Magazine Publisher Business Plan

Group Publishing, Inc.

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Strategy and Implementation Summary

Our strategy is based on serving a clearly defined niche market well. By having an identifiable market with available lists and related memberships, the management of The Group believes we can exceed publishing industry standards for conversion of potential subscribers. Committed artists are a passionate and loyal clientele. A thirst exists for the published periodical product that "Artists In Business" will provide. The initial issue, published in late summer of 1996 met with rave reviews at booksellers and distributors conventions and was profiled on Arts News radio. The task is to reach and inform the target market. The strategy is to combine sampling, direct mail, and group membership solicitation to build circulation through both subscriptions and newsstand distribution. Multi-channel distribution principles will be employed. Each has a differing margin structure but the combination will maximize the potential reach of the magazine.

5.1 Marketing Strategy

New subscriptions are both sample and media based. Sampling will be done to both known arts organization members and to artist mailing lists. Several of these databases are already available to The Group. "Artists In Business" has access to a list of 100,000 Artist business leaders. All will be sampled with the magazine.

Sample runs will be: 50,000 issues on the first and second runs, 75,000 issues on the second and third runs, and 100,000 issues on the fifth and sixth issues of 1997. All cost associated with these sampling programs are included in the advertising and promotion budgets for those months. A total of $362,000 will be spent on direct mailed sampling geared to subscription.

In alternate months, print media will be used. Arts publications will be employed. "New Brush" magazine, "Colours" magazine, and "Artistic License Today" will have the early insertions. As subscription base grows general interest media will be used later in the year. "Inc." magazine and "Business Week" are likely choices.

Finally, sales to Arts supply and retail bookstores through magazine distributors will also be accomplished. Key distributors have already expressed interest in the publication.

All sales projections through this multi-channel approach will reflect the different pricing and margin considerations pertinent to each.

5.1.1 Distribution Strategy

Distribution of magazines and books through retail channels are projected at retail less 60%.

Subscriptions through organizations are projected at list less 50%.

All direct sales are booked at full revenue. Cost of product is deducted for 6 issues per year. Fulfillment costs are expensed.

Direct sales of books are billed to credit cards and drop shipped. The magazine is an ideal vehicle to promote these sales.

Future sales are planned directly over the internet from the AIB website.

5.1.3 Strategic Alliances

The strategic alliance with Thallos Green and his AIB radio broadcasts holds great potential. Thallos plans to syndicate the broadcasts on Arts News radio stations across the U.S.

5.1.4 Promotion Strategy

In addition to advertising, direct mail, and media executions, public relations exposure will benefit magazine circulation significantly. Red Brushwielder has already appeared and been interviewed on Arts News radio programs four times. Tapes of these interviews are available. In one instance more than 1800 calls were received requesting subscription information from a single program.

Red Brushwielder has also been asked to tape programs for an Anytown radio station on the subject of Artists in the workplace.

Promotion strategy for sales through organizations to their memberships includes a split of the first year's subscription revenue with the selling organization.

5.1.5 Pricing Strategy

The "Artists In Business" magazine will sell for $3.95 per single issue on the newsstand.

  • A one-year subscription is $16.95.
  • A two year subscription is $29.95.
  • "Trade" soft-cover books will sell for $14.95.
  • Paperback size "booklets" will sell for $7.95.
  • Future hardcover books will sell for $19.95 to $22.95. No hardcover sales are projected in this three year plan.

5.2 Sales Strategy

Our combined sales strategy of sampling, direct mail, and organizations will result in the following first year sales goals:

  • 90,000 one-year subscriptions.
  • 50,000 one-year subscriptions through organizations.
  • 10,000 two-year subscriptions.

Four book titles are factored in in the second half of the year. Two are "trade" and two are "booklets." Sales goals are modest.

The following sections illustrate annual revenue over the next three years of $3.1, $4.8, and $6.4 million respectively.

5.2.1 Sales Forecast

The following table and chart presents specific sales forecasts by product, by month, over the first year of sales development. Years two and three are cumulative totals only. All sales project the relevant unit cost and margin differences to reflect discounts, commissions, and revenue splits.

Discount on ad revenue is 15% agency commission and 20% sales commission for a total of 35%.

All product costs for subscriptions are based on $.40 per issue--6 issues for one year, 12 issues for two years.

The only cost not included here is an author's royalty on book sales--expected to be 15%. These royalty costs are incurred on the P & L statement as an expense item.

