Online exclusive: Learn the secrets of what it really takes to start and run a magazine in interviews with Entrepreneur's staff , including editorial director Rieva Lesonsky.
Benjamin Franklin helped write the Declaration of Independence and the Constitution. Yet Franklin's own publication, General Magazine, folded after just six issues. Magazines are tough business.
In fact, 9 out of 10 new magazines fail, according to Cheryl Woodward, publishing business consultant and author of Starting and Running a Successful Newsletter or Magazine.
Those stats didn't stop Simone Gold, a practicing emergency physician now making her mark on the publishing industry. As other doctors zipped through the hospital emergency room, Gold, 39, overheard frequent conversations about lifestyle issues such as technology, money and travel. That was when lightning struck the key. For two years, she mulled the idea of a lifestyle magazine for doctors. Once she began working on her publication, it took her only 13 months to launch her regional magazine, MedicaLife , in the winter of 2005.
Gold isn't alone. Roughly 1,000 magazines are launched every year, says Samir " Mr. Magazine " Husni, a magazine consultant and chair of the journalism department at the University of Mississippi. Nearly 20,000 consumer and trade publications exist in North America, according to the National Directory of Magazines. So how can you launch a magazine that stands out?
People love magazines. They're personal, visually appealing, offer a unique voice and address subjects of individual interest. Research institute MRI reports that 84 percent of adults read magazines. Plus, magazines are an incredibly lucrative cash business once yours is profitable. According to Husni, average profit margins for magazine businesses range from 10 percent to 30 percent.
The survival statistics say "don't do it," but they don't tell the full story. "Big companies put a title on newsstands just to see what happens and then fold it within the same year," says Woodward, explaining that this skews the stats.
Husni says that of the magazines that fail, 70 percent never make it past their first issue. Starting a magazine is relatively cheap and easy--at least for the first issue. Woodward estimates you can put the first issue on newsstands for as little as $15,000.
Entrepreneurs who do their homework and plan well for the long haul have a much better chance of survival than the numbers indicate. "The most common mistake is not knowing the business--thinking that by just putting some ink on paper, you can create a magazine," says Husni.
For entrepreneurs who begin developing their magazines while still working other jobs, Gold recommends reading books about the industry and checking out websites, associations and professional gatherings. "Spend time at a newsstand, says Husni. "See what's out there and what you can provide that will be unique."
Once you've researched the field, put your business plan together. Your plan needs to cover your product, industry analysis, audience, competition, marketing strategy, management team and finances. "This takes an enormous amount of time," says Gold. "It's a preview of your commitment level."
After plugging information into the business plan, you'll quickly realize there are often no right or wrong answers--just calculated assumptions that require you to make decisions. For example, you can determine exactly how many magazines you'll have printed, but no one can tell you the number of copies readers will pick up (a 40 percent sell-through rate on the newsstands is considered excellent).
The magazine industry is unique in that some major facets depend on each other. "We're one of the few businesses where the story of the chicken and the egg is so essential," says Husni. "You need the circulation to get the advertising; you need the advertising money to build your circulation." Raising enough startup capital to get your venture off the ground is the best way to avoid being trapped in this vicious cycle.
In the end, the major choices you'll make in your business plan are how often your magazine will be published; whether your circulation is paid, controlled or a combination of the two (paid circulation comes from newsstand and subscription sales, while controlled circulation refers to copies given to a targeted audience for free); the total circulation number, including the copies you'll print and your projected sell-through rates; mechanical costs, including paper, printing and postage; subscription and single-copy sale prices; advertising rates; and your team members, whose strengths should complement your weaknesses.
Remember that a magazine is a business. Many magazines with great editorial content and design have failed because they weren't founded and executed on a sound business plan.