Starting a magazine on a shoestring - part 2

Michael Dolan

Starting a magazine on a shoestring

An inspired Choice

BY ALBERT N. DILLARD JR. PUBLISHER, AND JAMISON REMO, EDITOR, SAN DIEGO'S CHOICE

Three years ago I was teaching high school history. I had a steady salary, regular work hours, and job security. I had never so much as set foot in a magazine office, and I didn't know the first thing about the publishing business. But I did see a niche for a general interest city title--a "People-type' magazine--for San Diego.

The response from those I approached with my idea was consistent: "You don't have the experience or the money to make a go of it.' Well, that was true. But I was determined. And I was willing to ask questions and follow advice. I've never been afraid to ask what is involved in putting a magazine together and what it takes to keep one afloat. San Diego's Choice recently celebrated its second anniversary, and it all began with an inspiration from the May 1984 issue of FOLIO:, which explained how to start a magazine. I used that issue like a preacher uses the Bible, and it worked!

Getting started

A friend of mine, a former city councilman's aide, James Sills, had somnamburnalism background; together we came up with a name and planned the general format. The first order of business, then, was to lease office space. I rented a three-room suite and paid $700 out of my own pocket for three months' rent in advance. An additional personal investment of $428 turned on the telephones, and another $800 furnished the rooms.

I hired a secretary, got an operating license, and in February 1985 we put out a four-page pamphlet, a pilot to let the public know what we were about and what they could expect from us. It was mainly for attracting advertisers. The first issue of Choice came out five months later, and featured local TV personality Larry Himmel on the cover. I had put a total of about $10,000 into that first issue. The magazine went out to 40 subscribers, mostly family and friends. It consisted of 28 pages, and it looked relatively amateurish.

I am proud that today Choice consists of 72 pages, has a circulation of more than 20,000, and is one of the glossiest, most colorful publications in town. People are responding to it in a way that makes all the trials and tribulations of getting started seem worthwhile.

There were times when it looked like I would fail, but that, in my opinion, is the key to success: When it looks like everything is lost, you keep fighting. Last winter, Choice appeared ready to go belly-up. I'd invested virtually all my savings by then, more than $50,000. I was facing disaster when Carolyn Files stepped into the picture. Files (now my associate publisher) had a track record of taking companies from a loss position to a profit. As business manager and controller for the accounting firm of Moody, Nation and Smith, she became aware of the magazine and saw its potential. She approached her boss, Hamilton Moody, and he immediately believed in what I was trying to do. It is my firm conviction that no matter what your financial situation, no matter what height (or depth) your potential, it takes people who believe in you and your idea to make it work.

Moody's long-time friend, a retired cement contractor, Dewain Davis, proved to be Choice magazine's savior. This self-made millionaire bailed me out just in the nick of time. Davis wrote me a check for $10,000 to keep the magazine going. We used that money to put out the December 1985 issue.

A choice look

It is important to point out that Choice did not look as if it had taken only $10,000 to put out an issue. I was fortunate to be able to secure the talent and labor and services I needed at the negligible costs that I did.

Editor Susan Easterly came to us in April 1985 with a degree from San Diego State University and a little magazine experience. She was excited by the project and worked for $50 a week--and is as responsible as anyone for the success of Choice. (Easterly is now an associate editor at Cat Fancy, a national magazine published out of San Clemente, California. We're still in touch.)

Early on, Easterly enlisted the services of intern Sunny Geers, then a student at State. Geers is now my editor.

I was blessed with the services of a talented local art director, Vince Torano. He came on board in March 1985 and worked for free until the magazine took hold. Torano is solely responsible for designing the magazine's physical appearance. He magically got Dean Collins, a renowned photographer, to do all our covers-- gratis! And I found a young photographer, Denny Zemba, who agreed to become my in-house photography department of one!

We all worked long, hard hours-- Easterly and Torano over stories and art boards; Zemba running all over town with a camera; Geers contributing in all areas and learning the basics. I took a job at the Del Mar Race Track, where I brought home $750 a week from my position as a janitor, so that I could pay my dedicated employees their pittance.

Living with growing pains

When you are the publisher of a new magazine, you are not the boss; you are a worker. The magazine is the boss. I referred to my frequent bouts of indigestion as "growing pains.' And we grew.

We have not yet seen a profit from an issue, but our losses are getting smaller! And we are experiencing name recognition, are expanding our subscriber list, and building our circulation with added outlets and wider distribution.

I surround myself with people who have more knowledge than I in the field. I read constantly and keep up with the competition is doing. And I continue to give thanks in church for what I have been able to accomplish. Without my deep faith, I know I never could have even begun.

I've still never set foot in another magazine office (who has the time?) and I do still get growing pains. But I've made by "choice,' and wouldn't have it any other way!

