Gordon Woolf's Blog

The need to make a profit

The radio caller was critical of banks, which is not unusual, but she put it in a somewhat odd way: 'I have to pay them interest, but what do they actually DO (for me?)'.

This may be partly the reason for the current Occupy movements around the world. To some youngsters it may just seem that if their parents run out of money, they just have to go to "the hole in the wall', but to those parents does it also seem that if they can buy computers, washing machines, furniture and so much more on "48 months interest free", why should the banks charge interest. After all they are only giving you money for a while, not goods permanently.

I know that doesn't make sense, but it kinda sounds logical.

The reason for the demonstrations that I have sympathy with is that it is no longer true that the rich are getting richer and the poor are getting poorer -- it is, some people have pointed out with figures and graphs, that the super-rich are getting richer, and that the rich and the poor are getting poorer.

I could claim that some of my best friends are millionaires, which is not quite true but I have known a couple well enough to visit their homes and have them visit mine. I don't envy them. Sure they make more money than I ever had but they do have to work unusual and long hours and the stress level is more than I would want, even though as a newspaper editor I once flourished on stressful work.

But we now have company directors who get pay increases by the millions and yet manage to do similar work for several companies at the same time. If their individual jobs were at the stress level of "my" millionaires, they'd have been dead long ago.

That's what I mean by things getting less fair. And therefore in general terms the Occupy movement has my moral support.

I'm not particularly blaming the chain store owner with his 48-months interest free and similar offers. The one I have in mind has said that people are stupid to accept some of the offers made in his stores as they don't suit everyone.

It is necessary for businesses to make a profit in order to reinvest but there is a big difference between making a fair profit and making the most that you can. Is the first aim of company directors to make the most profit for their shareholders or a profit which will ensure that the company continues to be viable into the future? Customers are important too, with the rest of the community needing at least a little consideration occasionally.

I don't think the unfairness claim can be made against more than a small number of the people who run companies -- it just seems like that sometimes.

Better outlook for print media

A year ago, magazines were dropping like flies. However, over 2010, the ndustry stabilized enough for more magazines to launch than to fold – with a total number of 169 launches and 167 folds.

- State of the Media Report 2011, Vocus Media Research Group

That's a big turnaround, and the Vocus report, subtitled "Adapting, Surviving and Reviving" is encouraging reading for anyone in the media.

After the above quote Rebecca Bredholt, managing editor of magazine content at Vocus writes “I think publishers have figured out how people want to consume which types of content.”

In particular it will be interesting to see the continuing progress of AOL's offshoot, the Patch.org Foundation. This started almost 700 "hyperlocal news websites" and at least some of the staff are paid

There were 13 new weeklies and 5 new monthlies in the print side of the newspaper category. On the other side of the ledger, there were closures of 6 dailies, 109 weeklies, 12 monthlies, 9 online and 15 "other".

Of course all the above figures are for the USA. However, it does seem that the outlook generally is good for specialist publications at the expense of generalist. There is a good argument for putting some sections of print publications online, especially tabular material (one wonders why many daily newspapers still print detailed sports results and share prices).

You can download the Vocus report from:
http://www.vocus.com/resources/state-of-media/index.asp
(You do have to fill in a form first which asks details of name, job, email, etc but it does not seem to do any serious checking of what you enter),

Details on the Patch Foundation are at:
http://www.patch.com/foundation

Worst-case scenario: plan for it

In your business or even in life in general, have you worked out a worst-case scenario? It should be essential but I suspect too many people are unwilling to face the prospect of things going wrong.

Insurance salespeople will encourage you to consider what might happen if you had a fire, but few take it further than that, and the effects are often not those you can insure against.

Several recent reactions to changes in government policies, changes in the dollar exchange rate and surveys showing changes in consumer buying habits lead me to wonder yet again whether many business people ever work out what they'll do if things start to go wrong.

Those good at selling often overestimate their ability to sell -- but worst case is not always a lack of sales. As in the example I gave in the book Success in Store, it is also possible for a worst case to be caused by sales being too good. (Do you have access to funds to buy what you have sold, or, in a manufacturing business, the cash and/or credit to buy the raw materials?)

