When you self-publish, you are going into business for yourself. As a business person, it’s important to set up your business properly. This might sound daunting, but it doesn’t have to be. There are three broad steps involved:
- Choosing Your Publisher Identity
- Obtaining Your Business License
- Setting Up Your EIn and Business Bank Accounts
Let’s talk about your publisher identity first, because that’s the fun part!
Choosing Your Publisher Identity #
Your publisher identity is how you choose to present your business to the world. Some authors choose to publish their books under their own names, making it perfectly clear they are self-publishing. However, it is often to your advantage to give your self-publishing business its own identity. Doing so can help with your publicity efforts (book reviewers can be resistant to obviously self-published books) and can also help you keep a mental separation between the creative side of your work (your writing) and the business side (selling your books).
What you name your business is a personal choice. Your business can be named after the street you grew up on, your favorite tree, or even the first two random words that pop into her head. Once you have settled on a name for your business, you’ll want to check your state’s business registry to see if someone is already doing business under your preferred name. This registry is typically found through your state’s main government website. If no one else is using the name, you can proceed with obtaining a business license through your state.
Obtaining Your Business License #
The simplest way to obtain a state business license is to register as a sole proprietor doing business under an assumed business name (which some states refer to either as doing business as [DBA] or holding a fictitious business name [FBN]). Under this setup, both your state and the IRS view you and your business as one entity for tax purposes. This is akin to someone going by their full name in some settings but by a nickname in other settings. In both settings, the person is the same, despite what they are being called.
Each state has its own set of rules governing the registration of new businesses. Information on what your state requires is found through your state’s main government website. In most cases, the setup involves filling out a simple form and paying a fee. Once the registration is approved, your state will mail you a copy of your business license. If you prefer not to do the paperwork yourself, a legal service like LikeZoom or ZenBusiness can help.
There are other ways to set up your business besides a sole proprietorship, such as establishing it as a limited liability company (LLC) or a corporation. These are more complex business structures that treat the business as a separate entity. This is beneficial in some cases, especially if you plan to publish other people’s books at some point. Since there is more work involved in setting up a business using one of these options, most self-publishers stick to sole proprietorships. If you think you might want to go with an LLC or corporation, though, you’ll want to consult with a legal expert who can guide you through the process.
Setting Up Your EIN and Business Bank Accounts #
Going into business means having to pay taxes on any income you receive from book sales. It also means you can deduct the costs of goods and services you pay for in connection with your business. Tracking your business finances can be a challenge if everything is connected to your personal bank accounts. For this reason, it’s generally recommended to keep your business finances separate by setting up a checking account for your business. You should be able to set one up directly through your bank. Before you can set up a business account, though, you will need an Employer Identification Number from the IRS.
An EIN is used to identify a business similarly to how a social security number is used to identify a person. An EIN is free to obtain through the IRS. Although not a required step for sole proprietors, you will be required to have one when setting up business checking, applying for business credit, and setting up accounts with book distributors under your business name.
