I'm thinking about things like: personal budgeting, bookkeeping, forecasting, planning for taxes, and inventory management?
I'm going to approach this thread in terms of things I wished I had understood better, when I was a young designer just getting started with publishing games.
Let's dive in!
Every recommendation comes with an invisible "...if you have the security and privilege to do so" rider attached.
I thought capitalism was stupid (it is), and so for years didn't register and report on my business properly.
Both these things bit me on the ass.
Watch some youtube videos on how double entry accounting works. Find some free bookkeeping software/tools.
Start from $0.
They have some tutorials and helpful forums.
Its just easier the sooner you do it!
I'm writing on the assumption that you'll be a sole proprietor.
I highly recommend registering your business and opening up a separate bank account for it.
If you're not sure what's best for you, find a trustworthy credit union or small bank and ask someone nice.
The next bundle of advice sounds even simpler: know how much things cost.
Know your costs. Actually do the math.
I live in Canada. Canada Post has an online shipping cost calculator. I can plug in my book's dimensions and weight, and plug in a destination, and it'll show me the price.
That means call up three different printers, tell them your book specs, and ask them for estimates. Ask them how long they're good for.
Calculate shipping costs. Etc.
Know your costs.
Once you know your costs, factor them into how you operate your business and price your products!
If you want to sell to retailers, make sure you're pricing things to still turn a profit when sold at 50%.
You know what sucks? A game you depend on running out of stock when you can't afford to reprint it.
Know what else sucks? Doing your income taxes and realizing you owe big $$$ you don't have.
At the end of every month, I pay myself a flat amount. $3,400 CAD.
My business account has $30,000 sitting in it. You know how much is actually free to play around with? lol none. That covers my projected taxes to date & upcoming print runs. Isn't that wild?
For example, here's one for Canada: simpletax.ca/calculator
Basically: once you make past a certain amount of money, every dollar after that gets taxed at the new rate.
Most jurisdictions have sales tax to collect/remit!
In Canada, a self-employed person also pays employment insurance. It's a fixed percentage of income up to a limit, effectively capping at $856.36 annually.
But I promise, if you are proactive and plan ahead, it will become clearer with time and you will feel empowered.
Ask for help if you need to! Hire an accountant if you want to!
For tax purposes, you'll likely need to know the total dollar value of your inventory at start and end of year.
And you'll want to know how much stock you've got left + reprint costs.
But hopefully you get the idea?
Research. Do what works for you.
To recap so far: register your business, open a bank account, do bookkeeping, know your present and future costs, plan accordingly, track inventory.
You launched a successful kickstarter! It raised $60,000. You know that between Kickstarter and payment processing fees, you'll pay 8-10%. That leaves $54,000. You used KS sales to gauge how big a print run to do.
You decide that you'll print triple the number of books that have already sold. That comes to $10,000. You anticipate $800 for freight.
You've got backers from around the world! You anticipated a shipping bill of $12,000. Add a $2200 buffer to cover bounced packages and increased rates.
That leaves you with, what, something like $20,572 cash money! 💸
Are you starting to set aside money for that re-print now? If not, what metric will you use to decide when it's time to start setting money aside?
What are you going to do with that $20,572? Are you going to invest any of it back into the business? A new tablet? Printer ink?
You've got $18,000 that's all yours to spend! How often do you do a kickstarter of this magnitude? Every 12 months?
How many dollars do you draw from the account monthly?
When the Monsterhearts 2 kickstarter put a gigantic sum of money in my bank account, I totally mismanaged it because I hadn't developed the ability to forecast yet.
I've talked about how you handle money when it's "in the business," but with a sole proprietorship the membrane between "in the business" and "personal" is thin.
Self-employed or freelance life can be really amorphous. Knowing what your money is doing is important for anyone, but that goes double for people in our shoes.
But here's the deal: I might hate how money works in our society, but I know that financial stability only comes through financial literacy and awareness. Tangible skills everyone deserves to access.
Ditching avocado toast won't conjure up a down payment, we all know that, but using money strategically does have a meaningful impact.
Read about their approach over here.
Consider: sign up for the free trial of the app, get the hang of it, then decide if you wanna pay to keep going or cancel & do it diy.
She was interviewed on the Bad With Money podcast last year, and it's a good listen.
I don't always vibe. Some guests are entitled jerks. But sometimes I learn valuable skills.
The host, Shannah Game, talks a lot about "money mindsets" and how they influence us.
Bookkeeping and forecasting helps you manage that on the business side. Budgeting helps you manage that on the personal side.
Over time, you gain more control over your money mindset, and can make empowered choices.
I recommend it as a long-term goal!
(My personal draw is $3,400/mo CAD at this point, years in.)
The final advice: don't quit your day job until the income has been redundant for a while and you've built a cushion.
It sucks to put yourself in a situation where you have to constantly churn out new releases and can never take breaks or focus on longer-term projects.
Register your business. Open a bank account. Do bookkeeping.
Know your present and future costs. Plan and forecast accordingly. Track inventory.
Keep a budget. Hone your money mindset over time.
@DanTheCPA talks about how this can be managed for US folks.
There are different strategies for avoiding this situation! It's one I'd advise seeking professional wisdom on.
Keeping it simple!