Percentage of Income 2013-2014
Breakdown of Writing Derived Income 2013-2014
In Australia it is tax time and I have just finished doing my Profit and Loss (P&L) for 2013-2014. I thought I would share some percentages with you to give you an idea of what it is really like to make a living as an online writer.
First of all, my writing work made up just 45% of my total income. Tutoring gave me 35% thanks to having a long term student awaiting sentencing filling in 6 hours a week, every week of term time. I made just 8% from my community college lecturing as in both colleges and all three courses I offer, there were few takers but that was par for the course for everyone and every course. 11% came from the sales of books online with 1% coming in from Adsense and the sale of some domain names and web sites I no longer wanted. Book sale income then has to be carved up further as many of the sales were for books I either pay 50% royalties on to the author or are part of a business I share with a partner in Ireland.
A breakdown of the writing income finds 15% was earned writing content for websites, 25% editing other people’s manuscripts and publishing them and the rest, 60% from ghostwriting. This was by far the big earner for me and I put that down to a couple of reasons. First of all I am building a solid reputation as a ghostwriter and have had most of my commissions awarded to me by referral. Secondly, they are long projects but ‘big ticket items’.
So what can you learn from this? It has not been an overnight success kind of thing. I have been building up my business since September 2009 when I went full-time into online writing. More than half of my income comes from related activities such as tutoring and lecturing with actual sales of my writing (under my own name) making a percentage of just 11% of the total income. After paying withholding tax to the US government and copping the fees for the cashing of the cheques sent by Amazon, then paying the royalties to authors I publish and distribute for we are looking at maybe 5% at best. You could say 50% of my income is directly related to my online writing activities so the message is clear: either don’t give up your day job, budding authors, or make sure you have several irons in the fire.
The great news is my writing income has increased in both percentage of overall income and amount. What we need to take away from that is that I realised in January, after months of research and action in marketing my own novels, that I wasn’t going to make much money selling my own writing compared to writing for other people. Ghostwriting is far more lucrative as you get paid for what you write, not what people buy to read. The down side of that is your ego takes a hit when you see your book getting rave reviews but the client author is the one getting the kudos. Such is life, you can’t have it both ways. Well, you can. One book I wrote this past year that is doing great is ‘Sarah’s Child’ and I share the front cover with the author. It is his story, just written by me from info he supplied and fictionalised to keep everyone out of court. He has been doing a ton of promoting and pushing the book and while sales are good and steady, they will take a long time to recover what he has spent so far. This is one of the reasons I decided to shelve my own writing career as a novelist and focus on writing for pay, for other people.
While I am not about to disclose actual dollar amounts, the income earned was sufficient to allow me to travel to Malaysia and the Philippines to conduct research and collate information and experiences to update existing titles and to create new work, all of which generates income and so is tax deductible. My wife and five girls haven’t gone hungry, all the bills are paid but then we do live a modest lifestyle and within our means. Nett profit was 18% of Gross Income after all legitimate expenses have been deducted. 18% is not a bad profit margin, not brilliant, but not bad.
Nett Profit to Gross Income ratio 18%
Find Your Niche
I have found my niche, something I advised you to do some years ago when I started this website and blog. Find your niche, specialise and stick at it. It won’t happen overnight, but it will happen.