I’ll start with my usual disclaimer when I talk about anything related to the law: This is not legal advice, just information. What works for me won’t apply to everyone.
Now that that’s out of the way – I’m so excited to share the news that I am starting my own small press! I’ve given a lot of thought to the business behind being an author, and here are the reasons I’m talking the plunge:
1. Legal Considerations
Family law – In Canada, if a married couple divorces/separates, any business assets owned by one of the spouses are not considered common property and aren’t divisible. The exception is if the business assets were used for family benefit, or if both spouses owned/ran/contributed to the business. By having the writing stuff clearly separated out from personal finances, it is more likely that if an author ends up divorced (in Canada), an ex-spouse won’t be able to claim a share of those assets/income.
Estate planning – When an Amazon account holder dies, their Amazon account supposedly dies with them. In real life, lots of accounts continue to live on because a family member or friend has the password and doesn’t notify Amazon that the original account holder is dead. However, if you want your heirs to be able to legally continue your business after you’re gone, having royalties paid out to a business rather than an individual would support the ability of the account to live on with the business.
As part of your estate plan, you could assign rights to your books, characters, worlds, etc. to an heir who wants to continue writing under your pen name. Or if your heir has no interest in this but would want to keep selling existing works, having the distributor accounts continue to exist would make life easier for them. Another option for your heirs would be to license out your worlds, characters, etc. and have ghostwriters continue your work.
2. Business Considerations
- Some service providers/distributors/contractors will take you more seriously if you’re a “business”. This isn’t unique to any one industry – I see it all the time in lots of industries.
- Coming up with my press’s branding (a work in progress) has helped me conceptualize my author branding.
- Reserving and registering your business name protects it if someone else comes along and wants to use the same one. This is especially useful if you think your business might grow – for example, if you make enough money that there are tax benefits to incorporating. Incorporation would make no sense for me right now financially, but might someday be useful to also provide increased liability protection. For example, if I become a bestseller, learn lots about the industry, and decide to expand my press to publish other authors, liability would be a much bigger concern.
Practical Tips On Starting Your Own Small Press
- To show that my small press is a real business and doesn’t exist in name only, I will open a business bank account, and do business with contractors and distributors using my business name.
- I plan to open both a Canadian dollar and a US dollar account for the business. This is so that I don’t lose money on royalties paid out in USD. If I needed to take the money out on a regular basis to live on, this wouldn’t help me, but I plan to reinvest book revenue back into the business. So USD will come in, stay in the account until I need to pay contractors, then USD goes back out and I don’t lose money on the exchange rate.
Downsides To Starting Your Own Small Press
Of course, there are downsides to starting a small press to self-publish your books. Some of these include:
- Increased costs (another domain name, annual registration fee for your business, etc.). These costs run a few hundred dollars in my province, which my budget can handle, but for some people this is prohibitive.
- Increased time and energy required (paperwork required to start the business, maintaining two websites, marketing, etc.). I’m starting up as a sole proprietorship so the paperwork is pretty minimal, but I don’t know how it works in the US.
- More complicated taxes and record keeping. This isn’t a huge deterrent for me because I’m self-employed in my day job and have to deal with claiming expenses, etc. anyway, but it might be more than some people want to take on.
If you do want to start up a small press and don’t think you can handle doing your own tax return, but can’t justify the cost of an accountant, I have found tax software like Turbo Tax to be very helpful. Alternatively, there are lots of other great programs if Turbo Tax doesn’t float your boat, and I’m sure there are similar programs available in the US.
Finally, to end this mammoth of a blog post, here are some resources I found really helpful when considering the implications of starting my own press:
Basic pros/cons of starting a small press – http://www.independe…e.php?page=1810
Starting a small press as a strategy to get your self-pub books in bookstores
A good post about business planning for small presses
“Why Small Publishers Fail” – some good advice about things to avoid
Everything on this author’s blog. She’s a lawyer/author and she has awesome advice about:
– registering with the US copyright office
– small presses
– pen names
– contracts and negotiations