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Statistics on Self Employed Authors And Writers

Does relative scarcity translate into value? Not always, as self employed writers can tell you. Dozens of the books are published every year on the subject of selling articles and manuscripts. If we include books on writing effectively, promoting your work, or preparing screenplays, the number of how-to guides published each year may be in the hundreds. But the employment statistics for writers tell a different story.

The 2007 census numbers estimate that just over 44,000 people nationwide are professional writers or authors, and that includes people who make their primary living in other professions. There are more technical writers, at 47,000, then mainstream writers, and tellingly, there are more editors at 105,000 than writers of both ilks combined. That suggests that a lot of editors are either composing their own copy from press releases, wire services and other sources, or employing large numbers of part-time stringers who aren't counted in the writer totals. Of course, as nobody sent me the survey I have my doubts about the accuracy:-)

So, I decided to try the REAL statistics guys, and after a while of digging around the IRS website, found the spreadsheet for Schedule C reporting for 2005 (the last tax year available) by business type. Note that this isn't the 711510 code for independent writers, artists, etc., it's 511110 code for Publishing Industries (except internet). Just under 92,000 business tax returns for sole proprietorships were filed as publishing businesses, which excludes giant corporations, LLC's, etc. The total net income of publishing businesses reporting a profit for 2005 was $942 million. Around a quarter of filers, 21,000 in all, reported a loss. The average sales of the profitable group was $27,000. The average sales of the unprofitable group was $14,000.

Looking at the profitable publishers only, the average net income for the entire publishing group was just $13,348 per business! It's also interesting to note that the $942 million in net income was on about $2.47 billion in sales, so margins are pretty good for publishers who have sales. The reported payroll for profitable sole proprietors filing as publishers was $200 million in 2005, meaning if every business had a single employee, the average salary would be about $2,800 a year, but of course, most self publishers and not a few micro-presses have no employees, so the average is higher. Not surprisingly, the average payroll at the unprofitable publishers was much higher at around $4,700.

So the average self publishing author who reports income as a publishing business is earning less than $10,000/year in net profit. In some cases, those publishers are simply smarter than me about generating more expenses so they have less net income. But on the whole, I suspect the equation looks more like

limited sales = limited gross income = limited net profit

But on the whole, the tax numbers offer a more encouraging picture than the labor statistics numbers, even though all sole proprietorships filing as publishers aren't self employed authors or writers. In fact, many self publishers probably file as 711510 code writers, but that's what makes statistics fun.

4 comments:

Bryan Rosner said...

I suspect that this industry follows the same rules as any other: 10% of the businesses make 90% of the money.

Bryan

Morris Rosenthal said...

Sure it's not 80/20 like everything else under the sun?

Morris

Kim Isaac Greenblatt said...

I always tell my clients (and anybody who asks) to be very careful about what business code they are going to use because the IRS (and where applicable the respective state tax agencies and services) look at other businesses of their elk for reasonableness. I also caution would be publishers (and existing ones) to remember to run your business - as a business. If you treat it like a hobby or are taking deductions that you shouldn't you are asking for trouble.

I don't have a problem with the low income ranges because let's face it, it is hard to get things out there as a publisher and some types of books sell more than others. I still think everybody has at least one best seller or at least a perennial in them :).

Kim Isaac Greenblatt
www.kim.greenblatt.com
www.shockinglyawesome.com

Morris Rosenthal said...

Kim,

All very true, but in the case of self publishers, I think you can pick either code safely. There are differences between the expense profiles, of course, maybe I'll work out the writer/entertainer numbers some time just by way of comparison.

Morris