A couple days ago I was talking with an author friend, and they asked about the process of how my husband and I started Infinitas Publishing. I typed up a response, then realized that other people might also find this information useful. So here it is… the basics of how my husband and I started a business.
IMPORTANT: I am not a lawyer nor am I certified in taxes, so please do not take this as legal advice. These are just my experiences thus far, and are meant to be useful in figuring out what steps you may need to take.
Also note that this process varies depending on your location and the kind of business you want to start. This particular post is tailored to my experiences starting a publishing imprint in Missouri, in the United States of America. (Business law varies from state to state).
Choosing a Name
First off, my husband and I chose the name of our business. We chose Infinitas Publishing. We did a Google and Bing search, since the results are different, to see if there was anything too similar to the name already.
We found a few similar names, but we decided that our specific product (speculative fiction and games) and branding was different enough that the two companies wouldn’t easily be confused.
Once we found that we were in the clear for general terms, we did a trademark search. Since trademark law tends to be a pain and I still don’t feel like I have a good grasp on it, I figured we’d be best off avoiding anything too close to something that already existed.
As a side note, if the trademarks can’t easily be mistaken for each other, and they involve unrelated products, they should be free for use. (For example, if two trademark names were similar, but one related to a brand of vacuums and the other to a doggy day care. Completely different uses, so the companies can have similar trademarks.)
As an example, at one point Isaac and I called Battle Decks “Beastie Wars”… only to discover that “Beast Wars” was already in use by Transformers. Since both products involve entertainment and games, we decided to steer clear of the name. Not only that, but renaming the game Battle Decks gives us more versatility in future game expansions… never mind that there’s a PowerPoint slide competition of the same name. The game and event shouldn’t be easily be mistaken, however, so that shouldn’t cause any mix-ups.
To look up a trademark, I used the Basic Search Database (Under TESS, click “Search Trademark Database”), and told it to search “all” words.
Fictitious Name Registration / DBA
After we chose the name, we registered for a fictitious name / Doing Business As (DBA) license. For Missouri, this cost $7.00 and lasts for five years (which reminds me that I’ll need to renew my SBibb’s Photographic Illustration DBA soon). This allows you to legally use the business name instead of your own.
Determine the Business Type
You also need to decide what kind of business you’re starting. There are four major structures, including Corporations, but a Sole-proprietorship, Partnership, and Limited Liability Corporation (LLC) are the ones you’re most likely to run into at this stage.
Nolo has some great information in regards to business practices.
An LLC has the benefit of protecting your personal assets in the event of a lawsuit, but it does have a higher start-up cost. There are also certain tax benefits, and the salary structure is different but I’m not as familiar with this business structure, so I can’t say what those benefits are off the top of my head. If you are if you are publishing multiple authors or publishing materials that could result in a lawsuit, you may want to go the route of an LLC.
EDIT: Check out Raistlin212’s comments below for a better explanation of the benefits of the LLC business structure.
A sole-proprietorship is by far the easiest business to start, as all money coming into the business flows directly to you. Technically, once you have the DBA and EIN, you have the basics you need to start the business online. (This is the structure I use for SBibb’s Photographic Illustration).
A partnership is like a sole-proprietorship, except you have multiple people involved and there’s an extra form you need to fill out for income taxes (Form 1065 and the resulting K-1, which I’m not looking forward to figuring out next year, but I know a couple people I can ask for assistance). This is the structure my husband and I chose for Infinitas Publishing.
Employer Identification Number (EIN)
Once you have the DBA, you can apply for an EIN (Employer Identification Number) through the IRS (so many acronyms, I know). This number is handy because it identifies your business on tax forms. The EIN is registered on the federal level. You apply online and you get the number immediately upon completing the form. Doesn’t cost anything either, and you have a different number for each business (Infinitas Publishing has a different EIN than SBibb’s Photographic Illustration).
If you have any questions about filling out the form, your local bank may be able to help. I had a bit of trouble trying to call the IRS help line (I felt like I was playing a Choose Your Own Adventure game, phone style), but the people at the bank were able to answer my questions in regards to start dates and such.
