Burning $100 Bills: The Neophyte Publisher Money Boiler
A Realistic Guide To The Overwhelming Expenses Of Publishing
My first magazine projects were in the early '80s and since then I think I must have published in almost every genre in the periodical industry, from medical journals to heavy-metal music magazines! If there is one thing that I've learned, it's that the magazine industry is not for the faint-hearted. As one wag once put it, the industry is made up of a couple of dozen corporate factories and several thousand masochists. Then again, not every startup publisher has to try and compete with Hachette Filipacchi or Time Inc. head on. If you carefully pick your market segment and stay narrowly vertical, you stand a better chance of breaking through into an extremely competitive market.
The biggest problems with the business plans of the vast majority of neophyte magazine publisher wannabes are:
1) You don't have enough money to do what you want. Even if you think you do, you really don't. The hidden expenses you couldn't possibly fathom will melt through your cash like global warming through glaciers. Publishing a new magazine is a lot like riding a bike. You can read up all the helpful how-to articles on how to ride a bike, but unless you've actually gotten on the saddle and pedalled down the road, you're going to fall on your face. Guaranteed.
2) You either have to modify your plan, gain the experience that you'll need before you jump in and lose every penny you've ever had, or hire someone who does. And they don't come cheap. Twenty years ago, I would ask for (and surprisingly actually receive) $175 an hour for my magazine publishing consulting services. And that was in an age when $175 would buy groceries for a big family for a month. These days, you can expect to pay $400 an hour for the "middle of the road" consultants and $500+++ for the ones who can share the actual, realistic, and profound knowledge that you will need. Anyone who is asking $250 an hour or below, likely knows less about magazines than even you do.
3) You have to truly, profoundly, completely and thoroughly understand your target demo by doing an overwhelming amount of research. Just saying "every motorist will want to read this magazine," is a nonstop ticket to bankruptcy court. I once had a wannabe publisher look me in the eye and tell me with all seriousness "everybody on the planet will want to know what's inside this magazine and they will all help us." I hope he has found some help at some psychiatric institution. Demographic research is not "I've been a bowler since I was knee high to a grasshopper and know what bowlers want to read;" or "I've never missed an issue of Seventeen so I can do a teen magazine with my eyes shut." Demographic research is a hard-nosed actual proprietary study conducted on your behalf by a reputable market research firm which includes extensive face to face surveying and focus groups. Anything short of that, and you might as well just donate your research-allocated money to the Retirement Fund For 419 Nigerian Scammers.
4) You might want to consider taking on an investing partner, raising more cash through family and friends, getting regional agencies to do cash sponsorships, running fundraising events, etc. Do not, repeat, do not even in your wildest dreams think that you are going to receive $10 from pre-launch sales of advertising. Why? Because you are not. Selling advertising for a non-existent magazine is significantly more difficult than successfully extricating a military force from Iraq. If you have the sheer unmitigated gall, perseverance, sheer luck and massive cojones to be able to actually pull off some insertion orders prior to distribution, the client is going to wait to read the actual issue and pay you net 60 from then. Net 120 is more like it. And even the most irrationally generous factoring agency is not going to advance you a dime on a new publication. They know how slim the chances are that you're actually going to still be publishing when it comes time to collect the invoice.
When you want to visualize what it is like to be a new magazine publisher, envision the old coal fired steam locomotives where the sooty engineer has to constantly shovel coal into the searing burner to keep the train heading down the tracks. Only instead of coal, you're shovelling in $100 bills. Magazine publishing can have an amazing upside and has made many millionaires out of mere scribes. The dream has also devastated countless thousands of people around the world who took the leap before they had a very clear understanding of just how deep that water really is!
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