A note on using this book

This book was written to explain to writers without experience running their own companies how to grow a writing business using business models. First, we will outline what a business model is and is not. Then we will review the Sears Roebuck Company to analyze how a retail company developed and eliminated products over a long period of time to stay profitable. In addition, I use my own indie-publishing company, Magnolia Lane Press, as an example of a writer’s business model.

Several beta readers asked for a step by step guide to developing a business model, so I created a packet of worksheets you can download at: https://www.businessbooksforwriters.com/Business-Model-Worksheets.

These worksheets are designed to help you develop, evaluate, and implement a business model that fits your company at this point in time. You can use the worksheets for any future changes you might make to your business model.

Website Resources

I will continue to add supplements and information on the Money-Making Business Model for Writers webpage over time. Subscribe to The Writing Entrepreneur newsletter to get notices of new articles of interest to readers of this book.

Links

All links found in Money-Making Business Models For Writers are kept current on the Business Books For Writers web site for easy access and later use.

Corrections to the book

Despite our best efforts, occasionally a typo gets by our editors. This is especially a problem for readers if the typo is in a URL or if a site changes the URL of a link included in the book. If you find a link that doesn’t work, check our book update page where all corrections are listed.

Let’s get started.

In Chapter 1 you will learn how a business model will make you money, what is a revenue stream and how a business can survive by altering its business model.

Part I

The Power of a Business Model

Chapter 1: How will you make money?

A business model will make you money. Michael Lewis in his book, The New, New Thing[1], says, “All it (a business model) really meant was how you planned to make money.”

Carol Kopp in her article, “What is a Business Model?” on Investopedia[2] defines a business model as “a company’s plan for making a profit. It identifies the products or services the business will sell, the target market it has identified and the expenses it anticipates.” I would add that it identifies the expenses that the company anticipates will arise as the result of the company developing, implementing and delivering a product or service.

For a writer, the product may be a short story or book. However, it could also be a non-fiction book, an online fiction writing course or the licensing of a character’s favorite quote on a coffee mug.

A writer’s business model meets the following conditions:

1. A writer’s business model must create value for readers.

2. A writer’s business model must make money for the writer’s company by having the readers pay money for the value they receive.

3. A writer’s business model makes use of the resources available to the writer and may add to them.

4. A writer’s business model works best if unique.

5. A writer’s business partners must benefit from the business model.

Other books list more or fewer characteristics of a business model. Sometimes a business model generates additional benefits to the writer’s business as well, but the criteria listed above are essential for a profitable business model.

I was an executive at a number of Internet startups in the ’90s. Every company used a business model designed to maximize site visitors. The businesses then charged other companies to advertise on their site. The more visitors a site attracted, the higher the advertising fees.

After a while, investors who gave these startup companies millions of dollars realized that this website advertising business model was not going to earn them millions back. These venture capitalists (VC’s) funded the start of the Internet, but some lost money on the deal. The VCs’ business model of funding Internet companies in exchange for a percentage of the profits made on the advertising model fell out of favor.

In this book, I will return several times to the fact that a business model must deliver value to your readers.

At the end of this chapter we will examine the Sears business model, because Sears[3] is a good illustration of how a company introduces different business models over time.

Every business model used by Sears sought to deliver value to their customers. The initial value Sears delivered to their customers was ease of acquiring goods. As society, technology, and the economy changed, Sears tried to shift their business model to accommodate these changes. Over time Sears introduced complexity into the business model.

Sears’ initial business model was to mail rural customers a catalog and have them place orders through the mail. Farmers didn’t have to waste valuable time traveling to a distant town.

By the 1990s, the Sears business model contained many revenue streams. When the company began to lose money they adjusted by selling off some of their products and modifying their business model to concentrate on their core business.

TIP:

A writer’s business model must make money by providing value to readers.

As you read this book, think about the value that your writing business delivers to your readers (customers).

A business model is composed of revenue streams

This book differentiates between a business model (which encompasses all the products and services the writer offers) from a revenue stream.

A revenue stream is a product or service that produces income for the writer. An example will make this easier to understand.

When a writer sells short stories to magazines, the money they obtain is a revenue stream. When the writer also sells novels to traditional publishing houses, they get income from two revenue streams (the short story sales and the novel sales, since they are selling to two different audiences).

If the author starts self-publishing and selling their work, they have three revenue streams (short story sales to magazines, novel sales to traditional publishers, and indie-book sales). If the writer gets paid to speak at conferences, they now have added a fourth revenue stream – speaking engagements.

The writing entrepreneur has four revenue streams that comprise one business model. Each time a new revenue stream is added, a new business model is created because each new selling opportunity (or channel) impacts every aspect of the writer’s business. We will discuss this in greater detail later.

Many writers follow a similar path when they start selling their work. They write a book. They have a decision to make.

Will they get an agent, have the agent try to sell the book to an editor in hopes their book is a New York Times best seller? Will they write a book and self-publish it, doing all aspects of producing their books? (This is getting easier with programs like Vellum.) Or will they write a book and put together a team to outsource the production of their book, allowing them time to market their book and balance managing the team, doing the marketing, and writing the next book?

These decisions are not easy ones to make. Each choice involves risks that might result in no sales or might hurt a writer’s current sale figures. Whichever approach the writer takes, they have chosen a business model whether they know it or not.

By recognizing business models and learning how to use them and develop them, the writer learns how to grow their income. As long as you are making money writing, you are using a business model, even if it as simple as my friend who writes short stories and sells them to top genre magazines.

That is a perfectly fine business model. You can even make a living from such a model. If, however, after a few years you decide you want to increase the amount of money you are making, then you can go back and take a look at your business model and determine how you can increase your sales. You can add a new revenue stream, and start providing your readers with something that provides value for them.

Sears, Roebuck and Company

I could give an example of a business model using a publishing company, but I’m going to ask you to bear with me. Sears has been in business for a long time. Sears illustrates how business models make you money and can lose you money.

Initial Sears Business Model 1

Sears was founded as a catalog business. In my grandmother’s day, once a month a thick Sears catalog would come in the mail. Living in a hollow located in the Appalachian part of Ohio along The River (okay, the Ohio River to those of you not from the Ohio valley), my grandmother didn’t have a department store to go to when she needed household goods or appliances. There was a local general store, but she couldn’t find everything she needed there.

She had an option though: she could order almost anything from a Sears catalog. My husband’s grandparents in Delaware ordered their house from a Sears catalog! Sears was so successful with this mail order catalog model that they made history with the amount of money they made when they went public in 1906.

Sears Business Model 2

In 1925 Sears changed their business model. Rather than sell items through the catalog, they opened up brick and mortar stores. For many years, my mother had the option of ordering through the Sears catalog or going to the downtown Dayton, Ohio, store.

Over time it became expensive to put out those huge Sears catalogs. Post-World War II housewives and their husbands liked driving in their new cars to stores where they could browse a large variety of goods. The popularity of the Sears catalogs declined. Sears eventually closed down their mail order catalog business to cut costs. The loss of this revenue stream resulted in a change in their business model.

There was a population shift in the U.S. as rural farmers moved to cities and started to work in factories. Suburbs sprang up around the country. The economy boomed. GIs married and bought houses. They needed appliances for their houses. The consumer market grew.

Sears changes their business model, adding new revenue streams

Sears grew, too! They built shopping malls. They got into the insurance business. They created national brands: Kenmore, Craftsman, Silverstone, and others. They entered into real estate. They even started Prodigy with IBM in 1984 and launched the Discover card.

Each new industry Sears entered was a new revenue stream that made money. Each new revenue stream was also a new way to lose money.

Sears began to lose money.

More Sears business model changes

Sears tried to recover by selling off its extensive businesses. Each time they eliminated a business enterprise from the portfolio of products and services, they created a new business model.

The current Sears business model

Today the Sears business model is composed of selling goods and services through their retail stores and on line. To stay in business, they have had to closed down many stores, but they are still selling products.

Sears started out selling good through a mail order catalog. Their mail order expertise can translate well into email marketing and online sales. They have survived many business model changes. Don’t count this American icon out too early.

The Sears business model was developed over time. Their model changed many times. Some new ways of selling their products were added, many were dropped.

Writers have business models, too

The writers who are making six-figure incomes have followed a path not unlike Sears. They started with a simple business model. They tested and altered that model until they were able to increase the amount of money they earned. Then, after a while they had the knowledge, connections, and money to branch out into other areas and make more money. In Chapter 2 you will learn about the elements of a writer’s business model, and in Chapter 3 we will examine common business models that writers use to grow their writing businesses.

In Chapter 2 you will learn what you need to create a great business model.

Chapter 2: Creating a great business model

There are many business models in use by writers. In Chapter 3 we will examine a wide variety popular with authors. First though, let’s take a look at how to create a business model. Understanding the basics of a business model will help you when you are ready to set up a custom business model for your company.

This chapter provides a high-level overview of the elements of a business model. If after reading this chapter you would like to learn about the elements of a business model in more depth than covered in this book, study the approach made popular by Alexander Osterwalder and Yves Pigneur in their book, Business Model Generation[1]. The matrix they developed is useful in verifying all the elements of a business model have been identified and fulfilled.

I like to break the elements of a business model into three segments. There are as many ways to organize the elements of a business model as there are books on business models. For this book we will look at the nine areas within these three categories:

- Evaluate what you know about your readers

- Evaluate your resources

- Evaluate your finances

A writer can make money in many different ways. They start off though by writing something, often a short story or a book. However, authors can make money giving talks at conferences, selling audio books, or creating podcasts and getting advertising contracts.

We will examine all the ways writers can sell things besides stories later, but for this chapter we will focus on short stories and novels. Realize writers can sell many things besides their writing. Even when writers broaden what they sell, they still need to address these nine areas when evaluating a business model.

Step 1: Evaluate what you know about your readers:

1. Describe the type of reader most interested in the books you write.

2. Describe readers who buy your books.

3. List how your readers learn about your books.

4. Specify the benefits your readers will gain.

Step 2: Evaluate your resources:

1. What resources will you need to implement your business model?

2. What tasks do you need to complete to implement your business model?

3. Who are the professionals or potential partners that can help you and how will you motivate them to participate in your business model?

Step 3: Evaluate the model’s financing:

1. What are the revenue streams (different ways you will earn income) that your business model will produce as a result of using your business model?

2. What will it cost to construct and set up your business model?

Let’s examine each of these nine areas.

Step 1: Find readers who are looking for the type of books you write

Perhaps you write mystery books that you self-publish. This provides a single source of income from one set of readers. If you also derive income from romance books, that is a second revenue stream since you are providing value to two types of readers. The better you tailor a revenue stream to each of the types of readers within your business model, the more money you can earn.