A lot of this is done with a spreadsheet. Just take the figures a bit further to the extremes. Yes sales in the convenience store we bought were poor, and even our own mishandling of customers might have been unable to make them worse, but what if road works started in the street outside and took way longer than were planned? I've seen that happen to others, and after putting off the staff and allowing for the lack of a need to buy stock, the overheads were still at a level which drew on all resources. (In the case I'm thinking of, the local authority was prepared to make a substantial contribution to promoting the strip shopping area when the work was done, but the businesses still had to get through to that point.)

The advertisement rate calculator included with my book How to Start and Produce a Magazine or Newsletter makes it easy to work out what would happen to income if a periodical publisher found all orders coming in for full pages instead of a mix of small and medium ads. But that is the kind of calculation which should be done with any business. I'm sure you've heard the joke about the business owner who admits that they are losing a dollar on every sale "but we make up for it in volume".

Retailers in Australia are currently trumpeting the benefits of a high dollar in lowering prices on imported goods, especially electronics. But have they worked out what they'd do if, over say a three or six month period, the dollar conversion rate dropped to half its present level -- which was where it was only a few years ago.

Computer retailers used to stock computers. Now few do outside of the demo stock on the floor. Not only did they learn to cope with price fluctuations but also with continuing upgrades in specifications. But a lot of stores went broke or closed because it was just too hard to cope.

In another field I went through some basic costings with a couple planning a restaurant. If successful it would have been a goldmine, but the most likely scenario was that they would be working their butts off for less than a living wage. Then I discovered that none of their forecasts included the cost of borrowing the admittedly fairly small sum they would have needed to get started. So, unless they started with queues outside their door on the first days they would have been going backwards slowly but certainly.

So think now of what could go wrong, and what effect it will have. If you cannot cope with that, you will be unlikely to cope with success.

Make sure you get paid - redux

Getting paid is the final stage of any kind of freelance work -- or of running a small business of any kind -- but seems to be a particular problem in publishing.

I have already written on the subject in a blog item you'll find here, but it is well worth revisitng

There are several necessary steps, and many of those go back to the first ones when you are in the first stage of getting and accepting a job.

Such steps include checking the details of who you will be working for. Do you really know who they are? Try a search on the Internet: do they have a web site, does it give their actual address and is there information on how long they have been in business?

But I'm getting carried away giving my own interpretation of what to do when there is a good guide by a longtime copyeditor, Katharine O'Moore-Klopf, who has been successfully overcoming the problem of "How to avoid getting stiffed by clients" for many years.

Read it before you take on your next client.

A magazine title someone else has used?

It is among the more common questions I get: I am starting a magazine and I assume I need to make sure no one else is using the title I want and that it is not already copyrighted. How do I check that and how do I then copyright that name?

Titles as such can't be copyrighted, but it is normal for them to be registered either as a trading (business) name or as a trade mark.

However, it really depends on how important this is to you. The protection you may need is only really within the narrow field of the publication. It is not unusual for regional publications, for example, to have the same name with a suffix or prefix added in very small type on the cover and seldom used within the local area. Think of newspapers and particularly the many with News, Times, Chronicle etc as their name.

Registration as a business name/trade mark is more common in the US than in the UK or Australia, but I've previously mentioned the magazine known as the Musician which I published in the UK in the '60s. There was also a Musician published by the Salvation Army and one by the Brass Band Association. I recall only one mixup which was by an advertising agency which should have known better.

Consideration of potential confusion is more important than registration as you do need to make sure you cannot be accused of "passing off" your publication as one owned by someone else. Also, many titles are generic descriptions of the field and would be unlikely to be allowed for registration -- but may still be an ideal publication title.

Still room for print in magazines

There's still room for new print magazines. Design students in Amsterdam have just published a new print magazine, Odd. The beginning of 2010 saw 56 new magazines on US newsstands and if you think that's just a chance number, the figure for June, the latest given on the Mr Magazine website is 77.

In 1986, Samir Husni published his first Guide to New Magazines listing the 234 new magazines that I was able to find and document in 1985. The 25th Anniversary edition of the Guide will be out soon listing 704 new magazines that were first launched in 2009.

If you subscribe to the Magazine Launch feed from http://www.magazinelaunch.com run by the Magazine Publishers of America (MPA) you'll get their regular notifications -- and they are only the publications that make use of their service.

Among the most recent titles scrawere: Honor Student, Wine Press, Vintage Magazine, ChopChop (a food mag for 5 to 12 year olds!), Livestrong Quarterly (for cancer survivors and supporters), Parents of Color, and a number of regional magazines. The latter seem part of a strong trend in publishing.