Getting it started for a song

BY MICHAEL DOLAN PUBLISHER & EXECUTIVE EDITOR MUSIC CONNECTION

In 1977, the music industry was in a slump. Record sales were down, good talent was hard to find, and disco music was at the top of the charts. At the same time, just an ocean away, a new musical subculture was being born. Similar to the sixties, when every high school kid picked up a guitar and hundreds of "garage' bands were formed, music returned to the streets. And Southern California (being the music capital of the world) was a front-runner in the genesis of this new music.

I reasoned that there had to be some way to educate these young musicians about the business side of the industry and, at the same time, explain to the music industry that this type of music is a viable and profitable product. The goal of our magazine was to "connect' the high-powered music executive with the unsophisticated musician. Hence, Music Connection, a weekly trade publication filled with current industry news, reviews, interviews, and a free classified section where musicians could sell their instruments or seek other players.

A good idea, no experience

I was a musician/songwriter, and my partner, Eric Bettelli, was a motion picture projectionist when we started Music Connection. Neither of us had any experience in the magazine publishing business or in journalism. All we had was a good idea. We started by trying to find any other magazines or periodicals that even remotely resembled what we wanted to do. We discovered that there were plenty of music "fanzines,' and quite a few career magazines for actors, but there were no music industry trade publications specifically written for the local musician that intelligently approached the subject of making it in the music business.

Our next step was to determine a realistic estimate of our potential readership. A quick call to the Hollywood Musicians Union gave us a starting figure of 17,000 members. We also discovered--through agencies, management companies and private organizations --that an additional 50,000 musicians live and work (or look for work) in the Southern California area. That brought the figure up to nearly 70,000 potential readers, not counting the professional music industry executives and employees who work in the more than 100 record companies and independent music firms in Los Angeles. Yes, there was a readership for our magazine!

We continued our research. Eric began to investigate possible sources of advertisers and distributors, while I began preliminary design on the layout of the magazine, formulated story ideas, and scouted writers.

One flyer said it all

We designed a flyer that described the magazine and indicated it was "coming soon.' Eric took the flyers to over 300 retail outlets where we thought the magazine would sell. He managed to get commitments from nearly 150 liquor stores, all-night convenience markets, music stores and record shops off that flyer alone! We knew we had a hit on our hands when the largest newsstand in Los Angeles expressed enthusiastic interest in carrying a magazine of this type; they told us they would order 100 copies, sight unseen!

Then we considered the question of how to get the magazine to all these stores and newsstands. We found that local distributors were reluctant to take on a new publication that had inexperienced publishers and no proven track record.

So we decided to start our own distribution company. We would divide Los Angeles into zones, then have unemployed musicians deliver the magazine to the retail outlets, pick up the returns and the money, and drop off the new issue. We called the company Backstage Distribution Company and employed about 15 starving musicians a month.

Next, we put together a typewritten, scotch-taped mock version and began to shop printers. Most of the printers we found did not speak English. Instead they spoke a sort of jargon, peppered with terms like "blueline,' "flats,' "camera ready,' "turnaround time,' "screens,' "color seps,' and so on. I remembered an old high school friend who owned a small offset print shop in Van Nuys, California. He educated us on the language of printing and gave us a competitive price.

Our first issue was a preliminary 24 pager. We printed 7,000 copies at a cost of $1,200, which included typesetting and paste-up. It carried a cover price of 75 cents. We figured that if we could sell 5,000 copies, that we'd have lots of working capital and a hefty profit.

Watching that first issue roll off the press was exciting--our hard work and ideas placed in the mindless control of a black, greasy machine that made a loud, metal-to-metal noise and leaked ink.

But would anybody buy it?

Another exciting moment was standing at the newsstand waiting for what seemed an eternity for someone to buy our baby. It took from 10 AM till nearly 1 PM. Then, finally, a scruffy, long-haired musician type walked up to the newsstand, paused, picked up a copy, skimmed through it, and then walked over to the counter and handed the guy a buck. We were on our way to becoming magazine moguls! We went back to our office, opened a bottle of champagne, and gloated about what to do if we sold more than 6,000 copies and had to print more.

The next day, a monster stuck its head out of the cave for the first time, and we got our real initiation into the publishing business. We discovered that the musician we'd seen buying the magazine was the only sale that day. As it turned out, we sold a total of 700 issues out of the 7,000 copies of Vol. 1 No. 1 we'd printed. So now instead of shopping for printers, we found ourselves shopping for banks and loan companies.

