advances – what they are really made of

Inspired by Scalzi, I’m going to talk about money…. Specifically, what the general standards are regarding advances.

In this scenario, a debut author has sold a completed manuscript for $10,000 (an average opening advance in adult fiction tends to be between $5-15K). Now, the dictionary defintion of advance is: “to supply beforehand; furnish on credit or before goods are delivered or work is done.” In olden days, the advance was the money the author lived on while they wrote the book. Of course, in the case of a debut author, the book is written on speculation, but even for previously published authors, only a small portion of the money is now paid when the contract is signed. In the contract, the author and publisher will agree to a payout AKA when the author gets paid different portions of the advance.

Until recently, it was mostly typical to have an advance due half on signing the contract and half on delivery and acceptance. Now many publishers have added a payment due on publication (in really big advances, this can even include advances on hardcover and mass market publication separately). And in a multiple book contract, there can also be advances due on delivery of partial manuscripts. The reason I emphasized “on acceptance” above is that the editor has to read your book and approve any editorial requirements before it’s considered delivered. Given the workload of most editors of my acquaintance, this can be a highly variable period. So, let’s look at an example, cobbled together from a few debut novels that I sold in the last couple years, and I’ll add a timeline so a person can see why planning a budget for writing income and not spending it before it arrives (you’d be surprised how often I hear this one) are essential:

7/17/2007 Offer recd – Advance: $10,000
8/13/2007 Contract recd by agent (usually at least 30 days have elapsed)
8/17/2007 Vetted contract (with points negotiated) sent to author for signature
9/5/2007 Contract recd from author and returned to publisher
10/4/2007 Countersigned contract and payment recd by agent
10/10/2007 Signing payment of $4000 (minus commission) sent to author
11/19/2007 Revised manuscript (which author and editor have been working on since the offer was recd) is approved
1/8/2008 Delivery payment of $4000 recd by agent
1/11/2008 Delivery payment (less commission) sent to author
10/7/2008 Book published
10/21/2008 Publication payment of $2000 recd by agent
10/24/2008 Publication payment (less commission) sent to author

From the time the offer was received to the time the author was paid the full advance, you can see that 15 months have elapsed, and that was with very prompt editorial revisions on the part of both the editor and the author, and really nice turnarounds on the agent’s part for payments. Here are some other factors to consider:

Commission – typically 15%, so the payments the author received are $3400, $3400, $1700 (total: $8500)
Taxes – writers are considered self-employed and have to pay quarterly taxes, so that $8500 net earning gets even smaller (but I am not a tax accountant so I’ll leave that to someone else).
Costs of Writing – supplies, conventions, time, etc. – some of which is deductible but all of which requires investment

So, what’s your net income per month for this grand endeavor? Probably not enough to pay your rent. See Justine Larbalestier’s post on First Novel Advances or Tobias Buckell’s Author Advance Survey. Do I mean to be discouraging? Heck, no. I pay my rent from this too (and it can take a lot of sales at 15% minus taxes to make the rent). But I believe a writer should have a realistic expectation instead of dreaming of those 6-figure deals (which happen, but not so very often). So often I hear writers (and other creative types) putting forth the idea that dealing with money somehow detracts from their artistic and creative persona. But a girl’s gotta eat buy books.

35 responses to “advances – what they are really made of

  1. Thank you, that’s very enlightening. 🙂

  2. And this is why I’m not quitting the day job — it’s technical writing anyway so it DOES count as income from writing, and it means I can indulge in such luxuries as food and shelter while I write the fiction stuff.

  3. Having to work at a stressful day job sometimes detracts me away from my artistic mode, but when I think about the outcome I want (my book on a shelf in the bookstore), I plug away that much harder. Thank you so much for putting this into perspective. I have read some writer’s blogs and they have quit their day jobs already. At what point to you recommend this for your clients? If at all…
    ~Tyhitia
    http://obfuscationofreality.blogspot.com/

  4. It’s hard to work as an editor (or any other job that involves detail) if you want to write, but it’s not impossible.

  5. timeline
    I know the actual amount of time it takes to sell varies, but could you do a rough timeline for the marketing process of a first novel? ie: agreement to represent to getting it out there to publishers? Does this part of the process happen over months or weeks?

