Survey 1,000 authors about their writing ambitions and many will rank “going full time” as a primary goal. Some of us have wanted it for as long as we can remember. As teenagers, we imagined ourselves signing books and never looked back once we realised that writing was a real job. Others among us, meanwhile, might have discovered the writing bug as an adult, after years of working in a nine-to-five career and raising a family. We always knew it was possible but never realised we’d enjoy it so profoundly until we started writing as a hobby. Regardless of which camp you fall into, if you’re reading this blog post, you’ve probably fantasised about writing full time.

Indeed, making the leap is exciting. Perhaps it’s the siren song of freedom that calls you. The idea of never having to answer to a boss again. The fact that you can fix any mistakes you make without drama, make all the creative calls or take a day off without having to request annual leave. Maybe you’d simply like to retire your spouse and live on your own terms. Sounds like a dream, right? It is. But the dream can quickly slide into nightmare territory if you don’t prepare a safe financial transition into full-time authorship, especially if your family is to rely on your royalties to survive. One false step could destabilise your take-off, or even cause a catastrophic fall.

This article isn’t meant to scare you; simply to warn you of the risks you take if you don’t prepare your finances properly before you transition. Will the risk ever disappear entirely when you leave your day job? No. If business were that easy to predict, everyone would jump into it risk-free. It’s the gamble that makes it a challenge. That said, the likelihood of encountering financial strife and heading back into the workforce diminishes greatly if you create a safety net in advance. How does that look? In essence, that’s what we’ll explore in today’s article: five basic tactics you can use to minimise your financial risk as you become a full-time author.

Read Your Statements

The first thing you should do is pay attention to your finances. That might sound like obvious advice but many authors don’t do it. So many of us have spent decades internalising the limiting belief that creative minds “don’t do” maths that we ignore the paperwork. Look at your total income and expenses, though, and you’ll realise that balancing cashflow is simple addition and subtraction. What’s more, the figures will tell you whether you can safely leap into full-time authorship or if you’re better off waiting so you only need to make this jump once. By the way, this goes for your personal bank account and your business one, both of which should be separate.

Once they begin, many authors discover their accounts don’t match the story in their head. Riddled with outgoings — some they don’t even recognise — they learn they’re far less profitable than they first thought. Some months, they even make a loss, which they would never survive without a salary cash injection. Not only that, “random” expenses crop up… every month. And while they all seem like one-offs, the truth is that they occur on a regular basis. They might seem anomalous, but work out the average and you’ll notice a trend you can account for in your budget. This will give you a better picture of how much money your business really needs to run.

Create a Safety Net

Finding out you’re broke is never fun, but awareness is half the battle. If you know what you earn, what you spend, and where the gaps are, you can build a realistic safety net to survive a self-employment dry spell. According to Forbes, just $1,000 already puts you in a better position than 70% of consumers. Pay down high-interest debts and save enough to cover six months of expenses, too, and you’ll be in a top percentile of financial safety. Will these precautions keep you debt-free forever? No, but they will ensure you enter the publishing world sitting on a cash pile rather than fighting your way out of a hole. As billionaire Warren Buffett once said,

“Only when the tide goes out do you discover who’s been swimming naked.”

Better yet, keep a life raft. Indeed, many people choose to kick off the corporate cruise liner into open water, totally unaided, but not everyone needs to leave in one kick. Is it possible for you to leave your day job in stages? Some employers are supportive and understand the call of a dream. Ask yourself:

“Could I go part-time rather than leaving altogether?”

“Could I opt for a demotion into a role that gives me more time and energy?”

These arrangements might not leave you with a satisfying severance, but they will keep you afloat on a smaller income while you’re still scaling up from a shaky part-time venture into an almost-full-time business.

Account for Flukes

Once you know where your money is going and what size net you need to keep yourself safe in the event of a catastrophe, next you need to ensure your publishing business is consistently profitable. It’s common for keen authors to ignore this detail when they’re in a rush. Ideally, you want your author income to generate enough consistent revenue to cover all foreseeable business expenses, including all upcoming production and marketing costs. Plus, you’ll need to ensure it produces enough profit to cover your basic lifestyle costs. That way, you won’t be playing catchup, eating into savings, from the moment you serve your notice in the day job.

Much like the “random” losses, it helps to consider profit anomalies. Say you grossed $3,000 last month with a $2,000 profit. Can you reliably expect that again next month? Did a BookBub Featured Deal artificially inflate your turnover? Was the month editor-free? Assuming the perfect storm of high income and low expenses doesn’t continue, what will your average monthly profit be? If you aren’t sure, sometimes it’s best to keep your day job until you’ve generated enough regular profit to ensure you aren’t making decisions based on a fluke. Some authors wait up to 24 months to account for whole anomalous years like the reading surge of 2020.

Minimise Leaks

Jumping into full-time authorship is safer and less stressful when you first minimise your spend. For example, looking at your bank statements, you could probably cut:

• TV subscriptions
• Meals out
• Impulse online purchases

Living on less will release the pressure on your business and personal life. It sounds easy, but many authors never commit to this exercise because removing convenience from their life is hard. It’s also unpleasant to cut luxuries and ego-boosting purchases. However, ask yourself this as you go through your accounts with a red pen:

“Would I rather live without this if it makes me a full-time author?”

This exercise is a good practice for business and life in general. If you habitually plug your financial leaks, you keep more of what you earn, which is like earning more money. Just be sure not to go overboard on the penny pinching, especially if you’re supporting a family. After all, while going without new t-shirts might not affect your social life as an adult, your kids might face a different reality if their garments are two sizes too small in school. Likewise, just because you don’t need health insurance now, that doesn’t mean you should forego it if you live in the US. Best practice is to strike a sensible balance and consider your minimum lifestyle requirement.

Prepare for Longevity

Follow the last four tips and you’ll eventually end up in a position where you’re on top of your finances, you have a safety net and you enjoy consistent profits. On paper, you’ll be ready to go full time. However, even the best projections lose accuracy the further they stretch into the future. Sure, you can almost guarantee you’ll be safe for six months — or maybe two years — but what about five? Ten? Thirty? If you want longevity, you need to consider the potential weak points in your business as well as your own mortality. That might be a dark notion you’d rather avoid, but you’ll be grateful you factored in 80-year-old you decades before you need the support.

How do you prepare for long-term safety? Firstly, diversify your income streams. Yes, a single ebook series in Kindle Unlimited (KU) might support you now, but what happens if reader tastes shift and that series or format stops selling? What if Amazon closes KU? Over time, you’ll be safer releasing multiple series in different formats and making them available at lots of retailers. What’s more, you may also want to consider saving and investing outside of publishing, just as you would in any other job. Commit some of the monthly income your business pays you to these funds and you’ll be more able to retire. Even if you don’t want it, it’s nice to have the option.

Take all these precautions into account and you’ll greatly reduce the risk of running into financial trouble immediately after transitioning into full-time authorship or at any point in the future. Will you still carry risk? Absolutely, but that’s also true in a day job. Nobody can control the world and even corporate workers in super-stable jobs fall victim to economic downturns or disruptive technologies. At least working this way will put you in the best possible position to become a full-time author with the greatest degree of financial safety.

Daniel Parsons

Dan Parsons is the bestselling author of multiple series. His Creative Business books for authors and other entrepreneurs contains several international bestsellers. Meanwhile, his fantasy and horror series, published under Daniel Parsons, have topped charts around the world and been used to promote a major Hollywood movie. For more information on writing, networking, and building your creative business, check out all of Dan’s non-fiction books here.