This is a continuation in the author entrepreneur series of articles. I've also posted the arc of the indie author from first book to CEO of your global business.
Here we're focusing on the various business models that authors can use to generate revenue and satisfy customers.
Of course, many authors have day jobs which is a great way to pay the bills and writing can then be for fun or extra income, but this article is aimed at authors who are intent on going full-time in this business.
Why do you need to define your business model?
Defining your business model can help keep you focused. Opportunities expand as your profile grows and keeping your business model top of mind can help you say no to things that distract you. [I need to remind myself of this all the time!]
For example, renowned indie author JA Konrath states, “I gave up on public appearances a few years ago, because of diminishing returns. They were indeed fun, but the cost and time away from writing wasn't worth it to me.”
My business model includes professional speaking as well as being an author, but recently I have started to turn down speaking work in order to focus more on the writing and only taking interesting speaking events.
In considering where to focus my efforts, these were the most common business models I discovered – and some people mix and match between them.
Business model 1: Non-fiction books with info products, speaking and consulting
Many non-fiction authors make more money from the ‘back-end' of their books, rather than from book sales alone. This includes information product sales, professional speaking and consulting/coaching services. The book acts more as a business card as well as providing qualified leads and kudos for the author. The book itself doesn't need to make any money – it's the other services available that are more important for cashflow.
Big name speakers like Antony Robbins, Robert Kiyosaki and Jack Canfield are examples of where the back end business is worth far more than the book sales. Recently, the Wolf of Wall Street, Jordan Belfort has started to use this model. He wrote the bestselling book that became the film in prison, and is reportedly set to earn $100 million from speaking events and course sales. He has said that he makes more from this new business model than he did from stock trading. Of course, that's an extreme example and you may disagree with his ethics – but it's a good example of how the business model works.
A more authentic example is Chris Brogan, author of ‘The Freaks Shall Inherit The Earth,' and other books. Chris is a highly paid professional speaker, consults for large corporates on marketing, as well as producing Owner magazine and online training courses for bloggers. In terms of indies, Jim Kukral of Author Marketing Club also primarily uses this model, providing author services, consulting and professional speaking as well as writing non-fiction books.
You can also include those authors who write non-fiction books for writers. For example, SARK, of the wildly colorful creativity books, has online courses, as does Julia Cameron from The Artist's Way.
Robert McKee, who wrote the must-read ‘Story,' has an extensive online video membership program, as well as running multi-day speaking events for premium prices. I'm a professional speaker, and all my tips on speaking are included in ‘Public Speaking for Authors, Creatives and Other Introverts.' I also have multimedia courses, so I use this model as part of my business.
If you're writing non-fiction, consider how you can turn that into other products to offer more to your customers.
Business model 2: High volume fiction
For self-published or hybrid fiction authors, the model of writing fast and publishing often has become mainstream in the last few years.
It's not a new model, as it reflects the way the pulp writers of the early 1900s wrote, producing massive amounts of escapist fiction on cheap ‘pulp' paper so the price could be kept low. [It does not mean the writing was bad!]
Readers ate it up like candy, and authors became well known.
This same phenomenon has emerged since ebooks went mainstream. A good indie example is H.M.Ward, who releases romance novellas every few weeks and has sold over 4 million books, as well as hitting the New York Times bestseller list 11 times in 2013. Some authors are achieving this through collaboration, for example Sean Platt writes with David Wright in the Collective Inkwell, and Sean also writes with Johnny B. Truant for Realm and Sands books. Together they produce an enormously varied number of series and a lot of books a year!
This is not just an indie author model.
Isaac Asimov wrote over 500 books in his lifetime, Enid Blyton wrote over 600, Barbara Cartland over 700. Prolific authors still creating at a ferocious pace for their traditional publishers include R.L.Stine, the bestselling children's author of all time, who has been known to write several books a month. There's also Nora Roberts, who also writes under J.D.Robb and who writes a book every 45 days, writing 8 hours a day.
So ignore the people who say that writing fast means the writing is terrible! It's just one way of doing things.
Business model 3: Sporadic books with teaching/speaking/freelance writing
Of course, not everyone wants to write books at such a prolific pace, and literary writers in particular don't work at this fast pace.
Therefore, it's rare for a literary writer to make a full-time income from book sales alone unless that book happens to win a major prize.
So the business model for literary writers is usually to combine writing with teaching creative writing, applying for grants and prizes, or with another writing career like journalism or freelance writing. If you take a look at the prestigious Iowa Writer's Workshop faculty, you will see famous literary writers and poets like Simon Armitage, Ian McEwan, John Irving and more, who make money through teaching as well as writing.
What business model are you aiming for?
If you want to be a full-time author, then you need to consider how your income streams will work.
Of course, these business models can be combined and my own is a combination of all of these right now. I receive income from the sales of fiction and non-fiction books, from the sale of online training courses, professional speaking and also affiliate income from my blog. There are no rules and this is a mix'n'match game!
Want more on business for authors? Check out the book, Business for Authors: How to be an Author Entrepreneur
Top image: money rose from Flickr Creative Commons from K.L., teaching from Temari 09