  6. Thank you. I’m doing career planning with my husband right now, including considering whether or not to migrate the bulk of his career to print from being an internet person for forever, and I wasn’t sure what we could plan on in terms of advances and payouts if we did, so it’s good to know.
    I’m honestly kinda thrown by how long this all takes. I’d expected about a year’s delay from acceptance, but this sounds closer to two. I can understand the reasons why, but I still wonder how well it plays with today’s audiences… it’s gotta be hard to hold readers in thrall for the two year delay between book one coming out and a second book by the same author finally making it to the shelves. There’s this huge amount of data your average readers have to absorb in between, and it’s probably rare that an author is good enough people will remember their name for that long if they’re not being bombarded with it that whole time. Seems like there’d be a huge loss of momentum for most authors, one that would be extra hard to deal with if the author has an internet-based fan following. How do agents advise their authors to handle that now? Practical, doable advice aside, what would be the ideal magical fairyland of possibilities way to handle it?

    • As soon as the revisions are done and the manuscript is accepted, you get to work on the next book. And, since you’ve sold one, you can sell the second on proposal. So, a year might elapse between the publication of book #1 and #2, if you’re lucky and all goes well, and meantime, that second advance starts rolling in in its pieces and parts.
      Shelley, who looks forward to pretty green-and-white envelopes from DMLA
      http://www.allaboutusbooks.net

      • I’m actually more concerned about the loss of sales momentum, not the speed of the payments (since there are lots of ways to offset the importance of that, not least of which is to keep the day job).
        I mean… the real goal in being a professional writer is to have a lot of book sales, right? Advances are great and awesome and magical, but… they’re supposed to be just the beginning of what a book generates for an author (and their publisher). It seems silly to just stop planning at the advance when the real goal is to get beyond it. The readers buying the books and creating the demand are really the be all end all of making that the reality. If there’s going to be a year or more between books, I want to know how you make sure your audience remembers you well enough to pick up your next work, especially in the cases where the next work is not part of the same series.
        So. I guess I’m really asking, “How do you make sure the readers stay involved and panting for your next book for a whole year (or more)? Great writing only goes so far…”

        • The advice I’ve seen is that when you write the first book on spec and send it out, you immediately start on book #2. Even an acceptance will generally take several months, and even good authors get rejected— Lois McMaster Bujold submitted her Hugo-winning novel many places before getting published, and completed several other books in the meantime.
          It’s a time advantage— you can sell the second book immediately— and it can even be a sales advantage if they are part of the same series. “We’re interested in your book and were wondering if you had any plans for a sequel.” “Not only have I plans, I’ve completed the second and have started on the third.”

          • P.S. I should have said, “Lois McMaster Bujold’s first Hugo-winning novel.” My bad.

          • That’s the exact same advice as the screened anonymous poster gave. I think there must be a fundamental disconnect somewhere in what I’m trying to say, and I apologize for it taking so many tries to make myself clear. I wish I could see how I was saying it wrong.
            See, I am not really talking about selling books to publishers, or the time it takes to get them published. That’s going to take as long as it takes, and while there are ways to lessen that such as working on the next book immediately, they aren’t going to make that time go away. There’s a process there and I get that.
            But… taking that long is still a disadvantage on the end where you’re trying to get real people to go out and put down their cash for your next book. There’s still a great big year there in which they can lose interest. Assuming you can’t make the publishing time less than a year, which seems quite likely, what can you do DURING that year to keep the public’s attention on you (where it should be if you want them primed and ready for your next book release)?
            For example… let’s say you do something really amazing and write all three books of a trilogy before ever sending them out on submission. Even if they’re accepted, and edited, and published as fast as possible, there’s still going to be probably a minimum of six months between new books of yours hitting the bookshelves. The real people buying those books could lose interest or forget your name in that time.
            So… what do regular authors do, between books coming out, to keep their readers loyal and interested in the next book? What would agents LIKE for their authors to do?

            • Oh, I see what you mean now. I didn’t quite understand.
              If the book is good enough that the reader wants to read the sequel, they’ll remember it six months later. Even a year later. One of my favorite authors only publishes every two or three years, but she’s one of my favorites, so I always snap them up.
              Six months is nothing. A year isn’t too much either. I’ve been buying books in a series one-a-year for quite a while.

              • Oh, thank god. I was worrying that I was truly incomprehensible, so I’m glad someone got my question.
                I know there are some readers who will have that loyalty and buying the sequels thing happening from the writing alone… but I think they might be rarer than the ones who need reminding, and given a choice between doing nothing and having the rare repeat buyers only, and doing something and having a lot more repeat buyers who otherwise wouldn’t be, I’d pick the doing something for more book sales any day of the week.
                My generation especially, for all our fandom, just largely doesn’t care anymore about anything that we have the chance to forget about. I just don’t know the ideal way to do the actual reminding (though I have theories).