All of these are in print, though all seem to have strong websites and, often, web editions. One innovation which cannot be duplicated online is the scratch-and-smell cover. 

So, while much effort goes in to finding a profitable means of having an online publication, it seems the most popular and successful way is still with a "dead tree" publication backed up by online extras and promotion.

One problem for publications which would like to be online is that a high quality file is still massive if you are to compete with printed graphics. Even publications which cater for the graphics industry find it necessary to resort to slimmed down versions for those without really fast broadband connections.

And I wonder how many other people have the same problem that I do? I subscribe to a top quality online magazine, and download it the instant I get the email advising that it is available. But often I do not even get to glancing through the PDF. It sits there on my desktop until a week or sometimes two later I will print out a sad looking grayscale version on my laser printer. 

A print magazine goes to our lougeroom where it will be read during rest periods or while watching TV. Sure, I can take a wirelessly connected laptop there too, but I seldom do. Reading on screen is not a relaxing exercise, reading a print magazine is.

Do how much of it yourself?

As a small scale publisher, what should you do for yourself and what should you pay someone else to do?

That is a common question, and someone on a publishing email list rightly commented that it always seemed that the "experts" were saying that the newbie should get everything done (at a fee) by someone in the industry.

There is nothing wrong with anyone learning to do everything for themselves -- I even did a course in paper making because I thought it might help me understand the most basic of the raw materials we deal with, and it did.

The problem is that too many people are misled by the promises of people that everything is easy.

If someone...

• studies the book market,
• spends time not only reading the books on the subject (and most can be found in public libraries so you need only to eventually buy the ones which are going to be essential to you),
• talks to everyone in the industry (I've learned a lot from a bloke whose house I walk past into town who is a forklift driver for a major printer who seems similarly interested in learning more about the products he hauls around),
• is prepared to do the job (for example the layout) and then to look at it critically and do it again (I nearly sent a printing business broke when I looked at a book we'd produced as I handed the first copies to the customer, and then said "it's not good enough, is it" and we did it again, but we grew into a much stronger company),

then that someone can match everything the experts can do. It's not brain surgery -- you can practice without doing too much harm to anyone but yourself.

BUT, someone who says, I've never done a book before but I have Word (or I've just bought InDesign) and then, with a printed copy in hand, looks at finding a distributor or for someone who will tell how to get publicity for it.

I'm all for people doing things for themselves. I tend to run a mile from anyone who adopts the description of "consultant", and I like the description of expert as "ex", a has-been, and "spurt", a drip under pressure.

How to work out what to charge for ads

Magazines provide a fascinating problem for anyone interesting in the mathematics of costing production. That's because there are so many variables.

Think of this: you plan a new magazine and you follow the usual practice of giving discounts for larger advertisements. Or maybe you work it out the other way: $500 for a full page, $260 for a half, $150 for a quarter, $80 for an eighth-page. Now you reckon that most of your ads will be small sizes, but then in come the orders for full pages and someone asking what's your discount for a double page spread (a "truck" they may call it). Instead of celebrating you suddenly realize that instead of getting upwards of $650 a page, you are giving discounts below $500.

That truck is driving straight through all your cost estimates, accompanied by a dozen Humvees. You may save a little on the time of putting one ad on a page instead of placing 6 or 8 little ones, but you may also find that the advertisers or their agents are ultra critical on proofs and the quality of the final job. Then you realize that those full page advertisers placed orders for 3 or 6 or even 12 months and your revenue is disappearing fast. Your costs may be going down a little, but they'll still want to keep changing their copy.

Fortunately there is a calculator around to help. The Adrates calculator is not completely free - it comes as a free download with copies of How to Start and Produce a Magazine or Newsletter and is an Excel spreadsheet that lets you do all those what-of calculations before you start telling people what your rates are (or helps you work out what they will have to become if you already have a publication).

Enter your suggested full page rate and the percentage extra you will charge for smaller ads and the discount you will give for series ads. Guess the percentages you may get in series bookings (you can play around with all these figures as much as you like) and the spreadsheet will give you a guide to what your rate card might look like.

Then, and this is the clever part, it will tell you, based on what percentage of pages you intend to devote to ads, how many pages of ads you will need. Then you can enter all kinds of combinations of the sizes they might be. If you go over the total it will tell you and it will give a cumulative total as you enter the numbers of ads.