Our first stop was the Small Business Administration. We were told that the magazine business was an extremely "high-risk' area; they were not willing to lend us anything. We then tried most of the banks in greater Los Angeles and were turned down everywhere. We finally ended up going to friends and relatives for loans totaling $10,000. That 10 grand financed the project for the first year of publication. We were so committed to the project that we never once took a salary for that first year. Each of us took his share of jobs just to stay alive. I worked an occasional nightclub gig and Eric took an occasional studio call.

By the end of the first year, we were printing 4,000 copies. We had 350 subscribers and we were selling approximately 2,000 magazines off the newsstand. We employed a secretary at minimum wage, but we were still not taking any profit for ourselves. Readership was growing, but only by a few copies a month. We had no money for promotion, our overhead was getting higher, and we were both getting tired. The big cost seemed to be in typesetting, layout and paste-up. Our printer was doing all of it, and it seemed that each issue was a bit more expensive than the last because of some costly graphic trick. "Well, if you want to put that picture in a box, it will cost you extra . . . Sure we can do reversals . . . 10 percent screens, that'll cost ya.' We figured if we could somehow acquire our own typesetting equipment and paste-up the book ourselves, we could have "graphic control,' cut our printing cost, and, maybe, start getting paid for what we loved to do. So, once again, we were faced with acquiring more capital.

Turnaround

There was a similar industry trade publication in town that catered primarily to actors, as opposed to musicians. We approached the publisher of that magazine and asked if he would be interested in investing in our magazine, inasmuch as we shared the same counter space at most retail outlets. It took only one lunch meeting for him to say yes. He was willing to purchase 6 percent of our magazine for $5,000. That was the final investment of cash. We took that $5,000 and purchased a Compugraphic typesetting machine, and began saving hundreds of dollars in typesetting and graphic costs by producing the magazine in-house. From that point on, we began to make a profit and we also began to take a salary.

I'm quite certain that if we had taken a college course in journalism or if we'd had any experience in this business, we might have started biweekly or monthly or even bimonthly and gradually moved toward a more frequent release date. After five issues of publishing weekly, we decided to go every other Thursday. Also, from day one, we were terribly undercapitalized, and our lack of knowledge about the business cost us a bundle. If we had known that the project would be so time consuming and such a financial drain, I really don't think we would have taken it on. But there is something to say about blind commitment --being so blindly committed that you will do anything to make it work, like never taking a salary and sacrificing your relationships. That commitment, along with our naivete about the business in what kept Music Connection alive through our growing years.

Title two: The monster returns

After five years of successful publishing and building a profitable business, we had this idea of starting another magazine--a magazine specifically targeted to the songwriter. After acquiring quite a large mailing list of songwriters across the country, we took our five years' experience in the magazine business, a credible reputation in the music industry and $25,000 cash, and we invested it in what was to be the most informative and beautiful magazine in the music industry.

Our game plan was to distribute nationally and at the same time "direct mail' to our target mailing list. Our first print run of 40,000 cost us $16,000. We sent out 30,000, 56-page magazines for free to potential subscribers, thinking that the subscription money would finance the project. I'll never forget the first day we expected mail. We were actually looking forward to receiving 5,000 to 10,000 subscription orders. But once again, that monster stuck its head out of the cave: We received 200 subs in the mail and sold only 6,000 on newsstands across the country.

Once again, we were in financial trouble. We began investing more money in the project. Meanwhile, we had purchased additional typesetting equipment to accommodate two magazines and had hired plenty of additional employees. Our intention was to produce additional income by starting our own graphics business, but we were too overwhelmed with the new monster we'd created to give any time to a third business. Songwriter was actually starting to destroy Music Connection financially. Week after week, Music Connection would make another loan to Songwriter. After our fifth issue, we were facing bankruptcy on both Music Connection and Songwriter. We had to sell Songwriter or go bankrupt. We began soliciting potential buyers, and immediately got lucky. A multititle publisher in New Jersey was willing to purchase Songwriter for the price of our debt. We jumped at the chance to get the monster off our back. We sold Songwriter and began the slow recovery of Music Connection.

Experience and money

In retrospect, it seems ironic that with absolutely no experience and minimum financing, we successfully launched our first magazine--and then we failed in our second venture despite $50,000 and five years of experience. The first time around, we were committed to publishing a good magazine for the music industry. It worked. The second time around, we were committed simply to making more money. It didn't work.

We have learned a great lesson in business. It takes either enough working capital to survive for two years, or a huge commitment to the project. What was missing the second time around was the commitment.

This year we celebrate the 10th anniversary of Music Connection. We run an average of 48 to 56 pages every other Thursday, and have a four-color outside signature. Music Connection is distributed in 47 states and three foreign countries, and we have subscriptions from all over the world. We are proud to report that Music Connection outsells every other music trade publication of its kind in the nation, and has won the respect of both the music and publishing industries.

