Business-based Tips for Start-ups: Part 3, Projecting Expenses and Revenues

May 2009
by Maggie Calonico

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Business-based Tips for Start-ups: Part 3, Projecting Expenses and Revenues

by Maggie Calonico

As you prepare to publish a book, estimating production costs will go a long way toward helping you determine price and project revenue. Some authorities recommend including only the costs of printing, copyediting, cover and interior design, and shipping. Others recommend tracking every penny. I did both calculations, but I didn’t stop there.

Using production costs as a basis for setting price may be helpful, but you should also visit local bookstores to see how competing books are priced. If you price a trade paperback memoir or novel at $35 in accordance with a five-times-production-costs formula, and the usual price for such books is between $13 and $15, you might not sell too many. This is true even if your book is longer than comparable titles because consumers don’t usually buy books on the basis of length. They just buy a book. If you can otherwise justify a slightly higher price, however, try it.

Another drawback of relying on production costs to set price is that the formula may give you a false sense of your book’s potential profitability and set you up for big surprises later on.

Imagine, for example, that you have an offset print run of 5,000 books and…IBPA Members – Click here to view the full article (login required).

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