Angela Ackerman wrote a good article, “How Authors Can Find Their Ideal Reading Audience,” that provides information on how to find your readers.

Sell your books in new venues

Readers can obtain books in many ways. They can buy from numerous online retailers or in local book stores. Many authors have started selling their books off of their own websites. Readers can buy an author’s books at conferences or in used bookstores. The more places readers can find your books, the larger the number of people that potentially could buy your books since most readers repeatedly purchase books at the same place.

Always be on the lookout for new places to sell your books to capture readers who may not have seen your work before.

Provide new benefits to your readers

One way to enhance the benefits you provide your readers is to offer them more than a great story. For example, writers who do Kickstarter projects offer incentives to readers such as autographed copies of their books, or a character in a future book named after the reader. You can find some very creative incentives on crowdfunded sites like Kickstarter. Consider if these benefits are potential new, ongoing revenue streams for your business.

WMG Publishing runs a Kickstarter project every year that allows readers to sign up to get all their books they publish for the year. You can read the post Dean Wesley Smith wrote on his experience for his Kickstarter Make 100 program.

Connect with your readers in a new way

There are many ways to connect with your readers. Newsletters and websites offer readers the latest information on book releases and allow readers to learn more about you, the author. Book signings, speaking engagements, etc., allow readers to meet you in person. Podcasts can provide a personal touch without having to travel around the world. When you meet your followers, don’t forget to ask them what they like about your books. This is also an ideal time to ask their opinion about any new revenue streams you are considering or changes in your business model.

Step 2: What resources will you need to implement your business model?

Once you determine what you are selling, which readers will want to buy what you are selling, and where you will sell your books, focus on the resources required to implement your business model.

For example, selling to traditional publishers is a simple and very legitimate business model. You will need a computer, an internet connection, and a social media presence since even traditional publishers expect you to be involved in marketing your books.

Will you self-publish your books? This requires more resources but provides greater control over your rights to your work. You will need a computer, the knowledge of how to create an attractive cover, how to format the book interior, a copy editor, and a proofreader. You will also need to know how to upload your books to online retailers, and how to market your book online.

Every time you add a new way of making money from your writing, you need to think about what additional activities will you need to engage in to support your new approach.

For example, if you start accepting offers to speak at writer conferences, you will need to travel more. You will have less time to write.

If you start a monthly newsletter offering advice on how writers can add to their writing skills, you will need to devote time to turning out your newsletter on a regular basis. If you offer online classes, will you provide a chat room and weekly live advice sessions?

REMEMBER:

Calculate all associated costs related to any new revenue streams you consider.

You will need partners

Every business model involves you, the writing entrepreneur, and other people who help your business model succeed. Let’s say your business model is to write books and send them to your agent to sell to editors. The agent is a professional who is part of your business model and therefore a partner in your writing business.

Maybe you are an indie-publisher. You may have a graphic artist who does your covers. A copy editor who goes over your manuscript. A proofreader, beta readers who provide testimonials, an accountant to help with your taxes, and an IP lawyer to review contracts for you.

You can find reasonably priced cover designers, copy editors and proofreaders on gig sites such as Fiverr.com. I prefer to use accountants and lawyers in my home town where I can meet them in person.

Professionals charge for their time. Make sure before you move to a new business model you calculate the additional cost of using these professionals.

Make money, don’t lose money

When you create a business model for your business, always make sure that once you have the model up and running you will have more money coming in than going out. You can lose money for a few years as you ramp up. That is what I did, but eventually you have to break even and start turning a profit.

Businesses that can’t make a profit fail. Businesses do not fail quickly. They often take a long time to die, but if you can’t make money, your business will not survive. Always verify when you evaluate a new business model that you will bring in more money than you spend on creating and selling your books or other products.

Step 3: What are your potential revenue streams?

Revenue streams are the different ways you earn income for each type of reader (for short stories, books, screenplays, etc.) and products (for online classes, podcast sponsors and advertisers, speaking engagements, T-shirts based on characters, futuristic games you invent for science fiction fans, etc.)

Remember the writer whose business model is to only write short stories and sell them to one anthology publisher? She doesn’t expect to get rich with one revenue stream, but she enjoys the lifestyle and can afford to keep her business model simple.

If, in addition to writing short stories, you write novels and have an agent (one partner) who sells your book to an editor (a second partner), you have two revenue streams (the short story sales to magazines and the book sales to a publisher). If you sell directly to an editor, you avoid the need to have an agent. You can reduce your costs because you have eliminated one partner in your business model. If you start writing non-fiction books, you have a third revenue stream.

Let’s take a short quiz. Which of the following are revenue streams for a writer?

- E-books

- Print books

- Audio books

- Online courses

- Conference speaking engagements

- T-shirts based on a popular character

- Podcast advertising

- Sponsorships

- Copy Editing

- Proof reading

- Workshops

Writers could use any of these revenue streams. Some authors use all of these ways of making money, but don’t try to introduce all of them at the same time!

Joanne Penn writes often on her website about the different revenue streams she has developed for her writing business over time. Her post about the ten years she has had a podcast revenue stream is a fascinating study of how a business model evolves over time. “10 Years Of The Creative Penn Podcast. 3.2 Million Downloads In 215 Countries” by Joanne Penn, March 18, 2019. https://www.thecreativepenn.com/2019/03/18/10-years-the-creative-penn-podcast/

Writers are creative people. We don’t have problems coming up with new ideas. What gets writers in trouble is too many ideas. If you are not careful and pursue every option for making money you can think of without having a well thought out business model, your writing business could fail because you are no longer writing.

In Chapter 3 we will take a look at common revenue streams for writers.

Chapter 3: Common revenue streams

Many authors offer expensive courses and programs that describe their business model. Teaching you their business model becomes a revenue stream that makes up part of their business model.

Many sincerely want to help you, while making money for themselves. Remember, you do not have to copy their business model in order to become a financially successful author. However, you can learn a lot from studying other writers’ business models. You can gain ideas to incorporate into your own business model, one that works for you.

If you study authors making salaries of over a million dollars a year, you will notice most have been writing for years. A business needs time to develop the different revenue streams required to generate a high level of sales.

Let’s look at how authors build their business model over time.

The single revenue stream business model

As was mentioned earlier, many fiction writers start out writing short stories. If you write and sell short stories, send them to magazines and anthologies, and make money from your sales, you have a single revenue stream business model.

Below are a few ways as a writer you can earn money by just writing your stories and having a website.

Write more books

Writing more stories and selling more stories to magazines and anthologies than you do now will increase your income. This is within your control, but you will hit a window eventually where you don’t have time to write more stories. This is why writers are experimenting with dictation apps to increase the number of words per hour they write. The faster they can write, the more books they produce and the more money they can make.

Self-publishing

If you are a traditionally published author, consider self-publishing short stories or books as a new revenue stream. Self-published (or indie-published books where you outsource your covers, copy editing, etc., to sub-contractors) are on the market indefinitely. While it takes longer for them to make money, the total amount of money earned on your books over time can exceed what you get if you sell them to traditionally published markets where they sit on a retailer’s shelf or online for a short time and then are withdrawn.

Resell your reprints, stories, and books

Smart authors will resubmit bought stories to short story markets that take reprints after the rights to the story revert back to the author.[1] They also post previously sold stories to services like Bundle Rabbit, where the stories are available to editors who can pick and choose posted stories (including reprints) to use in their anthologies.

Concentrate on one online retailer

Many writers focus on one market and publish all their books there. If you follow this approach, you need to:

- Learn the technical details of working with the online retailer.

- Learn how to get your books at the top of their best-selling lists.

- Learn the most effective advertising techniques on their platform.

- Learn as much about your chosen online retailer’s process as you can.

If you become an expert on a single online retailer, especially if they are the one used by almost all writers, you can always write and self-publish a book describing how to sell there!

Patronage

A popular trend is to put a notice on your website asking your readers to help fund your business by sponsoring your work. You have probably seen this on a writer blog. “If you find this information useful, please help me continue to supply this information by paying me for my time.”

Your readers aren’t required to pay you to in order to read your blog, but you ask them to anyway.

A number of businesses sponsor author websites as part of their outreach program. Getting a site sponsor who pays you every month for advertising is the oldest internet business revenue stream we have – because it works! This approach requires you to have a loyal following, usually acquired through a blog that you update on a regular basis.

Interested in using patronage as a revenue source? Visit https://www.patreon.com/ to learn more.

Publish wide

This revenue stream requires you to publish on every online retailer you can find. This is often called “going wide.” You make it easy for readers to buy your books no matter where they shop. Readers tend to buy all their books in one place. If your self-published books are found on many online retail outlets, you will reach readers that you would miss if your book is not on the bookselling sites they frequent.

Draft2Digital is a popular way to publish your books with many different online retailers. Draft2Digital.com

Multi-revenue stream business models for writers

Early in my career I became an executive in an online business. In the early days of the Internet, online entrepreneurs followed the same business model: attract as many people as you could to your website and sell advertising space.

Writing entrepreneurs can follow the example of those early Internet entrepreneurs when looking for ways to expand their business model by asking themselves what is my business? Am I writer or an information provider?

Take a look at your company. When you think in broader terms, such as defining yourself as an information provider, it is easier to come up with more revenue streams besides writing stories.

For example, early indie-publishers realized they had developed into experts on how to self-publish books. They had information that beginning writers and non-technical writers wanted to learn.

Writers are creative. There is no reason for an author to sell only words. They have the skills, and can learn to develop websites, to create and sell covers, etc.

Writers are communicators. They are very good at painting a picture in the minds of readers. This is a skill that allows them to explain things in a clear and concise manner. They are natural teachers. They can teach courses. They can create podcasts.

Writers are editors and can offer copy-editing or proof-reading services.

Entertainers. Creatives. Communicators. Teachers. Editors. Writers have lots of skills that can be used to create revenue streams and once they learn those new skills they can write books to teach others how to do those things.

Sounds great, right? Sounds like the world is the writer’s oyster.

Only one thing kept writers from million-dollar success.

Business skills.

Writers that knew how to run a business could create multiple revenue streams and build not just a business, but a corporation.

Corporations make a lot of money. If you want to achieve a seven-or eight-figure income, start reading business books and attend business conferences that focus on the business side of publishing. Learning business skills is the key to financial freedom for writers. You have all the other great skills, but if you want to maximize your income potential from your writing, you must gain business skills.

Knowing how to run a business is crucial to realizing your income goals as a writer.

A word of caution.

