Choose Your Own Adventure Comes To An End

Cave_of_timePublisher and author R.A. Montgomery passed away this week. His name isn’t familiar to millions of young readers since the late 1970’s (despite being the J.K. Rowling of his generation with 250 million copies sold in 20 years), but his “Choose Your Own Adventure” books are well-remembered. You read the first few pages, make a decision at the end, go to a different page number, read a few more pages, and make another decision. Some decisions cause the story to end sooner than expected.

As a preteen, finding patterns fascinated me.

My parents got me the Coleco Quiz Wiz electronic trivia game for my 10th birthday in 1979. The booklet had 1,001 trivia questions and an electronic device that told you if your answer was right or wrong. The electronic device plugged into other booklets sold separately. I went through a half-dozen booklets before I discovered the pattern with the electronic device: the correct answer for a given question number was the same for every booklet.

Having written down the correct sequence for 1,001 questions, I could answer any booklet correctly on the first pass without reading any questions or answers in 15 minutes. Once I discovered the pattern, the magic of learning new trivia with Quiz Wiz was forever lost. I’ll see the question number and look at the correct number on the booklet page, as I have memorized the correct sequence.

A few years later, I would get an Atari 2600 video game console and the “Adventure” cartridge, a graphical version of the text adventure game known as “Colossal Cave Adventure” that was popular in university computer labs. It took a long time to discover the pattern to defeat the red, yellow and green dragons, as resolving the various quests required going back and forth in the game world. Once memorized I could replay the game in significantly less time than before, a useful skill 20 years later when I worked as a video game tester for six years.

After the home video game revolution in the early 1980’s went kablooey from the Atari E.T. cartridge scandal, I got serious about reading books. My parents had no problem with me spending my weekly allowance on video games, but became distressed when I bought paperback books (they didn’t read for enjoyment). On the bright side, I wasn’t doing drugs like everyone else. Reading was my drug. As my mother crawled into the bottle of alcohol abuse, I needed to escape from reality.

I came across the CYOA books at a game store. Most bookstores kept the books hidden away in the children department. With a college-level reading comprehension in the eighth grade, I wasn’t looking for books in the children department. After reading a dozen CYOA books, I used a pencil to mark the pages read and decisions made. Later I tried to map out the decision tree from each book, a useful skill for computer programming many years later. With the older books in series having 40 possible endings, I never did find a pattern among the different stories.

Writing The Financial Numbers

One of the most important lessons I learned from CNBC’s “The Profit,” where millionaire Marcus Lemonis invests his own money to help failing small businesses, is the financial numbers. If you don’t know the numbers, you don’t know your own business. My modus operandi for many years was to figure out the numbers in March or April, fill out the tax forms, and shove the paperwork into a manila envelope. That always worked well for the short-term, but not for the long-term if you want a profitable business.

November is a good time for looking at the numbers. With the last quarterly payment from Smashwords at the end of October, monthly payments for Amazon ebook sales from September and October being paid in November and December, and no foreseeable first serial and/or reprint sales, I earned my income for the calendar year. Expenses are the only thing I can control for the next several months, and prepare for tax reporting next year.

I spent several Saturdays entering the numbers into a Microsoft Excel spreadsheet to determine my income, expenses and cash on hand. With pen, paper and calculator in hand, I rechecked all the numbers to make sure that nothing was amiss with the spreadsheet. That’s the easy part. The hard part was printing out the invoices to cross-check the transactions with invoice numbers.

What do the numbers reveal?

Missing Money From Among Invoices

One vendor allows customers to buy credits in advance to automatically pay for renewing services. I had four invoices that zeroed out the credit account and presented a balance due, and four invoices where I paid the full amount due. That meant I was missing $5.19 USD from the credits account. After opening a support ticket with the vendor, I got reimbursed the next day for $6.00 USD. If I haven’t checked the numbers, I wouldn’t have caught this.

Too Many Transaction Accounts

Most transactions got paid from the business checking and PayPal accounts. A few transactions got paid out of personal accounts (i.e., checking, credit cards and PayPal). I’m going to simplify the bookkeeping by having all transactions handled through the business checking account.

Profits (Or Lack Thereof)

Will I make a profit this year? I thought I was within $10 USD of making a profit by having income exceed expenses. Alas, digging deeper into the transactions, the gap to profitability grew larger. Unless I can write a lot of content in a short period of time and find publishers to cut checks in a shorter period of time, I won’t have a profitable year.

