There's an old rule in book publishing that says your price should be 8 times your cost. I don't believe that. Take a field trip to the nearest bookstore to search out books in your category. Look for similar length and binding as well as topic. Use the price on these books as a guide in setting your own price. In other words, price to the market, not to your costs.

If you have an unusual book, one that includes rare photographs, for example, or exclusive insights from a celebrity, one with content that is of great importance to people in a well-defined profession or trade, or simply a limited edition book--you may be able to command a premium price for your book.

Two examples of breaking the 8x rule

1. I have a 156-page paperback book in my library (Workplace Wellness: The Key to Higher Productivity and Lower Health Costs) with a two-color cover and a pricetag of $49.95, published in 1992 by Van Nostrand Reinhold. The publisher could have printed 3,000 books and turned a profit after selling 100 books at a 40% trade discount.

2. One of the first books Griffith Publishing produced years ago was a racy and short (under 100 pages) novel that portrayed Americans as greed-driven empire builders exploiting the Hawaiian Islands. The author printed just 1,000 books and sold them for $20 each. Less than a year later this native Hawaiian author called to tell me he'd sold all his books and had been picked up by a commercial publisher. His profits on those first 1,000 books--about $17,000.

Set up a profit-and-loss statement based on your expectations for the first three years after taking delivery of your book

Include all of your direct pre-press and production costs.

Don't forget a generous allowance (20% of retail price is a ballpark figure) for marketing materials (brochure, postcard, signs etc) and advertising (direct mail, specialized publications).

Figure in a 40% trade discount for every book you sell to a bookstore or other retail outlet, including Amazon.com or other online bookstores.

Allow yourself at least 100 books to present to book reviewers, talk show hosts, reporters, and others who are in a position to help you promote your book. Your production costs for these "give-away" books are a deductible expense.

Calculate your break-even point

Your break even point is the number of books you need to sell to cover your costs. The formula is --

BE = Total Costs / Gross Profit per book sold

Example

Your book has a retail price of $20, and you're selling it to bookstores at a 40% trade discount.

Gross profit per book sold = $12 (60% of $20)

Your total costs are $5,000

Break Even = $5,000 / $12 = 416

You must sell 416 books to "break even," or pay for your direct costs.

But don't forget your indirect costs: travel, advertising, mailing, and even shipping costs, which you can pass on to those who buy your book.

Only sales can drive revenues

Of course you won't have any revenues unless you sell books. Long before you you have written, packaged and printed your book, be sure to take time to consider carefully the market for your book and how you will orchestrate the marketing program for your book. Griffith Publishing assists clients in preparing a marketing plan at no additional cost except for special services (brochure design, press releases etc.) you may request.