The author’s first responsibility is to create the outline for the book. You may have a broad idea of what you want the book to look like, but the author will flesh out the outline. The author submits the detailed outline to your company for approval. Once the outline is approved, the author should submit a schedule. The outline should have been reviewed by the time you start contract negotiations with the publisher, and both the outline and schedule should be approved by the time you sign the contract with the publisher. You and the author should be ready for the author to start writing the instant the ink dries on the publishing contract.

The first question companies usually have about the author is “Do we pay the author, too?” No, your company doesn’t have to worry about paying the author; the publisher will do that. As a matter of fact, the author will probably be rather pleased with this kind of book deal, as they’ll be able to calculate their royalties on the pre-sold copies up front and possibly negotiate a bigger advance as a result. In the example above, if the author got a 12% royalty against publisher’s net, the royalty on the pre-sold copies alone would total $17,976. In addition, with a $60,000 down payment, the author could reasonably expect an advance of $7200 for 12%, higher than the typical $5000-6000 advance payment. On top of all of this, the monies due the publisher would all come in within the first 90 days of the book’s life, guaranteeing the author a substantial and predictable payment within the first year of the book’s life, a much faster rate of return than most third-party books will produce.

Who you choose for the author will depend on the nature of the book, of course. You may have someone in your company who can write the book, either as part of their duties or as a special project. (Note: if they’re writing the book in addition to their regular duties, don’t expect great job performance or even full-time hours from them during that period. They’ll be too tired.)

On the other hand, you may want to bring in a special writer with specific industry expertise and name recognition (this may cost you a little extra). Some companies like to split the difference and have two people listed as authors: the company founder or other luminary as the first author, whose name may be purely for the swank value, and the second author, who actually does most of the writing. The circumstances for this will differ from book to book. Be flexible, and don’t be afraid to ask the publisher for suggestions, either; they’ll probably have a much larger stable of potential authors from which to choose.

Finally, it’s reasonable to expect to have control over the choice of author; after all, it’s your company’s money. Choose an author you have confidence in.

Would self-publishing actually be a better way to go? Suppose that the book is going to list for $29.95, a typical retail price for a 500 page software technical book these days. The normal wholesale discount is always at least 40% off of the cover price, so a book that lists for $29.95 will usually wholesale for about $18. But the big chains and wholesalers buy books in hundreds, sometimes thousands, and they don’t get just a 40% discount. When you buy a few thousand copies of a book, you can usually negotiate a 60% or 65% discount off of the cover price, so that same $29.95 book may only cost a wholesaler $12 or even $10.50. On a very large book order (15,000 copies and up), the discount may be as much as 70 or 75%, which would knock the cost for each book down to as low as $7.50.

To determine if self-publishing is really the best way to go, you need to see how much of the book’s price is profit margin as opposed to actual cost of goods. The raw cost for printing a typical book¾slapping the ink on the paper and wrapping a cover around it¾is around $4-$5. Added to this are the publisher’s costs for editing, proofing, desktop publishing, cover design, advertising, and so on, as well as additional costs if there’s a DVD included in the book, which will add maybe $1-$2 a book. And finally, there’s the publisher’s profit margin, at least another $1 a book. The fixed costs of doing a book will vary some from these numbers, but you can assume that you’re unlikely to get the publisher down below $7 or $8 per copy unless the book was very inexpensive to print or the pre-purchase order is extremely large.

Somewhere in here, somebody’s got to write the book, too. The author of the book needs to get money for their work. Exactly how much is open to negotiation, but you want to figure that the book is likely to take months to write… and that’ll cost money. If it’s you putting the book together on your own, you need to look at this to figure out where the money will be coming in for you.

The book will need editing and layout, too. If you’re thinking of a small-to-medium order (say, less than 5,000 copies), you may well save a dollar a copy by printing the book yourself, but it’s very likely that the amount represented by the publisher’s profit margin will be completely eaten up by production costs. If you’re not familiar with the production process, production costs can easily run to $5000-8000. Remember, the publishers are able to negotiate economies of scale that you, a one-time publisher, aren’t.

