Overhead is the money you put into writing and selling your book.  This includes things like the programs used to write it, ads you did to sell it or money given to an outside company to sell it for you.

Why does this matter?

Let’s say you made $1.00 on every $2.00 book you sold.  You sell 100 books.  Great you made $100.  Yes you did but in company standards you have to look at how much you spent to make the 100.  So let’s say you used a program to write the book and it cost you $20.   And here are a few other things you spent money on.

Program $20

Company to print up 50 books at $1.00 a piece… cost $50.

Ads to do yourself…. $50.

Company you used to put your book on Amazon, Barnes and Noble and other hot spots online… $100.

This isn’t really even close to true costs but in this example your total spent money on this book would be $220.  So if you only made $100, you would have lost $120 you didn’t make back yet.  You’re losing money big time.

Tons of self published authors forget this side of things and shouldn’t as it really is important to understand how much bang for your buck you’re getting.  If you used a company and didn’t make over how much they cost, don’t use them again.  If you did an ad and it didn’t get you more sales, try a different one next time.  Pay attention to how much your spending up front and how much your selling, over all you always want to sell more than you spend to sell it.

So far for me… my overhead is pretty low.  Granted I’m in the hole because I haven’t finished it yet and haven’t sold anything but my overhead at this point is under $50.  If I get a website, that has to go into my overhead money so I will have to make sure it will be worth the extra cash before deciding to do one.  I have my word press blog and that is free! 🙂  I have my word of mouth from those around me, that is free.  I plan to do some ads when I finally finish the darn thing but I want to keep my ad money under $100.  I know really low but I want to make sure I’m getting a good return on the money I spend first before putting out more money.

Blog about how much your overhead has been, how much you’ve made and what you might do different next time to avoid the high up front costs or how you might change it up to make more money next time.  It would be great to read how we as authors are learning about overhead, up front costs and what is working and what isn’t.