Hello everyone welcome back to Cloud Kitten Chronicles. I'm Joshua and today
we're going to be talking about self-publishing, creating a publishing
company, and everything in between. This was a video recommended by one of our
kittens in the kitten coalition, our Patreon. You can check that out over here.
This was a suggestion from one of our patrons Courteney Levit. Courteney wanted to know a little bit
more about our publishing company, Cloud Kitten Publishing, what it took to get
off the ground, why we started one in the first place, and if it makes sense for
authors to even start a publishing company or to just publish their book
themselves. When you finished writing a book this can actually be a really
confusing thing to try to figure out how to do because everybody has different
opinions. So I thought it would be good idea to lay down some information that
we found out and give you our reason for starting a publishing company and why
you might not necessarily want to do that. Now before I start talking about
all that stuff I wanted to say I'm not a lawyer. If you want to get actual lawyer
advice you should go and pay for an actual lawyer. All the laws and
regulations and stuff that I'm going to be talking about are specific to the US.
And to start off by saying that a publishing company is a business. It's
not just something that you write down on a piece of paper saying "hey I'm a
publishing company now" There's a lot of regulation and paperwork and legaly
stuff that you're gonna have to worry about if you start a publishing company.
Make sure that even after you listen to this video that you actually sit down
and put a lot of thought into whether you want to get into that whole mess.
Cloud Kitten Publishing specifically is a DBA or doing business as. It's a name
that our actual LLC is legally allowed to use so our actual LLC name is
Eclectic Wolf LLC. We decided to do that in the beginning because we wanted to
make sure that we structured our company such that if we decided to do
anything else in the future that we wouldn't have to re-set up an entire
company. We could just use the one that we already had. Eclectic Wolf LLC is
registered under the US government stationed in the state of California. So I
think when you actually finished your book and you've decided that you
actually want to go on the throw it out into the world. You kind of have three
options. Your first one is that you published the book as yourself the
author. You don't have any type of company it's just you. The second option
is that you go out and you query actual publishers you submit them your
manuscript, then they review it and they're like "yeah we really like this
here's a contract sign it, sign your book away and we will publish it for you and
handle everything that's involved with it" And then the third option is I want
to create my own publishing company. I want to actually run myself like a
business. Maybe I want to possibly branch out in the future to publish other
people's work and I want it to be more formal. So why would you want to choose
each of these individual options. Let's start out with just publishing yourself
no publishing company or anything just by yourself. I think
realistically this is probably the easiest option and it's the one that's
going to give you a lot more freedom as an author. The benefit on this side is
that you completely own your work. You can publish it you can change it however you
want to. It's going to require the least amount of paper work because all the
monetary related things and paying taxes that's just your personal account. You're
making an income and you got to pay taxes on it like you're making income as
an individual. However the downside is that you basically have no legal
protections. If somebody were to come out and sue you you would be personally
responsible for paying that if you lose the lawsuit. What that means is that if
for whatever reason you get sued for like a million dollars literally
everything that you personally own will have to be sold or given away in order
to make back this amount and you will personally have to pay back this entire
amount. Maybe somebody is looking at the cover of your book and they're like hey
that image that's on that book is copyrighted. I own that copyright. I
should sue them for damages. So if you own a publishing company
they're not going to be suing you as an individual they're going to be suing the
company (LLC) and so what that means if you eventually lose the lawsuit for whatever
reason all that money will be taken away from the business. All of your personal
assets will be perfectly fine but anything that the business owns, any type
of materials or money of the bank accounts, those will be the things up for
grabs. And so this is a way to possibly lose some
your money but not lose your entire livelihood. But this isn't necessarily
perfect. The courts could decide that you are personally responsible for making
the decision that caused whatever thing that happened that you're being sued for.
So while the LLC can provide a number of protections it's not perfect. It usually
depends on the state but in general LLC's are very very strong for personal
protection. So you're like "hey great this is great I can set up a business I'm
protected I don't worry about anything." Well yeah but it's a lot of work and it
costs a lot of money to actually set this up and maintain it as a business.
Like I mentioned this is a business. You're running a literal business that
is registered with the government and you need to do everything that goes
along with that. The first thing you're gonna need to do is even set up that LLC.