Not everyone wants to spend their time pursuing the goal of making as much money as they can. Having worked for a number of entrepreneurs making a million dollars or more a year, I can tell you they work long hours and deal with a tremendous amount of stress while building their companies.

A business earning the owner a seven-or eight-figure income requires the entrepreneur to make trade-offs. How many hours a week will you work? How much money will you put back into the business? How much of your writing time will you give up managing your business?

In my first business plan, I set a goal of making a six-figure income within ten years. Some might say that is too long a time frame, but it was a comfortable timeframe for me. Each writing entrepreneur has to decide what their personal goal is and how to achieve it. For me, I wanted time with my kids and someday, I hope, grandchildren.

As a writer you have many of the skills required to create multiple revenue streams for yourself. If you don’t have the skills required to become a millionaire writer right now, you have the skills to learn them. But before you alter your business model to include a new way of making money, factor in the lifestyle change required. Then if you still want to add a new revenue stream, go for it.

Whatever you decide, know that writers, even traditionally published authors, are no longer dependent on traditional publishing houses for all of their income. You have choices. You can always add new revenue streams. You are limited only by your imagination, and writers have plenty of that resource!

Before you start creating your business model, let’s take a look at common multi-revenue business models used by writing entrepreneurs who are making million-dollar-a-year salaries.

Common multi-revenue stream business models for writers

Fiction Writing Business Models

For writers who want to write fiction and not get into teaching or traveling, you can increase your income from spin-off services from your writing. Here are some examples:

Website and/or Blog Advertising

Readers like to meet and get to know their favorite author. You can’t sell your stories if readers don’t know your stories are for sale. For these reasons, even traditional publishers will have writers create a website. That website is a potential goldmine of supplemental income for you.

First, if you get enough readers, you approach other companies who might sell to your niche and offer them advertising space on your website or in your books. Do you write horror stories? Halloween costume retailers might love your audience. What about romance novels? Do your readers like lingerie or chocolate or wine? With some imagination and a good-size audience, you can turn that site into cash in your bank account.

Affiliate income

Do you have a writing app that you love and tell all your friends about? Does the company that puts out that app have an affiliate program? Do you sell your indie-published books on an online retailer with an affiliate program?

Affiliate programs can yield a nice supplemental income, too. Sign up. Get your affiliate ID and look for ways to let your readers know that if they like your recommendations, they can help support you by using your affiliate link. Don’t hide the fact you act as an affiliate. Readers are often happy to help you out and you can earn some extra cash.

Do you have a “best list” on your blog? Maybe you write an annual blog post on “the best fantasy books of the year.” Use your affiliate link on each book. If your readers click on the book and end up buying it, you make money.

If you have built up a large readership following using an email list or some other technique, you can make a nice income from affiliate programs.

Don’t ignore the potential of this revenue stream.

Derek Doepler of Book Best Seller Secrets has an affiliate revenue stream. He often contacts his email list advertising other author’s books with a disclosure announcement that he is an affiliate. He includes a Material Connection Disclosure Announcement stating that you should assume he may be compensated if you make a purchase based on his recommendation to you.

Brand Income

Writers who have established a strong brand can make money by selling items that play off of popular characters or beautiful covers from the author’s books.

Create a T-shirt or coffee mug with a saying that comes from your book. Do your fantasy or SF characters play a game you invented for your book? Sell that game. If this idea appeals to you, then learn about licensing. As the writer, you own the licensing rights to characters, etc., that come from your book.

If you didn’t create your own cover, have a lawyer check your contract and verify who owns the art work as you don’t want to violate your cover designer’s license!

Steven King has a strong brand. Do a google search for “Steven King t-shirts” and you will see many examples of an author licensing characters or novel titles as a revenue source.

TIP:

Never give up your rights to have your own author website.

Never let a traditional publisher deny you the right to create a personal author website. You have lost a number of potential revenue streams if you don’t have your own website and blog.

Don’t get me wrong: your traditional publisher’s site will benefit you in growing your brand, but insist on retaining the right to have your own site as well.

REMEMBER:

Always have an Intellectual Property (IP) lawyer review all publisher agreements before signing a contract.

You don’t want to give up the rights to your work forever. Teach yourself about author rights. Learn about licensing rights. These represent potential revenue streams for your business. Make sure you are getting paid for any rights another company pays you to acquire. Verify that the contract states when your rights revert back to you. I can’t say this too many times: always have a lawyer familiar with author rights and licensing review your contracts.

Bundles

Bundles are a popular way to increase a writer’s income. Services like BundleRabbit.com and PublishDrive make bundling easy.

You can either enter a bundle where one of your books is sold as part of a package of books bought together, or if you have written lots of books, you can bundle them yourself.

Do you have three series, with three books in each series? For one price, let your new, die-hard fans get all the books in one purchase. You can even upload your reprinted and short stories that haven’t sold. Editors looking for content may find your story an ideal fit for their anthology.

If someone else is putting the bundle together, check what other books are in the bundle. A cozy in an erotica bundle might not help the author brand you are trying to create. (Thanks to the writer/editor Leah Cutter for this tip!)

Business Books For Writers participates in a yearly business book bundle for writers that runs two to three weeks.) If you are interested in receiving a notice of when the book bundle is released (usually in April or May) sign up for The Writer’s Entrepreneur newsletter to get the announcement of when the bundle is running. (https://www.businessbooksforwriters.com/thewritingentrepreneur/)

Selling to schools, clubs, or companies

I know a great writer, David Hendrickson, who wrote and self-published a hockey book that a student of his read and loved. The student told his teachers about the book, and in the end, the book was put on the school’s required reading list. That is a lot of copies of a self-published book to sell!

Did you write a fantasy book that takes place in a secret garden? Talk to your garden club about whether they would like to buy the book for their members. Did you write a military SF book based on your military experience? Talk to your veteran’s group about buying in bulk for their members.

Before you embark on selling your book to organizations, I would recommend you buy the non-fiction book How to Get Your Book Into Schools and Double Your Income With Volume Sales, by David Hendrickson.[2] David’s book discusses what you need to know and how to avoid problems when you sell to schools.

Selling to organizations is a great way to make money, but if you don’t research how to do it right, you could lose more than you make. https://www.hendricksonwriter.com/book/how-to-get-your-book-into-schools-and-double-your-income-with-volume-sales/

Non-fiction books

If you are a fiction writer, not a non-fiction writer, I encourage you to read this section. One way to make an eight-figure income is to write non-fiction books. I used to think that people who wrote non-fiction books for writers were just trying to take advantage of beginning writers. Then I had the experience of having writers ask me to share my business knowledge with them.

I wasn’t ready to start writing non-fiction. I had a lot of fiction books I wanted to write. However, I had learned how to write from writers willing to give up some of their time to teach me, so I decided it was only fair I pay forward to other authors. I didn’t expect to make money writing these books; my goal was to avoid losing money.

If you have an area of expertise that other people would like to learn, consider writing a non-fiction book. Maybe you have mastered a writing tool, like Scrivener, or are an expert using the to-do software, Todoist. Whatever the skill, you can share your knowledge through writing a non-fiction book. You will provide others with something they value and create a new revenue stream for your business model.

If you are interested in learning more about writing non-fiction, you can visit the Nonfiction Authors Association. https://nonfictionauthorsassociation.com/

Speaking engagements

If you decide to write a non-fiction book with the idea you will then go back to writing fiction, prepare for your local writing group asking you to speak on your non-fiction book. If you do a good job, readers will tell their friends about your book, and you could find yourself doing multiple speaking engagements. Set a fee (I started out at $25) and as the groups get larger, start asking for more money.

If you enjoy public speaking, check out the National Speaking Association (NPS) which has classes, certifications, and resources to help you build this lucrative revenue source. NSAspeaker.org

Conference Appearances

Many local and regional conferences accept workshop or conference speaker proposals. You don’t make money, but you can save money if it is a conference you had planned to attend. You can often get the conference fee waived. As more people learn about your talk, expect to get an offer to fly you to a regional or national conference and have all your expenses covered. You have reached the top tier when the conference pays you a speaker fee in addition to covering your expenses.

You can easily develop the talk you give into an interactive workshop, where participants actually get hands-on experience in what you are teaching.

If you are getting rave reviews, you may receive so many requests that you don’t have much writing time.

Jane Friedman’s business model includes several revenue streams. One is speaking. She includes information on her speaking career on her website. https://www.janefriedman.com/meet-me/

On-line courses

Create an online course. Now you can give that popular talk to a lot of people without having to do the traveling.

Subscription Membership programs

You might find you enjoy teaching online and your fiction book sales have taken a steep jump upward. You can create a membership program. For a fee, students get entrance to a private social media group. You can start a subscription program where writers pay for your newsletter, such as the Hot Sheet that Jane Friedman publishes.

Other options you can include in your subscription program:

- One-on-one coaching.

- Bundle your books for a reduced fee.

- Throw in free copies of books you write only for subscribers.

- Publish a collection of your short stories once a year only for subscribers.

Just remember when you are putting together a subscription program, you have to provide your members real value. Otherwise they won’t stick around long, and your subscription sales will decline.

Many authors who have online courses, host them on Teachable. At $999 it isn’t inexpensive, but it is reliable and offers many nice features. Teachable.com. Mark Dawson has many of his courses for authors on Teachable, including his Self Publishing 101 course.

https://selfpublishingformula.com/courses/

The Secret to Making eight-figure income as an author

We have covered the most common business models for writers. I’m sure you have heard of ones that aren’t listed here. Great! Take a hard look at those models. The most lucrative business models are often those no one else is using.

If you can invent a new revenue stream that readers love and no one else has thought of and you implement it first, you have a chance to make a lot of money.

Oh yes, there is one other requirement to making an eight-figure income no writer should forget: you have to write a novel that everyone loves. Your readers must tell their friends to buy your book. They must love the book so much they demand their kids and their book club have to read the book. And one last thing: everyone must know where they can buy your book.

In Chapter 4 we will take a look at a case Study of Magnolia Lane Press reviews how one author added new revenue streams

Chapter 4: Case study

Magnolia Lane Press

It takes time to develop a complicated business model of multiple-revenue streams. In this chapter I will show how a writing entrepreneur can add multiple revenue streams as their business matures.

Not every new writing entrepreneur will follow this time line. If a well-known indie-publisher has a loyal following of thousands of readers and an enviable bank account, they can handle a more complicated business model sooner than an unpublished, unknown writer.

The evolution of a business model from years 1-3

Years 1-2

When I left the high-tech industry to start writing full-time, I was a short story fiction writer. I intended to start up a company with a simple, single revenue business model. I would make money from writing short stories and selling them to print magazines, online magazines, or anthologies.

