Self Publishers - Did you create a company?

I watched a webinar today and now I have something else to worry about other than writing. And creating covers. And marketing.

So this is a question to all of you are self published - did you create a company (of any type) or a publishing company when you started to self publish?

I understand the tax and legal advantages of creating a business entity of some type. What I'd really like is some feedback about whether actual indie authors go that route or not? It's easy when looking at listings on Amazon to tell if the book is from a major publishing company, Random House, for example. It's not so easy to tell on other listings if the author published as an individual or through a publishing company they created or just through a small press company.

I also understand treating your writing as a business, but does that include setting up a company (publishing or otherwise)? There are going to be a lot of costs involved in setting up a company, depending on where you live. Right now, if I had the choice between spending, say, $500 to set up a company and $500 to get a professional cover, I'd go with the cover. But is that the right choice?

Opinions? Comments? Helpful (or not!) suggestions?

 

I've got a thread going on this process over at https://www.writingforums.org/threads/wherein-i-roll-my-own-in-the-publishing-house-line.147122/.

So far the cost of "setting up the company" has been $145: $70 to get the name registered in my state and $75 for county bar association Legal Journal to run the required advertisement of that fact.

I suppose you could count the cost of the ISBNs I purchased from Bowker, but that's an investment. Owning my own numbers means I am the official publisher and retain all rights to my work.

And there's been a few bucks for web addresses for my future website, and there might be a bit more for hosting, if I choose to go that route. But an author website is recommended whether you form your own publishing company, or if you let CreateSpace and Kindle be the publisher of record for you.

Oh, and I've laid out a little on a couple of guidebooks to help me get all this right.

The nice thing is that having my own little publishing company means I can deduct all these expenses on my taxes, as well as anything else I spend connected with my writing. I realize the point is moot until I make money from my books and have income to deduct from, but that's what all this is about.

 

The answer to this is probably going to depend on your jurisdiction, and probably also on what you mean by creating a company.

I'm in Canada and I self-publish with no extra legal structures (not incorporated, no DBA, etc.) It's not a problem, and I can deduct expenses from my income with no issues. It sounds like this may be different in @Catrin Lewis's jurisdiction? My ISBNs are under my author name.

 

I'm in the UK and have published under my own name. I may convert to a company if things look to be needing me to, but initially it's not a problem to self-publish as an individual. Dealing with ISBN's, barcodes etc have not been an issue.

 

A friend and I have started an online publishing venture, The Pood: http://poodpawprints.com

We have a couple of titles up:

The Pood:



Abe 2.0:



With more to come:

http://poodpawprints.com/coming-soon.html

And on Facebook:

https://www.facebook.com/poodpawprints


We just started it within the last month or so, ergo it’s too early to determine if it will be the slow-motion train wreck that I predict. My friend is mostly handling the business end of it, so he could supply the details of the ins and outs if any are interested. He actually is a member here but has not posted in a long time. If we do succeed we will be looking for writers (fiction and nonfiction).

 

This sounds like what the Ontario government calls a sole proprietorship. Years ago, when my wife and I started a web development service, I'm pretty sure this is the way we went... although, how we got around the 'sole' part of that so we could co-own it, I don't remember. I've never been much good at that business stuff anyway, so this isn't surprising.

My understanding is that there are no real tax advantages to a sole proprietorship as far as income is concerned (all income is still seen as personal) but it does give one the advantage of writing off expenses (including equipment and a percentage of rent/hydro/etc.) as the cost of doing business.

Does that sound about right or am I mis-remembering?

Oh, and another question: I read somewhere that here in Canada we don't have to pay for ISBNs. Is this true? Also, are those ISBNs for Canada only or are they international?

 

I report income as "self-employment income" but, yes, I guess it counts as a sole proprietorship, since I'm the only person involved... I can certainly write off the standard business expenses when reporting as self-employed income.

