** Pulled from contactanauthor.co.uk**
A good resource for a little bit of the business side of writing! Check it out!
Of course, experienced publishers already know how to do this. So these hints and tips are for non-publishers who may want to produce a book – maybe a ghostwritten autobiography, a company history or a book featuring a range of toys.
First, make sure you have the right author for your project. Look at other books they have written and talk to them to see how easy they will be to work with. For a ghostwritten autobiography, you may want to meet the author face to face to make sure you feel comfortable talking to them about yourself.
If you feel happy so far, ask them to write a small section of the book you have in mind. This will help you check that their writing style fits your expectations.
Once you are sure you want to go ahead with them, you need to talk business. Although you may feel awkward discussing finances, it’s important to have a clear agreement before you go any further. Amongst other issues, you should agree how much the author will earn (see below), who owns the copyright, whether their name will appear on the book and what happens if either of you want to pull out of the arrangement.
There are two ways to pay an author for a book. The first is to pay a royalty on each copy sold. This is a percentage of either the cover price or the price received. Usually you pay a non-returnable amount of money up front as an advance. No further money is due to the author until the book has earned that amount in royalties.
The second way is to pay a flat fee. This is simpler for you to administer, but less popular with authors as it doesn’t let them share in the book’s success. A compromise solution is to pay a flat fee to cover a print run of a set number of books and make further payments if you wish to print more.
If you change your mind and decide not to go ahead with the book after the author has started writing it, you are expected to pay a kill fee. The exact amount will depend on the amount of work he or she has already done.
To prevent problems later, you need to put your agreement in writing. You can find sample author contracts on the web to use as a guide, but don’t use an over-complicated agreement that you don’t understand. Simple wording and some professional help can save tears later.