If you’re on top of your numbers, updating your numbers should take a few minutes to a few hours of your time each week. I should have my business tax return penciled in on New Year’s Day, saving me the headache of scrambling to put everything together at the last minute. With this year’s numbers in hand, I can figure out ways to reduce expenses and make more money next year.

Becoming A Weekend Writer

When I became serious about writing in 2006, my goal was to become a full-time writer in five years. I would write a novel each year to give me a one-in-five chance of finding an agent and getting a publisher. Meanwhile, my non-writing tech jobs continued to pay the bills. That was the plan for the first few years until the Great Recession came along in 2009. After being out of work for three of the last six years, filing for bankruptcy and having just enough money to survive, I’m giving up on becoming a full-time writer to become a weekend writer.

After 60+ job interviews over the last eight months of being unemployed, I landed a new non-writing tech job. This particular job has great future potential and may last longer than the last three jobs that ended after nine months. Since this job requires that I get up at 4:30AM to take a two-hour bus trip to get to work on time, I have very little time before, during and after work to write. Buses, unlike the light rail and commuter trains, tend to jerk and bump around in traffic. Since I ride one of the busiest bus routes in Silicon Valley, it’s impossible to write on a clipboard without scrawling the pen across the page and stabbing someone in the leg.

I’m using my commute time to study for the CompTIA Security+ certification, which is highly relevant to my current job as a desktop security remediation specialist. This certification and the other certifications I plan to take in the next year will position me for my next job. As I parlay ten years of desktop and help desk experience into a new career in information security, my income and employment prospects should grow steadily in the coming years.

With my 45th birthday just around the corner, various retirement calculators inform me that I need to save at least $10,000 USD per year for the next 20 years before I can retire. This is somewhat doable with my current income since I live a modest lifestyle. Unless I put money into a 401(k) at work, I will only be able to save $5,000 USD per year in a Roth IRA. The nice thing about being a weekend writer is that I don’t need the income from writing to support myself. I can open a Solo 401(k) and put 100% of my writing income (maximum contribution for 2014 is $52,000 USD) towards my retirement.

I’m going to banish that conflicting feeling of not being a full-time writer while working a full-time non-writing tech job. I’ll squeeze in whatever administrative task needs to get done between coming home from work and going to bed early during the week to free up my weekends for actual writing. When I retire from my non-writing tech career in 2034, I’ll become a full-time writer.

A Profitable Writing Business

CNBC The Profit TV SeriesOne of my favorite TV shows is “The Profit,” which I first watched in Las Vegas last year, where Marcus Lemonis spends his own money to turn around failing product-oriented businesses. His focus is People, Process and Products. You can run a business with two of three P’s, but you need all three to make a profit. Unlike too many reality TV shows, he isn’t afraid of walking away from a bad deal and ending the show on an unhappy note.

After my father passed away from lung cancer in 2012, I opened a living trust and split the writing business into two business entities: a California LLC for blogging and ebook publishing, and a Wyoming LLC for an Intellectual Property Holding Company (IPHC) to license my copyrights. After changing my workflow, this worked out quite well for a year-and-a-half.

And then I lost my non-writing job last October.

Since the two businesses doesn’t generate enough free cash flow to cover the cost of their respective business entities, and I needed every dollar of unemployment benefits for living expenses, I couldn’t afford to carry any more business losses. The California LLC got dissolved this past December. The Wyoming LLC will get dissolved at the end of this month. Now that the writing business is once more a sole proprietorship, my actual business expenses are quite low without the extra overhead.

The major expenses I have are web hosting and stock graphics for ebook covers. The predictable cash flow of ebooks sales can easily pay for those expenses. Cash flow above and beyond expenses becomes profit. Once you have excessive profits, you can pay for the self-employment taxes that come with being a sole proprietorship and build up a cash reserve. One of the problems I had with an out-of-state LLC is that I didn’t have the $3,000 USD minimum to open a business checking account for the IPHC.

Despite dissolving the separate business entities, I haven’t combined the internal structures for the two businesses. Blogging and ebook publishing is one business line. Licensing copyrights—first serial and reprints—are another business line. The accounting and related paperwork for the two business lines will be kept separate. Once cash flow reaches a critical mass, I’ll resurrect the two business entities and split everything up again.

