There are no hard choices for me when it comes to gently rocking on a boat. Image © Jain Lemos.
Spreadsheets, don’t you love them? It’s time to start developing a budget for your project in this next critical step of my Ultimate Guide to Producing Documentary Books. As the publisher, I like to think in fifths (and hopefully not drink a few!) when first sketching out a budget to get an idea of the numbers. These are the five categories:
In a perfect world, I allot $10 per category for a book with the suggested retail price of $50. I receive $10 for every book sold as the publisher! But that sounds too good to be true. Let’s break it down further.
First, my SRP is cut in half because the distributor needs to sell the book for $25 to the bookstore so they can retail it for $50. Keep in mind, I still need to allot $5 to the distribution category to cover all those expenses. Still, in this scenario, I make $5 a book, which isn’t too bad. On a title with one writer and one photographer, they would divide $5 a book. But for a book covering an event where a dozen photographers are needed, the pie slice looks pretty scrawny. This means the number of books sold is more important. You’ll rinse and repeat that last sentence often.
Here’s an example. The gross revenue for 10,000 books sold at $50 is $500,000. Remember, we have to cut that amount in half right out of the gate. So we have $250,000 to work with, spread over five categories. Ideally, as publisher, I’m looking to make a $50,000 profit from this project no matter how I slice it. If I’m only going to be the book’s packager, then the production budget I receive from the publisher would come from the first two categories totaling $100,000. This is to deliver the book’s final mechanical to the publisher who will then cover manufacturing and distribution. My fee is based on how wisely I spend that production grant. The publisher isn’t concerned with how much money I personally make on the project, but rather with the contractual materials I produce.
Whether your role is publisher or packager, you’ll be figuring your brains out. In the authors category for an event book, a dozen photographers could make about $4200 each, which is okay for a two or three day shoot. But there isn’t any money left for the writers, so the shooters either have to receive less or the writer fees have to come out of another budget category. Let’s see what we can borrow from production. $50,000 is going to be eaten up quickly as it will cost roughly $20,000 for the designer. The rest goes to a big range of expenses including, travel, accommodations, meals, transportation, office expenses, insurance premiums, legal and accounting services, staff support, editors, proofreaders, photo research and license fees. Hmmm. Here is where your own skills are called into service to take up as many tasks as you can—budget yourself in those roles, too—but keep your good-use-of-my-time equation to within reason.
Now for the manufacturing component. Your printer is going to have to work hard to get the price of printing, paper and binding (PPB) down to $5/book, especially if the page count is too high and those fine materials you’ve just specified are too rich. Big publishers have deep volume discounts and can demand low prices. As for the rest of us: tweak, tweak.
But wait! There is still $50,000 in the distribution category. Halleluiah, it’s a slush fund. Nope. It’s needed to cover packaging, shipping and fulfillment costs. Surprise! This category includes marketing and publicity. Dang. Budgeting is a non-exact mix of mosaic and chemistry. Be meticulous, think creatively and keep track of costs for everything including your software subscriptions.
How many times will you revise the figures in the print run and SRP cells? It’s irresistible seeing that budget magic happen instantly and the reason why you’ll start to love spreadsheets like I do. Beyond the SRP/run ratio, there are other ways to monetize your project including partnerships, sponsorships, syndication and spin-offs. There is a reason the income section is at the top of the worksheet so keep adding rows. By the way, if you would like an Excel template for a book budget, give me a ping! When I return the topic will be Organizing Systems as we move right along to Part 9 of 33.
Even the giants don’t always get it right. Have you seen the stats today for Hard Choices? A $14 million advance and only 60,000 copies sold so far. The 60k represents a less than 10% sell through based on what was shipped. Ouch.