To Build a Business

XPress Access | May 2023

May 12, 2023

Writing as a business

You’ve likely seen writers talk about publishing books through their imprint or “small press.” But why do they do it? What are the benefits of incorporating as a company to sell your books? Is it all about taxes?

Great questions, curious seeker of knowledge! Thanks for asking.

My first company was Stormfallen Entertainment LLC, founded in 2015. The name was inspired by my science fantasy series being published on Wattpad. I was convinced it was the right time to start a company because I thought that’s what self-published authors did. Well, maybe if I was writing with a more defined purpose and had established my goals beforehand. Thousands of dollars lost and zero profit later, I shuttered the company, and all I had to show for it were unused business cards scattered about my office like debris from the wreckage.

I bring up this experience because this post isn’t meant to convince you to start a company. It’s expensive, time-consuming, and sometimes not worth it. I want to share my thoughts on why I started my second company in 2021, how I went about it, the money involved, and where I hope to take it.

This should not be considered business or tax advice, as I am not an expert. “To Build a Business” will only scratch the surface of these subjects, so I highly recommend consulting with a business professional. Additionally, this is designed for writers in the United States, as I’m not familiar with the laws and processes of other countries. Remember that this information varies widely by state (I’ve only previously incorporated in GA and UT).

For those who aren’t XPress members, I’ve included a wonderful video by Bethany Atazadeh (published in 2019), where she conveniently breaks down the how and why of starting a company as an indie writer. If you’d still like to upgrade, your support would be greatly appreciated!

The Storyletter has been running a series called “To Build,” emphasizing the basic tenets surrounding writing fiction online and establishing yourself as an independent creator. If you’d like to read the topics covered thus far, here’s the list:

Where do you even start?

To consider whether or not you should start a Limited Liability Company (LLC), you might want to have clear goals in mind for your writing. Have you finished or plan to finish a book? Are you selling merchandise? Are you traveling a lot for your writing events?

You don’t have to be doing any of the abovementioned things. You can start a business at any time in your journey, even after you’ve published 15 books if you want to. There’s no rush either way. The idea is to prevent throwing money down the drain (which, I believe, we can all appreciate). It’s like getting a tattoo; you want to be entirely sure before committing. Okay, maybe not the best example, but you get what I mean.

What would be the main reasons for incorporating as an author? Let’s break down the benefits to see if it’s right for you.

Benefits of an LLC

Liability Protection
- The first major benefit of an LLC is protecting your own ass(ets). By incorporating, you create a new entity that functions on your behalf. This separation protects your personal assets (home, car, savings) from potential business debts or legal liabilities related to your writing.
- Examples of legal issues that could arise are disputes over contracts, copyright claims, defamation claims, or outstanding business loans.
Tax Advantages
- This is likely the most asked-about benefit and the most interesting aspect of doing my taxes this year. I won’t get into it right now, as it seems to warrant its own post. But know that purchases done on behalf of your business (electronics, mileage/gas, supplies, event passes, author copies, software purchases, cover art designs, etc.) are all considered tax write-offs.
- Pass-through taxation enables profits and losses from an LLC to “pass through” to the owner’s personal income tax return, avoiding double taxation.
- As a sole proprietor without an LLC, you could face self-employment taxes on your entire net income, whereas an LLC owner may be able to reduce their self-employment tax liability. These regulations vary, so please consult with a tax professional.
Professionalism
- Depending on what you’re going for, forming a business can generate a more professional image, which lends greater credibility and legitimacy to your writing.
- This opens doors to partnerships, brand deals, sponsorships, agents, collaborators, and even publishers.
- It also enables one to open business bank accounts, enter specific contracts, and obtain business credit cards or loans, among other specialized things.

If this sounds like something you’re ready to tackle, then let’s move on to the basics.

How to form an LLC + Extras

Choose a Name
Appoint a Registered Agent
File Articles of Organization
Create an Operating Agreement
Obtain an EIN
Register for State Taxes and Licenses
Open a Business Bank Account

I’d go through each of these steps, but here’s the thing: I took the easy route of paying someone else to do it all for me on both occasions. So, technically, you can do all of these steps yourself (with a few fees here and there), but utilizing a service that streamlines the process and provides you with all of your legal documentation in one convenient location is the most time-efficient way to do it (in my lazy opinion).