The mistake I made two years ago was making an emotional decision and not a business decision. The emotional decision was protecting what’s mine from relatives who were eager to take everything my father owned after his death. The business decision would have taken profitability into consideration. After being in the writing business for eight years and the ebook publishing business for four years, it’s time to have a profitable writing business.

Finding Markets With Duotrope

DuotropeDuring my snail mail days (2006-2010), I found new markets to submit my short stories via the Writer’s Digest annual market guides. Every six weeks I would thumbed through my worn copy, read the market descriptions, make a list, and send out another two-dozen short stories to face a cruel world of rejections. That changed when I started submitting short stories via email and came across Duotrope.

The Writer’s Digest market guides became the writing bible since the 1920’s. As a teenaged wannabe writer, I checked out the previous market guides from the library to read the articles and see how the markets changed year-to-year from the 1960’s to the 1980’s. So ingrained that the market guides were back then, a magazine editor took me to task for submitting a manuscript by not reading the current 1984 market guide and cited the 1980 market guide that I did use. Comparing the two volumes side-by-side, there was a big change in the market description.

The market guides have gotten thinner and thinner over the years as rising paper and postage costs drastically reduced the number of magazine publishers, and the traditional publishing houses merged from many independent rivals to a few conglomerates. As I made the transition to submitting exclusively via email, I could no longer justify the cost of a thinner market guide.

Consulting printed volumes in the Internet age often meant finding market descriptions stale and out of date most of the time. Although you could go to the publisher website or send off a self-addressed stamped envelope (S.A.S.E) for the latest writer’s guidelines, you had to wait until the next volume came out to discover new markets. Not all publishers went through the trouble of being listed. Writers needed an online service to search market listings.

Duotrope came on the scene in 2005 as a free service, and recently became a subscription service for $5 USD per month or $50 USD per year. It’s worth every penny. With ~5,000 fiction, non-fiction and poetry markets are available to search by title, genre, length, payments, and submission type (electronic or postal). If you use the submission tracker, you can contribute to the statistics for each market by how long it takes for a publisher to respond to each submission and the acceptance-to-rejection ratio.

I’ve found many market listings that I submitted my short stories and poems to over the years. According to the submission tracker, I currently have a 22% acceptance rate (4.9% for short stories, 61% for poems) for the past year. My favorite feature is the weekly email that lists new markets, recently opened/closed markets, and submission deadlines for themed anthologies. I scanned the approaching deadlines to submit recently rejected short stories or find writing prompts for new short stories in the near future.

Writer’s Digest had an online service called Writers Market for many years. The service was often bundled with the deluxe edition of Writer’s Market at $70 USD per year. Not too surprising that Writer’s Digest would overprice their online service to protect their printed monopoly. The service is now available for $5.99 USD per month or $39.99 USD per year. With prices being more reasonable, I might give it a try someday. Until then I’m using Duotrope.

A Trio of Short Stories eBooks

A Trio of Short Stories eBooks

When I started selling ebooks four years ago, I could package a 1,000-word short story ebook and readers would buy it for a buck. That was four years ago. Looking at the accumulated sales data since then, readers are less incline to buy a 1,000-word short story ebook for a buck these days. Although the 1,500-word short story ebooks are still selling good, I think the minimum word count for a short story ebook that readers are willing to pay a buck for is 2,000+ words. I decided to improve my ebooks to better meet changing market conditions.

I came out with three new short stories ebooks−“Reaching For The Heavens,” “Travelers Among Strange Worlds” and “A Sorrowful River Runs Through Here”−that each has three short stories organized around a common theme. This trio of short stories ebooks features eight short stories that are still available as short story ebooks and an original short story.

Are readers willing to pay a buck for a 3,000-word short stories ebook?

The initial sales data is yes. A co-founder of a new ebook subscription service contacted me about publishing on their platform and specifically requested the trio of short stories ebooks (a future blog post will cover this in detail). An encouraging start for a new product category.

I may remove the eight short story ebooks after I get more sales data from the subscription services like Scribd, Oyster and others. Subscription services justify having as many ebooks as possible to increase every opportunity for attracting readers. However, since I specialize in SHORT ebooks (i.e., short stories and essays) and will be publishing my 75th ebook at year’s end, pruning and maintaining my ebook catalog becomes an issue. Sales data decided the creation of the new short stories ebook; sales data will decide the fate of the older short story ebooks.

Is The Bottom Falling Out For eBook Retailers?