Making your own luck

BY ARTURO VILLAR PUBLISHER, VISTA

It's funny how so many people believe that luck has a lot to do with success. The launching of Vista, an English-language Hispanic magazine, and its dramatic circulation growth in 20 months from 427,000 to 1,095,000 had two essential elements: good planning and hard work. Luck was a marginal player, at best.

It was indeed fortunate, for example, that Harry Caicedo and I met. I don't think either of us alone could have started Vista. But together we found the right chemistry. We each had worked on similar projects earlier and shared a clear vision of Vista's editorial and financial potential.

It was relatively easy to convince Fred Estrada, the leader of our initial group of investors, to put up some venture capital. We were looking for $150,000. He pleasantly surprised us by suggesting that $250,000 would put us closer to take-off and thereby make it easier to raise additional money. But I had traveled twice around the country getting ideas to refine the project and trying to identify potential investors before I heard about Fred.

What a stroke of luck, some people say, that you were able to interest two of the country's most knowledgeable persons in the newspaper magazine business to serve on your original board of directors. But Warren Reynolds, publisher emeritus of Parade, and Mort Frank, chairman emeritus of Family Weekly, had to be convinced that the concept was sound, that the planning was adequate, and that the commitment to work hard was there before accepting this responsibility.

When Harry and I had put all this together--the result of our original $10,000 investment plus 18 months of travel, meetings, intensive research, careful planning and unbreakable faith--the stage was set for our next big step.

Selling ideas to mainstream newspapers is no easy task. Their executives tend to be very cautious about changing editorial or distribution patterns. They are, in essence, sensitive to their readers' habits and careful about interpreting their preferences.

We knew that most newspapers in areas of high Hispanic population were thinking of ways to improve their reach among Latin readers. Some had experimented with Spanish-language sections. Other had been approached by would-be publishers with a variety of products. Few, if any, of these projects had worked.

We decided our effort needed something substantial to give it credibility. We commissioned a 950-household survey in 11 "Hispanic' cities throughout the country. We worked closely with our research firm to develop the questionnaire, map out the areas to be canvassed and plan the methodology to avoid biases. The results, among other things, confirmed reader interest in a Vista-like magazine, and that it should be published in English. We now had solid data to back up what our gut told us about our idea.

Easy, right? Guess again.

How do you tell a gathering of newspaper executives--publishers, editors, circulation directors, advertising managers and marketing specialists-- that you want them to distribute your magazine and pay for it? How do you convince a circulation director that distributing the magazine "selectively' is not a headache, but a "challenge'? How do you soothe an advertising manager's fear that your advertising effort will not cut into his revenues even if yours is exclusively national? Finally, and most important, how do you convince editors that your magazine will be trustworthy, informative, entertaining, balanced, graphically attractive --in short, professional?

The positive data from our research helped allay some fears. We forcefully pledged not to solicit any local advertising (our national run precluded that anyway). We agonized for many days over selecting the content of our first prototype.

Running a risk

Finally, we made a tough decision. We chose a controversial topic for our cover story: Jesse Jackson's Rainbow Coalition. We worked diligently to make it informative and balanced. The effort paid off. Editors and publishers saw that Vista could be trusted to handle sensitive subjects well.

With a 50-pound projector, a slick presentation and copies of our prototype, we set out to visit the newspapers. Getting the appointments was not difficult. Publishers, we learned with delight, make a habit of answering letters, returning phone calls and keeping dates. (We, in turn, were unpunctual for only one of at least 40 appointments: A Los Angeles freeway maze undid us that one time.)

As we embarked on this uncertain trek, we made what I now see as a very wise decision. That was to choose as our first "target' a newspaper publisher with a well-known record of minority outreach. Early in October 1984 we went to see Charlie Kilpatrick of the San Antonio Express News. We sat in his spacious offices, turned off the lights, projected our presentation, prayed silently as he and his executives watched. We answered their questions, passed out copies of the prototype, answered more questions, presented copies of our contract and held our breath as Charlie and his associates went to confer in an adjoining office.

Neophytes though we were, Harry and I realized a decision was in the making. I, the optimist, was convinced we were about to get our first newspaper. Then Charlie Kilpatrick returned to ask the best question of the meeting: "Where do I sign?'

Other publishers took longer to decide. But by early spring 1985 we had signed up 12 newspapers for a combined circulation of 427,000, amply exceeding our minimum requirement to launch. The premier issue of Vista was delivered to our charter subscriber papers that September.

Today the magazine is averaging 28 pages with roughly a 50:50 editorial /advertising split. You may think we are lucky to be able to tap into a well-defined Hispanic market advertising budget pool. After all, companies like Coors, AT&T, R.J.R. Nabisco, Coca-Cola, Anheuser-Busch, Braniff, General Foods, Aeromexico, Ford, General Motors, Chrysler and military services such as the Army, National Guard and Navy are well known for their Hispanic efforts. But you may not know that few of these companies or services had advertised in Hispanic English-language media. Most of them were convinced that Hispanics could be reached only in Spanish; some even thought Hispanics did not like to read.

