Closing my books from last year, I thought you would like to see how my revenue numbers and income report differed from 2017 to 2018. I always spend some time at the end of the year going through what worked and what didn’t work in my business, which is a practice I recommend you doing as well. Sometimes, you will learn things you missed before, and other times your analysis will confirm your previous assumption.
Total revenue:
This is only the revenue, not including expenses, from both years. There was originally a $10,000 discrepancy in my additional revenue in the final category, and I tracked it back to a massive overvaluation of my income in 2017. $10,000 is a big discrepancy, which shows how much I have grown in my business in just one year.
I have refined my process over the years, and this reflects the actual money earned from 2017, which was $18,000 less than in 2018. Based on these numbers, I should be thrilled with this year. However, as you will see in the expenses below, more money led to more expenses. Still, this is excellent growth in a year when I was just trying to hang on while only having one book release.
Photo by Michael Longmire on Unsplash
Expenses:
My expenses are quite high, but they are inclusive of many things, including part of my mortgage, books plus other research, almost all meals, and many other things, so it’s not really fair to compare the expenses to the revenue, and yet that is exactly what I have done.
If it looks a little bit ghastly, well frankly it is a bit ghastly. My main goal for 2019 is a focus on profit margin. While I made $18,000 more in revenue in 2018, I also had $15,978 more in expenses, which means 2018 felt a lot like 2017 all around. 2018 was the year when a $10,000 credit card bill became the norm.
Much of this additional expense was spent editing, cover design, etc for 21 novels which don’t come out until 2019, which was sunk cost for 2019 releases. In 2018, This is how much I spent on editing and preparing my slate of books for release. This is the amount I spend getting books ready for release in 2018 alone.
However, I have been working on this slate of books since 2015, and there are expenses which have been accounted for in previous years. In total, I have 21 books which have been edited and proofed. Not included in the above were payments of:
These expenses were paid between 2015-2017 for editorial and cover design. That is a total of $10,544 to get 21 books through production. Interestingly, I previous produced a graphic novel called Pixie Dust, and the total expenses for production of that single book cost me $8500. I also produced a book called Katrina Hates Dead Shit, which cost me over $11,000 to produce.
This means I was able to get 21 books through production for less than the cost of Katrina, and 15 books through production for less than the cost of Pixie Dust. Cost of production is the major reason I have moved away from producing graphic novels. It is just so much quicker and cheaper to produce novels, and the amount each book needs to recoup is minimal by comparison. Compared to Pixie Dust, which needed to recoup $22,000 to break even after printing expenses, each novel I plan to release only needs to recoup $503 to break even, which is much more manageable moving forward.
Another large additional cost was my 2-week book tour to Spain, which, while fun, did not nearly cover expenses. However, it did open me up to being an international author, and I was published for the first time in Spain as a consequence of my trip, which made it worthwhile.
Finally, convention costs increased by almost $10,000 this year. I can almost completely explain the increased expenses in those two line items.
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Sources of income:
Let’s break down where the majority of my income came from in the previous two years. As you will see, I have many different streams of income which I have developed over the past several years.
Verizon:
In previous years, my Verizon dealership pulled its weight with the rest of my total revenue, but in 2018 its production dropped by more than 50% from the previous year. If I hadn’t seen this drop I would have been in much better shape. However, you never know how companies will fare from one year to the next. This is the reason I diversify my interests so that in case something happens with one income stream, it doesn’t devastate me financially.
Photo by Nsey Benajah on Unsplash
In 2017, I ran 2 Kickstarters, compared to running only 1 in 2018. Running half of the Kickstarter I did in the year previous accounts for the drastic drop in money earned from the platform in 2018. While I made $11,000 less from Kickstarter this year, I also ran my most successful campaign ever. If you want to see how we designed out wildly successful Cthulhu is Hard to Spell campaign, you can do so by clicking here.
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My show appearances dropped from 35 in 2017 to 24 in 2018, and my income from them did not drop much, which is good. This drop in shows was intentional as I needed more time to increase my production of books. Luckily, even though I cut my appearances drastically in 2018, I did not see a significant drop in revenue. However, my expenses increased by over $10,000 in 2018, which means I effectively made $12,000 less in 2018 than in 2017 when accounting for expenses.
Photo by Nicholas Green on Unsplash
Book marketing was something I incorporated into my business in November of 2017 and continued throughout the entirety of 2018. In all, this was one of the most surprising categories on my income sheet, as it was a revenue stream I didn’t even expect to have when 2018 began, and it ended up being my #1 source of revenue.
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Additionally, it helped tremendously with course sales. Over 90% of course sales came from these builders, which makes them even more essential to my success in 2018. Additionally, I was able to add tens of thousands of people onto my own mailing list.
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This was a category I had been trying to get off the ground since 2015, with little success. In fact, between 2015 and 2018, I made a total of $107 on course sales. This category exploded for me in 2018, which was great because I had very little expectations going into the year.
I launched 3 brand new courses in 2018, and they were all profitable in the first month of release. Additionally, it takes me less than two weeks do develop and launch a course. The best part of this category is my total expenses for making a course are close to zero, and I only pay $400 a year to host all the courses. Marketing aside, this is my most profitable category by a wide margin, as it costs the least to produce and takes less time than even my books take to write.
My biggest earner by far in 2018 was
Build a Rabid Fanbase, then my Kickstarter anthology course. If you want to see my current course offerings, you can check them out
by clicking here.
Photo by Santi Vedrí on Unsplash
If you noticed, Amazon and other retailers do not make the above list. That’s because I made so little on them it’s not even worth splitting them off. For an author, that is very strange, but I have been able to build a six-figure career without it. Until 2019, I made all my book money from Kickstarter and shows, with almost nothing being added from Amazon or other retailers.
My hope is that in 2019, with 18 releases, that this category will explode like courses did in 2018. It is nerve racking though, because based on previous data I have no reason to expect monumental growth.
So, what did I learn from 2018? I learned that if you don’t launch a lot of books, you don’t make a lot of money as an author. I was lucky that both book marketing and courses took off for me in 2018, because otherwise I would have been financially devastated as I worked to build up a slate of books.
While I didn’t learn this lesson in 2018, it did solidify for me that you need a lot of different revenue sources in order to give your business a good foundation for success. My Verizon dealership underperformed in 2018, but I was able to prop up my revenue with book marketing and course sales.
In 2019, I hope to launch an ebook category successfully and replace my Kickstarter income with book sales income. I have zero Kickstarters planned for 2019, though I have several in 2020. My hope is that by 2020 I can have courses, Kickstarter, Amazon sales, and book marketing all working together to create a robust revenue picture for 2020 and beyond. I don’t expect to make more in 2019 than I did in 2018. I would be very happy to maintain my current income level and increase my profit margin significantly.
My profit margin was something I started taking seriously in 2017, worried about in 2018, and now have a handle on for 2019 and beyond. Hopefully, I can increase my profit margin substantially moving forward, even if I end up stagnating in my revenue as a result.
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