First thing: Sorry this took a while for me to get to. I saved it a few days ago and haven't had a chance to sit down and do the research I needed to do to provide you with a proper answer. So, with that said, let's begin:

There are a couple of things I need to get out of the way before I talk about this more. Firstly, I’m going to do my best to answer your subject in the time period you specified, but it’s at the very beginning of my knowledge so I’m going to drift into the 13th and 14th centuries as well. Second, and the really bad TLDR answer to this question: you wouldn’t have written a novel, and publication wasn’t a thing.

Novels and Publication are both modern concepts. It isn’t sensible to speak of a book being “published” in an era before the printing press and copyright law, and the concept of a novel is also usually traced the early modern period, (Miguel de Cervantes’ Don Quixote comes up as the “first novel” a lot.) though some would contend that the genre began as early as the 11th century in Japan or as late as the 19th century. Novel, in modern parlance, is kind of a catch-all for “long prose fiction,” but it’s important to understand that we go into a novel with certain expectations, expectations which broadly define it as a genre.

Some examples of those expectations: A novel should be a long, internally coherent work, that roughly represents reality. (Even fantasy novels or science fiction are expected to be realistic within the bounds of their created worlds) It should follow a set of characters that are developed realistically, usually through dialogue, and who change throughout the story. It should be the original creation of one author, who takes full responsibility for the contents of the text. Most importantly, though, novels, and art in general, is self-justifying. You write a novel because you want to write a novel. There doesn’t need to be any particular outside reason.

All of these assumptions cannot be held for a medieval text. Even when medievals wrote long prose fiction (Which, from my understanding, represents a small minority of texts.) they largely wrote Romances, (which were also frequently written in verse) Chivalric tales of love and adventure. While I need not go into the details here, they have a very particular style, involving knights, quests, love, and supernatural forces that simply exist in the world. Importantly, they are frequently at least on the surface, didactic texts (Texts meant to teach) and usually pose some sort of moral, or represent the moral purity of the lead character. (Examples include Gawain and the Green Knight, and Lanval)

This is important, because it gets back to that last point I made about novels- we conceive of literature as self justifying. Medieval writers, especially in the period you’re citing largely did not. Texts were valued based on their sentence (meaning or significance), and the auctoritas (Authority) of their writers. Both of these roughly meant the degree to which the texts conformed to truth, truth being defined by scripture and Christian doctrine. What this means is that pure fiction is looked down upon as the lowest form of literature.

Robert Henryson, in the prologue to his Morall Fabillis, puts it this way:

Thocht feinyeit fabils of ald poetré/ Be not al grunded upon truth, yit than,/ Thair polite termes of sweit rhetoré/ Richt plesand ar unto the eir of man;/ And als the caus quhy that thay first began/ Wes to repreif the of thi misleving,/ O man, be figure of ane uther thing./

Made up stories, “feiyeit fabils” are not grounded in the truth, and therefore aren’t considered valuable. Henryson here and in later passages is articulating a defense of his fables and the fable genre: that they are to teach you how not to be, and how better to live by example. So while Henryson is defending against the idea that fictional tales are inherently worthless, he’s doing it within the bounds of the point I made earlier. His stories DO have a moral point, so they have value.

In short, particularly in the twelfth century, before many of these defenses really started to carry weight, you probably wouldn’t have written a long work of pure fiction, even if it had a moral point. What would you have written? There were a lot of things: theology or philosophy, scientific or medical texts, political treatises and much more. Fiction did have a place, it wasn’t non-existent, but it was a minor player. There’s a lot more I could say here about how that developed, but it’s not really germane to the question you asked, so I’ll leave it here.

So what about the second part, publication? (And really this was the majority of your questionn, but the context of the first part is important for the second.) Well, at the period you spoke of, there’s a very limited book trade, and the word publication implies a certain level of mass market production that just cannot be found until the printing press.

The twelfth century, furthermore, is at the beginning of a sizable economic boom, as European economies increased in interconnection and complexity, populations rose, and so on. This meant substantial changes in the creation and sale of luxury goods (And books certainly were luxury goods), but I’ll address that a bit later and first talk about the twelfth century.

Book production was, obviously, small scale and done by hand (Manuscript literally means “handwritten”), and this meant books were quite expensive. Anyone literate was almost by definition part of the elite, and the writing or copying of a book would require a substantial amount of work by someone who was part of that elite. Even a simple, undecorated codex would cost a substantial amount of money. Even for a successful lawyer, part of that educated elite, a collection of six books or so would be respectable, and thirty or forty very impressive indeed.

Most texts at the time you cited were copied or written in monasteries, generally for use by the monks of that monastery or the community they were a part of. New texts would be composed by those with a scholarly bent, and then, if they were well regarded, might be copied by other monks and scholars that found them valuable, and taught from. New production often took the form of glosses or commentaries on older texts, intended to help others better understand them. Exegesis and explicative commentaries on the bible, for example, make up a substantial part of literary production at this time. Very very few people would be sustaining themselves off of writing or bookmaking, and largely this practice could only be supported by a larger institution, like a monastery, that had an interest in the production of literary and scholarly work.

However, as the middle age went on, we see an increase in economic complexity, and with it a rising demand for luxury goods like books. This was part of the larger economic boom and rising populations that defined this period. With it, came an increase in specialization and a rising number of skilled craftsmen and educated workers. As states strengthened and bureaucracies expanded, proto-universities sprung up around various centers of learning, to feed the rising demand for clerks, lawyers, trained preachers and so on.

Professional scribes and an early book trade really come to life around this time, centering around major urban and university centers, London, Oxford, Paris, Bologna and so on. These would serve to copy and disseminate key texts, but they could also function as a way to distribute new works. One wouldn’t simply write a new book and take it to the bookseller, though. Rather, for whatever reason, be it commission from a noble, the entertainment of your friends, or as part of your scholarly duties, you would write something, and share it within your circle. If it was good, and well liked, people might copy passages from memory, or pay someone to do it for you. The idea of textual ownership isn’t really something that existed at this point, and it doesn’t seem to be the case that authors at this time really attempted to control the dissemination of their works. (Though some tried to control the form of the transmission, making sure the texts remained whole, they were largely unsuccessful). These texts would be compiled, borrowed from, commented on and glossed, rewritten or adapted, and generally blend into the wider textual community they were based on.

Far from profiting from the sale of these works, individual writers would often be completely unattributed or misattributed in these compilations, copies and reproductions. Many of the compilations of all of Chaucer’s works leave out many of his writings, while incorrectly including those of less known poets. Indeed, insofar as individuals made a living through writing (And the overwhelming majority of writers did not.) it was usually through the patronage of either a wealthy individual or an institution such as a university or a monastery. Authorship was not a profession in and of itself, but a part of a larger job, or a hobby for the amusement of ones’ social circle.

So in sum, the process would be something like: be part of the educated elite, have a reason to write something, often either pay to dictate to someone or be part of a community like a monastery that could support the collaborative work of preparing a manuscript, provide your text to the immediate community or patron you wrote it for, and if it’s good, it might be copied and disseminated among the wider literate community. You would almost certainly receive no money from the actual sale of your books, as most of them would be copies and compilations made by people you had no association with, even in the unlikely case your book was successful.

I’m realizing now that this answer is quite long and somewhat rambly, so hopefully it makes some sense. Please feel free to ask me any followups you may have!