Author Budgeting & Finances Guide – What to Prioritize if You Have a Limited Budget for Creating Your Book

The Rough General Guidelines

In General, you want to prioritize your Budget for your Book in the following manner

1.  40% to Creating a Very High quality product. This includes editing, proofreading, cover, and everything else involved in creating a polished final product (your book)
2.  30% to Marketing via External Channels
3.  30% to Building Your Own Marketing Channels. This includes your email list, website, and social media accounts

All three are absolutely critical

The First (creating a very high quality product) is the most critical

The Second (marketing via external channels) is critical as it takes time to build your own marketing channels

The Third (building your own marketing channels) is the biggest determinant of your long term success. It’s painful to take money out of your book creating budget and your book marketing budget to build your own marketing channels (email lists, website, etc). However, this is what will give you long term sustained success

Let’s look at different scenarios and how you have to move around the priorities of the above 3 Key Elements

If you have No Money At All

Contrary to popular opinion, we will be blunt – If you have no money at all, you cannot create a high quality product

Everyone who is telling you – you can create a high quality book without spending anything at all – is mistaken

Be prepared for failure and tough times. Here is how you handle each part if you have no money –

1. To Create a Very High Quality Book without having money. See if you can get a high quality cover in exchange for some editing or writing work i.e. have a cover design do a cover for you and in return you write out some pages for their website or do some copywriting for them. Do an author exchange for editing and proofreading (with the understanding that it is not going to ‘same as if a professional did it’)
2. To do marketing without having money. There is no way. What you can do is find blogs and small promotion sites which will feature your blog as they are starting off. The Bloggers might do a review or mention in return for a free copy of your book (which costs you nothing as you can send them an ebook). The small promotion sites will offer you a free mention in the hope that when you become successful later, you might spend money with them. However, all the marketing channels that work cost money
3. Building Your Own Marketing Channels without money. This actually is not that bad – you can get a free website and blog and build that up gradually. You can get a Twitter and Facebook account and slowly build a reader base. Some email list providers don’t charge for the first 1,000 to 2,000 email subscribers. Do keep in mind that the website and blog and email list are what you own. Your social media pages on Twitter and Facebook are completely controlled by Facebook and Twitter and you can’t depend on them

You basically end up with a product that can be, if you put in a ton of effort, a decent product. What sucks is you will have to compete with people who have money and can put out a very high quality product

If your Total Budget is $100 for Book Creation, Polishing, and Book Promotion

This is not much better than the previous scenario

Resist the pipe dream that $100 of marketing is going to buy you a miracle. Instead put the $100 into getting a book cover or getting editing. One of those two is the much better investment (as compared to marketing)

If your Total Budget is $500 for Book Creation, Polishing, and Book Promotion

Split up the $500 as

1. $300 for editing
2. $100 for proof reading
3. $100 for cover

You will have to do a LOT of searching and analysis to get decent to high quality editing and proof reading for those rates

Covers is easier as sites like www.GoOnWrite.com and www.CreativeParamita.com offer pretty high quality premade covers in that $30 to $100 range

If your Total Budget is $1,000 for Book Creation, Polishing, and Book Promotion

This is getting close to the amount of money you need to create a good product. However, it is still a bit short

1. Assign $700 for creating a good quality book. $500 for editing. $100 for proof reading. $100 for cover.
2. $300 goes to External Marketing Channels
3. Your Own Marketing Channels you would have to depend on free options

The Monetary Value of Time

At this point (after looking at how tough it is to create a high quality product with a small budget) it is worth stressing on The Monetary Value of Time

1. Figure out what the value of your time is. Is it $10 per hour? Is it $0 per hour? Is it $30 per hour? Is it $100 per hour?
2. When determining your budget to create your book, don’t make the mistake of spending far more in time (and the associated monetary value of your time) than you would in money if you just hired an expert
   1. Example: Don’t do your editing yourself and spend 100 hours on it and it costs you $2,000 (assuming your time is worth $20 per hour). Because you can get a professional editor to do it for $500 to $1,500 (in some cases) and that editor would do a MUCH better job than you would
   2. Of course, if your time is worth $0 per hour, then it costs you nothing
3. If you are having trouble getting $500 or $1,000 for your book budget, perhaps the REAL opportunity is to find some work that pays you well – you will be happier and you can take out a little bit of money each month and use that to build a high quality book