                • I don’t see repeat readers as rare. Don’t you have authors or series that you follow?
                  I was reading Grafton’s Alphabet books for several years. I bought all the Harry Potters, and when the new Song Of Ice and Fire book comes out, I’ll buy that, too.
                  Most readers are like that.
                  “The number one reason someone buys a book is because they’ve read and enjoyed a previous work by the same author.”
                  — James D. Macdonald

                • Not to mention, that many readers won’t pick up any given book the day it was released but rather a few months down the line. Plus, series exist and many are quite successful, so apparently there are readers out there willing to wait.

                • The other thing is, the publisher prompts the reader to remember by issuing the paperback edition of the first book around the same time the second book comes out in hardcover.

                • *sigh*
                  I have concluded that I am asking for apparently a dramatic shift in paradigm when it comes to sales, and that may not be an appropriate thing to do here and now.
                  So, nevermind. My experience is that sales improve dramatically when more readers anticipate the book’s release and go right out to buy it immediately, but I’ll be the first to admit that my experience is in a different area and on a different scale, so perhaps is not relevant here.

                  • And to continue to use LMBujold as an example. By the time her first book sold, she’d finished the 2nd, and was 1/2 way through the third. Baen bought all three, and brought them all out in about 6 months, bing, bing, bing. Naomi Novik, more recently, had the first three books of her Temeraire series published just a month apart. So, if you’re a fast enough writer with a flexible publisher, you don’t have to have your books come out once a year.

                  • If I can pop in here with a thought…
                    I’ll agree that you’re right. It IS hard to hold that excitement for a year.
                    BUT (And it’s a big one.)
                    You’re only thinking of this re: you, as a debut author, with your first novel. That only happens once.
                    As the years go by, however, and you continue writing and selling books, THEN it no longer matters. Why? Because someone reads one of your books, and likes it. What do they do? They go find out if you’ve written any more, and they go try those. Say this is five years down the road and you’ve got three books published. They’ll go read all three, and if they liked all three, it is probably now only 3-4 months until your next comes out… and they’re now one of your fans and willing to wait. After that, they won’t forget you, and they’ll breathlessly wait all year long, as long as you keep putting out books they like!
                    I hope this encourages you a little!

                    • Re: If I can pop in here with a thought…
                      I was thinking of this question in terms of all authors at all points in their careers, all of whom will have delays of at least a few months between books. Yes, sales can be good just by writing good books and relying on the readers to remember you, that was not actually in question. What I was asking was for people to stop thinking of that level of sales as “good enough,” or “encouraging,” though, and to instead brainstorm ways to actively seek to make their sales even better. It was a self-marketing question, really.
                      For example, let’s assume you’re a chef at a restaurant, and you consistently make good food and the restaurant has consistently decent service. Fine. It’s an okay, maybe even a good restaurant, and it’ll have a steady customer base of locals and some tourists. It’s probably about 2/3 full every night, full on holidays and weekends, and definitely not in danger of closing. It’s making a decent profit, etc. What then turns it into a TOP restaurant? Marketing. Having a chef and an owner who are driven and go out and find ways of getting butts in seats and a line out the door takes the exact same chef and the exact same service and makes them a heck of a lot more successful. Suddenly it won’t be locals and a few tourists stopping in… the restaurant will be an attraction unto itself.
                      So I was asking how authors might take their “restaurant” from good to top.

                    • Re: If I can pop in here with a thought…
                      I see what you’re saying here. In my mind, websites are one of the best ways to do that. You can offer scrapped scenes, so readers will tell their fellow readers “You have to go check out this site!” You can offer contests or giveaways or something to encourage interaction and word-of-mouth. And then there’s commenting on blogs. That can get your name out there, too.
                      Another thing I’m going to use is MySpace. You know how they’ve got that “favorite authors” field? Well… there’s a NYT Extended List author whom my stories are similar to. There are LOTS of readers with myspace pages, with her in their list of favorite authors… and that field is searchable, too! So guess what I’m going to do, once my book is under contract? I’ll never mass-spam them all, but I’ll take the time to friend them all, and make sure my own page announces when the book will be released! Maybe I’ll run a contest to encourage immediate book sales, too.
                      Honestly, though, I think that quality of writing is 95% of the game. Many people never think to check out their favorite author’s websites, but EVERYONE wants to tell someone when they’ve read a good book… and they usually know which of their friends have similar tastes, and which don’t. There’s nothing more effective than that. On the other hand, no amount of marketing will make someone recommend a book they didn’t particularly like, be it a difference in tastes or quality of writing. So in all honesty, I’m not really sure how much we really CAN do!
                      -Kathleen MacIver
                      http://www.KathleenMacIver.com