Sales Forecast
Year 1 Year 2 Year 3
Unit Sales
Mag Subscript Sales 1 Yr 90,000 120,000 150,000
Mag Subscript Sales 2 Yr 10,000 20,000 30,000
Mag Subscript Whsl 50,000 50,000 50,000
Newsstand Sales Whsl 56,500 72,000 80,000
Ad Revenue Pages 118 150 150
Book Sales--Direct 25,500 50,000 80,000
Boo Sales--Whsl 7,000 20,000 30,000
Booklet Sales--Direct 14,500 30,000 50,000
Booklet Sales--Whsl 0 15,000 20,000
Total Unit Sales 253,618 377,150 490,150
Unit Prices Year 1 Year 2 Year 3
Mag Subscript Sales 1 Yr $16.95 $16.95 $16.95
Mag Subscript Sales 2 Yr $29.95 $29.95 $29.95
Mag Subscript Whsl $8.50 $8.50 $8.50
Newsstand Sales Whsl $0.99 $0.99 $0.99
Ad Revenue Pages $2,182.00 $3,365.00 $3,976.00
Book Sales--Direct $14.95 $14.95 $14.95
Boo Sales--Whsl $5.98 $5.98 $5.98
Booklet Sales--Direct $7.95 $7.95 $7.95
Booklet Sales--Whsl $0.00 $3.18 $3.18
Sales
Mag Subscript Sales 1 Yr $1,525,500 $2,034,000 $2,542,500
Mag Subscript Sales 2 Yr $299,500 $599,000 $898,500
Mag Subscript Whsl $425,000 $425,000 $425,000
Newsstand Sales Whsl $55,935 $71,280 $79,200
Ad Revenue Pages $257,476 $504,750 $596,400
Book Sales--Direct $381,225 $747,500 $1,196,000
Boo Sales--Whsl $41,860 $119,600 $179,400
Booklet Sales--Direct $115,275 $238,500 $397,500
Booklet Sales--Whsl $0 $47,700 $63,600
Total Sales $3,101,771 $4,787,330 $6,378,100
Direct Unit Costs Year 1 Year 2 Year 3
Mag Subscript Sales 1 Yr $2.40 $2.40 $2.40
Mag Subscript Sales 2 Yr $4.80 $4.80 $4.80
Mag Subscript Whsl $2.40 $2.40 $2.40
Newsstand Sales Whsl $0.40 $0.40 $0.40
Ad Revenue Pages $788.02 $1,178.00 $1,392.00
Book Sales--Direct $2.99 $2.99 $2.99
Boo Sales--Whsl $2.99 $2.99 $2.99
Booklet Sales--Direct $1.59 $1.59 $1.59
Booklet Sales--Whsl $0.00 $1.59 $1.59
Direct Cost of Sales
Mag Subscript Sales 1 Yr $216,000 $288,000 $360,000
Mag Subscript Sales 2 Yr $48,000 $96,000 $144,000
Mag Subscript Whsl $120,000 $120,000 $120,000
Newsstand Sales Whsl $22,600 $28,800 $32,000
Ad Revenue Pages $92,986 $176,700 $208,800
Book Sales--Direct $76,245 $149,500 $239,200
Boo Sales--Whsl $20,930 $59,800 $89,700
Booklet Sales--Direct $23,055 $47,700 $79,500
Booklet Sales--Whsl $0 $23,850 $31,800
Subtotal Direct Cost of Sales $619,816 $990,350 $1,305,000

5.3 Milestones

Important milestones are:

  • Raising "seed" capital.
  • Publishing magazine by February.
  • Launching subscription marketing programs.
  • Achieving subscription goals.
Milestones
Milestone Start Date End Date Budget Manager Department
Sample Milestones 1/4/2008 1/4/2008 $0 ABC Department
Finish Business Plan 5/7/2009 6/6/2009 $100 Dude LeGrande Fromage
Acquire Financing 5/17/2009 7/6/2009 $200 Dudette Legumers
Ah HA! Event 5/27/2009 6/1/2009 $60 Marianne Bosses
Oooooh Noooooo! Event 6/26/2009 7/1/2009 $250 Marionette Chèvre deBlâme
Grande Opening 7/6/2009 7/11/2009 $500 Gloworm Nobs
Marketing Program Starts 6/6/2009 7/1/2009 $1,000 Glower Marketeers
Plan vs. Actual Review 11/1/2009 11/8/2009 $0 Galore Alles
First Break-even Month 3/5/2010 4/4/2010 $0 Bouys Salers
Hire Employees 2/1/2010 3/3/2010 $150 Gulls HRM
Upgrade Business Plan Pro 4/22/2010 4/24/2010 $100 Brass Bossies
Totals $2,360
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