Converting the skeptics

Still, we were confident as we set out to seek advertisers. After all, we had 427,000 verifiable circulation--an unprecedented figure for Hispanic print. Our expectation was to sign up four to six pages of advertising per weekly issue. We soon realized that we would either have to get very lucky or face a long stretch of missionary work.

Missionaries we became, and good ones at that. In the process, we had to shift from an intended weekly to a monthly frequency and raise an additional $1,050,000 instead of the projected $650,000 before hitting the black. Along the way, we have had to convince people that our concept, though new, is right. Having identified a new segment of the growing Hispanic market--the bilingual Hispanic--and having created a medium to reach them efficiently, we had to convince advertisers and advertising agencies (especially Hispanic ones) that we were for real and good for the long haul.

What helped? First of all, our circulation growth. It was not an easy decision to go for more papers and larger distribution in the face of advertisers' resistance. It required raising more capital and diluting our original investment. But when we started posting more newspapers and additional circulation every month, advertisers had to pay attention. They realize newspaper publishers know their readers better than anyone else and don't lightly make decisions to carry new magazines.

Perseverance and, most of all, patience are other components that have helped. Not one single potential client has been lost because of our exasperation. Missionaries tend to get impatient with nonbelievers. We successfully resisted that pitfall because we understood the roots of the confusion and knew that only time and circulation growth would turn attitudes around. Research has also helped. For instance, we have been accepted as members of the Audit Bureau of Circulations.

We produce a superb editorial package, widely applauded. And even I would have to admit that we are lucky to be able to publish such a quality product with a relatively small staff-- though maybe that is precisely why it is so good.

Our sales staff is dedicated and getting better. A topnotch sales manager, Barrett Alley, brought us Hispanic and mainstream publishing experience and advertising agency background.

With 26 newspapers already carrying Vista, we are carefully choosing our next markets: for 1987, New York City, San Francisco, San Jose, San Diego and Albuquerque. We would like to keep our year-end circulation figure at about 1,500,000.

We have been through a lot and are not yet making big money. But we have shared in tons of satisfactions. We realize we are filling a need for Hispanics to communicate with each other. We are raising their potential to contribute to our society.

We are helping others understand Hispanics better, even those who work at our host papers and cover their multiethnic communities. Finally, we are beginning to hear the recognition of our peers, and even if they say we are lucky, we like it.

Doing it on your own

BY GAIL ROSE PUBLISHER, SINGLELIFE

Being voted "the most likely to succeed' in a high school yearbook can have curious effects on people. I was given that honor in 1965 when I graduated from Cleveland Heights High School. In 1980, I realized I had just five years left to live up to those words before my 20th class reunion. The mandate itself, however, gave me the confidence to succeed in the risky business of publishing, and to do it all on a $13,000 investment.

It was while I was in graduate school working on a master's degree in urban affairs that I came across a statistic from the Census Department that revealed that 46 percent of the adults in Milwaukee County were single. This was a surprisingly large figure--especially for a conservative, family-oriented city such as Milwaukee. I also knew that there was no one in town serving the needs of single people. My first idea was to publish a book for singles--a guide to Milwaukee day-care centers, health clubs, housing facilities, social and recreational organizations, and so on. But I soon realized that it would become altogether too quickly outdated, and that a magazine featuring personal ads would have a better chance of succeeding.

Before putting the first issue of SingleLife together, however, I tried to learn everything I could about the magazine publishing business. FOLIO: became my bible; I read each issue from cover to cover and attended a FOLIO: conference in 1980. I took courses in graphic design, layout, typography and offset printing at the local technical school. I also visted Living Single, a magazine then in existence in Columbus, Ohio, that was doing many of the things I had in mind.

At the start of my venture, I had $13,000 in the bank from the estate of my mother. I knew this wasn't a lot of money to start a magazine, but I essentially took the attitude that I'd have to make it without outside financing or not make it at all. I had learned that the founder of Living Single, for example, had been forced to sell out to his partner, a Columbus newspaper, and I didn't want to be put in that position. I also didn't want to borrow money to finance my operation because I didn't want to fail with the magazine and feel guilty about losing someone else's investment. I told myself that if I made it, I'd make it alone, and if I failed, I'd fail alone.