                • You might find this article on Stephanie Meyer’s internet presence and strategies helpful. I know there’s a tendency to recoil at the mention of Twilight, but I think the article highlights how useful the internet can be when engaging readers.
                  Though I’ve yet to secure an agent or publish, I’ve always posted updates on the status of my book to a LiveJournal blog which I mainly use to blog about issues and news items of interest to my target market (the blog actually came first). It’s a small thing, but it reminds people that I’m out there and working.
                  You also might find this post from author Jane Lindskold over at Tor interesting.
                  Kathleen Peacock
                  http://kathleenpeacock.wordpress.com

        • I have heard from plenty of disgruntled writers who really would love to do 2 – 3 books a year (fiction) and aren’t because many publishers do NOT want you submitting a big book more than once a year, there aren’t that many available slots in their schedules out there.
          Some writers who are very prolific have been known to submit under different names to different publishers. Some alternate technical or magazine writing with fiction, or write in different genres. Many write short stories whenever they’ve got a spare moment. Some of them have a lot of fictional balls all going in the air at the same time, they’re working on the proposals and synopses that’s eight and nine books ahead of themselves, and filling in ideas and finish work on the next four or five in front, all of it going at once, so they have a steady output always heading out the door. They’re planning all the time. Try reading if you want to see this in action, if you’re not already familiar with her. I’m blanking on other folks who do this, sorry!
          Scalzi’s absolutely right about the lack of financial security.

    • … it’s gotta be hard to hold readers in thrall for the two year delay between book one coming out and a second book by the same author finally making it to the shelves.
      That’s not quite how it works.
      Look at the dates above: The revised manuscript is approved on 11/19/07. The book is published 11 months later, on 10/07/08. During that time, the writer works on and hopefully finishes book 2. That book gets turned in on, say 9/15/08 and can be published 11 months later, ten months after book 1.
      You don’t have to wait for book one to be published to start writing book 2.

  7. I guess it’s a good thing writing (for me) is a compulsion/passion/need rather than how I make a living. I’d hate to have to rely on a muse for a paycheck. Still, your post isn’t as discouraging as it might be, and a reasonable amount of earned money like the above would go a long way in lowering some of those eyebrows of ‘writing is a profession?’ dismissal. Many thanks for the information.

  8. On self employment taxes
    Since I *am* a tax accountant, I thought I would pipe up here on the subject of payroll taxes. While those of us with day jobs and employers see 7.65% of our checks go to payroll taxes, those who are self-emlpoyed like writers lose twice that because they must pay both the employee and employer portions of the tax. In Arcaedia’s example, that would whittle the $8500 to $7225. And here’s the kicker: self-employed people don’t have the advantage of built-in withholding, so they have to plan ahead and save 15-30% of that $7225 so they can pay their federal (and state, if applicable) income taxes. Assuming that our debut novelist’s partner doesn’t have a fabulous day job that puts them in a high tax bracket, that leaves our writer with approximately $5750 for his or her trouble.
    The moral of the story: this is why I went to college and became a tax accountant after freelancing full time for a couple of years.

    • Re: On self employment taxes
      I’m assuming then that a person working FT at a day job still has to go through all that, treating it as a second job (that happens to be self-employ)? At what level do you start treating it that way, or should you do that even if you’re not making much at writing? (Making a couple hundred a year in short story sales vs. making a few thousand from novel sales, for instance.) I hope these aren’t stupid questions. o.O

      • Re: On self employment taxes
        I did some contract work while having a day job and yes, you treat it as a separate job with a nasty tax bite. (Nasty only if you’re not expecting it.) Scalzi’s advice to hold out half of your freelance paycheck isn’t a bad idea; it’s overestimating but not by that much, and if it’s stuck in an interest-generating account while you wait until tax time you get a little extra benefit.

  9. Yeah, the advance numbers always sound a lot more impressive before you do the math.
    I liked Scalzi saying that you should just basically take that advance amount and cut it in half and figure that’s the amount you’re actually getting after taxes/agent cut, etc.
    “Half” is math I could actually *do.* heh

  10. Great info, thanks.
    Travis Erwin

  11. Thank-you. I’d always wondered about this stuff.

  12. Thanks for this info. I knew advances tend to be small like that, and I even knew about half going to the tax man (grrr), but I had no idea those advances were squirreled out a little at a time. That’s good to know. Lucky for me, I’m not in it for the money. I’m in it for the glory, LOL. Do you have a “Glory Disbursement Schedule?”

  13. Thank you for this information. It’s very useful.

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