All writers think of what they do as an art. Smart writers understand that writing is also a business. Really smart writers see themselves also as entrepreneurs.
As a veteran of both a Silicon Valley technology law firm and a Valley start-up, I've known people who labored for years late at night and on weekends to create a new product while holding down a full-time day job; who, when the prototype was ready, found a venture capitalist to help make the prototype commercial-grade, validate the product by attaching the venture capitalist's imprimatur to it, and introduce the entrepreneur to prospective customers; who then started a real company and learned to run it, creating new products and selling them to new customers in new markets.
You can learn a lot by applying this classic technology entrepreneur model to what writers do. The writer labors alone for years creating the first cut of a manuscript (product). When the manuscript is ready, the writer finds an agent (venture capitalist), who invests not money, but time in helping the writer re-write and otherwise tune up the manuscript. When the manuscript is more ready, the agent introduces the author to publishers (customers), with the agent's imprimatur helping to get the publishers to take notice. The publisher buys the book; the author quits his day job, and thereafter devotes himself to his new business - writing new books (creating new products) to sell to his original publisher (the original customer) and to new ones (foreign sales and subsidiary rights).
In technology, the closest analogue to the writer's business model is the so-called fabless semiconductor company. Big semiconductor companies like Intel run multi-billion dollar fabrication plants to manufacture their chips. But there is also a smaller breed of chip company that doesn't run the fabs, and instead only designs chips and then licenses the design to the Intels of the world for subsequent manufacture, distribution, and sale. These fabless companies create nothing but intangible intellectual property (copyright, patent, trademark, trade secret). Their business is licensing that intangible property to someone else. Likewise the writer: the product you sell to your publisher isn't really a book, but rather the underlying copyright in that book. The publisher then prints the books, markets them, and sells them.
From this model, several important points emerge:
First, creation of the product (writing the book) is only the first step. You are now running a company (albeit a sole proprietorship), and your company is responsible not only for creating the product, but also for marketing, branding, and selling it. Yes, other people will be involved in these efforts (see below), but the ultimate consequences of success or failure will be yours alone. Run your company accordingly.
Second, although in various ways your and your editor's interests are aligned (you both make more money from a better book), and although your editor might also become your friend, the most fundamental aspect of the writer/editor relationship is that of salesman/customer. Never lose sight of the fact that your editor is your customer. Before anything else can happen, your editor must decide whether to buy, and how much to pay for, the product (copyright in a book) that you are trying to sell him. Do you feel that your manuscript is weak, but that once you show it to your editor, she'll help you make it better? Maybe she will. But, in any other industry, would you show your customer a product that you didn't feel was ready? Bear in mind, "ready" doesn't mean perfect; it means good enough to accomplish your objective, which in this case is a sizeable advance; the editor's enthusiasm sufficient to infect the publishing house (no corporate customer makes a buying decision alone, and you have to remember that not just your editor, but the entire publishing house, is your customer); the customer's ongoing impression that you are professional and can be trusted to turn in nothing but similarly "ready" products in the future.
It bears mentioning here that, unlike your editor, who is your customer, your agent is more like your partner. Your editor is buying something from you. When he does, you and your agent will make money the same way (by dividing revenues, commonly 85/15). This financial dynamic puts you and your agent on the same side of the negotiating table. But even here, as in all partnerships, the principals will stay together only so long as they each believe it is in their interests to do so. Accordingly, the points in the paragraph above bear thinking about in relation to your agent, as well.
Third, strictly speaking, readers are not your customers. They are not even your publisher's customers. They might not even be your publisher's customer's customers: Putnam sells to Ingram, who sells to Barnes & Noble, who (finally) sells to a reader. There are many layers of distribution, marketing, and sales between you and what is known in the software business as the end-user - the reader. Obviously, this doesn't mean the reader is unimportant to you; the reader is still your indirect customer, and if readers stop buying, so will everyone else in the customer chain. But it does mean that your marketing efforts should be directed, to the extent possible, at all levels of the customer chain. Almost all writers know they should market to readers; author websites are a good example of this type of effort. But how many writers recognize, too, that they need to market to their publishers? Does Dell Computer want to know that Intel is investing in chip R&D? Of course it wants to, and Intel markets not just to end-users (computer customers), but to the Dells of the world, too. Similarly, you should keep your publisher apprised of your own R&D efforts: conferences you attend, connections you make, ads you take out, media coverage, etc. When your customer sees you investing in yourself, your customer will be confident that she ought to invest in you, too.
It all comes down to this: as an entrepreneur, you have a unusual degree of control over your business future. That is to say, you are unusually responsible for that future. Some people find this degree of responsibility intimidating, and this is one reason entrepreneurs are rare. But if you believe in yourself and you know what you're doing, what could be more comforting than knowing that you are in charge of the course of events? All that's needed is the right roadmap, and I hope the points above will provide a good start.
Suggested further reading:
Dale Carnegie, How to Win Friends and Influence People
Bill Davidow, Marketing High Technology
Roger Dawson, Secrets of Power Negotiating (audio course, available from Nightingale Conant)
Guy Kawasaki, Rules for Revolutionaries (and all of Kawasaki's other books)
Brian Tracy, The Psychology of Selling (audio course, available from Nightingale Conant, also available as a book)