Disclaimer
I am not a lawyer. Nothing in this article is to be construed as legal advice. Please read this as a peer offering you insight into how she believes these things work. Make sure you consult a lawyer or tax specialist for anything you are concerned about. No one on the internet can replace appropriate advice from professionals.
Note: this article references what it is like to run an author business in the United States. Please disregard if you live outside the USA.
Pen Name
Creating a pen name was one of the most enjoyable activities I had as a new author. Why someone might wish to keep their real name a secret is beyond the scope of this article, but privacy and identity deserve to be protected and many authors choose pen names to protect themselves and family members.
A few things to consider when choosing a pen name:
Make sure your name is not the same as another prominent author. Others will confuse the two of you, and it could cause some awkward complications. Currently, an author's name cannot be trademarked, but do not call yourself Sara J Maas and expect to get away with it. Her fan base would eat you alive.
Try to choose a name that is easy to pronounce and spell, as this will aid potential readers in finding you when they search your name.
Many female authors worry that they need a masculine sounding name due to bias in the reader pool (excluding romance genres). This is why you will see names like J.E. Preston or S.R. Newton on epic fantasy or other genres that are typically dominated by male authors. They are genderless or masculine sounding and help authors overcome some of the bias readers may have. (It's unfortunate that we have to think like this, but until this isn't a problem, being mindful of biases can help you sell more. It's not right, but that's how it is.)
If you write in the romance genre, having a female sounding name is expected as the genre is dominated by female authors. Since I write romantic fantasy, my feminine pen name actually benefits me.
Last, but not least, use a name you enjoy. I will still use my girly name if I write an epic fantasy. You need to be aware of the stereotypes, but they should NOT make you pick a name you aren't comfortable with. Make sure you are happy with the gender or nongender that people will assume based on your pen name.
Please note that I'm discussing some stereotypes that some may find hurtful. My goal is to help others understand the self-publishing business, and never to harm in any way. Every identity deserves respect.
Running your business: Sole Proprietor vs LLC
To my knowledge, you can either run your author business as a sole proprietor, or as an LLC (Limited Liability Corporation).
What is the difference you might be asking? Well, to my understanding, this means you can either run your author business without your identity, or you can have a seperate business identity.
For tax and financial purposes, a sole proprietor will use their social security number while a LLC will have a business number called an EIN.
Which should you choose? Both are great options, so see what the requirements are in your state and go from there.
I chose to be a sole proprietor because I find it a bit simpler just using my identity for everything instead of keeping everything separate with an EIN. If you expect to put thousands and thousands of dollars into your business, having the protecting of an LLC is worth looking into in case it goes bankrupt. You personally won't be held financially liable for business debt.
As I am going slower and trying to not spend large amounts right off the bat, I feel safe using a sole proprietorship.
What I've mentioned is extremely basic. Please don't pick which one you do based on my experience. Hop onto Google and look into the options in your state to see what makes you feel the most secure as an author.
Copyright: Protect Yourself
There are two parts to copyright that I want to cover.
The first thing about copyright I want you to know about regards your manuscript. When you publish your book, the entire work is copyrighted once it's published. It belongs to you.
Many authors get the completed manuscript copyrighted before publishing. This does have a cost to it. This is not required, but it can be helpful if someone pirates your book because you can take that earlier copyright and prove the book is yours.
That said, the book still belongs to you legally once you publish it and you can fight pirating just with the publishing information. Just pick whichever option makes you most comfortable.
The second thing about copyright that I want you to pay attention to is the material you are using. When you're getting art or marketing images, make sure you have permission to use them in that format. Many people don't know that using images from Pinterest or Google to make book trailers is a no-no. The owners of those photos or art have not given their permission for authors to use their work for free.
This is why I try to take a lot of photos and videos and use those for my marketing. I do use some stock photography with Canva Pro, but hundreds, even thousands, of people use the same photos for their stuff. If you want more unique marketing materials, taking photos is a great way to do that. I'll go into more details about this idea in the marketing article that I plan to write as a part of this series.
Taxes
Hey look! It's everyone's favorite subject! Taxes!
I'm joking.
Are you afraid of taxes as an author-entrepreneur? I have good news. It's not hard.
Just keep a list of everything you spend on anything related to your writing as well as any money you make.
I was able to do my taxes as a sole proprietor in TurboTax for last year in... I think it took an hour. As long as you have tracked what you spent and where, it will be fine.
Talk with a tax professional if you're worried, but from one author to another, it really will be okay.
In conclusion: take all of this with a grain of salt and research what will work best for you, BUT also be encouraged that the business side does not have to be scary and overwhelming. It's completely doable and can even be easy.
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