I'd say that for us specifically setting up that LLC is probably one of the most
expensive parts of running our business. So the initial cost that we actually had
to put down to set up this business was $5000. This isn't what we paid it was the
deposit that we had to put down to actually say this is an amount of money
that we have as an organization to start with spending. So the actual cost of
the lawyers to set up the LLC, they charged $2, 700 to
completely set up our business, file our DBAs, and basically you fill out all the
paperwork. And then at the end of it once everything was set up they gave us this
beautiful binder here and this binder has literally all the paperwork related to
our company that we would ever need. It has our bylaws, our operating agreements, how the
ownership of the company is split up between Megan and I, how taxes
should be filed. Now $2,700, it's a lot, but I feel that when you're setting up
this type of organization you're gonna want to hire somebody that you know has
a very real experience working with it. You can always go to a company like
Legal Zoom or something like that but I really would not recommend it for doing
something as large as setting up an organization. You're gonna want to create
a one-on-one relationship with a lawyer because you're gonna need to go back to
them at some point to do some other work. For example when Megan and I moved
apartments we needed to go and ask them "hey what documents do we need to sign?
Who do we need to notify?" and they are able to do all of it. However it was very
expensive to also do that since that was a lot more work that
they had to do. And then not even including the lawyer fees you need to
pay for a ton of stuff just to upkeep the business. California has a law where
every company no matter how much money they make needs to pay a minimum of
$800 a year. It doesn't matter how much money you made.
Even if you were operating in a net negative and you barely made anything
that year you at least have to pay California $800. We need to pay for a
registered agent which is a person that basically just sits in an office
somewhere that the government can send mail to make sure that we get legal
notices. And then we have to have a ton of software to just track how our
business is running. So for example a QuickBooks membership and that's to sync
up to our bank accounts and track every individual thing that we have to spend
and then attach the receipts to it because as a business you need to keep
your receipts for literally everything that you buy. And then all the software
that you would normally need to buy to actually run our business so like the
Adobe suite for like Photoshop and After Effects, ISBNs for our books, there are
just so many costs that go into running a business that you don't initially
think about. So how about we take a look at what we've actually spent on our
business. I want to show you guys this so that you guys understand exactly how
much money it takes and along with how much money we've made and you can make
the decision as to whether you think it's a good idea and want to spend that
money. So here we go this is the screenshot right here of my QuickBooks
account of every expense that we've made sense we've created the company. As you
can see we've spent about $1500 on advertising which didn't
work out quite as well as we hoped but we learned a lot of things. We've spent
about $800 on software over the past year and that's between
Google, Amazon services, Shopify, Adobe products, that's literally everything
that we needed to run our business, make video content, make publishing content,
literally all that stuff. We have some fees in there that we had for keeping
servers for our personal websites and our business websites. The Cloud Kitten
Publishing logo and the design of Aletheia's cover is in there as well and that was
over a thousand dollars. Then our editing costs for Aletheia was about
$1800. We spent about $1,200 on actual products so that's the physical
books that we bought to sell to other people and we did that by going to a convention and we do
that on our website. Check out our website down below and buy Aletheia. And also that's included in products that we just gave
books given away for free either through giveaways or for friends and family or for gifts
or anything like that. You also pay some money to ship to people. We have to pay some
fees to Square whenever you make a sale. So here we go we have our taxes. As
I mentioned we have to pay a minimum of $800 a year to California so
we've had to pay that twice now since it's almost been two years. We included
travel in there to convention and I think was BooknetFest. And so here
you are you can see our wonderful operating income of negative
$13, 000. Now that's a lot of money. That's because it takes a lot of money to run a
business like this. So now let's take a look at the money that we've actually made.
