SPQ 037: How to Build Assets with Your Self-Publishing Business
Introducing Self-Publishing Assets
In episode 36, Steve talked about some of his favorite books. One of those books is “Rich Dad Poor Dad” by Robert Kiyosaki. Although Steve disagrees with a few aspects of Kiyosaki’s brand, he does agree with the idea of building assets.
Steve defines an asset as any item that generates cash flow. Your goal should be to build as many assets as possible. At the time of this recording, Steve technically has about 90 published assets, from Kindle books to audiobooks. He would like to add about 50 more assets to his portfolio in 2015.
Joanna Penn covered this topic in a blog post titled “It’s Not Just One Book: Your Rights and How to Exploit Them.” She talks about how you can exponentially grow you portfolio with just one book. You can put the book in Kindle format, print format, or audio format; leverage foreign rights to the content; use the books to create information products; turn small pieces of content into apps; or license your content to other people.
Investments and Cash Flow
You need to think about two investments when creating your assets. The first is your financial investment, or how much you spent to create the content. The other is your time investment, or how much time you spent creating the finished product. You must track these items closely to fully understand what it truly takes to put something in the marketplace.
When you publish a book, you need to focus on one major goal. Instead of focusing on making money, Steve believes you should focus on breaking even (getting back the money you put in to the project). It all comes down to cash flow, or the movement of money in and out of a business. Simply put, income minus expenditures equals your cash flow. This is a very simplified definition of cash flow, but it gives you an idea of what’s involved.
When you focus on positive cash flow for each book, you reach what real estate investors call “infinite return.” Your asset is already paid off and it is generating income. If you put $1,000 into producing the book and you’ve gotten $1,001 back, that one dollar is the start of your infinite return. You’ve already made your money back, and now this book can infinitely earn money for you, your spouse, and your descendants.
The Importance of Tracking
Keep an expenditure spreadsheet for each book project. It can be a simple Excel file or a workbook with multiple tabs for your books. Here are some of the expenses you should be tracking:
- Graphic design
- Ad campaigns
- Stock images
- Translation services
- Fiverr gigs
- Review copies
- Paid book promotions
- Audio production
- Outsourced content
Tracking your time and expenditures can help you figure out which actions are generating the most income for your book-based business. Tracking also shows what is working with your business and what is not.
When Steve started writing his habit books, he talked about health habits and productivity. When he did a cost breakdown, he realized he was spending the same amount of money on each book, but he was selling about ten times more productivity books than health books.
Resources and Links
SPQ 036: Steve recommends eight books on self-publishing and business
Rich Dad Poor Dad: Robert Kiyosaki tells the story of how his real dad and his “rich dad” (a friend’s father) shaped his thoughts about money
Your Rights and How to Exploit Them: Joanna Penn explains how you can create several different assets with just one book