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In Math for Writers

Meet Me at the Leaders in Publishing Teleseminar!

I am so excited to announce that I’ll appear today at 2:00 EST on a teleseminar hosted by editor and book designer, Jill Ronsley. I’ll be talking about Math for Writers, my book that’s coming out later this month. The event is free  and live! Just call in using the details below.

Jill and I will talk about how math can be useful to writers — from making the most of numbers in reported stories (and even fiction) to getting published to earning more money and making better business decisions. You won’t need a calculator or a slide rule or even a No. 2 pencil. Just listen in.

Hope to “see” you there! Then come back here to ask more questions and continue the discussion. Here are the details.

Leaders in Publishing Series

Hosted by Jill Ronsley

Guest Speaker: Laura Laing speaks on “Math for Writers”

Date: Jan 7, 2013

Time: 11:00 a.m. PST (2:00 p.m. EST)

To attend the live call:

Dial into the conference: 1-712-432-3066.

Enter the conference code: 652681

Did you attend the Leaders in Publishing Series teleseminar? Do you have more questions? Ask them below. We can continue the conversation here, or perhaps I’ll devote an entire post to your question.

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In Math at Work Monday

Math at Work Monday: Andrea the book editor

Another book editor? Well, there’s a lot that goes into this process — from figuring out layout to determining what which book will be profitable. 

Andrea Rotando has been a book editor for Barnes & Nobel and Sterling Publishing since 2001. She’s also an experienced travel writer and the editor of Luxury Cruise Bible. In our interview, she talks about calculating the profit/loss for a book — a reality check for any book author!

Can you explain what you do for a living? 

I always knew I wanted to be in a creative field, but I never guessed that I’d end up in book publishing. I moved to New York City in 1991 with a music degree under my belt. I worked at recording studios until I segued into the magazine business by way of Pro Sound News and Musician magazines. Those experiences jump-started by passion for publishing and in 2007 I segued from magazine publishing to book publishing.

I joined Barnes & Noble in 2007 as a senior editor. I acquire, develop, and shepherd the production of projects for the Sterling Innovation and Fall River Press imprints. Both of those Sterling Publishing imprints exist with the express mission of creating proprietary books and kits (book + components) for the value section of Barnes & Noble stores.

I look to acquire books that will appeal to a broad section of Barnes & Noble’s customers and I also license existing content to create new packages of old favorites from third-party vendors. I work on a wide variety of topics, from crafts to cookbooks to light reference to military history.

As a hands-on editor, I’m involved in every aspect of a book’s creation, from contract negotiation to manuscript development to supervising copy editors and proofreaders and being the liaison with the production, design, and sales teams. I also supervise and mentor junior editors on the team.

Andrea Rotondo

When do you use basic math in your job?  

Basic math comes to the rescue in so many ways in my job. One major way I use math is to devise and monitor project schedules. One of my responsibilities is to make sure books arrive at each Barnes & Noble store on time. This is incredibly important since promotional tables for our products are set up at the front of each store on a certain date each month and a new batch of books are displayed. If a book doesn’t hit that table on time, the company loses sales. Not only don’t we earn money for that book, we’ve undersold the capability of that table and that means our department will be under its revenue goals for the month.

I use math to calculate the length of time each part of the book creation process takes and I assign those tasks accordingly. When something goes wrong, I look at the timeline and see where it can be expanded or contracted.

Do you use any technology (like calculators or computers) to help with this math?  

Sterling Publishing uses a proprietary online profit and loss (p&l) system. This is where we can log on to create or update the p&l statement for each book. The p&l includes fields for costs such as the advance to the author and his or her royalty rate as well as hard costs like editing, design, printing, and freight. The system automatically calculates the margin of the product. If the project doesn’t hit a certain acceptable margin, we don’t move forward.

I have to admit though that I often whip up “back of napkin” p&ls before going to the official system. This helps me get a sense of where the product margin is and where I have to work to trim expenses before committing to official paperwork.

How do you think math helps you do your job better? 

Math is like insurance. As long as I have the raw data about a project (advance, royalty rate, number of first printing units, print costs, etc.), I can calculate if that project will be a financial success (i.e., “make its margin”). Without math, there would be a lot of guesswork as to which projects would earn out and which wouldn’t.

How comfortable with math do you feel?  Does this math feel different to you?  (In other words, is it easier to do this math at work or do you feel relatively comfortable with math all the time?) 