A few months before I started the business, I attended a short story workshop where authors who knew me started asking for business advice. I realized they had a need – they wanted to learn to run a business. I had the business knowledge to help them fulfill that need.

What I lacked was the resources of knowledge to self-publish books.

I had identified how to provide value to potential readers of these books — write non-fiction books that shared my business knowledge that other writers lacked. I knew the writers who talked to me were willing to pay for my books. I had been writing for some time and had confidence in my ability to express topics in a clear manner. I had potential partners. I knew how to get partners to help me and how to provide value to those partners.

My potential partners included:

- A writers’ group that I had belonged to for years that had people who could teach me how to self-publish my books. I exchanged business advice for self-publishing advice.

- Three writer friends who were excellent editors who agreed to act as beta readers for my first book. I provided them value by exchanging my beta reading their books for them beta reading my book.

- Access to Fiverr.com where I found a wonderful professional graphic designer and also a professional proof reader.

- A professional copy editor for my books.

- A professional interior book designer who was referred to me by a non-fiction writer I met at a workshop. The book designer formatted the book and created the e-book files I needed to upload to the online retailer. They also offered to create the print version of my book. Great! A second revenue stream from having written one book!

- I met a voice actor at a workshop who had a voice studio. For a fee he produced the audio book for my non-fiction book. I now had three revenue streams. My readers could get the information in the book in the way they most valued.

- When I told a long-time writing mentor I planned to write a book for writers on how to create a business plan, she offered me an opportunity to participate in her upcoming business book bundle for writers. This brought me a fourth revenue stream.

I needed the following resources to get started:

- The knowledge of how to create an ebook, print book, and audio book – this was provided by the interior book designer.

- The skill to create a book cover for an ebook and a print book – this was provided by my graphic designer.

- The time to write the book. I write full-time, so my schedule was my own to manage.

- The money to run a publishing business for five years on a tight budget. I had saved money to fund my new business.

- The business background to organize and run a start-up company. This was the third company I had started and the previous two had been successful.

- The tech background as a programmer to learn any new technology I needed to master.

- A web design background and familiarity with WordPress to set up a company website.

- The determination to keep going no matter how impossible the task seemed at the time.

DON’T GET DISCOURAGED:

Don’t get discouraged if you lack the skills to build your business. Take a look at what you do know and teach yourself new skills or pay someone who has those skills to do them for you.

Writer’s have to learn new things all the time. You know how to learn and that is the key skill to success.

I created a unique business model for Magnolia Lane Press. I would write fiction short stories to sell to magazines and anthologies, and non-fiction business books written for writers who wanted to start a writing business but lacked entrepreneurial skills. I would price the books to earn enough money to justify the time I spent writing them. I wanted the books to provide value to readers by teaching a new business skill that readers would use to build their companies and make more money.

I decided to limit the books to under 25,000 words so that busy writing entrepreneurs could read the books in a weekend. The goal of each book was to provide the readers with a new skill they could use in their business to help them succeed.

Fiction book example

I am known for writing mysteries, thrillers, YA, and SF stories that examine how diversity makes a society stronger. At a time when societies around the world struggle against all forms of racial, economic, and societal bias, this is a message that many people value. I don’t preach this message, but the value of diversity often plays a role in my underlying plots.

Your fiction expresses your beliefs, and there are readers who find value in the insights you provide through your fiction.

Every author has a unique voice that sets their fiction apart. Readers are drawn to your stories through their connection to the characters you create, the compelling conflicts they face, and how your characters change as a result of their experiences. Write a good story and your readers will value your work and pay you.

Year 3-4

The next business model for Magnolia Lane Press

From the day I launched Magnolia Lane Press, I started laying the foundation for my second business model. Earlier in my career as an independent consultant, I spent several years teaching Web Project Management for eclasses.org to web professionals frustrated with how to manage all the web development work they had to complete. Since I had experience designing and teaching online courses, creating online business classes for writers was a goal of mine.

I had a lot of tasks before my business was ready to launch online classes. I needed to write enough books that creating online courses made sense. I also needed to acquire all the equipment, software, and hosting services to create great online courses.

When I have published five of my business books for writers, I will launch my first online business course for writers. In the meantime, I am picking up the skills I will need to create my fifth revenue stream.

Success as a writing entrepreneur generally requires patience. I am on track for launching the online course revenue stream in my fourth year.

ASSIGNMENT:

Take a minute and write down the value your readers get from your writing. Do you have a unique idea? Don’t worry if the answer is no. The unique idea often comes later after the writer has more business experience.

A single revenue stream business model can work well for you if you are starting out because it allows you to organize your business, have time to write, and build your inventory. While you are building your business, talk to your readers to learn what value they believe they get from your work.

You can lose a lot of money if you implement a flawed business model. If your readers don’t think your books provide information or provide an experience they value, you will not sell many books.

Many writers assume when readers don’t find value in our books it is because we are bad writers. That is the first conclusion many of us reach when sales are down. Consider if you are targeting the wrong readers. For example, you may think that your books provide value to under twenty-five-year-old readers, while in fact, the readers who are your biggest fans are stay-at-home moms in the twenty to forty-five-year-old age range.

If you are wrong about the type of reader who will value your books, you can lose a lot of money advertising where those readers never go. If they don’t see your ads, they won’t buy your books because they won’t know they exist.

IMPORTANT:

Business Models must create value for your readers and make money for your company.

The first couple of years after you launch your company is a great time to connect with readers and discover if the people who like your books and would buy them are the readers you expect to like your book. Keep writing while getting to know your readers and continue to build your inventory of books.

Once you have confirmed that there are readers who value your books and will pay for that value, then you can buy advertising. When readers like one of your books, they will buy your other books. This is why writing entrepreneurs make sure they have three books or more available for readers before putting much money into advertising.

One word of caution as we examine different business models you might consider for your business. One business model can earn a lot of money for one writer but not another. When possible, customize your business model to take advantage of your strengths, skills, and experience.

Two writers can both write a romance that takes place in Milan, Italy, and in both books the heroine will have a tabby cat, but they will create different stories. Every writer has their own voice. The two writers will bring different experiences to the story. I might write from the viewpoint of a Caucasian Appalachian American or German woman, because those are two cultures I know well. An Italian woman might right from the viewpoint of a woman from Sicily or Rome.

As you go through this book, look for business models that fit your personality, your skills, and your experience. Look for business models that utilize the resources you have, are doable with the partners you have, and that create value for your followers.

Review your Mission Statement and Vision Statement in your business plan. Verify that your business model aligns with the goals you laid out for yourself and your company.

There is no right or wrong business model. There are only business models that make you a profit and those that don’t. The great thing about business models is you can always change them. Admit when a business model is not working. Too many writing entrepreneurs know there are problems and try to fix an unprofitable business model, rather than analyze why the model isn’t working and create a new business model that does make you money.

If you haven’t downloaded the worksheets that go with this book, consider doing so now. You will be able to take the information in the chapters and use them to evaluate your current business model and to test any future revenue stream ideas you have for the future.

Download the worksheets

In Chapter 5 you will learn the different elements of choosing revenue streams that will work for your writing business given the goals you have set for yourself and your company.

Part II

Developing Your Business Model

Chapter 5: The business model for you

There are many reasons writers start out with a single revenue stream business model. Such an approach is easiest for a writer to envision. There is a good chance that the writer has been writing stories or novels and sending them to editors or even an agent for some time before making the decision to start a writing business.

The single revenue stream business model is a good one for beginning writing entrepreneurs because:

1. It is the business model that most closely resembles the way the writer has been selling their stories and books.

2. Setting up the business the first year is time consuming. The beginning writer needs to set up accounting and financial systems. They often need to strengthen their partner relationships. A single revenue model gives the author the time for these essential organizing tasks.

3. The new writing entrepreneur needs to keep expenses to a minimum.

4. It is difficult to lose money using this business model as there is little risk involved. You might not sell every manuscript you submit, so you might not earn much, but you are not going to have to invest in equipment or software. You do not have to pay partners or take classes to learn new skills. Therefore, expenses are low and predictable.

Many writers are content to use this model for the life of their company. They don’t make as much money as they could if they developed new revenue streams, but they prefer low risk and they want to maximize their writing time.

Why a writer might want to change their business model

Writers decide to change their business model when they want to earn more money. After several years, they may become comfortable with running a business. Through taking classes and networking with other writers they become more productive, producing more stories than before. They have gotten a reputation on social media and have made connections that have led to being invited to speak at conferences and interviews on podcasts.

Opportunity comes knocking

A writer might change their business model because they stumble on an opportunity they didn’t seek. The writer doesn’t go looking for a new business model, the new business model finds them. This can happen when the author writes for a niche genre or even across genres. Sometimes, as was the case with Magnolia Lane Press, expertise in an area of interest to a group of readers results in requests for non-fiction books to teach skills the author possesses.

The writer’s goals change

Writers change as their writing and business skills improve. A writer may change the goals for their company. For instance, let us say a writer started a full-time writing business and started rock climbing as a form of exercise. As they learn about rock climbing, this becomes their passion. They start blogging about rock climbing. This new interest leads to a new revenue stream from writing books on rock climbing.

A desire for increased income

A desire to make more money or to create a more stable income stream than what comes from selling books can motivate a writer to start producing an online course. You may not have as many students pay for your course as people who buy your books, but students often value the personal attention they receive in a course over the information contained in a book.

The number of readers has declined

Revenues from your books can go down for a number of reasons including:

- Your followers have switched to a new technology. As the popularity of tablets grew, readers switched to following authors whose stories appeared on the tablets. As many brick and mortar bookstores closed, certain age groups quit reading print books. Authors who didn’t get their books into e-book format no longer provided as much value to their followers as they did before. E-books were less expensive and easier to obtain than print books, therefore altering the value readers felt they received from print books.

- The economy has changed. If followers’ income levels change due to a rise in unemployment or inflation, the number of books bought fluctuates. Readers buy used books, trade books, or borrow books from the library.

- Society is changing. Societal changes, such as the rise of the #MeToo movement, might impact readers’ views of the behavior of long-standing characters. What was once seen as acceptable behavior becomes repugnant.

- Your target audience numbers are declining. If you have spent years writing a series that appealed to those born before 1950, the size of your target audience is shrinking due to their age. Look to launch a new series that will appeal to younger readers.

- Followers have quit buying your books. You need to determine why your followers no longer gain value in reading your stories. Are reader habits changing? Is interest in the genre declining? Market research on the publishing industry can help identify trends. Partners can help shed light on economic shifts. Readers are the best source of information - ask them if they have bought your latest book and if not, why not?