There’s something else you should consider. The publisher is also providing advertising and distribution. You’re going to get a number of copies of the book for yourself, but you also want the publisher to distribute as many copies on the shelves as you can so you get the maximum marketing whack out of having the book done. Doing the book with a little 2-person publisher is hardly going to give you the distribution you’re looking for; you might as well publish the book yourself. So unless you have a need for just a few thousand copies of a book, or you’re dealing with a very specialized topic that has specialized distribution requirements, you’ll probably want to use a large publisher that already has an extensive array of books in their catalog and a solid reputation for quality, such as Osborne/McGraw-Hill or Addison-Wesley.

So, in short, yes, you can always say “Hey, kids, let’s put on a show! My dad’s got an old barn we can use!” but you may discover that there are a lot of hidden costs and tasks that an established publisher will take care of. The initially higher costs described in the next few posts on this subject also represent a fairly turnkey approach to the process: You just negotiate a deal and you’re good to go.

The normal chain of events is for a publisher to solicit a company about one of its products that’s selling well and arrange for a book. At other times, the product manager may approach the publisher to interest them in doing a book about a new product. In fact, many companies maintain relationships with publishers just to keep them apprised of new developments.

Publishers like to sell at least 10-12,000 copies of a book because they’ll make a reasonable profit on that volume through normal distribution channels. To figure out if it’s going to be worth it to do a book, publishers normally use a metric that looks something like this: you can usually sell books to 3-5% of your potential market over two years (the average lifespan of a hard technical book, though non-technical books can have a much longer lifespan), assuming that there’s not a ton of competition for the same market slice. Various weighting factors come into this, such as:

• How hot is the topic? What are the hot topics now? And, more importantly, what are the next hot topics going to be? If a topic isn’t hot now, will it be hot in six months or a year? There are also endorsements to consider¾if the book is endorsed or (better) co-authored by a major industry figure, featured on a national TV show or in a motion picture, or otherwise plugged by a celebrity, then you can sell more books.
• What’s the competition for this book? Hot topics will pump up the potential sales for a book… but they’ll also increase the number of competitors in the field. Are there a gazillion other books aimed at the same market share, as was the case with the Internet in the late 90s and whatever the latest version of Windows is? If so, can you focus your book to provide some differentiation in the marketplace?
• How complex is the product? Some products are more complex than others. A book about the latest Wii games and game systems, for example, is not going to have nearly the depth of a book about Java programming (but it may have a much wider audience).
• Does the product desperately need a third-party book? It may not be politically expedient for the publisher to say so, but if you have a pretty good product that also has pretty bad documentation, there may be a strongly increased market for a third-party book that will fulfill the promise on which the documentation failed to deliver.

Now, if you have a user base of, say, 150,000 users or more, or if you’re a big enough company to be able to guarantee that kind of user base for a new product, you’ll probably have publishers eating out of your hand. But most companies don’t have a user base large enough to interest a publisher in their products under normal circumstances. And for a lot of companies, a user base of even 10,000 would be something they only dream about. What can you then do to get a book out on the shelves? The answer is for you to subsidize the printing of the book by arranging with the publisher to purchase a large number of copies beforehand. Purchasing a large number of copies means that the publisher doesn’t have to justify sales exclusively through normal channels, which minimizes the publisher’s risk for doing the book.

Having a third-party book about a product is an enormous marketing boost. Regardless of the size of your user base, a book gives users additional information about the product. A book also gives potential users a chance to evaluate the product and (hopefully) decide in favor of buying it.

Most importantly, a book adds mindshare: when people see the product’s name on a book in the bookstores, it validates you and your product as a contender in its field. Having a book about your product can mean substantial differences to sales.

My previous posts have shown you how to get into the usually exciting and occasionally high-paying field of book writing. Now I’m going to tell you how to arrange for a book through a publisher about one of your company’s products. (Note: The principles I’m describing will apply to any non-fiction book about any product or service, such as stereo gear, cars, legal services, or specialty catering.)