Now I'm not showing this for you guys to be like "oh no they're so negative" it's
because I want you guys to understand how expensive it is to run a company
like this. Aletheia has sold very very well for a single published book from an
author that nobody had heard of before Megan published anything before she
even really had a social media following. I think we're personally doing great and
this is something that I look at and it's a really great drive forward to say
okay this is what we have to work towards. A lot of people think "oh those
authors always trying to push to make more money and become rich" and it's not
about becoming rich. A lot of times authors need those sales just to
make back the cost of actually publishing a product. Now it would be great
if you eventually after your number of years and maybe once Megan releases a
book or two more that we actually start becoming more positive but this is
something that just needs to happen. When you're running a company you're gonna
be negative for a while until you start getting the company off the ground. So as
you can see we've made about $300 from Amazon. We've sold
about $300 worth from Lightning Source (IngramSpark) directly. So far we've
made about $150 on Patreon. About $200 from
PayPal from selling product. Shopify from selling through our
online store. Square is the income that we made at Booknet fest by selling our
book directly to people at the convention (also a formatting job). So if you're taking a look at
that and being like "wow I don't know if I can spend that amount of money" or if
having that personal protection isn't really worth that amount of money in
the beginning, that makes sense. There's nothing wrong with that. If you want to
take on the personal risk, if you're like it's gonna be fine I don't really think
that many people are gonna be reading it, I know that the stuff that I've put in
the book is not copyrighted anyway, I think more than likely you're gonna be
fine. Once you start making thousands of thousands of dollars from your book then
might be the time to think okay maybe I should go and get published or I should
make a publishing company for those legal protections. But if you're just
starting out I think you're gonna be fine just selling the book as an
individual author. You're gonna have a little bit of issue probably with name
recognition because people are gonna say oh this wasn't published by a publishing
company. But I think even owning our publishing company, nobody had ever heard
of Cloud Kitten Publishing before so it was kind of like the same thing. Yeah
it's owned by a company but that doesn't really mean anything cuz it's not a
company that I've heard of before. But if you're like hey I really want
that name recognition of a publishing company that's really good or yeah I
think it's really important to have those legal protections, you can go out find a
publishing company. You're gonna have the negative that a publishing company is
going to be very picky, it's gonna be a lot of work to go and query all of those
different publishing companies before someone finally chooses you, and when
they eventually choose you you might end up losing some control over your
creative freedom. But if that safety net and that marketing ability is really
important to you, yeah go ahead and do that. Like none of these options are
better than the other one. They're all just different options for different
things that people care about. You're gonna want to pick the thing that has
the best risk to reward ratio for you specifically and don't let anybody shame
you otherwise. There is one last option that you can possibly choose. You can go
and find a hybrid publishing company. Now these hybrid publishing companies you're
gonna have to do your research because they're given a lot of complaints a lot of
times because there are vanity publishers which you're basically just
paying for work and in which case you probably should just publish it yourself
or there are actual hybrid publishers that
provide a service that I think is a good mix between having a traditional
publishing company protecting your work and paying all those upfront costs and
you needing to actually go out and start a company and pay that ten thousand
dollars to actually run your business. More than likely the way that that's
going to work is you're gonna go and find a hybrid company that you like.
You're probably gonna end up paying them some money especially if they're not a
big publisher they might not be able to front literally all the costs of
publishing your book and so they're usually gonna ask for an amount and
usually that's to cover cover design and editing specifically. But then you don't
have to worry about literally any of those other costs. They handle literally
everything else and usually they're gonna take that money pay for some
things pay for a number of services out of their own pocket and then you're
going to get an actual publishing experience having to have spent some of
your own money but not having to lay down all of it in order to actually get
that benefit of having a pretty much professionally published book. Hybrid
publishers are gonna have a little bit less name recognition but if you're
going for a hybrid publisher you're probably not gonna be going for name
recognition and more than like you're probably gonna be able to retain some of
your creative freedom instead of going to a normal publishing company and them
telling you what exactly needs to change for them to publish your book. And then
in regards to legal protection, more than likely if they're going to act as
the publisher and so you don't have to worry about those legal protections. Just
make sure that when you eventually read the contract that they put in front of
you they are taking on the risk of all these things because if you're paying
them otherwise you're probably better off just paying for those individual
services yourself. So there you go everyone, that is my insight anyway into whether you
should still publish a book, whether you should create a publishing company, go to
an actual publishing company. As you saw they each have their individual benefits
and trade offs and I think that you're gonna need to make a choice as an
individual what you think is best for you and your book. None of these options
are objectively better than one or the other.
It's just a matter of what you think is gonna be best for you. Don't let anybody
shame you otherwise. It's your work and obviously you're gonna want to do the
thing that's going to benefit your work the best. Again
I'm not a lawyer. Do your own research, go talk to a lawyer. A lot of times you can
go to them for free and they'll be able to tell you what they think you should
do and how much it's going to cost. Again Thank You Courteney Levit for
recommending this topic. I think is very important. If you guys have any similar
types of questions or questions about publishing in general leave us a comment
down below what you want to see us make a video about. Go become a patron. Go
become a Kitten in the Kitten Coalition at our Patreon. We have a ton of beautiful
wonderful benefits that you get between extra video content like bloopers and
vlogs, you can even get some critiques by me and I'm pretty harsh. So that's it
guys if you enjoyed this video leave us a like, please subscribe if you haven't
already, if you've already subscribed ring that bell so you can be notified
whenever new videos like this are released. We released three times a week.
And yeah go check out a Patreon! We love you guys and we'll see you in the next video!