There are two ways to make money

I am always surprised at how many entrepreneurs, and not just writing entrepreneurs, don’t think about the fact that there are two ways to make money:

1. Increase sales

2. Cut costs

Increasing sales is harder than cutting costs. Examine your expenditures and see if you can cut your costs. Your profits will immediately benefit.

Everything moves at a faster pace these days. Expect that innovations that impact the publishing industry will also continue to evolve quickly. If you wait until you see your profits decline, you may find you have waited too long to recover.

Gone are the days when an entrepreneur could analyze why they were failing and take years to correct their course. Smart entrepreneurs these days keep their eyes on developing technologies and project how they can quickly incorporate those evolving technologies into a new business model.

Entrepreneurs know that the first company to exploit a new technology in an industry is often the company that makes the most money from their innovation. One of the most common ways to do this is to look for new technologies being used in other industries and figure out how to utilize it in your industry.

That is why forward-thinking writing entrepreneurs are learning about virtual reality. Just as movies became the new way to access stories, VR might become the preferred storytelling technology of today’s generation. Innovation happens at an exponential pace. Storytelling could change faster than you think.

Are you a science fiction fan? There is a wealth of new technologies being discussed in science fiction. One of them might send your writing business profits into the stratosphere.

In Chapter 6 we will take a look at what revenue model will work best for you.

Chapter 6: Evaluating your business model

You do not want to immediately begin work on implementing your new business model without testing your assumptions. Take the time to evaluate the cost of setting up the new business model, the likelihood of the model succeeding, and determine whether your followers will pay for your new product or service. Finally, conduct a cost analysis to verify you will increase your profits.

How to evaluate a new revenue stream

Launching a new revenue stream is an important step that requires you to use writing time, money and resources to be successful. Your new idea may seem brilliant at two o’clock in the morning, but will you make money on the idea over time? Will your idea increase loyalty from your readers? Will your idea help your other revenue streams make more money? Take the time to determine if your new potential revenue stream will help or harm your business before you launch not after your business is in trouble.

Always list every assumption you make

I led high-tech teams for over twenty-five years. The one thing I preached to my staff was, “Always check your assumptions. Assumptions are what will get you in trouble.” One of the best things you can teach yourself as an entrepreneur is to catch yourself when you are making an assumption and determine if your assumption is correct.

As you are evaluating new potential revenue streams and whether to include them in a new business model, teach yourself to notice when you make an assumption. Testing those assumptions will increase the likelihood that your predicted outcomes will come to pass.

Beginning writing entrepreneurs often make the mistake of assuming:

- The technology for producing books will remain the same

- The economy will remain the same

- Inflation will remain the same

- Readers’ tastes will remain the same

- The writer’s financial situation will remain the same.

- The writer’s health will remain the same

- The writer’s family situation will remain the same

An incorrect assumption can negatively impact the success or even feasibility of a business model. While you are evaluating new business models, create a list of the assumptions you are making and then decide what will you do if that assumption is incorrect.

Calculate the costs related to changing your business model

Creating a new business model can absorb much of your writing time. In an effort to boost revenues, you can temporarily lose income. Prepare for this contingency. Give thought to the process you will follow. Balance the amount of time you devote to your decision on how you will structure your new business model with your immediate financial goals.

Before you choose a new business model, determine how much time you spend on creating the new revenue stream. Then calculate the cost of implementing a new revenue stream. Ask yourself if, in light of these numbers, are you better off creating the new revenue stream? Too many writing entrepreneurs assume a new revenue stream is always good for the business. (Remember what I say about assumptions – they get you in trouble.)

An example of the costs related to changing a business model

Everything you do in your business impacts the entire business. For example, a writer who has sold short stories to magazines and anthologies for the past ten years, writes a short story a week and sells eighty percent of the stories they write for an average of $300 a story. (This is a business book. You knew numbers would be included at some point.)

Our imaginary writer is making about $12,300 a year from their writing. (Eighty percent of 52 stories written is about 41 stories.) Forty-one stories times $300 equals $12,300. This percentage is high. Most short story writers do not sell eighty percent of the stories they write.

The writer would like to make more money, retire early, and write full time. She decides to change her business model and add a revenue stream from writing novels, too. After all, novels sell for more money than short stories.

Our theoretical writer is not used to writing novels. She takes six months to write her first novel. She writes half as many short stories for the year (since she is not writing stories for six months and is writing a novel instead) and loses $7,200 in income the first year she implements her new business model. She gets an agent who shops her novel around. After six months her novel has not sold.

During those six months, our new novelist has written twenty-one short stories. Her six-month break from writing short stories means that she does not get any income from the six months she took to write her novel, since she wasn’t writing short stories. Given the long lead times in the magazine and anthology markets, she probably went more than six months without any income.

Being a smart, professional writer, she anticipated this and had the foresight to save up for the disruption in her profits during her transition to a new business model.

Our theoretical author may have to write several novels before she reaches the level where she sells a novel to a publisher. She may not recover the short story revenues she gave up when she wrote the novel. When you create a new revenue stream for your business, anticipate how potential drops in income may impact all the revenue streams within your business model.

TIP:

Always have a backup plan before you implement a new business model in case your assumptions are proven wrong.

If the writer decides to self-publish her novel, she should think about the additional costs she will encounter. She either buys the software and learns to produce her own e-books and print books, outsources the production work, or hires a company to produce her e-books and print books. She needs to factor in lost short story sales while she learns to produce her books. She must not forget to calculate the time she would spend finding contractors or hiring a firm to do the work for her.

The point of this example is not to say one revenue stream, such as selling to traditional publishers, is preferable to another, such as indie-publishing. The example is to show you the types of trade-offs in time and money you are making when you decide to introduce a new revenue stream into your business model. You would face these same trade-offs and risk analysis if you decided to start charging to speak at conferences or started offering online writing courses or producing your own audio books.

When you think about creating a new business model for yourself, consider:

- The amount of time you will lose as you work on analyzing and preparing to launch your new business model.

- All the expenses you will incur.

- How the new revenue stream will impact your existing revenue streams.

REMEMBER:

Your business can make a lot of money, but if you are spending more than you are making, you will go bankrupt because you are not making a profit. Your profit is your income minus your expenses. Keep your expenses as low as you can to keep your profits high.

What are the best business models?

My goals for Magnolia Lane Press’ business plan was to launch a business model that would equal the net income (income minus expenses like taxes, etc.) I generated as a high-tech executive within ten years.

You probably have different goals. Document your goals in your business plan. If you change your goals, update the change in your business plan. The best business models are the ones that help you reach your financial goals for your business.

Business models and risk

Prepare for the unexpected. If you work hard, opportunities will come your way. You don’t have to pursue every chance you have to make money. Create the life and the lifestyle you want for yourself and your family. If making an eight-figure income is your dream, then go for it, but as I stated earlier, you will put in long hours to achieve that dream.

Make sure you are pursuing your dream and don’t feel you have to meet other people’s goals. A lot of people capable of making eight-figure salaries decide not to go that route. Entrepreneurs often get caught thinking success comes with million-dollar salaries. If that lifestyle isn’t fun for you, then don’t feel like you failed if you only create a five-or six-figure business after ten years.

Business requires risk.

Smart entrepreneurs try to reduce the risk of losing money as much as they can. As discussed earlier, subscription businesses are a stable source of income (or carry less risk) because customers agree to buy from you every month.

Authors who charge a monthly fee to become a member of a closed group or to get monthly coaching, etc., have created a subscription business. Subscribers develop a greater loyalty to the service than customers who buy one book from you and may never buy your books again. That is why a good business model for writers would include at least one revenue stream that provides an incentive for a reader to keep buying from the author on a monthly basis. This requires you, the writing entrepreneur, to keep providing value on a consistent basis to your subscription customers.

Multiple revenue stream business models reduce risk.

If you are dependent on one revenue stream and it quits generating income, you are without any revenue at all. This is why one revenue stream is riskier for the entrepreneur than a multi-revenue stream business model.

Business models that involve more than one revenue stream are sometimes called portfolio business models. If you make an incorrect assumption and one of your revenue streams does not prove profitable, your other revenue streams will continue to earn you income while you eliminate the failing revenue stream.

Your followers must like your plan.

Your business model is not about you, it is about your followers. Before you launch a new revenue stream, make sure that your customers believe that your idea is a good one. Test your idea by talking to your followers. Describe what you want to offer them and see if they clap and beg you to let them know when they can sign up.

If you are like me, you are an introvert, so the idea of reaching out and talking to your followers about your new product or service is terrifying.

You are an entrepreneur though and you want to make more money, so gather your courage and get yourself to a book fair or middle school PTA meeting or wherever your followers hang out. Tell them about this great idea you have. Then see how they evaluate your new revenue stream. They may provide you with valuable ideas because they are the ones whose needs you are trying to satisfy. Listen to what they say. Customers know better than you what they value.

Don’t forget to ask your loyal readers how much they are willing to pay for the value your new revenue stream will provide them.

In Chapter 7 you will learn how your business model will change over time as your company matures.

Chapter 7: Your business model timeframe

The introduction talked about how many successful writers try to help authors succeed while creating a revenue stream for their own business. They do this by offering programs that teach writers how to make money with their writing. These presenters follow a standard process to persuade prospective buyers to purchase their program. They typically offer a free webinar with useful information for people who sign up for the webinar.

You can gain valuable information from these programs that will teach you important skills for growing your business. Sometimes you can learn about how to use software that will save you time. Many will teach you how the presenter grew their business. You can save money by learning from their mistakes.

These programs are not bad, but you have to understand that not every business model is the right business model for you. What worked for the presenter may not be appropriate for your writing business at this point in your company history.

At the end of the webinar, presenters sometimes target the writer’s insecurities with a hard sell for the presenter’s product or service. The writer will get thousands of dollars of free books, webinars, classes, etc., for just a few hundred dollars if the writer signs up for the program in the next two days. And you are told this is your only chance to get this great price.

Wait three to four months. You will start getting emails again for the same offer. This is, after all, a revenue stream for the presenter.

How to determine when you are ready to change your business model.

More complicated business models are better suited for writing companies that have been in existence for a period of years. You will experience more success when you evolve your business model over time, just as these financially successful writers did.

Start-up writing businesses benefit from a simple business model

The first few years you are in business, you should not expect to have high sales figures as a self-publisher. Writing is not generally a get-rich-quick scheme. There are authors who write one book that takes off. These lucky few become wealthy quickly. Usually you discover that they have been perfecting their writing for years before they suddenly became rich.

Writers sometimes discover the downside to this quick fortune; they have less time to organize their business and learn about their customers. The business that grows steadily establishes a foundation that carries the owner through downturns and remains profitable longer.