Here are some examples of the top services for incorporating an LLC in the United States:

LegalZoom: A well-known and popular service for legal matters, including LLC formation. They offer different packages and additional services such as registered agent service and compliance assistance.
Incfile: Incfile offers various services related to forming an LLC, such as filing the necessary paperwork and providing a registered agent. They have competitive pricing and offer free registered agent services for the first year.
ZenBusiness: ZenBusiness provides an affordable and easy-to-use platform for LLC formation. They offer a variety of packages and additional services such as registered agent service, Employer Identification Number (EIN) filing, and operating agreement templates.
Rocket Lawyer: Rocket Lawyer provides LLC formation services and access to a wide range of legal documents and attorney consultations. They also offer a subscription-based model for ongoing legal services.
MyCorporation: MyCorporation is an experienced provider of LLC formation services. They offer a variety of packages and can assist with additional services such as obtaining EINs, filing annual reports, and registered agent services.
Northwest Registered Agent: Northwest Registered Agent is known for its personalized customer service and specializes in providing registered agent services. They also offer LLC formation services and assistance with additional requirements.

I went with Incfile for my first company but always got a shady impression. Not that they did anything nefarious, but because the aesthetics were super outdated at the time (2015), and there was always some random person from Texas calling me to check on my documentation. The vibe was off. But they did nothing wrong and operated on time without hiccups, so I apologize, Incfile, for the mixed review. I did like the super fancy binder they sent me that had my company name engraved on the side (did that cost extra? I think so).

For my second company, I chose ZenBusiness. The website was intuitive and easy to navigate. I’ve not had to deal with anyone over the phone. They even allowed me to modify my name for a small fee a few months later, which was nice. Although there was a hefty $400 surprise at the one-year mark for filing the annual paperwork with the state of Utah, it’s worth it in the grand scheme of things as I’m terrible at renewing things on time.

So let’s say you go with one of the services above. What do they do for you, and why does it matter?

Name

You’ll first want to come up with a unique name. Right away, you’re going to find that their built-in services are going to make this process a cakewalk. They will check your state’s business name database AND check with the U.S. Patent and Trademark Office to make sure the name isn’t trademarked. You’re company name might not be in use in your state, but that doesn’t mean that a business in another state doesn’t have the legal rights to it. You're good to go once it’s determined that the name is free to use.

Logo

The logo isn’t necessary, but I highly recommend it. You’ll want to use it on your book's spine, and the front and back matter for publishing. I designed mine using Canva Pro. However, there are many specialized tools to set you up with a logo. You can even find a graphic designer on Fiverr if you need help.

Articles of Organization

To operate as a company in your state, you’ll need to designate your company and what it does. This will be in your own words. I wrote, “Storyletter XPress Publishing LLC is a producer and publisher of genre fiction, serial fiction, and poetry.” Use broad industry terminology to encompass as much of the business as possible.

ZenBusiness will complete all the necessary paperwork and send it to your state for processing. It took about 20 days for the paperwork to come back as approved. Like I said earlier, if you ever need an amendment to your paperwork, you can do that through their portal with a fee.

Every year, you will need to re-submit your annual report. In Georgia, I had to log in to a state website and pay them $50 to remain in “good standing.” I haven’t had to do that here in Utah, but the charge from ZenBusiness was roughly $400 to process all of my compliance paperwork. This means that if you’re not making more than $400 a year from your writing, the company will be in the red.

Employer ID Number (EIN)

This is the most important number you’ll receive after incorporating. It’s a 9-digit number issued by the IRS. That’s why it’s also known as the Federal Tax Identification Number. It’s proof that your company even exists. Anything requiring proof of your company will request this number, such as hiring employees, business permits and licenses, and lines of credit. It’s like a social security number, but for the entity, and in some cases, you can use it in place of your SSN to protect your identity. This number is significant for the next big step.

Business Checking Account

I highly recommend setting up a business checking account. It doesn’t matter who you go with as it’s mostly preference. However, look for banks offering a high-interest rate on the money you keep in the account. You can’t beat money making money, especially if it’s just going to be sitting in an account anyway.

The real reason having a business account is so crucial is that you’ll want to separate the money coming in from your business and the money from your personal income. This will make your life easier during tax season, as well as in helping you monitor your profits/expenses.

I also recommend starting a spreadsheet to keep track of your monthly expenses throughout the year. Here’s a blank spreadsheet that you can copy and use. Go to File > Make a copy to start your own. Otherwise, everyone who clicks that link will see your information.

Ready to launch

That should be all of the basics for starting your own LLC. I hope this has been useful in helping you decide whether it is time for you to incorporate or not. I can say from experience that it’s always a cool feeling to be a “founder” of a company. It’s even better when you make that first sale. But, at the same time, it’s not necessary for what we do as writers. If you’re going the traditional route, your time and money are probably better spent working to get an agent and lawyer than starting a company. Then again, this isn’t business advice!

For Storyletter XPress Publishing LLC, I hope to publish my work and other talented writers. I also think of my company as a service provider in that I aim to assist people in publishing themselves. The traditional publishing days are dying, and with self-ownership rights moving in this direction, I’m confident there’s room for us to learn and grow together.

Are you incorporated? Are you thinking about it? Let me know if you have any questions or if I missed something in this article.

Storyletter XPress Publishing