The Business Plan

Why do we need a plan?

• To keep things straight

• To impose discipline

• To save time and money

• To clarify alternatives

• To make decisions easier

• To plunder later

• To provide benchmarks

It all fits together in the plan…

Editorial

Advertising

ProductionCirculation

Things to remember

• A plan is only words and numbers

• It is only an estimate, a forecast, a goal

• There should always be deadlines

• You can always change a plan

• “The journey is as important as the destination”

Reasons why people don’t

plan

If I write it down, and I’m wrong, it will show I don’t know what I’m doing.

I’m the boss; it’s all clear to me so who needs a plan?

I don’t know how and I haven’t time to learn.

I’m too busy launching this magazine.

I’m a big picture person.

What makesmagazine plans different?

• Ideas are cheap, execution is difficult

• People pay for magazines in advance

• Advertisers pay for advertising in arrears

• We sell ideas and audience, not goods

• Growth is geometric; so is decline

• People can do without magazines

• The end user doesn’t pay the freight

What makes a good plan?

• Concision, specifics, comprehensiveness

• Plain English

• No unwarranted assumptions

• Realistic general objectives

• Realistic specific strategies

• Clear measurement of success or failure

Answering key questions

• Where has your magazine been?

• Where is it going?• How is it going to get

there?• Who will take it there?• How long will it take?

• Who are its competitors?

• How will you know how you’re doing?

• What will it cost? • How much money will

it take in? • How much money will

it make?

There are no magic bullets

• A plan is only as good as its research• Nobody else can write it for you• Readers and advertisers care only about

outcomes• Investors care most about return• There is always more than one way • Sometimes good ideas just don’t work• Sometimes you are wrong

Audiences for the plan

• Internal – Board of directors– Advisory groups– Management and staff

• External– Bankers– Investors– Funders

Questions investors will ask(and a plan should answer)

• Is there a unique competitive advantage?

• Have you gone beyond the idea stage?

• Is there a large market?

• Will it make a substantial profit?

• Are you totally committed?

• Does your team have the skills and experience?

Things to remember

• A business plan is a synthesis of many different sub-plans (editorial, marketing, production, financial, design, advertising and circulation)

• A business plan brings these elements together and presents them in a coherent, obvious and convincing way to win support from the intended audience.

Elements

• Title Page

• Executive Summary (2 pages max.)– most important highlights of the plan.

• Table of Contents

Elements

• Situational analysis – the challenges and opportunities being

presented to the magazine; – scope of the enterprise; The business

background– what makes it unique; – outlook as a publication and as a business.

Elements

• Competitive environment – the market (pages and revenue);– major competitors for reader interest and

advertiser dollars– special challenges by market trends, direct or

indirect competitors– SWOT analysis

Image and mission

• For a going concern, important to restate the “core values” and a degree of passion

• For a startup, important to demonstrate that you’ve thought it through and that the positioning is compelling

• The editorial mission statement is a critical part of establishing the seriousness and attractiveness of what is a risky business.

Which is better?

• We intend to publish a magazine for people interested in government and politics

OR

• Our magazine affords a unique opportunity for communicating with the most important and elusive people in Canada in an authoritative setting. Our readers are recognized leaders in their fields who have pronounced intellectual curiosity and little time for nonsense.

Elements

• Editorial and content strategy – editorial mission– audience– content initiatives– revised editorial outline – opportunities for line extensions or spin-off

publications? – What resources will be required (including

web resources), and at what cost?

Elements

• Circulation strategy– Current and potential readers? – Price? To reach them? To access them?– Grow, by how much over what period of time? – How can the magazine improve

• New business? Conversion? Renewals? Visits? Page views? Click throughs?

– Sources– Resources

Elements

• Advertising sales and promotion strategy– Unique selling proposition– Strong sectors and how can those be optimized?– Weak sectors and what will enhance them?– Key advertisers? And how are you going to get them?– Revenue forecast, how much, by whom? – Line extensions and new products– What resources, research and marketing materials

will be necessary? – How will success be measured?

Elements

• Production strategy– What production efficiencies are available?– What pricing issues are anticipated (paper,

outsourced services)? – Where is the balancing point between

production savings, editorial quality and advertiser service?

– Do we have the skills, inside or outsourced, to produce a winning digital product?

Digital publishing strategy I

• Print + web– How website, blogs, social media, digital

editions will augment and enhance print strategy

• Digital only– How to build and retain audience, price

appropriately, create engagement and multiply opportunities for sales (e.g. rich media, pod- and videocasting)

Digital publishing strategy II

• What impact will the magazine’s digital strategy have on the enterprise’s bottom line?

• How will print and web strategy complement each other?

• How will a digital-only magazine compete and with whom?

• What resources will be necessary?

Elements

• Ancillary revenue– What is the magazine doing now to exploit its

brand?– What opportunities are available to expand

outward?

Elements

• Management, staffing and operations– Key or critical management and staff – Outside expertise – Relationships with key suppliers and lenders– Investment or working capital the magazine is

likely to need – Likely costs or savings in facilities, equipment,

training and recruitment?

Elements

• Action Plan and timeline – what will happen, when; – a visual and/or bulleted presentation of the

key events

Elements

• Financial model and projections – Detailed supporting modelling and financial

projections• Balance sheet • Pro forma income (profit & loss) statement• Cash flow• Operational budget

– Supporting documents

Elements

• Appendices– Rate card and media kit– Audience profile information– Detailed management and staff profiles

Special cases

• Launch – Lacks historical data– Needs most situational and competitive data– Projections and assumptions need to be

verified– Includes one-time start-up costs– Needs to speak particularly to audience

interest and likelihood of success

Special cases

• Repositioning– Historical data, but moving on a tangent– Need emphasis on reasons for repositioning

(i.e. the situational analysis)– Need to provide a cost-benefit analysis – Need to rationalize payback on investment

and comparison with doing nothing

Special cases

• Expansion or merger– Combined data – how the whole will be

greater than the sum of the parts– Cost-benefit necessary for disruption and cost

of merger or expansion– Need to detail payback and compare with

doing nothing

Special cases

• Conversion to digital– Differences in audience– Cost-benefit analysis of changeover to digital

publication– Medium and long term payback– Change to competitive environment

Form and structure

• Be concise and comprehensive

• Use plain English; avoid jargon; use the active voice

• Avoid whimsy, be businesslike; dress your plan for success

• Follow established forms and use standard accounting conventions

And finally…

• “By when”, “By whom” and “Howcum?” as important as “What”

• Assume nothing; be realistic and conservative

• Set realistic objectives for the magazine• Set realistic goals for individuals• Make comparisons meaningful and

measurable (per-page, per-issue, share of market etc.)

It is all about audience