I spent $5,000 just getting out the first 40-page, four-color issue. The rest of the money was gone within the first six months. But I managed to keep going for a number of reasons. First, the magazine responded to a real need in the community. Subscriptions and personal ads poured in without expensive promotion. After a year, the magazine began hosting monthly subscriber parties (subscriptions could be purchased at the door), which were attended by 400 to 600 people. Our expenses for these parties were minimal. Hotels were delighted to hold the parties, given the profits they made on the cash bar. Now the host hotel pays for the privilege of having subscriber parties through a yearly contract to advertise in the magazine. The parties normally bring us 200 new subscribers each time, and current subscribers pay a small cover charge.

My other efforts to survive without outside financing included keeping expenses down as much as possible. I relied a lot on bartering and managed to trade advertising space in the magazine for rent, office machines, furniture, plants, and the services of such people as accountants and lawyers. I was especially lucky that in Milwaukee, the number of radio stations per capita is very large, and consequently, stations here compete fiercely for listeners. This made them very eager to trade advertising space for radio time to promote the magazine.

Establishing credibility for the magazine was not easy, but it was hampered less by my being a woman than by the fact that it was a singles magazine. Milwaukee is a very conservative market, and it was difficult to sell advertising agencies on the magazine because of the "sin' in "single.' There is a gross misconception that someone without a spouse is a swinger. Also, my prime competitor for display advertising is the local city magazine owned by Wisconsin's largest printing company that has unlimited financing for promotion. I made it a principle to pound the pavement and not give up. I went to every meeting of the Milwaukee Ad Club, I made myself visible at the Chamber of Commerce, I sent out frequent press releases, and I sold ads right along with my advertising sales people.

I am by no means a one-person show. I managed to surround myself with some wonderful, devoted and multitalented people who set high standards for themselves and the magazine and valued their work even more than the financial compensation they earned. We learned a lot from one another along the way.

I also have had a fine distribution system. Because SingleLife wasn't a national magazine, I could offer the local distributors a higher than normal discount, which gave them an incentive to give the magazine good in-store service and good rack position. The general manager of ARA, Wisconsin's largest wholesaler, gave me a chance to succeed when I first started, and I credit the distributors with keeping us successful, too. Our magazine is on the stands for 60 days, and outsells most national newsstand magazines in Milwaukee on a per issue basis.

Probably nothing equals the thrill of seeing an issue of SingleLife roll off the press after months of work. It's like having a baby, and each issue feels like my newest child. The magazine has wonderful expansion possibilities that should prove a challenge as I eagerly await my 25th high-school reunion in 1990.

SingleLife is now in its fifth year of publishing; compared with other regional singles magazines around the country, it's both large in size, at 80 pages per issue, and in circulation--all on a $13,000 investment that has never been recapitalized. The magazine is published bimonthly and much of it is in color. Its total circulation is 22,000, 80 percent of which is paid. The newsstand price is $1.95; subscriptions are $9.95, $16.95 for two years.

When my 20th high-school reunion rolled around two years ago, I went to it feeling that my mother would have been very proud of me. I'm also happy to say I didn't disappoint my classmates who voted me "most likely to succeed'!

Winging it

BY WILLIAM H. THOMPSON CO-PUBLISHER, BIRD WATCHER'S DIGEST

Bird Watcher's Digest is the largest circulation magazine for bird watchers in the world, with 63,000 paid subscribers and single-copy sales of nearly 2,000 in nature centers and selected bookstores.

It was started in 1978 when I borrowed $35,000 from a local bank, printed 36,000 copies, and mailed out 31,181 cold to prospective subscribers. We also mailed about 400 copies to bird columnists, nature and outdoor writers in states and provinces throughout the United States and Canada, and sent a copy to Roger Tory Peterson, the dean of the world's birders. (Dr. ?? responded with four pages of suggestions, later agreed to serve as our senior adviser, and writes a regular column for BWD--typical of his genuine interest in and support of anything he feels will help birds!)

The first issue was digest size, 96 pages of newsprint plus a 70# coated stock cover printed in two colors, perfect binding, but no color inside. We had six pages of ads and included 32 articles. The format was arrived at with the help of Bill Sheppard, then a colleague at Marietta College, who edited the first issue. Bill had been involved with Pro Football Digest in the late 1960s, a Marietta-based publication no longer around.

My co-publisher-wife, Elsa, Sheppard and I read 2,700 articles and rated each one before selecting 32 for that first issue.

Elsa started it all by becoming an ardent bird watcher when we moved back to my hometown, where I took a job as vice president of our alma mater, Marietta College. As she became more interested, so did our two sons (our daughter, Laura, now a freshman at Miami University,' "hates' birds --primarily because for a time the magazine took up all her parents' time and most of her house).

As my own interest grew, we started looking for a magazine for bird watchers written in a popular vein. There was none. There was, however, "Birds I View,' a weekly newspaper column in The Marietta Daily Times written by Ms. Pat Murphy, my wife's mentor and now BWD's associate editor. We had been struck by the uproar that developed when the newspaper threatened to drop Murphy's column. How many more like her were out there, we wondered, and were their columns enjoying the same loyalty?