Technology, software for writers, and the increased maturing of the Internet has provided many revenue streams for writers as we showed in Chapter 3.

Let’s take a look at an example of how a writing entrepreneur might develop their business model over time.

(Note, there are many ways to develop your business model. This is just one way.)

Start with a single-revenue stream business model

Years 1 to 3:

During the first three years after starting a writing business, a writer will concentrate on getting their company up and running. If they are starting an indie-publishing company, or are not running the business full-time, the timeline may last longer.

During this time, the new writing entrepreneur tends to concentrate on the following:

- Write books, either indie-publish, traditionally publish, or do a combination of both. Build an inventory of books readers can buy once they discover the writer’s work.

- Start to build a network among other writers, concentrating on writers at the same level or with a few more years of experience. To grow their network, they look for ways to provide value to these other writers. They buy their books and post reviews. They comment on their blog posts. They volunteer to beta read for those in their network. They recommend any courses they offer to other writers in their network. They attend workshops by those in their network at conferences.

- Develop the business skills writing entrepreneurs need to succeed. Practice writing by writing and selling stories and books. Increase your writing productivity. Teach yourself about online marketing. Learn about the legal and accounting side of writing locally and worldwide. Learn how to indie-publish a story or find a company or individual to turn some of your stories into indie-published stories. This will open up revenue streams unavailable otherwise. Create a partners list of sub-contractors to handle work you cannot do yourself or you can do but would consume valuable writing time.

- Organize your business. Set up your financial records and develop the habit of keeping them up to date. Find an accountant who understands the tax codes that pertain to writing and publishing companies.

- Analyze your sales to targeted readers. Look for upward trends and pinpoint markets that are not buying. Determine why the books are not selling.

Years 3 to 5:

Once the company is up and running and there is an inventory of writing that is available for sale, begin to consider changing the business model. Search for new revenue streams that:

- Create additional value for followers that they are willing to pay for, complement existing revenue streams.

- Do not decrease income from current revenue streams.

- Identify revenue streams that grow your business more than the value derived from your current revenue streams.

The most successful new business model will present readers with an approach that will enhance their existing relationship with the writer and increase their loyalty to the company.

After year 5:

As a writer’s business evolves, more ideas will arise regarding how to provide more value to followers. These ideas may establish additional revenue streams, or they may result in former revenue streams being cut. Make sure if you eliminate a revenue stream you are providing more value to the followers impacted by your new model and not less. If followers believe the value of what you are selling goes down, they will quit buying from your company.

Changing a business model by adding an additional revenue stream

When you are ready to make a change in your business model, review the elements of a business model outlined in Chapter 1:

- A writer’s business model must create value for readers.

- A writer’s business model must make money for the writer’s company by having the readers pay money for the value they receive.

- A writer’s business partners must benefit from the business model.

- A writer’s business model makes use of the resources available to the writer and may add to them.

- A writer’s business model must offer something unique.

Be honest with yourself and analyze whether your idea for your new business model incorporates these elements.

Here is a typical analysis. If you lack any of these elements, then wait to implement your new business model until you have all the elements for success in place.

- You have an inventory of books. You have a readership. Your business model is working. You are making money but would like to make more.

- You have an idea of how you can provide more value to your readers or you have decided to start producing work that will provide more value to a new different set of readers.

- Readers (or new readers) have told you they will pay you for the value you provide when they buy your books. (You can verify this by selling the new product or service to those customers who have bought from you before.)

- You have gained additional partners that can help you and you know how you can provide value to them.

- You are comfortable that you have developed the business skills you need to become a successful writing entrepreneur.

- Your idea for making money is unique and your business is in a position to implement your new business model.

- You have calculated the cost of your new business model and you can afford going forward even if you have calculated incorrectly and lost the money required to invest in the new idea.

Over time, many writers add new revenue streams to their business model. However, adding a new revenue stream requires time, resources, and money. Expect a testing period just as there was with your initial business model during the first years you were in business.

Once again, do not put a lot of advertising or marketing money into pushing a new revenue stream until you are certain that your new idea is in fact bringing in more money than you are spending to acquire that income.

Expected revenues over time

The point of a business model is to make money for a business. Be realistic about the amount of money you will earn. Don’t expect to make money overnight by launching four or five revenue streams simultaneously.

A typical writing entrepreneur income stream over time would be:

Year one to two:

You earn enough money to buy a cup of coffee a week, but maybe not at Starbucks.

Year three:

You earn enough most months to buy dinner for you and your spouse.

Years four to ten:

By turning out more books, adding a revenue stream, and concentrating on offering followers real benefits, your income starts to inch up to where you can fund a family vacation a year.

After several years, your reputation grows. You have a large network of potential partners; you have the income to fund revenue streams that have higher costs to launch. You now have the income to outsource work, so you have the time to make any new revenue stream successful and to write!

At this point potential income starts a slow rise to five figures or more. When you reach this level depends on the writer’s productivity, access to capital (money), the perceived value of the product offered by followers, and the uniqueness of the business model. A writing entrepreneur who offers a product or service readers love will make a great deal of money. Think J.K. Rowling or Joe Friedlander.

A word of caution: some writing entrepreneurs will reach their income levels sooner or later than other writers. This isn’t a competition. Concentrate on providing value to your followers, not on how quickly you hit an income goal.

The advantage of being the first to market

I know one writer who started a podcast interviewing famous writers as a way to learn and expand his network among authors. He was one of the first writers to explore this new technology and create a revenue stream from podcasts. Advertising revenue from the podcast and affiliate income from products reviewed in the podcast became an integral part of his business model. He gained visibility among other writers, increasing his followers and enlarging his network of potential partners for new revenue streams.

Be prepared for the downside of success

The author described above found meeting so many other, more famous authors sent new business opportunities his way. Each opportunity offered a new revenue stream. He also lost a great deal of writing time he hadn’t anticipated losing. What started out as an experimental revenue stream launched his business but threatened his writing career.

This is not unusual. At some point, if you are successful at adding many new revenue streams, you risk:

- Growing beyond your capacity to run your business. If this happens, you can hire people to help you out.

- Growing beyond your ability to pay your bills. You can end up bankrupt if you overextend your company and accumulate debt you can’t pay off.

- Growing beyond your desire to run your business.

The last point raises an issue many writing entrepreneurs have to face. At what point do you want to become the CEO of a publishing company and give up being a writing entrepreneur?

Walking away from potential income is not easy on you or your family.

Everyone who knows me knows my mantra is “always have a back-up plan.” That is not just for setbacks. Before you launch a new revenue stream, ask yourself what is your plan if your new business model loses you money? Write down your backup plan. When things go badly is not the time to try to devise an alternate plan, as you may not have the time to implement your alternate plan before you have to pay your bills.

The writer mentioned above decided that while he was proud of his entrepreneurial success, what he really wanted was to free up more of his time for writing. He began to eliminate revenue streams from his business model.

Some writers find they like running companies more than writing. They give up writing.

Either is a legitimate choice, but you want to make the choice rather than have the market make it for you.

Always have a backup plan.

If you see an opportunity for an innovative new revenue stream, proceed with caution. You don’t want to try an undiscovered revenue stream idea inspired by a new internet technology AND try to launch several other revenue streams at the same time. You will overwhelm yourself, have little writing time, and risk running out of money.

You can also burn yourself out. Burnout is a serious medical condition, and as a writer you need to avoid working to the point you lose your love of writing. Burned-out writers cannot create and often they can’t write at all.

In Chapter 8 you will learn how to determine if you are ready to launch your new revenue stream.

Chapter 8: Your launch decision

Once a business model is chosen, document the implementation process required to launch your course. Evaluate the pros and cons of a new business plan based on the criteria below.

Financial Review

Make a list of all the financial implications of creating the new course. In particular take a look at:

- The cost of any online course software you need to purchase.

- If you are hiring a developer to take a written script and create the online course, include the development cost of the course.

- If you plan to develop classes yourself, research costs of buying video equipment, sound equipment, and editing equipment.

- As mentioned before, include any legal and tax costs associated with offering a course.

- List all your financial assumptions and create a backup plan to use if your assumptions are too high or too low. Many entrepreneurs think companies fail because they do not have enough sales. The most common reason a company fails is because demand is too high too soon and the company has not prepared a backup plan for high sales.

- Forecast anticipated profit (income minus costs) for each month over the first year of your new business model. Make sure you have the cash needed for the first months when costs are often greater than revenues. An initial loss in profits is expected, but at some point, the revenue stream needs to generate a profit. Know when that point should occur and have a backup plan if your calculations are wrong.

Customer implications

Your followers may tell you that they love your new revenue stream idea, but will they pay money for it? And will they buy it more than once, or if it is a one-time purchase, will they love it so much they will tell other people to buy from you? Here is a checklist to use to evaluate whether your followers will want to buy your new product or service.

- Will the change confuse your customers? (Note, the term customer is being used, because at some point, a writing entrepreneur is no longer selling only to readers or followers, depending on the new revenue streams you create.

- Will you offer existing customers a discount for signing up for more than one revenue stream? How will you communicate that? How long will the discount last? Do you have the technology in place to calculate the discount when the customer meets the discount requirements?

- Are you bundling for a subscription service? How will you track bundled customers? Are you bundling with partners or bundling products unique to your business? How will you track the bundled products over time for each customer?

- Do you believe the new business model offers convenience for your customers? Have you talked to them to make sure they agree?

- Do customers think that your new business model offers them something unique that other publishing companies do not provide?

Review the processes required

Savings will come from well-designed processes which introduce efficiencies in areas of the business such as:

- Purchasing. Bulk ordering of books can lower production costs.

- Marketing. One ad can promote two or more revenue streams resulting in a single ad purchase increasing income across multiple products. For example, it is less expensive to advertise the books and online courses together in one ad.

- Distribution. Are there efficiencies you can get by buying any aspect of the production of the revenue-producing product in bulk? Investigate technologies for getting your products into the hands of your customers, targeting methods of lowering the cost of delivery at reduced rates.

- Partner relationships. Does your revenue stream require cooperation or transactions between your business and your partners? Review the financial stability of your potential partners. Research their company reputation. A bad reputation could damage your brand and your ability to sell your products or services. Do your partners have the finances to meet their obligations? Consider a short-term trial to make sure they can deliver on their promises to you.

- Verify that the new revenue stream will make the time invested in changing your business model worthwhile.

- Analyze the impact the changes in your new business model make on existing revenue streams. Does the change enhance or diminish the value of existing revenue streams?

Identify what you learn

When you change your business model, you will learn a great deal more about your business and yourself. Take advantage of this opportunity to learn everything you can about every aspect of managing your company.