Math has never been one of my strong suits but I like numbers, especially as they relate to the economic health of a project. I love being able to look at a project’s data and see where the opportunities are for the author and company to make a buck.

What kind of math did you take in high school?  Did you like it/feel like you were good at it? 

I don’t feel that I received an adequate education in regards to math while in high school. The courses were very basic. In college, I struggled with calculus. I’ve definitely become more comfortable with math, but I wish I had a more solid foundation from which to build.

Did you have to learn new skills in order to do the math you use in your job? Or was it something that you could pick up using the skills you learned in school? 

A basic knowledge of addition/subtraction is really all any editor needs.

Any questions for Andrea? Ask in the comments section!

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In Math at Work Monday

Math at Work Monday: Craig the writer

Welcome week three of our month devoted to publishing and media. If you haven’t previous posts, what’s stopping you? So far, we’ve looked at book publishing and on-air meteorology (television weatherpersons). This week, it’s time to look at writing. Today you’ll meet Craig Guillot, a freelance writer in New Orleans, who specializes in finance writing, among other things. Craig is the author of Stuff About Money: No BS Financial Advice for Regular People, an ebook, which he says will be available in April. (I’m a source for one section!)

Bottom line? Math helps keep Craig profitable. So if you’re a budding freelance writer–or looking for ways to leave more on your bottom line–listen up.

Can you explain what you do for a living?

I’m a non-fiction freelance writer. My specialties include business, personal finance, retail, real estate, travel and entertainment. I’ve written for publications and web sites, such as Entrepreneur, CNNMoney.com, Washington Post, Nationalgeographic.com and dozens of trade publications. I also have a personal finance book Stuff About Money: No BS Financial Advice for Regular People.

When do you use basic math in your job?

In the actual writing, not much. Just like any other writer or journalist, I interview sources, research, take trips out in the field, gather information and write. I occasionally do a little photography and video too. I do use math on occasion in some of my personal finance work to demonstrate and calculate different things related to retirement and investing.

But I use math a lot in the background. Writing just happens to be my trade. Like any other self-employed person, I am ultimately running a business. As a freelancer I sell my services to editors and corporate clients. I have a lot of regular clients, but I’m constantly taking on new projects and new deals. I need to be able to carefully estimate my time and expenses to give a client an accurate quote.

To me, everything is about the hourly rate. I need to use this as a basis for building my income. And while my overhead isn’t much, I do have to know what’s going out to pay taxes, what’s going into savings, retirement and everything else. It may seem like part of my personal life but I consider it all part of my job. When you’re self employed, you have to constantly think about all of these things.

Do you use any technology (like calculators or computers) to help with this math?

I’m not sure I even have a calculator in my office anymore, but my main tool is Excel. I use it for everything, and I mean everything. It’s a calculator but so much more. There is no problem that can’t be solved, no analysis that can’t be made, in Excel. When you learn how to use it and how to write the formulas you need, you can do anything with it. I use it to analyze my revenues, analyze the profitability of certain assignments. Like everyone else, I use Quickbooks, but I also use Excel for background stuff.

I break everything down to a formula or percentage. This includes my monthly income goals. It doesn’t have to be that way. I don’t imagine it’s that way for many other writers but it works for me and helps me make the optimal decisions. I’ve used Excel to track, analyze and compute things in my regular life as well. I used it in the remodeling of our house, in tracking my net worth, in monitoring my investments, planning retirement, planning trips. I sit down, make up a spreadsheet, build some formulas, input the data and then use it to help make decisions. I run marathons and even use it to track my training runs and races. The more you learn how to use Excel and write formulas, the more uses you find for it.

How do you think math helps you do your job better?

One way it helps me is with analyzing my hourly rate and profitability. Whenever I take on special projects for a corporate client or a custom publisher, I use it to give a quote. I prefer to work on a project rate. I give them a single number but behind that is a lot of math that I have used to arrive at that number. They don’t need to know any of that.

I may also build in a variance. It will let me know if I might be able to live with a cut in that number. So if they want to try to negotiate that down a bit, I know that I can drop by 5%, 7%, 10% or whatever it might be for me to still make what I need to make.

I also need to factor in opportunity cost. That is what else I could be doing with my time. Do I take this project which will tie me up for three weeks or do I decline it and go after smaller but potentially more lucrative projects that will make my time more flexible? I use math to figure all this out.

How comfortable with math do you feel?

In relation to personal finance and business math, I feel very comfortable with it because I use it so much and see the value in it. But all the standard stuff you learn in school? I really don’t remember any of that. I’d have to pull out a book and look up some formulas if you wanted me to calculate cubic volume or something like that.