And yes, ISBNs are free in Canada, and they're for use all over the world. It's just a registration system - it's insane that the Americans have to pay so much for theirs!

http://www.bac-lac.gc.ca/eng/services/isbn-canada/pages/isbn-canada.aspx

 

Cool! That's good to know. Socialized medicine, socialized ISBNs... what more could a person want?

 

But even if you don't register an actual company, you do still need to fill out a self assessment tax form to declare any money you receive from book sales. Even if you only make £1.00

 

Yes, I have a separate bank account for everything to do with my writing, so I can keep a clear check on any tax liabilities. Fortunately, my business background is accounts, so that is all second nature to me.

 

I've self published under a pen name and when filling out my Self Assessment tax forms, I use my pen name as the company name.

I keep all the receipts from purchases I make regarding my writing - be it swag, research books, my own book to give away, postage and packaging.

I also have a separate bank account for all sales royalties to be deposited into.

When filling in the forms, I add up all my sales for the year, (checking via the bank statements and my Amazon KDP/Createspace account reports) and all my expenses for the year, fill in the form on-line and send it off.

 

It's a bit more complicated if you're getting income in different currencies - the publisher statements won't match up very well with the actual money that shows up in your bank account.

I keep a US$ account for my US royalties and just make sure it's empty on December 31 - and all $ from that goes into my Cdn$ writing account before it gets spent/invested. So then I just have to add up deposits to my Cdn$ account to get the year's writing income (in Cdn$).

There may be an issue with cash-based vs. accrual-based accounting, depending on jurisdiction. I use cash-based because of the exchange rate issues (can't really tell how much I've made until it's actually in Cdn$ after I receive it) but I'm not sure all jurisdictions are okay with this. And obviously if you're using cash-based for for income, you have to use it for expenses as well...

 

When it comes into my bank account, it's automatically transferred into £Sterling. Those are the figures I use, I use the KDP account statements to make sure I haven't missed anything off the bank statements. KDP run reports every month but my bank statements are three monthly. You can bet your bottom dollar that I've lost at least one of them through the year!

I reconcile one against the other and use the £sterling bank statements as the final figures for the self assessment. Which also means I don't have to mess on with conversion tables.

 

I was happy to find out this past tax season that I could take the $450 or so I spent in 2016 on ISBNs, business registration, how-to books, and so on off of my overall US tax bill, even though I haven't yet made a dime off of sales. The way the IRS code is set up these days, those expenses come off of any other income you might have. Yea! Instead of owing, I now expect a refund.

This was a nice surprise. I filed a Schedule C for Hendrick Hill Books thinking I'd report those expenses, not be able to take them for 2016, and they'd roll over into this year, when hopefully I'll have a few sales. Nope!

I liked getting the deduction for them right away. But if I hadn't reported them for the year they were incurred, I wouldn't have been able to claim them at all.

Scary. It's nice to be saved from your own potential stupidity.

 

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I did.
I highly recommend that any self publisher do it, if they are serious.

In my opinion, and it is worth every penny you paid for it, spending 500usd on a cover is foolish.
Covers are to sell books not win art awards.
If you are smart enough to write a book then you are smart enough to download a template and diy a cover.
Just keep it simple, keep it legible at amazon thumbnail size.

You should be able to set up your company for under 500usd.

 

I did not incorporate but I did create a title for one. It's always good to have more than just your name attached to a self-published book. That way you can proclaim that it was published by the company's name, giving off a perception that you were published by a mainstream source.

Isn't lying fun?

 

I did the same by writing under a pen name but publishing under my real name. No lying involved!

 

Hi, i do not think having a self publishing company before publishing, or publishing under a publishing company or as an individual really affect the success (sales or leads) of your book.

from experience and research i have made, I got that there are some few basic factors that can affect your book sales when published on an ebook store like amazon and its likes

these are what to consider while thinking of publishing your book.