If you are doing freelance work, having this number is nice because it gives you a number to give contractors for the Form 1099-Misc without having to give them your social security number.
Business Bank Account
It is usually recommended that you have a separate banking account for your business to keep your income and expenses organized. This may especially be helpful if you’re ever asked to produce records for tax purposes.
Check with your bank to see what they require to start an account. I went to US Bank, since I was familiar with them and they had a basic package that suited our needs and wouldn’t cost us money to use. This was important since we didn’t expect a high inflow of money to start with. For a partnership, our local branch required a General Partnership Agreement (an LLC needed an Operating Agreement). They also needed the EIN, and I think they needed proof of the registered DBA. It took a couple weeks for this to show up in their system, so be sure to plan ample time between getting everything registered and actually starting the business.
If you need assistance with the General Partnership Agreement or Operating Agreement, there are several sites online that offer free templates. Once you find a suitable template, you can tweak it to fit your needs.
If nothing else, this agreement acts as a guide to each partner’s responsibilities in the case of misunderstandings or if anything gets rough. Now, if you want to be sure that everything is legally correct, you may want to hire a lawyer to look over your forms.
Since Infinitas Publishing is between my husband and I, we didn’t do this, though we did make sure that we understood everything in our agreement and that it suited our needs.
For SBibb’s Photographic Illustration, I don’t use a separate bank account. Due to the nature of my work, I have very few expenses that I apply to that business. However, I do keep a ledger of all income, and it is still advisable to have a separate account, even if you’re a sole-proprietor.
Once the business bank account was set up, I created a business Paypal account and input the new information into my Kindle, Createspace, Smashwords, and The Game Crafter settings. Now when we receive royalty payments or purchase proofs, they’ll be linked to the business, rather than our personal accounts.
Smashwords Publisher Account
Smashwords has a “publisher” account option, which I upgraded to so that my works would show up as published by Infinitas Publishing. Then I created “ghost” author accounts for my Stephanie Flint and Stephanie Bibb names, and I’ll add Isaac’s name once we start publishing our co-authored works.
Our next step will be to fill out the Missouri Sales Tax form. During the time that we only had ebooks, we didn’t need to worry about sales tax, but once we get print books made, which we plan to offer to bookstores and try selling at a local holiday market, we’ll need to collect Missouri sales tax.
As a side note, I’m not sure about what differences we’ll see when I get to selling wholesale (to bookstores) versus retail (holiday market). I’m still researching this, so I’m a bit sketchy on this. However, when emailing the Missouri Department of Revenue, I’ve been able to get some very helpful information on what forms we’ll need to fill out (Form 2643 and 53-1), along with details about the form.
Give yourself a bit of time to get through it all, but definitely ask if you have questions.
Important: Check with whichever state(s) you’re doing business in, because the requirements vary.
Of course, all of this information is for if you plan to self-publish rather than seek representation through a trade publisher. Be sure to research both sides thoroughly, as there are pros and cons to each.
Granted, this doesn’t even cover creating a logo, a website, buying ISBNs, approaching book stores, and everything else I’ve forgotten at this point. But hopefully it will give you a starting point, and maybe I’ll talk about the “branding” and marketing side of things at a later date.
Also, If you’re curious to read more about the business side of publishing, take a look at Kristine Kathryn Rusch’s “Freelancer’s Survival Guide.”
I picked up a copy through a StoryBundle offer, and while I’m still in the process, it has been immensely helpful in considering what steps to take to start the business. Plus, some of the articles are on her website for free, so you can read through whichever ones you need. 🙂
I hope you find this post useful. Do you have any tips for starting a publishing business?
By the way, Carissa Taylor was awesome and agreed to host a give-away of one free, ebook copy of Magic’s Stealing, so if you’re interested in winning a copy, head over to her blog.
She also has some really useful information on Twitter pitching and a list of literary agencies that accept YA science fiction and fantasy, so be sure to check those out as well. 😀