Diesel eBook StoreWhen Bibliocracy stopped being an ebook retail store last year, I didn’t care much since I never made money from the three ebooks I got to post for sale. When Sony closed their ebook retail store earlier this year, I shrugged my shoulders since I didn’t make much money over the last four years. But when Diesel abruptly closed their ebook retail store last month, I checked the numbers and realized that I didn’t make much money there either.

Is the bottom falling out for ebook retailers?

The short answer is yes, based on my ebook sales numbers over the last four years. Bibliocracy was an independent ebook retailer that wasn’t successful. Sony and Diesel were part of the Smashwords premium catalog, which lagged behind the Big Three—Apple, Barnes & Noble and Kobo—in sales. No surprise that these three ebook retailers have raised the white flag.

Amazon is now a distant fourth behind the Big Three for selling my ebooks. The “world’s largest market” is typically 20% or less of my annual sales. I expect that number to become smaller this year. The general trend for most Amazon authors over the last few years is declining sales. If Amazon stops selling ebooks, I wouldn’t miss them as a publisher.

The longer answer for Diesel is an antitrust lawsuit against the Big Five publishers over the agency pricing model that allow publishers to control the prices of their ebooks and prevent ebook retailers from offering discounts to compete with other ebook retailers. Diesel may have a strong case since the publishers are reluctant to grant the smaller ebook retailers the same terms that they given Amazon and Apple. As many independent bookstores have complained for years, this two-tier system makes it difficult for them to compete with the larger retailers.

As the ebook market continues to grow, it’s not unusual for the bottom of the market to shake out weak businesses. If Kobo stops selling ebooks, I’ll start worrying about the overall health of the ebook retailer market. Until then I’m going to keep on writing, publishing and selling my ebooks wherever I can.

A Video Trailer For A Haiku Poem

After I decided to publish a daily haiku poem on Tumblr, I started writing haiku poems for submission. My first acceptance and publication was “Changing Winter” for Poetry Haiku (Winter Issue 2013). My second acceptance was five haiku poems for “Words Fly Away: Poems for Fukushima” (Spring 2014), a poetry anthology about the March 2011 tsunami and nuclear disaster in Japan. The editor posted YouTube videos of poets reading their Fukushima poems. Last week I put together a video trailer.

Unlike the other poets who read aloud their poems in front of a video camera, I wasn’t going to do that. If I read all five haiku poems that I submitted, the video would be very short and very uninteresting. A 30-second video trailer to introduce my haiku and the anthology was a better approach to promoting both.

“Fukushima Seeps” was the easiest of the five haiku to adapt into a video with the last line being about Godzilla, our favorite kaiju who routinely stomps Tokyo whenever mankind does something incredibly stupid, say, building a nuclear reactor in the path of a tsunami. With the new Godzilla movie coming out in May 2014, this became a fun little video to put together.

On a piece of paper, I broke down the video into a script.

 

BEGINNING TITLE ONE

“Fukushima Seeps”

White text on black background.
Fade in Godzilla theme soundtrack.

BEGINNING TITLE TWO

A Haiku Poem by C.D. Reimer

White text on black background.

HAIKU LINE ONE

Fukushima Seeps

White text over still picture of blown nuclear reactor.

HAIKU LINE TWO

Poisons Pacific Ocean

White text over still picture of Pacific Ocean radiation exposure.

HAIKU LINE THREE

Here Comes GODZILLA!

White text over black background.

MONEY SHOT

Godzilla coming out of ocean still picture.
Fade in and out Godzilla roar soundtrack above theme soundtrack.

FINAL TITLE ONE

Read “Fukushima Seeps”
& Other Haiku Poems by C.D. Reimer

White text over black background.

FINAL TITLE TWO

“Words Fly Away: Poems for Fukushima”

http://fukushimapoetry.wordpress.com/

White text over black background.

FINAL TITLE THREE

Spring 2014

White text over black background.

FINAL TITLE FOUR

“Godzilla” © 1954 Toho Co. Ltd
All Other Copyrights Belong To Their Respective Owners.

White text over black background.

FINAL TITLE FIVE

“Fukushima Seeps” Haiku & Video
Copyright © 2014 C.D. Reimer

Fade out Godzilla theme soundtrack.

 

After I scoured the Internet for still pictures and Godzilla soundtracks for an hour, I put the video together in two hours with my MacBook and iMovie. This was my first time using iMovie, so I spent an hour learning how to use the program and one hour completing the video. Satisfied with the results, I uploaded the video to Tumblr and YouTube.

