As WealthBeing says, business is easy until you put numbers to it: anyone can make and sell something, the hard bit is making sure that sales values exceed costs. And when you’re starting out the common assumption is that costs will be high, and precede income, so at some stage it’s easy to just keep spending and hope that enough income will come in later.
So it was with getting copies of my book printed. I had to decide on the right initial print run. I had all the quotes, which boiled down to two:
- 500, which cost £2,500 or £5/unit
- 2,000, which cost £4,800 or £2.40/unit.
One is a low cost per unit the other only requires half the outlay.
Just to complete the picture, I need to sell 2,700 to recover costs, assuming the lower cost, 2,800 with the higher cost, and 25% of that volume as digi-books.
I opted for a 500 print run for the following reasons:
- It’s a start up and there’s still plenty I don’t know. Maybe the digi-book will sell much more than printed, maybe there’s an error in the book that we’ve all missed.
- A colleague who had done something similar said 500, that’s what he’d done.
- The deciding factor is where the money comes from. At start up you need to fund the business yourself; when it’s up and running funds will come from customers and lenders/investors. By spending less at start up I’ve used less capital for stock and have more for other things.
And note that the difference in numbers required to break even is small -100/2,700 is less than 5% because the sale price of £20 is high compared to either unit cost.
I hope that helps.