While evaluating a potential new business model, look for ways to increase your knowledge about different aspects of your business, including:

- How you can improve the efficiency of developing current and new products.

- Calculate the strategic implications of the changes you are making to your business. This knowledge will provide a better understanding of your business and can lead to ideas regarding potential new revenue streams you didn’t think of before.

- Questions from your customers and partners will provide insight into your business reputation. Verify customers and partners perceive your brand the way you do and use these findings in your future marketing efforts.

Review your assumptions

Never hesitate to stop an implementation and re-evaluate the business model if you discover something you missed. Changing your business model before you launch is much easier and less expensive than introducing a new option to your readers and then having to quit selling your product or service.

In Chapter 9 you learn why you need to create a business model story and tell it to your customers, partners and yourself!

Chapter 9: Your business model story

A useful method of verifying you have accounted for all aspects of your new business model is to create a narrative that tells the story of how and why you are making changes.

Why tell a business model story?

By writing and then telling your business model story to your partners, readers you meet, and to fellow authors, you will learn:

- Problems others spot in your business model you might not have thought of because you are so close to the business.

- False assumptions you made. Readers might point out that they wouldn't pay as much as you plan to charge or that they would be willing to pay more.

- Issues your partners might have with your plan. Maybe they feel your delivery time estimates are too short for certain times of the year.

TIP:

Writers often ask why bother creating a business model story. The answer is because as a writer, when you tell the story of why you are changing your business model you are forced to see the model as an entire, cohesive story rather than the individual components. A business model should fit together like a plot.

As a result of repeatedly telling people your business model story, you will begin to see ways you can make further refinements in your idea, before you spend money, time and resources on creating what might otherwise be a flawed revenue stream.

Creating your story

As with any story don’t bore your audience with all the research you collected when creating your business model.

Tell your story to your customers, your partners, and your friends. Utilize the techniques of good storytelling and practice until you are comfortable reciting the story.

You are a writer. Have fun creating your business story. You have the skills for this!

How to tell the story of your business model

Start your business model story by showing how you developed your new business model one step at a time. Always start with a character or follower or customer, depending on your business model.

Write a short story, not a novel. Use present tense, active voice, and first-person point of view.

Include your research but sprinkle in details like a spice, don’t recite statistics. Just like a proposal you send to an editor, you want to draw the listener into the story. Avoid the temptation to say, “I did this, then I did that, and then I did this.” Show why the model will inspire a reader or allow them to achieve their dreams.

Use a three-act approach.

Give your story depth

Start out showing the value the new business model will deliver to a customer. Describe a reader and bring them to life. Create the setting by using examples based on customers you talked to when gathering feedback on your idea.

Act 1: Show how your new business model helps your followers

Include in your story what need (problem) confronts the characters (your readers or if you are branching out into other media, like online classes, your customers). Explain how the hero (we are talking about your writing business, so you are the hero) will solve the problem for your followers in a unique way. Don’t forget to include how your grateful customers are happy to pay you for your new product or service.

Act 2: Identify the impact of this new business model on your writing business.

- List the risks your company is taking if the business model turns out not to increase your profits but decreases your profits.

- Describe conversations you had with your customers and their feedback regarding the new business model. (How many followers did you talk to? What percentage said that your business model would create something they would buy? (For example, how many customers said the model gave them something they valued and that they would pay for?)

- Explain your backup plan.

- Explain a potential conflict you must overcome to fill the need (the resources required), whether you have them, and the skills required to implement the solution.

- Explain how you tested the technical aspects of implementing the new business model and what worked or didn’t work.

- Explain how this business model paves the way for future business models and what impact this business model will have on your existing revenue streams. Will you eliminate a revenue stream? Explain why this is necessary and how the death of the revenue stream will position your writing business for even greater success.

- Describe why you have decided to change your business model and why you expect the change to increase your company’s profits.

Act III: End your story by showing how your new business model will create future opportunities for you to provide even more value to your customers.

Every story needs an ending. Many endings refer back to the beginning of the story. Your business model story is no exception. You have told a story that explains your business model, and the impact of your new revenue stream on the rest of your business. You described your customers’ favorable reactions. You described the risks involved should one of your assumptions prove wrong and your backup plan to minimize any negative impact on your business. Recite testimonials from readers and partners you interviewed as part of your research.

Now end your story with a declaration you are confident the new model will put your writing business in a position to grow in the future and put you in a good position for when you are ready to add your next revenue stream.

Benefits of writing your business model story

As I stated in the Tip before this section, there are benefits to crafting a business model story. First, the exercise will force you to take a final look at all aspects of the model. You will get a final chance to look at the costs and think about if the price is reasonable.

Reciting the business model story to your partners aligns their expectations. After hearing your story, they will understand what the new business model is and how it benefits them. They will understand the importance of meeting agreed upon schedules.

The story will drive a consistent message in marketing and sales materials. After repeating your story multiple times, you will become more comfortable talking about how your different product offerings complement each other.

By constructing your business model story, you increase the likelihood you will uncover issues you did not think of before. Inconsistencies, false assumptions, and perhaps an opportunity you didn’t see before will become more evident. Discovering roadblocks to success before you launch new initiatives is preferable and less expensive than having your customer uncover those problems for you.

Example of a business model story

If you would like to hear an example of a business model story, I have put a recording of my business model story for starting an online business course for writers at: https://www.businessbooksforwriters.com/business-model-story

In Chapter 10 you will learn about choices that writing entrepreneurs face when they achieve great financial success.

Chapter 10: A parting warning

All entrepreneurs face a dilemma when starting a company. The more successful you are, the more you become a manager rather than an entrepreneur.

Writing entrepreneurs face this dilemma, too. The more revenue streams you create to make money, the less time you have to write.

It is more of a problem than you may realize. When I went to interview for my first startup position as Director of Technical Support, the entrepreneur who founded the company told me to think long and hard about joining a startup. “Once you get bit by the entrepreneurial bug, you will never want to work for any other type of company.”

Startups are small.

As an executive, you have a lot more responsibility than you do at a large company. You have fewer people you have to deal with when you get a new idea.

Startups are fun.

You will have a lot of responsibility which means you have a lot of flexibility and can implement your new ideas.

As successful startups grow, they can become big companies. It is rare when the entrepreneur is valued in a big company. Large companies do not like taking risks. They want to keep things stable and enjoy their profits.

This preference to keep things the same over time can lead to a business’s decline if the company is not innovating. That doesn’t always happen, but it can happen and does happen.

The entrepreneur can also become bored with managing a company. They want to create new solutions for people. In this way, entrepreneurs are like writers. I talked about this in a blog post I wrote. “Why Writers Make Great Entrepreneurs.” [1]

Do you want to be a manager or a writing entrepreneur?

Often when entrepreneurs hit eight-figure incomes, they are not entrepreneurs anymore. They are managers. Many leave and start a new company. They spot a need that someone has, and they devise a cool way to fulfill that need that people will value. They are off and building a new company again. A similar thing can happen to a writing entrepreneur.

All artists have a choice to make when their business becomes not just profitable but eight-figure profitable. Are you a writer or are an entrepreneur? When your writing business grows to the point you are a manager, and don’t have time to write you may find you can no longer act as a writing entrepreneur.

Be aware it is not easy to return to writing multiple books a year after you have developed a multi-revenue stream business model that is making you an eight-figure income.

Letting go is not easy.

Stepping away from a financially successful organization you have created (even if the company only employs a few people) is not easy. You must give up control to assistants, accountants, lawyers, a production team, management team, and marketing team.

The time to make the decision of whether or not you are a writer, or a manager, is not when you start making an eight-figure income and regret you have no time to write. You want to consider your personal goals for your writing business your first year as an entrepreneur. Include these goals in your business plan.

Your business plan is your company compass because the first thing you put in your plan is why you are creating the business (your mission statement), and what you want your business to achieve (your vision statement).

Your business model should stay consistent with your mission statement and your decisions should support your vision.

That is why you need a business plan. When you are tempted to chase the money just because you can, you have your business plan to remind yourself what you, as the founder of your company, valued when you started out on your journey.

When to get help.

Many writers get virtual assistants when they find that they have so many revenue streams that they either a) aren’t enjoying themselves or b) don’t have time to adequately support all their revenue streams themselves.

I never feel I have enough time to do everything I want to do with my business, but for now I can juggle four revenue streams at once and still enjoy my work. One reason I have held off on launching my fifth revenue stream is because I am not bringing in enough money yet to afford to pay for help. When I do, my first hire will be a virtual assistant.

Get a virtual assistant.

Many writing entrepreneurs have started using virtual assistants as they grow to handle social media, advertising and marketing tasks. Virtual assistants are best at handling administrative tasks, that you could do, but take away from your creative time and revenue producing services that only you can provide, such as giving paid talks, one-on-one coaching.

Form a production team.

One of the smartest things I did was to put together a production team that does my covers, copyediting, proof-reading, interior book design and audio book production. This five-member team saves me over a month of work a year. As soon as my profits allow, I will start building my marketing team. You can write and build your business, but you must have a plan and you must be willing to give up some control over your business. This is a choice a writer must make, and it can limit how big your company grows.

Hire a team to run the business side of your company.

Some writing entrepreneurs recognize this and get back their writing time by hiring professionals to run their business so the writer can write and turn out more product! Your business changes significantly when you start hiring other people. A good book that deals with the moving from a small sole proprietor business you run by yourself to a company is LLC or Corporation? How to Choose the Right Form for Your Business by Attorney Anthony Mancuso.[2]

Stepping back from a high income is not easy.

Successful writing entrepreneurs who have not prepared for growth can find it hard to step back from an eight-figure income and return to writing books. Partners who are making a lot of money from your business don’t want you to downsize. Customers who depend on your products or services want to continue to buy products they love.

You can feel guilty if you change your business model to give yourself more time to write. You can feel you are letting down family members who have come to depend on your financial success. They sacrificed a great deal so you could reach that high income. If you walk away, they pay the price with you.

Putting your personal and business goals on paper is how you make conscious choices about what you want to do with your life and how you resist the guilt that comes from walking away from your financial success.

It is okay to change your vision for your company.

If you decide that your vision for your company has changed over time, and your vision was limited those first few years, don’t hesitate to change your vision statement. And pursue the new vision you set for yourself and your company.

Whatever choices you make, enjoy yourself.

The only reason to start a company is to do work that you take pride in and value and provides value for others. In the end, as I hope you have learned from reading this book, that is also the only way to succeed financially as a writing entrepreneur.

Further Reading

Books that are good companion books to Money-Making Business Models for Writers:

How to Make a Living With Your Writing, Joanna Penn, Curl Up Press. 2015, 2017.