We decided to find out, subscribed to a clipping service, put up a map in the front living room and started pinpointing bird columnists. We quit at about 900. We knew the material was there. We knew no one else was doing what we were about to do.

We'd also found statistics in those clippings that told us there could be as many as 40 million people in the United States feeding wild birds!

Deciding to point

Those facts more than anything convinced us to rush into print without developing the usual prototype, testing lists and rounding up additional capital in advance. But we did put together a rough business plan, which we modified just about weekly for the next four years.

We formed a Sub S Corporation, and persuaded a long-time friend and former college English professor to move to Marietta and become the editor. Those were the two smartest moves we made, and have much to do with our being alive today. Mary Beacom Bowers not only edits to perfection, she is deadline driven and always on time. For several years, BWD was the only bird watcher's publication that came out on time, and that helped attract advertisers.

Our home was our office until three years ago. At first we used one living room. Then we took over the dining room, then the back living room, then the garage. And Elsa, who handles fulfillment, ancillary sales and who fields bird questions, worked out of the kitchen. Our kids licked stamps, carried boxes and moved aside as more and more of the house disappeared.

Mary, Elsa and I took no salaries the first year. Mary took a modest salary the second year and Elsa and I split one. Three issues into the first year we used the benefits of Sub S status to interest outside investors and raise an additional $150,000. They were pleased the second year when our conversions came in at 65 percent.

BWD was (and still is) subscription driven, so we've stayed away from soft offers in direct mail, preferring payment to perhaps faster growth. And our direct mail over the years, with two exceptions, has not only paid for itself--out and in--but also covered fulfillment. The same can be said for space advertising, and we hear not everyone can make the latter work.

Our average circulation per year went like this: 3,600 in 1978/79, our first year; 8,300 the second; 18,800 the third; 30,000 the fourth; 37,000 the fifth; 35,500 the sixth after dropping unprofitable school plan subs; 41,000 the seventh; and 53,400 last year.

We have pursued new subscribers with coupons on the back of bird feed bags, stuffers in bird feeders, card decks, "take ones' in nature centers, etc., with break-even in mind.

Early on we designed our own fulfillment system and had it written in RPGII for our local printer's IBM System 34. That, and BWD's need for local mailing services, started a new business for Richardson's Printing in Marietta. We purchased our own System 34 for almost nothing two years ago, had our program updated and streamlined, and still do everything in-house.

Finding subscribers

Fortunately, from the outset we built in a good gift donor component that allows our space ads to work well. When we found there were no large lists of birders, we had to get to people who "knew' birders, and 38 percent of our new subs are gifts.

We use an 800 number effectively in our promotional efforts.

At first, when we couldn't attract much outside advertising, we started ancillary sales with house ads. Elsa runs it and it has grown steadily over the years. We are careful to be noncompetitive with our outside advertisers, and, in fact, got out of the workshop business a year ago because some advertisers complained.

We now own a two-story brick office building adjacent to our printer/mailer, employ nine full-time, and operate a retail outlet store on the first floor.

Should we have launched BWD the traditional way? If we'd had $2 million to begin with, we probably would have. But if you have $2 million, why start a magazine?

Building a business on business

BY PHILIP C. HAUCK EDITOR AND PUBLISHER WISCONSIN SMALL BUSINESS COUNSELOR MAGAZINE

Frankly, starting a magazine is no big deal. All you need is an idea, time and enough money to pay the printer. It becomes difficult only if you want the magazine's revenues to support you, and your family, and any person who considers herself or himself your employee.

We chose the latter route for our adventure, and only rarely look back and question that decision--certainly no more frequently than weekly.

We published the first issue of Wisconsin Small Business Counselor in November 1985, and have published monthly ever since. Currently, we have just under 2,000 subscribers (at $45 per year), a little advertising--and are nowhere near break-even.

So far, down the black rat hole of promotion, printing and living expenses, we have poured all the savings for our 16-year-old daughter's college education ($45,000), plus $150,000 in loans from people we constantly tell we're going to pay back, despite our forlorn balance sheet--people like the bank ($50,000) and good old "F, F&A' (Friends, Family and Associates).

The product's the plus

Like most entrepreneurs, the best thing we have going for us is our prospects--and our product. Our magazine provides 16 pages of practicable advice and information from Wisconsin experts to Wisconsin business owners on how to operate their businesses better. The emphasis is on common sense, practical advice from practitioners--not academics. It is increasingly focused on what the subscriber wants to know (what other similar businesses are doing, what they should know, taxes, Wisconsin legislation).

