Last night when I got a chance to take a deep breath, I again reviewed and toted up projected operating costs for the first six months of Camptown Races Press’s existence.
Why six months? Because with any luck, the thing should run in the black by then, assuming I can put 15 to 20 bookoids online each month. Apparently critical mass is achieved at about 100 publications. That would be 17 squibs a month.
I’ve written two, each taking about a week or ten days to prepare. However, during that time I’ve also had to do with a new, painful, & temporarily debilitating surgery at the same time my summer course draws to an end — significant distractions, we might say. Also both of the new bookoids are longer and more sophisticated than necessary. If I wrote two books/month that were what I would naturally write when confronted with a keyboard and a screen and filled in with eight- to ten-page quickies (heh!), I could probably crank six or eight a month myself and hire out the rest. Assuming I can find enough people to write nine or ten in a given month.
So I calculated the minimum and the maximum operating costs I think will be necessary to run the new publishing imprint for six months, assuming it does indeed generate enough copy to produce 100 novelettes and free-standing short stories over that time.
Making another assumption — that I can learn to format these things for Kindle and Nook myself — the major costs are editorial (i.e., hiring writers), cover design, stock art, hosting fees, and back-end website management. Over six months, these will range from a minimum of $5,085 to a maximum of $7,850.
I propose to capitalize the new business with funds in the S-corporation. These figures represent about half to three-quarters of the S-corp’s liquid assets. And of course they don’t account for any unpleasant little surprises, like this handy-dandy MacBook Pro self-destructing….
True, The Copyeditor’s Desk will continue to bring in some money. We still have several editorial clients, two of whom pay a decent rate. But in a good year the editorial biz only nets about 10 grand. This has not been a good year, so far. Nor am I any more enthusiastic about taking on new editing clients than I am about ever having to teach another section of freshman comp…
But oh, my! This morning I sat down to begin drafting the proposal for the Boob Book, preparatory to sending out my pitch to publishers who might actually pay me an advance — which, should any such thing come to pass, would also help to capitalize the nascent porn business. And the thought wafted into my mind:
How incredible would it BE if all I did, every day, is write?
What if once again, after all these years, I were a writer and ONLY a writer?
But then of course the sane voice whispers, “Are you kidding? Have you even considered the opportunity cost of spending all your time writing when you could be earning actual dollars teaching dunderheads online?”
The question is, which endeavor really represents the opportunity cost: the writing or the teaching? If scribbling steamy novelettes really can generate more than $1,120 a month, then teaching is the culprit here, because it would take away from the total potential earnings.
But if I can’t make that much, then spending my time writing instead of teaching is going to cost me $1,120, every month from now until I shuffle off this mortal coil.
It’s a big risk. Very big. I could lose my shirt.
Is it worth it?
Well. I’m not fond of teaching. In fact, I would go so far as to say I hate it. And I’m very, very tired of editing arcane academic works. I would go so far as to say I hate that, too.
I like to write. I’m good at it. And any day I’d rather spend eight to ten hours writing in pursuit of the almighty dollar than teaching or editing for part-time hire.
Yeah. Say I’m crazy, but I think it is worth it.
6 thoughts on “Start-up Risk: What Will the New Enterprise Cost?”
You are a very talented writer, Funny. I read a lot of blogs (because on my current budget I can’t afford to do much else) and most of them can’t hold a candle to the way you use words. They are bloggers, but you are a writer.
If you want to see if you can earn a living with your talent, I say you should try now. If not now, when? Like you’ve already stated, you can always go back to teaching if things don’t pan out. Just my 2 cents worth.
May I add a self-serving “amen” to the comment above.
Absolutely worth it! Why spend so many hours struggling with academic software and un-academic young minds? Especially since the alternative is happily writing smut! 😉
Seriously: Do what YOU want to do for a change, i.e., write. As you’ve noted, it doesn’t have to make you rich* but merely solvent.
Go for it.
*Although how nice if it DID…!
When you think about it, $7500 and some effort is not much risk as all. The rewards are much bigger. If you want lower risk, only do a smaller quantity.
What makes a successful plan is not the risk put forth, but the risk of backing out. Can you recover some of the costs? Will you have any revenue that offsets the investment? What is the risk/reward ratio? How long will it take to recover money invested is you succeed, vs. go broke.
Go forward, create wealth, and understand the outside costs.
These are good points of consideration.
While it’s true that $7500 isn’t much in the large scheme of things, it is more than half the S-corp’s liquid assets. Will it put the S-corp out of business? No. But I’d like not to see $7500 go down the drain.
Can I recover some of the costs? Possibly, if I can hang in long enough.
Will I have any revenue that offsets the investment? Yes. However, if I spend the bulk of my time on a project that doesn’t pan out, it’ll take a couple of years for revenue from other sources to make up the loss.
What is the risk/reward ratio? Unknown. If the reward is a steady income that at least replaces teaching income, then obviously t he ratio is positive. If, however, it ONLY replaces teaching income, then we’re looking at a neutral ratio…1:1, as it were. If the reward is an income upwards of net $3,000/month in my pocket, then absolutely risk is way lower than reward.
To recover $7500 would take one to two years, depending on the amount and type of work that comes into the S-Corp.
To recover $15,500 gross personal income from teaching: n/a. It would not be recoverable.
Comments are closed.