1. Attractive book cover; even though the popular saying "you can not judge a book by its cover" true? but in reality most readers will tend to stay to check if your book cover only catches their first glance. then they will decide either to move to the next book or consider buying it. for this reason I strongly recommend working with a professional graphics designer who will patiently work with you all through to achieve a good eye catchy design for your paper back or kindle publishing, and you can fined alot of these freelancers online,. I had a very pleasant experience with this designer on one of the project i handled for my uncle when he published his first book. you may want to check her out here; http://bit.ly/gigGAL42

2. Good book titles; Having an eye catchy book cover will cause a prospect to take a second look at your book, but without a good title, they will surely pass on to the next book on cue,. So it s very important to frame your title as much that tells the reader to read more and at the end buys your book for full reading. in doing this you can suggest some few titles on a list and ask critics to help you choose which best tells your story!


3. Publishing Know how; Many young or first time self publishing authors, do not take additional time to make research on mistakes to avoid when publishing or what to do to enhance their sales on kindle and other publishing sites, there are many other stuffs to consider when publishing, things like key word research on kindle search box, good about book description, summery or synopsis among others, for the sake of these you can read more HERE and HERE.

I WILL HAVE TO KEEP IT SHORT HERE FOR THE PURPOSE OF REPLY, I am new here when am relax I will have to write a post With more factors to consider when publishing your book, I WILL GLADLY SHARE MY EXPERIENCE.

Thanks

 

No. Just filing self-employment taxes.

 

This is very true. The human brain has an eight second attention span; you have to be able to hook someone within that short period of time or their interest in it is lost forever. It's a proven psychological principle and it's essential in marketing: open with a hook to catch their attention (in this case, a catchy title) and then if you can keep those eight seconds, you get 30 more seconds, then 2 minutes...i.e. as people read through it. That's why they say always open with a bang!

Side note: gold fish have nine second attention spans...

Where are we, exactly, on the hierarchy of life if that is true...?

 

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Having a company can protect you legally.
And avoiding the appearance of self publishing has to help sales; looking self published can hurt sales.

Titles are important and helpful when good.

Covers need to be legible at amazon thumbnail size.
They should not be confusing.

That fiverr link might be good.
But never pay hundreds or thousands for an artsycraftsy cover from a self appointed 'professionsl' cover artiste.

 

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Because in this country anybody can sue anybody.
They may sue if they think your story is based on them or you used somebody's name by random luck.
Or just cause they like suing or whatever reason.

You *are* a publisher if you truly self publish.
Many self publishing companies are really vanity presses so you don't publish at all with them. They are the publisher of record.

We will disagree on the value of covers. If it is not confusing or turns off the browser then it did its job.
People are more interested in genre, or author, or reviews, or many other things than an artsy craftsy cover.
I see so many truly terrible covers done by so called 'professional' cover artists that may look artsy but are not sales oriented.
And many of the 'professional' cover artist sites do charge hundreds to thousands of dollars.

Paying for a cover may work for a traditional publisher who makes a profit and writes it off as a business expense but not for a self publisher paying for it all themselves.

If you are smart enough to write a book then you are smart enough to download a template and diy a cover.

 

I disagree. If you own a book, you also own what the business world calls a "product" (just making sure you're following along...). Though I respect your integrity, it's not misleading the readers to anything. I recommend not LLCing or incorporating the company; just have a name and a website, and mention it as your publisher. A company is not defined by legal status; anybody can sell a product (in this case, a book) as long as taxes are paid, but self-publishing is, in itself, a free-for-all market where most of the income you make off of residual checks is tax-exempt.

I've been on Amazon for 3 years now and I have not once been asked to pay a tax to the government, so the only question is: if you were your reader, would you rather buy a book from an author with a website dedicated to himself/herself...or the one that says "So-And-So Publishing"?

It's not deception; it's marketing.

Perceived value is a concept Toyota invented. They realized people value safe vehicles so they made the locks on their doors sound heavy. Mind you, the locks and doors were the same level of safety you'd expect for a cheaper model, but they make thousands of net per sale.

You can have the integrity; I respect that. But I'd rather see a paycheck...