During Cover Design Week I said this about self-publishing costs:
Unfortunately, what we have to spend says nothing about how we should spend it, and what things cost now says little or nothing about their total cost over time. The only thing we can say for sure is that if we don’t have [enough money] we’re out of luck. Other than that, even knowing the cost of the service does little to help validate the expense.
As regular readers know, I think the most important thing an independent artist can do is control costs. At some point, however, authors interested in writing professionally will have to confront publishing expenses (site hosting, POD fees, etc.), as well as consider a number of author services (proofreading, cover design, etc.).
To my mind the only useful way an independent author can assess such costs is to compare each outlay to potential revenue. That’s obviously Business 101, but it’s a mindset many independent authors fail to adopt. Instead, self-published writers often see expenses as worthwhile or necessary because they fund the physical production of a book: money gets spent and a book — your book! — springs to life. The problem with this approach is that it omits any relationship to sales or revenue, which means each expense is not a business decision so much as a purchasing decision, like buying fruit at the grocery store or a new pair of jeans.
If you’re trying to be a professional writer, implicit in that goal is doing what you can to avoid going broke. You don’t have to aspire to wild profits, and there are good reasons for not doing so, but at the very least your minimal goal should be recovering direct costs, if not also compensating yourself for your time. Even the ultimate goal of writing full time and living on one’s earnings demands similar analysis, because the realization of that lofty dream is directly related to your cost of living. The cheaper you’re willing to live, the longer you’ll be able to stay in business for any amount of generated revenue.