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So my name is Ana Novkovic and I'm about to start writing and all that. I really really don't like my last name Novkovic. It's so hard to pronounce and I worry it would just distract readers and not look good.

I am considering using the pen name Ana N. Is it a bad idea to have an pen name within only an initial for a surname?

You can publish under any name you choose. Whether it makes a difference to your sales is a very open question, but if it makes you feel better about publishing your work, then by all means use a pen name. Many great writers have done so -- Mark Twain was a pen name; so was Andre Norton. More recently, John Varley was a pen name -- and these are just the ones I know, whose work I've read (and I'm a pretty narrow reader).

On the other hand, people with harder names than yours have published under their birth names -- Somtow Sucharitkul, for instance (though after several years, he changed to using S.P. Somtow). Aleksandr Solzhenytsin was another.

I'd suggest you don't worry about whether your readers can pronounce your name, and concentrate on writing work they'll want to read. If they want to read it, they'll get past your name.

Your name is fine. I would not choose an initial for a surname because people will wonder what you're hiding and you have to file extra paperwork for a pseudonym. But of course you can always tell people "just call me Ana N." when you want. Some of my daughter's teachers at her school go by "Mr. G" or "Ms. O" because their names are long and/or hard to pronounce.

Partly because your name is the same as a Slovenian politician famous enough to be listed in Wikipedia, you should consider an alternative. Do you like your mother's maiden name? Would you prefer a shortened version or an English translation of your surname (Like Ana Novik or Ana Newson, for example)? It should be short enough, memorable and have some charm for you, and it should "age well."

I've had a pseudo for years for arts things that I do that are completely unrelated to my main career, they definitely come in handy. But do tell your publisher and/or agent your full legal name :-)