Tuesday, August 26, 2014

Follow the Money! A Freelancer’s Financial Life

Follow the Money! A Freelancer’s Financial Life by Jen Arena
Invoices, W-9s, royalty statements. There’s more to freelancing than just writing—sometimes it means dealing with the financial side. Last week, I went back over the past year to get a sense of where the money was coming from. How much came from the books that I dreamed up and my agent sold? How much came from my licensed writing? I broke it down into percentages below.

I won’t tell you how much I actually made, but I’m relieved it’s significantly more than what The Guardian recently reported an average writer makes in a year. (To make things simple, I figured this out based on what I booked this year. So for example, if a received an offer on a picture book in May, I included the entire advance even though I may not get paid part of that advance until a year—or more!—later.)
Little, Brown Books for Young Readers pubbing Sept, 2014

The breakdown:
Advances (3 books): 29.9%
Licensed writing (5 books): 29.7%
Flat-fee writing (2 books): 24.6%
Editing: 8.9%
Royalties: 6.9%

Here’s a little explanation of each category in case the terminology is unfamiliar.
Advances. This is the way many traditional book publishing contracts are structured. The publisher offers the author an advance against a royalty. The advance is a dollar amount and the royalty is a percentage of sales income. So, as a simple example, a publisher could offer a writer a $5000 advance with a 5% royalty. The copyright is in the author’s name, and sometimes the author will earn money years later on this book through royalties. The author may also earn money from subrights, such as translations, book club sales, etc. My books 100 Snowmen and Besos for Baby were advance/royalty contracts.
Flat fee writing. For a flat fee contract, the idea is often generated by the publisher and farmed out to a writer. The publisher offers the author a flat fee to write a manuscript, for example, $3000. Once the author completes the project, she’ll see no more money afterward. Sometimes an author will have the copyright in her name, and sometimes she won’t. Fair Is Fair and The Rainbow Mystery were flat fee projects.
Licensed writing. A license is a brand, like Barbie or Sponge Bob, or a movie, like How to Train Your Dragon. The licensor hires an author to write a book about characters it created. Like with a flat fee contract, for a licensed contract, the author is paid a set amount (for example, $3000) and doesn’t receive any money after that. The copyright is in the name of the licensor. Blondie: Rapunzel’s Royal Pony and Monsters University: Roaring Rivals were licensed contracts.
Royalties. Once a book earns out its advance (see above), the publisher pays the author royalties. Looking at that original example, on a book that costs $10, the publisher would need to sell roughly around 10,000 copies at the 5% royalty for the author to earn out her advance. (10,000 x .05 x $10 = $5000) I’m still earning royalties on my books Slinky Scaly Snakes and One Little Flower Girl.
Editing. In addition to writing, I freelance edit manuscripts for publishers, agents, and authors. Freelance edit jobs are a great way to smooth out the rollercoaster of writing, because they’re usually paid quickly and can be finished in a couple of days or a week.

What’s the takeaway? For me, the key is diversity. These five areas are ones that have worked well for me, but your five (or three . . . or six) may be different. School visits, for example, can be another way for children’s book authors to earn money, or teaching creative writing classes. By diversifying your sources of income, you spread out the risk. One year, you may do well with licensed writing and not so well editing, and the next year, those two categories may be reversed. Diversity is a great thing to add to your freelance career in other ways, too, such as writing for different age levels, writing different formats and genres, publishing with small publishers and large, or publishing traditionally and self-publishing.
Don’t let yourself be pigeonholed into just one category—you might surprise yourself with the different talents you have!

JENNIFER ARENA: Formerly an editorial director at Random House BFYR, Jen Arena has written over 50 books for kids under her maiden name, Jennifer Dussling, and under the pseudonym Tennant Redbank, including fiction and nonfiction, licensed and original. Some of the books she's written are Gargoyles, Bugs, Bugs, Bugs, Slinky Scaly Snakes, Pink Snow and Other Weird Weather, Fair Is Fair, Deadly Poison Dart Frogs, Gotcha!, and The Rainbow Mystery. Her books have been published by Scholastic, Grosset & Dunlap, DK, Scholastic, Kane Press, Two Lions, and Bearport Publishing and translated into French, Spanish, Korean, and Arabic. 

Booklist called Jen's recent book 100 Snowmen "adorable and educational, too," and One Little Flower Girl, published by Scholastic, won an Oppenheim Gold Award and was featured on Martha Stewart's wedding website. She has a number of books coming to print soon including Besos for Baby with Little, Brown, Marta Big and Small with Roaring Brook/Macmillan, Lady Liberty's Holiday with Knopf/Random House and a biography for Grosset & Dunlap's Who Was . . . ? series. When she's not writing or editing, you can find Jen in her garden, on a volleyball court, or curled up with a good book. http://www.jenarenabooks.com/

Come join the A PATH TO PUBLISHING Facebook Group to talk with 1,350+ other likeminded authors, editors, agents and illustrators:  https://www.facebook.com/groups/apathtopublishing/

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