We have marketing problems we vastly underestimated. First, despite nine months of testing how to get the best responses, our first pass at the state's 101,000 business owners stimulated not quite 2 percent to subscribe. There are far more owners than our research showed who are happy with their comfortable world. They read little and seek little information on how to do better.

Second, as for advertising, we've been less than successful getting Milwaukee business and ad agencies (we're in Green Bay, but have subscribers in 68 of Wisconsin's 72 counties) to place business with us; we're still too small. However, the tide is now turning; increasing numbers like the look of the magazine and are taking a flyer to see if we yield results.

Such success will be no panacea, though. When ad agency discounts, frequency discounts, commissions, page production and administration costs are totaled, the take isn't all that great. But it's helpful--and frankly, advertising lends credibility to the publication for prospective subscribers.

Immediate prospects

So, what are our prospects? Breakeven is some months away, depending on increasing subscriptions and reaping renewals. Probably, it's a combination of 2,500 to 3,000 subscriptions and moderate advertising. Our market potential is 5,000 to 10,000.

We figure we'll need at least $50,000 more in investment, potentially up to $100,000 before solvency is firm. To get that, we hope to sell equity involvement to several other publishers who have been very supportive; we're at the point where we need their experienced counsel, help and close attention to foster our growth.

Getting to this point really hasn't been that hard. It took no effort at all to spend our own $45,000.

As a precaution, we approached two banks earlier with our business plan and ideas, and sought the backup of a $50,000 line of credit. We wanted to provide some stock and our home as collateral. One bank said yes, and it would cost me only a point plus various closing costs like appraisals, less than $600. The other said yes, and since it's only a short-term situation let's bind it with a lien; court filing costs less than $50. That was creative--and they got the business.

At that point, seven months into the adventure, we explored with our accountant and attorney our alternatives for raising equity capital. When we shared our alternatives which close relatives, they figured our optimistic new business plan (Updated Version Two) would actually happen and offered to loan us $100,000. Their method was creative, too. They pledged common stock as collateral to their bank, but continue to get the dividend income. The bank loaned them each draw I requested, and charged a very low interest rate; then, they loaned the money to me, and I pay them the interest monthly. Lucky! Now that game is all over, though.

How are we building the business? In 1986, we spent our expensive dollars on direct mail solicitation. In 1987, we spent the early part of the year testing a number of subscription development techniques that are much more targeted, and have same-year payback. These include asking current subscribers for names of business owner-friends who should subscribe, developing a direct-to-business (cold call visits) personal selling approach, promoting volume discount buys to businesses for their clients or to associations for their members, and others.

How to build revenues

Talking about money, we know what our costs are. There are no surprises. What we don't know is our revenues. We can't find a peer publication in the United States that is close enough in market and thrust to compare with--so we are inventing the wheel as far as learning what motivates our target subscriber to subscribe. The recently finished readership survey is telling us what current subscribers like about us, as is a phone survey we're doing of 100 subscribers. Now, we are hopeful of turning that feedback into a marketing communications emphasis that effectively strikes the right chord in our target customer.

One thing continues clearly in our minds as we seek break-even. People who are investing in our dream aren't doing it because they want us to realize it. They will do it for three reasons:

1. We have demonstrated we know what to do to make them money, and are committed to doing it through the equity document.

2. They believe in us as competent managers of this enterprise; they are investing in us.

3. They know we are committed to realizing that dream, which will ensure that they will get return on their investment.

They will have fun with it, too. But they could have fun with other places they invest in. Our job is to make sure that our place is the place they want to do it. We're committed to making that happen.

It's just that easy!

Photo: "To pay my dedicated employees their pittance, I took a job at the race track as a janitor, bringing home $750 a week.'--Albert Dillard Jr.

Photo: "We were so committed to the project that we never once took a salary for that first year. Each of us took his share of jobs just to stay alive.'--Michael Dolan

Photo: "The launching of Vista and its dramatic circulation growth had two essential elements: good planning and hard work. Luck was a marginal player, at best.'--Arturo Villar

Photo: "I relied a lot on bartering and managed to trade advertising space in the magazine for rent, office machines, furniture, plants, and the services of such people as accountants and lawyers.'--Gail Rose

Photo: "Should we have launched the traditional way? If we had $2 million to begin with, we probably would have. But if you have $2 million, why start a magazine?' --William Thompson

Photo: "So far, down the black rat hole of promotion, printing and living expenses, we have poured all the savings for our 16-year-old daughter's education ($45,000), plus $150,000 in loans from people we constantly tell we're going to pay back, despite our forlorn balance sheet.' --Philip Hauck

COPYRIGHT 1987 Copyright by Media Central Inc., A PRIMEDIA Company. All rights reserved.
COPYRIGHT 2004 Gale Group