The Secrets of Success: A Freelancer's Survival Guide Short Book, Kristine Kathryn Rusch, WMG Publishing. 2010.

Books on Business Models

Here are a few books on business models for those who want to investigate this subject in greater detail:

Adam J. Beck, Gerard George, The Business Model Book, Pearson Education, Limited. 2018.

Adam K. Masterson, Business Model Generation: The Blueprints Every Entrepreneur in Every Industry Needs Today to Achieve Maximum Profits, 2d edition, CreateSpace Independent Publishing Platform, 2d edition. 2014.

Alexander Cernev, The Business Model: How to Develop New Products, Create Market Value and Make the Competition Irrelevant, Cerebellum Press. 2017.

Osterwalder, Y. Pigneur, Business Model Generation: A Handbook for Visionaries, Game Changers and Challengers. John Wiley & Sons. 2010.

Jim Muehlhausen, Business Models For Dummies. For Dummies, 1st edition. 2013.

Additional Resources

The Business Books For Writers web site contains additional resources for readers of the Business Book for Writers series, including:

- General information for writing entrepreneurs

- A list of corrections for each book

- Downloadable documents

- Resources page

If you would like to continue to get helpful information, business advice, and information on contests, giveaways, and requests to participate in our beta reader program, to our newsletter The Writing Entrepreneur.

A Word from Tonya

Thank you for purchasing Money-Making Business Models for Writers.

I especially want to thank my loyal readers who also bought The Writer’s Business Plan, Meeting the Writer’s Deadline, and Completing the Writer’s To-Do List. Your support and feedback contribute a great deal toward the continual improvement of the Business Books for Writers series.

If you found the advice, tips, and information included in the book valuable, please tell others and help us help other writers to realize their dream of supporting themselves by writing full-time.

Ways to Reach Tonya

Your feedback is always valued and incorporated into future editions of the book. Please send any comments, questions, and suggestions to

Email: TPrice at TonyaPrice.com.

Twitter: @BusBooks4Writer

LinkedIn: TonyaDPrice

Facebook: BusinessBooksForWriters

Additional Links:

Business Books for Writers Website

Author site: https://www.TonyaDPrice.com

Publishing site: MagnoliaLanePress.com

Tonya’s Fiction

You can find links to Tonya’s short stories on her website, Anthology and Magazine Sales.

Mysteries and Thrillers

- "Night of the Healer." Fiction River, Hidden in Crime.

- “Payback.” Fiction River, Hard Choices.

- “Payback also appears in The Best American Mystery Stories – published October 2019

- “Spy in the Sky.” Fiction River, Spies.

- “Stealing Amy.” Fiction River, Stolen.

Romance

“A Love to Remember.” Fiction River, Feel the Love.

About this Book

Writers must juggle many tasks, so the Business Books For Writers are written so you can complete each book in a weekend. That is why none of the books in the Business Books For Writers series exceed 25,000 words.

Most business books written for writers take a very broad look at publishing, marketing, etc. You learn a little about a wide range of topics.

The Business Books for Writers series takes a different approach. Each book focuses on a specific business topic with step-by-step instructions, worksheets, templates and examples for learning a new business skill that will help you succeed as a writing entrepreneur.

If you found Money-Making Business Models For Writers valuable you may also like:

The Writer’s Business Plan

The Writer's Business Plan gives you the knowledge to succeed — not with one book, but across your entire writing career. Written in clear language without jargon, The Writer's Business Plan guides you through creating your business plan in seven simple steps. Write a business plan in a weekend. Save time with eleven downloadable worksheets and a business plan template.

Meeting The Writer’s Deadline

Spend a weekend with Meeting the Writer's Deadline and learn the techniques and strategies you need to launch your book on time and on budget. Loaded with examples and tips. Become a writing entrepreneur who reaps the benefits of meeting your deadlines.

Completing The Writer's To-Do List

Completing The Writer's To-Do List shows you step by step how to create a master daily task list, get control of your emails, and develop a personalized approach to managing action items that you can stick with over the long-term. Control your to-do list rather than allowing it to control you.

About the Author

Tonya Price is a published fiction author having published short stories across a variety of genres. Her short story “Payback,” published by Fiction River in Hard Choices, is included in The Best American Mystery Stories 2019. She has also written several thriller novels, a modern German detective series, and a Young Adult historical novel.

After working at the World Health Organization in Geneva as a Statistical Analyst on the Smallpox Eradication Team, Tonya Price completed her MBA at Cornell’s Graduate School of Business in Marketing and Finance. She started her high-tech career at Hewlett-Packard as a Support Engineer for the Personal Computing Division. During her high tech-career, she held positions as the Director, Vice President, and as a consultant to web agencies and high-tech startups on Web Design, Project Management, and Internet Marketing Strategy.

Tonya is a serial entrepreneur working on her third venture as the founder of the indie-publishing company, Magnolia Lane Press. You can find her on Twitter at @BusBooks4Writer or @TonyaDPrice2.

Praise for Money-Making Business Models

“ Tonya digs into the nitty-gritty of business plans for beginning writers, concisely addressing different topics to enable any writer to create their own business plan (and modify it as needed over time). An added bonus is a myriad of ideas I had never considered as potential income streams. Many writers don't like to think about the business side of things, and Tonya makes it approachable.”

Stephannie Tallent, fantasy and science fiction writer (www.stephannietallent.com) and knitting pattern designer and author (www.sunsetcat.com).

“I didn’t realize I needed to think about business models until I read Tonya’s book. She explains the concept in an easy to understand style without jargon.”

Rebecca Senese, Canadian fiction writer who won an Honorable Mention in “The Year’s Best Science Fiction” and has been nominated for numerous Aurora Awards.

"A worthy book for writing entrepreneurs interested in thinking beyond business plans to business models."

Karen Abrahamson, author, the Detektiv Kazakov mysteries and The Unlocking romance series.

Dedication

This book is dedicated to my dear friend who writes under the name Dory Crowe. A powerful writer, an amazing editor, and a true inspiration during the years since I met her on my writing journey. We each have chosen different business models, but we share a respect for each other’s talents and a love of writing. I wish you all the success you deserve as you create your success your way.

Acknowledgments

Thanks to everyone who encouraged me to tackle the topic of Business Models for Writers. This isn’t a common topic, some might say it is an advanced business topic for writers, but it is an important one. Too many writers spend time and money wondering why their book isn’t selling and thinking that the reason is because they aren’t a talented writer. They never realize that they are great writers, but their business model doesn’t work for them.

Too many writers sign up to learn the secrets of selling, never realizing that, while the information taught worked well for the author teaching the course, every writer needs a different and unique business model. If the business model you choose doesn’t work for you, your sales will struggle.

I signed up for several of these courses, spending over a thousand dollars on one that only later did I realize was not a good match for my business at the time. I hadn’t been in business long enough to launch the business model.

Before committing to writing this book, I interviewed a number of writers in the Oregon Writers Network started by Dean Wesley Smith and Kristine Kathrine Rusch, two fantastic and very generous writers and the founders of WMG Publishing and editors of the Fiction River anthology series, who have taught numerous writers over a span of dozens of years. Kris has graciously included each of the first four Business Books for Writers series in her annual Business Book Bundle for Writers, an opportunity I appreciate.

I tested my idea of writing the book on a number of published authors who own their own indie-publishing companies and asked what kind of business topic would help them. Most requested I write a marketing book, but when I described my idea for a book on how business models could help writers, they all embraced the idea. Matt Buckman, the accomplished military romance writer, along with author and professional editor Lyn Worthen, graciously spent several hours sharing their thoughts on how business models help writers, supplying me with many ideas for this book.

The book is much better for the feedback from my beta readers, all part of the Oregon Writers Network. These include Karen Abrahamson, Andy Michael Schwarz, Stephannie Tallent, Rebecca Senese, and Kelly Harmon. I am indebted to you for your honesty and helpful comments, including your encouragement to add more examples and create the Worksheets.

Money-Making Business Models for Writers

Copyright @ 2019 Tonya D. Price

Published by Magnolia Lane Press

https://www.MagnoliaLanePress.com

A “Business Books for Writers” series book

https://www.BusinessBooksForWriters.com

All rights reserved. No part of this book may be reproduced in any form or by any electronic or mechanical means, including information storage or retrieval systems, without written permission from the publisher. You can contact the publisher at: Publisher@MagnoliaLanePress.com

E-Book: ISBN: 978-1-68384-007-7

Cover Design: ZoranFiver, Fiverr.

https://www.fiverr.com

DISCLAIMER: No warranty is made, express or implied. This book is sold with the understanding that its author-publisher is not providing legal, accounting, or other services. Rely on your own judgment and knowledge of federal, state, and local laws, or hire a professional.

Notes

Introduction

1 Dean Wesley Smith, https://www.deanwesleysmith.com/, has been my writing teacher and mentor for many years. He and his wife, Kristine Kathrine Rusch, founded WMG Publishing which offers writing craft and business-related courses at https://www.wmgpublishingworkshops.com. Take a look at their websites and see if you can figure out their business model! We will examine it later in this book.

2 Tonya Price, The Writer’s Business Plan, Magnolia Lane Press, 2017.

Chapter 1: How will you make money?

1 Michael Lewis, The New, New Thing, W. W. Norton & Company; 1st edition (October 17, 1999)

2 Carol Kopp, “What is a Business Model?”, Investopedia, 26 March 2019, https://www.investopedia.com/terms/b/businessmodel.asp

3 Much of the historical information on the evolution of the Sears business model came from information found in the Sears, Wikipedia entry, https://en.wikipedia.org/wiki/Sears. This was supplemented by family history as the women in my family loved Sears and still remain loyal consumers of their products.

Chapter 2: Creating a great business model

1 Alexander Osterwalder and Yves Pigneur, Business Model Generation, Wiley; 1st edition (July 23, 2010)

(available on the Strategyzer website: https://www.strategyzer.com/canvas/business-model-canvas.

Chapter 3: Common revenue streams

1 If you are not familiar with how an author’s rights work, read the book Self-Publisher’s Legal Handbook by Helen Sedwick, Ten Gallon Press, 2014.

2 David H. Hendrickson, How to Get Your Book Into Schools and Double Your Income With Volume Sales, Pentucket Publishing 2017.

Chapter 10: A parting warning

1 “Why Writers Make Great Entrepreneurs” by Tonya D. Price https://www.businessbooksforwriters.com/writers-make-great-entrepreneurs/.

2 Anthony Mancuso, LLC or Corporation? How to Choose the Right Form for Your Business, NOLO, January 2016.