I’ve dialled the phone number on the company website, and after a couple of rings, a man picks up with a cheery ‘Hello, Blackfish?’But it’s not the receptionist, or someone’s PA. It’s the managing director.
Matt Bielby spent 11 years launching titles for consumer magazine giant Future – including Total Film, SFX and PC Gamer. Now he runs Blackfish Publishing, a small independent publishing firm, from an office near the bank of the River Avon in Bath, employing five full-time staff – which might explain why he’s the one answering the phone.
Bielby is one of a handful of journalists who each year trade the nine-to-five for the cut-throat world of business and take the plunge into publishing their own magazine. It’s not an easy way to make money. According to credit reference agency Experian, 515 media companies folded in 2007, and around half of these closures were voluntary liquidations – when shareholders decide the business is not worth pursuing, or the company has become insolvent.
‘Think of how hard you think it’ll be – then double it,’Bielby says. ‘You’re taking such a punt with how many copies you’ll sell, how many ads you’ll sell. There are so many things that you’ve got no control over.”
Blackfish, which was set up in 2006, launched its first title – science fiction monthly Death Ray – last May. Bielby used a combination of his own funds and a long-term bank loan to raise the finance to launch. But as the ‘credit crunch’forces banks to tighten their belts and cut down on lending, would-be magazine entrepreneurs are increasingly having to look elsewhere to get their ventures off the ground.
‘Business angels’are one option wealthy individuals – often businessmen in early or semi-retirement – looking to invest anything from £100,000 to a couple of million in risky, but lucrative, start-ups in exchange for a substantial stake in the company. They’re generally in for the long-run, offering expertise and contacts as well as much-needed cash, and there are several thousand of them in the UK. But finding one with experience in, and enthusiasm for, publishing can be a bit like finding a needle in a haystack.
Beer & Partners is one of a number of business consultancies that plays match-maker, introducing early-stage entrepreneurs to potential investors. It recently helped secure the funds for Profile, a monthly magazine for young, upwardly-mobile City workers, and is currently seeking £100,000 for a title targeting Britain’s two million-plus student population.
Despite what all the textbooks might claim about the importance of a business plan, Beer & Partners chief executive Mike Weaver says persuading someone to invest in your magazine is just as much about people as it is about cash-flow forecasts. ‘If it’s an early-stage business, you’re really investing in the guy who’s come up with the idea and is running it,’says Weaver. ‘We like people to have not just a concept but also to have done some work and put their own sweat and blood into it.”
Getting past the gatekeeper is tough. Out of the 3,000 people who approach Beer & Partners with a business plan each year, only 100 get taken on by the agency, and the chosen few have roughly a 50 per cent chance of walking away with an investor’s cash.
If it all sounds a bit too Dragon’s Den for your liking, the alternatives are only as limited as your imagination. Freelance journalist Helen Gilchrist secured funding from the Prince’s Trust to help set up Stranger, a bi-monthly lifestyle, music and surfing magazine based in Cornwall, which launched in 2004. The Trust provides entrepreneurs under the age of 30 with low-interest start-up loans of up to £5,000; grants to help pay for marketing, and practical business advice.
High drop-out rate
For smaller, local magazines, there are a number of companies offering a foot in the door. For a £3,250 set-up fee, Mags To Riches provides a ready-to-launch publishing business in a box, with training guides, page templates, media packs and accounting spreadsheets, plus ongoing support and a monthly supply of editorial content that can be used as fillers. Since it launched in 2005, the company has helped around 40 individuals set up local magazines around the UK.
But despite the name, Mags To Riches director Tania Houston insists operating a one-man-band local magazine is anything but a get-rich-quick scheme. ‘There is a high drop-out rate in this business,’she says. ‘When you start you need to be able to free as much time as you possibly can. In that first month, you’re going from nothing to 32 pages, and that’s an awful lot of adverts to sell and create. I certainly don’t say you’re going to make millions.”
Houston, who lives in Hampshire and has run her own local magazine, the Chandler’s Ford Directory, for more than three years, says the titles she has helped launch typically made a profit of £800 to £900 in their first month. As it builds up a reputation, much of the advertising content (which generally makes up about 75 per cent of the magazine) is repeat business, and profits can rise to around £5,000 a month for an established title.
Other companies offering similar products include Community Times, which works on a postcode-exclusive franchise basis. Success rates and levels of satisfaction vary greatly from company to company – it pays to seek advice from someone who is already running a magazine, but be aware that in some cases they get paid a referral bonus if they persuade someone else to sign up.
If all this talk of spending thousands of pounds on setting up a small magazine is putting you off, Gustav Temple has proved it is possible to grow from small beginnings with an initial investment of just £500.
Temple was on a computer skills course for the unemployed when he stumbled upon the idea for The Chap – a satirical ‘gentleman’s quarterly’for the trilby-wearing, pipe-smoking man and an antidote to today’s lads’ mag and celeb-weekly culture. He scraped together enough money from friends and family to produce the first issue in 1999, and circulation soon plateaued around the 5,000 mark.
It wasn’t until 2006, when Temple secured a bank loan and paid £3,000 to get the title into WHSmith, that The Chap began to take off. Sales climbed to 15,000 and the title is now turning a modest profit, allowing Temple to pay contributors and a professional designer. ‘Distribution was the most difficult aspect of it all,’he says. ‘If I was going to start again, I’d buy a van and just distribute it myself, because that’s where the money goes.”
The Chap’s success story comes with a health warning. Even after nine years, Temple says self-publishing still consumes all of his time. And with all the early-stage worrying about finance and producing a great first issue, Temple warns it is all too easy to forget the vital ingredient for getting a title off the ground: Publicity. ‘We didn’t really make a big deal – we just seeped it out into the world. It’s important to start with a bang,’he says.
‘The Chap caught the eye of the national press in 2005 with its charity stunt, Children in Tweed, which sought to redistribute the nation’s tweed hats and coats to young people on a run-down inner city council estate to improve their self-esteem.”
One new launch that didn’t forget about the importance of PR was Shortlist – a product of publishing start-up Crash Test Media, led by ex-IPC editorial director Mike Soutar and Tim Ewington, formerly of Emap.
The 500,000-circulation free weekly men’s magazine launched in a blaze of publicity last summer, after finally securing cash from a hedge fund from GLG Partners, following a long trawl through the daunting world of venture capital.
‘When we went in to see people, we hit them with a very well-worked view of the market, some great creativity and a business plan that was bullet-proof,’says Ewington. ‘You can do all the Powerpoint you like. If you were asking for my money and you didn’t do a dummy, I’d show you the door.’Venture capital is only an option for the very biggest of magazine ventures. Six-figure sums are typically catered for by business angels, while anything under £100,000 is generally considered ‘friends and family’or bank loan territory.
Whichever option you choose, Ewington warns that raising finance is the biggest hurdle any publisher has to overcome. ‘You’ve got quite a roadshow to do,’he says. ‘It will take you twice as long to raise money as you imagine. They are not just going to hand it over to you there and then.’
He also warns against putting all your eggs in one basket – approaching a broad range of would-be investors will increase your chances of success, and if more than one backer expresses an interest, give you a powerful bargaining chip to negotiate on terms.
‘Some people think if you’ve got a great idea and a great business plan, you’re coming towards the end. You’re really only up to the starting line – you’ve got the battle of getting the money, and then launching.
‘It’s Churchillian: It’s not even the beginning of the end, it’s just the end of the beginning.”