Opening Checking Account For IPHC

Questionable Content Webcomic #2650Jeph Jacques, the webcomic artist of “Questionable Content,” recently related the difficulty he had in opening a checking account after telling the clerk what the business name was, where the clerk looked at him funny and asked if the business sold marijuana over the Internet. I ran into the same problem when I tried to open a checking account for my intellectual property holding company (IPHC), except no one accused me of selling marijuana over the Internet.

The people at THE BANK were more than happy to open a FREE small business checking account for my IPHC until we got into the nitty-gritty details.

The purpose of an IPHC is to separate my copyrights away from the writing business and myself personally. If someone sues me, wins a judgment and tries to go after my assets (i.e., royalty income from copyrights), they would have to file a lawsuit in Wyoming since I incorporated my IPHC there. Even if they won a judgment in Wyoming to receive income from my IPHC, I’m not legally obligated to distribute any income and they would have to pay taxes on “phantom income” that they would never receive.

The business name for an IPHC should never include your legal name to make it difficult for ambulance chasers to casually search databases for easy targets to file frivolous lawsuits against. Wyoming doesn’t even require owner’s name on the public record, if done through a registered agent. (You still have to reveal the name of your IPHC in a court of law to avoid criminal accusations of hiding assets during a lawsuit.) Most IPHC names are typically unrelated to what the business actually does.

Even after I explained the logic behind the name and the purpose of the IPHC, THE BANK viewed my small business with suspicions. Banking regulations have tightened since the aftermath of 9/11 to prevent terrorists from creating shell companies to launder money into the United States. (Never mind that corporations and Wall Street create shell companies to hide all kinds of activities, legitimate or otherwise.) Since I was clean-shaven when I walked into the branch office, no one accused me of being a terrorist.

With some major misgivings, the branch major submitted my application. We spent the next three weeks going back-and-forth over whether my IPHC was a legitimate business. THE BANK didn’t like my business formation documents because none of it was in my legal name, I didn’t have a corporate website, and used a personal email address. THE BANK refused to accept documentation from my registered agent because it didn’t have a fancy letterhead. I couldn’t set up a cooperate website and email addresses until I had a checking account set up.

The application for a checking account was eventually rejected because my IPHC wasn’t registered with the Secretary of State (SOS) office to do business in California. I did a face-palm when I heard that. Registering to do business in California would require revealing my identity to every ambulance chaser in the state and paying an annual $800 USD franchise tax on income earned over the Internet. That would defeat the purpose of setting up an IPHC.

THE BANK did approve opening a business account for my writing because all the business formation documents were in my legal name, I had a corporate website and email address, and registered with the California SOS. With all my ducks lined up in a row, I got approval in 15 minutes.

As for my IPHC, all my transactions go through PayPal. That’s fine for now. But PayPal has a reputation of randomly freezing accounts with substantial balances, especially if the account wasn’t linked to a checking account, and takes months to resolve. If I ever open a checking account for my IPHC, I would have to fly into Wyoming and present the paperwork in person. That, of course, would be a business tax write-off.

Read An eBook Week 2014

Read An eBook Week 2014The annual “Read An eBook Week” promotion at Smashwords is here again, running from March 2nd through March 8th. Check out the resource page for more information. This year I have 15 ebooks enrolled in the promotion. Five omnibus ebooks at a 50% discount (coupon code REW50), five recent ebooks are FREE (coupon code REW100), and the usual FREE ebooks are still FREE (no coupon code).

If this year is like the last few years, the FREE ebooks will fly off the virtual shelves and I’ll have one or two direct sales. This isn’t surprising. Most writers who publish on Smashwords make the majority of their ebook sales from the premium catalog (i.e., Apple, Barnes & Noble, Diesel, Flipkart, Kobo, etc.). This promotion and the annual summer/winter promotion in July are good opportunities to reach out to the many readers on the Smashwords website.

Two related notes concerning the Smashwords premium catalog.

With the recent announcement of Sony closing their ebook store on March 20, 2014, and transitioning their users to Kobo, I have removed all the Sony ebook links from my author website. Because Kobo is still transitioning users from Sony, this has prevented my recent pre-order ebooks from showing up on their website.

After the announcement that Scribd was coming to the premium catalog in December, I pulled my ebooks off the Scribd website and removed the ebook links from my author website. With my Smashwords ebooks now showing up on Scribd, I’m in the process of restoring all the ebook links on my author website.

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