The first step in creating a magazine business plan explores the possibilities of new platforms
Dwight D. Eisenhower said, “In preparing for battle I have always found that plans are useless, but planning is indispensable.” Have you ever felt in your personal life, like plans are useless? Many people feel this way, and in fact I’ve heard the best advice you can give a bride before her wedding is to plan that not everything will go as planned. Just knowing that imperfection is part of the plan can be a soothing anecdote.
But when it comes to business, it’s not soothing to set goals, employ strategies, and think that, “oh boy, golly, things might not go as planned” because that might more literally lead to layoffs and downsizing in a temperate organization that’s stagnant in growth.
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When your publication first launched, it had a magazine business plan. But years pass, and that magazine business plan might be celebrated when you pass milestones, but it becomes elderly and goes into retirement at some point.
That’s why it’s important to create a new strategic magazine business plan at least every five years.
At Mequoda, we spend a significant amount of time building custom magazine business plans for our niche magazine clients who are adopting a multiplatform magazine business model. During this process, we run through seven elements of the business plan that guarantee success when properly implemented.
If the first half is done correctly, when you get to the modeling of revenues, profits, and economic value, you will be surprised to see how far multiplatform publishing can take you.
The first step is determining which platforms you will publish on.
Most publishers who start with a print magazine brand will launch several free platforms. First they launch a free portal with content that will attract users from search, free downloads and a free email newsletter, so that you can convert free website visitors into email subscribers.
Think of the first step in planning is like a pyramid, to support the notion that media products have a natural hierarchy.
Drawing this pyramid out on paper is an exercise through which you dig down and determine exactly how you’re going to run your magazine company. The pyramid provides a method for organizing content to maximize profit.
The foundation of the pyramid shows how you’ll draw prospects into your customer base, including free articles and downloadable freebies.
Then, level-by-level, you monetize those individuals by pushing them up the pyramid to product levels that are increasingly more valuable to them and more profitable for you.
Designing your enterprise in this way is a dramatic departure for most media companies, which have historically been horizontally integrated as magazine, newsletter or book publishers. Over the past 30 years, we’ve seen special interest media evolve toward vertical integration in which the goal is to produce media in and for a variety of content platforms.
Once free website visitors arrive and you convert them to your email list through freebies, email promotions are sent out to promote the print magazine subscription, bundled with several new paid platforms: a digital magazine app, a web magazine, and a magazine subscription website.
Some publishers also have live events, both digital and in-person. Others have physical products, like books, that they sell. There can be many content platforms, the key is determining what priority you’ll launch them in, which is rarely all at the same time.
As part of building a magazine business plan, you will need to gather some numbers. Every viable online publishing business, whether existing or contemplated, needs a business plan with a five-year financial forecast suitable for senior managers, equity partners, and venture capitalists.
Start in the red, break even in year two, and then move ahead to increasing nets sales and profits. That’s the ideal (and simplest) publication business forecast.
Every senior manager and investor wants to see a formal magazine business plan, and especially, the five-year, profit and loss forecast. They want to know immediately how large the business will become, and how much of an investment is required to build the business out to maturity.
A bar chart that shows growth over five years should illustrate the three major factors:
- The amount of money that must be invested in the project (net contributions)
- The size of the business after five years (total net sales)
- The profitability of the business
Once your platforms are in place, and you think you know the revenue you can achieve, put together a seven-part business plan that leverages your new platforms and determines revenue goals.
- What content do you have, and what will you produce? (that’s the part we just reviewed)
- How will you build an audience?
- How will you increase revenue?
- How will your organize your teams for efficiency?
- What technology will you leverage?
- How will you measure success and failure?
- What will your exit plan be?
Benjamin Franklin, said “If you fail to plan, you are planning to fail.” So what side of the force will you be on? If you need help with planning, reach out and we can help you tidy up.