You’ve started your writing business, you’re slowly seeing some revenue movement and you may or may not be profitable. Your publishing business is growing! Now it’s time to think about the future of your business and how you’d like your business’s financial health to grow, alongside some all-important planning for your personal financial future.
This instalment of our four-part series is going to look at the importance of investing your time to build a financial plan, when and how to consider a health benefits plan, and why I think a succession plan is one of the most important plans you’ll ever make.
Financially Planning for Your Future as an Indie Author
Too many authors leave these parts of their plan until they’re earning a significant income, when in fact, planning for financial and personal health is something you can start doing rather quickly and early in your journey.
Note: before I jump into this, I want to be clear, I’m not a financial planner. I have one I trust, and she advises me on all things future planning and current saving for that future. I highly recommend you find someone you trust to have your own unique plan created.
Let’s start with a financial plan – this plan should always start with paying yourself first. Yes, I know that’s not always possible, and trust me, that’s typical for most businesses. However, if your business doesn’t have a clear pathway where you can start to pay yourself even a small portion of income, you will have difficulty continuing with your publishing work. For me, I started small and paid myself only $5 a week! There were two reasons for this:
- Getting into the habit of paying myself weekly. This way it’s a task that isn’t missed when I’m busy or finances are tight.
- Making sure my budget included paying myself. Often for me, if it’s not written in, it’s left behind when times are lean. I made this a recurring transaction that was non-negotiable, but the amount is very flexible.
Once you are regularly able to pay yourself, pay yourself again but in a future savings fund, like an RRSP. Start small. When I first started, again, I invested $25 a month into a retirement savings plan, and to be honest, I’m only up to $100 a month, but it’s still a significant amount of money should I ever decide to retire.
I have my financial planner automatically withdraw the money on a regular basis on the day my royalties are deposited so I don’t even miss it.
Talk to your financial planner and see what investment funds are right for your needs, but don’t think that this stage must wait until you’re earning a significant income. Start small and build healthy financial habits.
Next, let’s talk about an optional investment for your future because depending on where you live, your access to health care, and whether you have a partner who has you as a dependent on their benefit plan, paying into a benefits plan may or may not be necessary.
As entrepreneurs, it’s challenging to budget for unexpected health care needs but there are ways to save when accessing coverage.
Here are a few suggestions well worth your time and energy spent researching them:
- You could join your local Chamber of Commerce and pay into their group benefit plan. This is my favourite Chamber benefit. You get the rates negotiated on behalf of hundreds of business owners for a fraction of the cost than if you paid directly.
- You could find a private plan and pay a monthly fee if joining a Chamber is not something you’d like to do.
- Finally, you could pay into a savings account each month to save for dental and other extended health care needs that aren’t covered by your provincial plan.
Whichever option you choose to pursue, this is something I’d recommend working into your cash flow only when you can afford to do so.
Finally, let’s talk about the one plan most entrepreneurs, regardless of their industry, don’t plan for until they’re knee deep in it: succession planning.
First, what is succession planning?
Succession planning is traditionally defined as a process for identifying, recruiting, training and mentoring high-performing employees with leadership potential, preparing them to step into senior or executive positions when vacancies occur. It ensures a company can continue to run smoothly during planned or unplanned leadership changes.
So how does this translate to authors publishing their own works? Typically, we’re not looking to hand our business over to an employee, but are planning for what we’d like done with our business when we are no longer operating it or are unable to do so or just simply interested in handing off most of the daily work to an author assistant, for example, and slowing down on all other tasks not related to writing.
Here are the succession planning pieces that I recommend you start considering:
- Should you fall ill, will it be easy for a trusted family member or employee (assistant or similar) to find your passwords and login information? Do they have access to your marketing plans, templates, budgets? If not, creating that file is always a first step, and storing it somewhere that’s easy to access is a good idea, like a Google Drive folder or via a shared planning software tool. Or, simply print it out and put it in a desk drawer or file!
- Have you updated your will to include income generated from your author business, and should you pass, who you’d like it to go to? Or if you’re unable to make decisions, who will decide what is next for your business? If you have not considered these questions, now’s the time to do so.
- In your succession plan, should you pass away or become unable to write, have you indicated your wishes for your published and non-published works? Do you want a ghost writer to finish any incomplete manuscripts or would you like your work that’s currently published to be unpublished or to remain live and generating income?
- What is your exit plan when you’re looking to retire from publishing? Do you want to slow down on your schedule or stop completely, or transition to shorter projects? Would you like a team to continue marketing for you while you stop writing, and for how long? Getting these plans down is helpful to begin to reverse engineer your growth plan.
All of this may feel very overwhelming and not something you can easily build into your daily life, and I’d have to agree. These plans are all something I’ve built in slowly for my business with the help of trusted professionals.
Here are the professionals I’d recommend you contact in order to make these financial plans easier for you:
- Estate lawyer(s) for will preparation.
- Accountant that specializes in small business taxes.
- Financial planner that specializes in small business owners’ needs.
- A trusted assistant who can grow with you or who comes with experience in administration for entrepreneurs in the creative field who also excels in organizational systems for digital businesses.
You can also often find these resources via your local small business services advisor. In Ontario, Canada, for example, these are called Small Business Enterprise Centres and across the country you can find these government services via FedDev Canada or your provincial offices. In our final installment, I’m going to break down all of the government services available to you to help you navigate owning your own publishing business. Wishing all of you authors out there good luck and happy planning!
Remember: it’s never too early to start planning for your future.
Holly Darling – Owner, Holly Darling HQ – Email Marketing Consulting
Contemporary Romance Writer – Holly Mortimer
Holly Darling is the owner of Holly Darling HQ, a business that focuses on helping authors create and implement their email marketing and business strategies to sell more books and build their brand loyalty. She has worked with creative business owners for the past ten years, helping them grow a business that is data-driven and automated, allowing them to spend more time on writing their books while easily implementing their business plan.
She has appeared on multiple author-focused podcasts, delivered multiple workshops on email marketing and automation at over fifty conferences and appeared on Canadian news channels as a creative entrepreneurship expert.
She is also a self-published contemporary romance author under the pen name Holly Mortimer, and she’s turned her passion for travel into a romance brand that transports readers around the world discovering love inside their favourite travel destinations.