Finally it gives you the total income at full rates, and then, the really important figure: based on your previously entered proportions of repeat ads, it gives your likely revenue per issue. And that is the figure which may come as a shock.

Of course you can then work out what happens if you get an extra full page. Sure, the revenue will shoot up but there is the calculation this spreadsheet does not do for you: what effect does it have on your printing and other production costs (especially if it takes you into the next postage category and you have a lot of mail subscribers).

This isn't a magic solution, but it will help with calculations that every magazine and newsletter publisher has to do at some stage, even if it is on the back of an envelope.

The book is available from Worsley Press or from Amazon, at US$26.95 and there's a lot more help than just this spreadsheet.

But first, have a look at the Adrates file (Download Adrates) which shows how the spreadsheet works.

 

Oh no! Not the 'Under New Management' Sign

In my book Success in Store both I and my co-author separately berated anyone who'd even consider a sign stating Under New Management.

If the business was good then you do not want to make a point of saying that the old owner has gone; customers, even those who are not actually dissatisfied, may take it as an opportunity to just drop off, to try that other shop they've been thinking of going to.

If the business was bad, then if a sign with those words is all you can do to make it appear that things have changed, then you may appear to be doing the same old things in the same old way.

But this sign is a play on the theme. It's big, on a busy road where it stood out even to people like me who had not noticed the business as it was. But it makes a strong point and it is in a field where many such businesses in Australia were taken over by huge groups who seemed to have money to burn but then burned out. It can therefore be a good idea to promote the benefit that the "new" owners are in fact the old owners who knew what they were doing.

We hope it helps. 

A real reason to publish it yourself

Some people publish their own book because that's the way they want to do it -- to retain control, regardless of the effect that has on sales.

But take a look at this blog interview with someone who has seen both sides. (And with 25 books published, mostly by big publishers, he has major experience!) In 10 years, and with new editions as needed, John Bear sold more than 200,000 copies of his guide to distance learning for degrees; then it was taken up by a major publisher . . . which just did not do as well as he continued to do with his own edition which, through a stroke of luck in contract wording, he was able to continue to sell direct.

Such direct comparisons are rare, but it shows what a small publisher can achieve with a book that fills a need. I quote:

"It's so easy to get carried away, as I was, by the heady feeling of being published by someone big and famous. Perhaps that ego boost is reason enough. It is fine to hope for big sales, but one should not hold one's breath."

He adds:

"Even with more than 25 books published by the big guys (Ten Speed, Time Life, McGraw-Hill, Harcourt, Price/Stern/Sloan, Career Press, Prometheus), the most fun I had, and, by far, the biggest profits I had, were from the self-published, self-promoted books. While Bear's Guide was the most enduring, the most successful (over the short term) was one I bet you don't know about: Mailing from Mexico. Boy, talk about finding a niche. This was a 64-page 'manual' with information you couldn't get anywhere else, so my co-author and I sold it for $100, and we sold 1,000 of them from just two ads in Entrepreneur Magazine."

And that is also an important point: books are information and their possible sale price is related to the value the prospective buyer will put on them. In a book store books tend to be compared, even subconciously, with other books: why does this one cost $70 and that one, which is bigger, only $30? By mail and email and internet order you are selling the information. If you can find that niche, it becomes less a book and more a study guide, a manual, and some may prefer to put it out in a report format.

With one of my books, an early version of the one on PageMaker, I put out two versions: the normal book and the same information as a looseleaf manual for several times the price. Why I didn't stick to that format is anyone's guess. The numbers sold were smaller, but the profit per sale was very high and there were no middle men; every copy sold directly to a newspaper somewhere in the world.

Incidentally, that interview is on the Small Press Blog, run by Thomas Nixon, and though he now posts infrequently, it is still a good site for information on the small publisher world. And note that Mr Nixon calls it the "small press" blog with the subtitle "Your guide to independent publishing". There are mentions there of the dreaded term "self-publishing" but presumably they are to give the important keywords which will bring those who think it is the right term to his sites.

My own book on publishing your own book is Publish Your Book and though it is available from a publisher, Worsley Press, that is the publishing firm which I started and where I first produced that book on a copier, bound it myself, guillotined it to size and packed copies to mail out.