What kind of math did you take in high school?  Did you like it/feel like you were good at it?

Just the basics. Algebra, geometry, standard high school stuff. I wasn’t particularly good at it, I was just average. But I majored in business in college and took a lot of accounting, finance and business math classes. I always excelled at those and had a stronger interest in them. Math dealing with money just felt real to me. There was an instant connection of “Oh, I could actually use this someday.”

Did you have to learn new skills in order to do the math you use in your job? Or was it something that you could pick up using the skills you learned in school?

I did pick up some new skills, but a lot of the business and personal finance math I used today can be traced right back to college. The fact that I actually enjoy this kind of math really helps.

Anything else you want to mention?

Yes. I believe that many of our growing financial problems in this country—like people getting into mortgages they couldn’t afford, our lack of savings, our failure to put enough money away for retirement, our problems with credit card debt—can be traced partly to our failure to use math in our financial lives. People buy homes and cars on emotion but rarely run the numbers. They wouldn’t use debt to overspend if they really knew the long-term consequences. There is a numerical answer for everything in your finances. You have to know why that number is important, how to calculate it and how to use it.

Any questions for Craig? I’m sure he’d be happy to answer them!

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In Math for Writers

Royalty Math: How many books will you have to sell?

Photo courtesy of Jain Basil Aliyas

So let’s say you got a book deal. Yay! Have that glass of wine or virgin daiquiri — and then it’s time to get down to business. How much can you actually earn from this venture?

If you’re new to publishing, you may not know how you’ll earn a check from a book deal. With the advent of self-publishing and ebooks, there are many different models. Still, many publishers depend on the tried and true advance-royalty model. But how does this work?

First the writer gets an advance. This is a lump sum — sometimes paid in installments — that is paid to the writer before the book is published. This figure can vary widely, from $0 to a seven-figure value. It’s based on the author’s expertise, reader demand and expected sales. That means J.K. Rowling is going to earn a higher advance than a funny, charming math geek.

The advance is exactly what it sounds like — an upfront fee based on what the publisher thinks the book will earn. So you’ll get paid for your time writing the book, even though the publisher isn’t earning anything yet.

Royalties are what you’ll earn from the book sales — usually a percent of the price of the book. But there are lots of things to consider here, like how much a bookstore actually pays for the book.

Here’s the catch: you’ll need to earn out your advance, before you start getting royalties. In other words, you won’t see a dime from your publisher until after your royalties equal the advance you were paid. (And sadly, some books never do this.)

Whew! And you thought all you’d have to do is write the darned thing!

Any experienced writer will warn you: read your contract carefully before signing. I’ll go one step further: do the math. (Surprise!)

What you want to know is the number of books you have to sell before you actually earn some cash. If that number is in the stratsophere — or your advance is really low — you may want to shop around. (Then again, there’s something to be said for taking a risk or enjoying a labor of love.)

Mathematically speaking, there are several variables: the amount of your advance, price of the book, royalty percent and the number of books you’ll need to sell to earn out. The advance, book price and royalty percent are set. What you need to know is the number of books you need to sell.  Let’s look at a simple example:

June has been shopping around Physics for Grownups for several years. She’s convinced that she has a great idea, if she can only find the right publisher. Lo and behold, on her 17th try, she finds a publisher who is interested. The contract offers a $5,000 advance and 5% royalty. The book is priced at $12.99.

Is this a good deal?

June is no dummy. She knows that a physics book isn’t likely to be a best seller. Still, she doesn’t want to spend weeks and weeks writing if she’s not likely to see any profit. Based on the contract, how many books would she need to sell to earn out her advance?

She will earn 5% on each $12.99 book. (That’s assuming that all books are purchased at the cover price.)

$12.99 x 0.05 = $0.65

In other words, June will earn $0.65 per book. To find out her break-even point, she needs to divide her advance by the amount she’ll earn per book:

$5,000 ÷ $0.65 = 7592.3

So, June will need to sell 7,593 books before she will even get a royalty check. That’s a lot of books.

Only June can decide if this is worth it. Some books are like tortoises — they make slow and steady progress, while other books are flashes in the pan. If June plays her cards right, she could do just fine over a long period of time. The math can only give her the cold, hard details.

Have you published a book? If so, what went into your decision to take the leap? Did you do the math or just decide it was worth it regardless? Share your ideas in the comments section.

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