Forming a pdf company--your experiences?

[Bacris]

IOne thing I'll throw in is that a DBA (doing business as) is a sole propriatorship, which may not work if you and your brother want to share ownership.

Depends on your state, really. In Texas, for example, a general partnership can file for a DBA / Assumed Name certificate. DBA isn't automatically sole proprietorship.

Which is why I do strongly recommend checking with your Chamber of Commerce or a site like Texas Wide Open For Business, if your state has one. You can typically find out what options are available, what forms you need, how much they cost, where to send them, and where to download them.



Other than that, I will echo what's already been said - if you are worried about litigation or liability, speak to a lawyer. You likely don't have to drop a huge amount of cash for a business-forming consultation, although it will likely be significant enough that you'll want to shop around and get referrals before going to just any lawyer in the yellow pages.

 

[Prest0]

You also need to think about how you want to file your taxes. If you want to file income from the company on your personal taxes, that'll narrow your options. One of my 12 to Midnight partners is a CPA, so we started out as a partnership, then the next year moved to a S-Corp, then last year moved to a C-Corp--all based on what would be the best tax situation. Whatever structure you choose, you'll have to think about how you manage your finances and file your taxes. It really is a big headache, and I shudder to think what shape we'd be in without Jerry. Not only do you need to consult a lawyer, but an accountant wouldn't hurt either.

Let me echo the others that you're probably better off setting yourself up as a design studio and working through an established publisher. The PDF land rush is coming to an end, and it takes more and more effort to build a brand. Working with an established publisher lets you tap into their customer base.

 

[Morrus]

I'll just echo Bacris, too. Make sure you know why you're doing it. Do you want to be a publisher, or do you want to be published? Being a publisher doesn't involve an awful lot of "fun" or creative stuff; it's accounts, marketing, contracts, scheduling and so forth. It's a lot of hassle.

If your main aim is to be published, consider being a "design studio" - just design stuff and sell it to interested publishers.

 

[GMSkarka]

eing a publisher doesn't involve an awful lot of "fun" or creative stuff; it's accounts, marketing, contracts, scheduling and so forth. It's a lot of hassle.

Quoted for TRUTH, and because it isn't shouted from the rafters as loudly as it should be.

 

[Bardsandsages]

Quoted for TRUTH, and because it isn't shouted from the rafters as loudly as it should be.

PREACH ON, MY BROTHERS!

Seriously, I am one of those weird people that enjoys the back-end of running a business as much as writing material. I enjoy the process of watching a project move from just an idea to a finished book. I enjoy working with writers and artists. I enjoy marketing. I enjoy figiting with the website and developing new services. I enjoy editing. I even get an odd enjoyment out of accounting (sick, isn't it).

But if you DON'T enjoy any of these things, then you don't want to be a publisher. You want to be published. There is a world of difference between writing a product and having said product torn to ribbons by playtesters and having to start all over again.

 

[Napftor]

As a freelancer for a number of years now, I'm well aware of the question most posited to newbie company proprietors: "Do you want to publish or be published." In truth, my brother will be handling most of the technical grunt work so I'll still be creating (and likely still freelancing). For this reason, being co-honcho of a business is still attractive. I'm also looking forward to learning more about the behind-the-scenes workings of small businesses and networking with even more industry folks.

Thanks for the comments so far and feel free to keep 'em coming!

 

[Fifth Element]

Seriously, I am one of those weird people that enjoys the back-end of running a business as much as writing material. I enjoy the process of watching a project move from just an idea to a finished book. I enjoy working with writers and artists. I enjoy marketing. I enjoy figiting with the website and developing new services. I enjoy editing. I even get an odd enjoyment out of accounting (sick, isn't it).

You know, some of use even have degrees in business administration and professional accouting designations.

Though I guess it's not too surprising that there aren't a lot of creative types with those credentials...there's not a lot of overlap between the two populations.

 

[BLACKDIRGE]

Although I am relative newcomer to the publishing business, I am finding it to be a rewarding experience. Not necessarily because of the money (I make much more as a freelancer), but because of the control I exercise over my products. Every word, every piece of art, every bit of graphic design has been either created or approved solely by me, and that's something you just can't get as a freelancer. Not to say that I don't listen to my artists, editors, and graphic designer, but at the end of the day, the final decision is mine, and I like that. I like it a lot. Now of course, I am speaking from the perspective of a publisher who writes virtually all the material he publishes, and I assume since you are a successful freelancer, you will be doing much the same.

BD

 

[Ty]

Lawyers and accountants oh my!

I'll echo what others have said about seeing an attorney. Keep in mind though, the choice of an LLC, S-Corp, or C-Corp depends upon a number of factors including what assets you're putting into the company and how you intend on pulling cash out of the company (assuming you make any). All three offer general limited liability but that does not mean complete limitation of liability from someone going after you personally for something. Before you see your attorney though, make sure your business model and every detail of what and how it operates is completed or it will cost you. I know my old rates four years ago were over $250.00 an hour for business incorporations.

