Cathix
First Post
mcathro said: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!
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.
I've been watching your company for a while and your philosophies are spot-on. I'm inspired by your progress and admire your drive.
Anyone would do well to listen to your advice, and see how it applies to their own company.
My brother has suggested incorporating right away for tax reasons so that's fine with me; shows we're serious going in. I do plan on working with freelancers as I'd still like to freelance myself for many of the great publishers I've already worked with. My current thoughts are to lay the groundwork for Tricky Owlbear's lines and then I can act as line developer and perhaps editor--maintaining a firm creative hand without the time expense of personally writing them all.