One Key Point: Writing and Selling Books is NOT going to solve your Financial Problems. Sorry, if you don’t have a good financial situation – writing books is NOT the answer. Going into an extreme lottery ticket profession like writing is just about the worst thing you can do if you are looking for a steady source of income, or a financial pot of gold

If your Total Budget is $3,000 for Book Creation, Polishing, and Book Promotion

This is where you really are looking at a very realistic chance of creating a very high quality book

1. Assign $2,000 to creating a very high quality product
   1. $1,000 to $1,500 goes to editing. Focus on getting the absolute best editor you can afford
   2. $300 to $400 goes to proof reading
   3. $100 to $700 goes to cover. Again, focus on getting the absolute best cover you can afford
2. Assign $500 to marketing and sales through external channels
3. Assign $500 to building your own marketing channels. Focus on email list and blog growth

One important note: Do not assign any of your budget to ‘things I want for myself’. If you are rationalizing and thinking your Book Budget can go into things like laptops, tablets, phones, bicycles, cars, etc – you are doing yourself a disservice

Your Book Budget should go only to things that help you create a very high quality book, things that help you market and sell it, and things that help you build your own direct channels to customers/readers

If your Total Budget is $5,000 for Book Creation, Polishing, and Book Promotion

This (and the next level) is a bit of a sweet spot. Here the focus shifts from ‘finding the best service provider in the bargain section’ to ‘finding the best service provider’. This is where magic starts to happen – when you for the absolute best

1. Assign $3,000 to Book Creation
   1. $2,000 for Editing
   2. $500 for Proof Reading
   3. $500 for Cover. In some cases you can assign $1,000 for Cover and $1,500 for Editing
2. Assign $1,000 to promotion and marketing through external channels
3. Assign $1,000 to building your own channels

The absolute most important thing is to be very careful with every cent. Once you go higher you get two main types of service providers

1. Those who will sell you a $1,000 service and provide $1,000 to $10,000 worth of value
2. Those who will sell you a $1,000 service and provide little to no value
3. There is, surprisingly, very little middle ground

Make sure you pick service providers that are proven to work. Be as careful with your money as if you had just $100 to spend

If your Total Budget is $10,000 for Book Creation, Polishing, and Book Promotion

Use a similar allocation as for the previous level. Same things to keep in mind

1. Assign $4,000 to Book Creation
   1. $2,000 for Editing
   2. $500 for Proof Reading
   3. $500 to $1,000 for Cover
   4. Rest for Book Interior Design and Book Formatting and Typesetting
2. Assign $3,000 to a Launch Expert service. This will ensure that you get a Bestseller Ranking and some good reviews and sales at the start and greatly increases your chances to success
3. Assign $1,000 to Follow on Marketing
4. Assign $2,000 to Building Your Own Marketing Channels

It is critical to pick a Launch Expert service very carefully. These are completely different from promotion sites (though they often build their service as a collection of packages bought from promotion sites). Look for one with demonstrated results – at least 100 and ideally 1,000 success stories and case studies

If your Total Budget is $30,000 for Book Creation, Polishing, and Book Promotion

Put away $20,000 for later, when you know more about the market

Take the remaining $10,000 and look at the section on $10,000 Budget

If your Total Budget is $100,000 for Book Creation, Polishing, and Book Promotion

Put away $90,000 for later, when you know more about the market

Take the remaining $10,000 and look at the section on $10,000 Budget

If you have an Unlimited Budget

Put away everything. Take just $10,000. Look at the section on $10,000 Budget

After testing out with $10,000 focus on these three areas using increments of $10,000 of your money

1. Great External Marketing Channels – Figure out which channels are giving great Return on Investment ($3 or more per $1 you put into marketing). Put more money into them gradually while keeping the 3:1 ratio of money you make to money you invest
2. Good External Marketing Channels – Figure out which channels are giving good Return On Investment ($1 or more per $1 you put into marketing). Put more money into them slowly. Remember, even though these channels seem ‘break even’ they are very valuable because you are increasing your reader base. Additionally, when you have more books, these ‘Good’ channels with 1:1 ratio, can turn into Great channels with 3:1 ratio
3. Your Own Marketing Channels – Any channel you own which is break even is worth investing it. It is particularly important to focus only on those of your own marketing channels which actually break even or give positive Return on Investment

Having an Unlimited Budget is actually a curse if you are not very careful about focusing ONLY on internal and external marketing channels which are break even or have positive return on investment