Your second concern should be tax reporting, both state and federal. Keep in mind that states are getting squirrelly with sales and use taxes, particularly with electronic or e-products. Don't forget your local accountant. Interstate sales shouldn't be too much of a problem unless you actively are visiting the state to sell your products. Of course, don't forget your federal self-employment, yada yada. An accountant should be your next stop after an attorney.

 

[mcathro]

(I posted this over at rpg.net as well but would like a broad range of responses...)

I know these forums are rife with folks who have jumped through (or seen others jump through) the hoops of business building. My brother and I have decided to form our own pdf venture called Tricky Owlbear Publishing. I'm about to tap Empty Room Studios to design our logo and we're deciding under what business configuration to form our company--LLC, S-Corp, etc.

What I'm throwing out to the public here is a request for any advice on company formation. My brother is the business end, really, but I'd like to hear about other folks' experiences. Do we need to drop a boatload of bucks for a lawyer to make us legally official? Is there an aspect to online small business formation that is easy and on the cheaper side? As I'm just the creative arm of this endeavor, all information no matter how basic is appreciated.

I'll go ahead and wade in here with my two cents. I started publishing last September, about seven months ago, so my advice should at least be timely if not relevant.

First suggestion: Drop the delusions of starting your own company and continue to freelance heavily for the Adventurer Essentials line! Ha!

OK, seriously...jump in with both feet and do it. Forget all that stuff about hiring and expensive layer and incorporating. You can do that anytime in the future you want. You are already a partnership. Get a Paypal business account under Tricky OwlBear OmniMedia or whatever and you are set. Not to say that you shouldn't form some type of corp or other legally defined entity, but don't blow a bunch of money when a partnership is free and you can start putting out product immediately. I am a sole proprietor and will either incorporate or form a LLC later this year.

Liability. There is virtually none in the PDF biz. (Compared to manufacturing chainsaws or performing cosmetic surgery anyway.) We are dealing with OGL stuff (presumably) so even if you did something wrong, what kind of monetary damages are likely to be involved? By way of example let me ask a question: How many publishers reading this have ever been sued by another publisher, customer or large "mainstream" print publisher? [Cue crickets.]

Assuming you aren't releasing a series of "Behind the Ebberon Warforged Loincloths" line or an in depth look at Imperial Star Destroyers for your D20 Future game I wouldn't worry. And if you did, the nice folks who own the copyright will send you a letter and ask real politely that you stop. (Usually before the courts get involved!)

Taxes and income. As a freelancer you already have some valuable experience in this area. But the one point that just about everyone (except Louis) has missed so far is that as a business you pay your expenses FIRST, after your expenses you then have profit left over from which you pay your taxes. (Pretty simple, right?) Unlike regular nine-to-five Joe's, who get paid, taxed and THEN pay for their expenses. So, as an example; one of Skortched Urf' Studios expenses this year will be my Gen Con ticket, my flight and my Hotel. Any new D&D books or PDF's I buy are now business expenses. That new computer with the Adobe Creative Suite is also a business expence. Don't forget the home-office deduction for the spare room you run Tricky OwlBear OmniMedia from. Do it all square and legal, and you may not actually make very much profit to pay taxes on at all. (But you sure took care of your business expenses!) [Usual unnecessary disclaimer about following all the applicable tax laws and consulting a super expensive accountant and attorney Blah, Blah, Blah...you get the idea.]

Now I am in the position where I am a true publisher, in the sense that I "create" very little of the actual content. I farm as much of it as I can out to freelancers. I am one of those weird guys that LIKES the business side of things. You have an advantage that your creative arm is "in-House" and you will not have to pay for outside freelancers. Is your company relying on your talents alone or do you plan to hire freelancers as well? Beware burn-out; you may want to take frequent breaks and freelance for an outside project like the Adventurer Essentials line. Ha! But seriously, watch your pace. But I also feel that doing your "own thing" is way more fun than working on some stupid Torch or Ten Foot Pole PDF when you really want to be working on that Behind the Warforged Loincloth project...or whatever. So that probably will not be too much of an issue.

I would recommend a regular release schedule. I try to publish one item a week minimum. Four to Six per month, to keep your "name" out there in front of people. I will often wait until one of my products drops off the front page on RPGNow and then release another. That doesn't always work since some days fifteen new products will hit at once, but you get the idea. A company that has three products and is five years old...is exactly where I would be if I didn't hire freelancers!

OBS Exclusivity: I wouldn't. I am on OBS and YGN currently. I figure if I can earn 5% of my OBS sales on YGN then its a wash, and I still have my options open if I later want to sell on another site like e23 or Piazo or whatever new web-store might come along in the coming years. (And as digital content matures, new outlets will definately become avalible in my opinion.) But that's just me. To be sure, 90%+ of my sales come from RPGNow; so that's where you need to be.

But my final advice would be DO IT. Don't fret all the details, they will work themselves out. (Or your brother will figure it out for you!) Get in there and start releasing quality products and building some lines that interest you.