Shweiki Media teams up with John Lawo, Jr., president of Magazine Media Strategies, Inc., to present a webinar on recognizing potential problems of magazine publishing. Lawo works to help publishers be more productive and take more money to their bottom lines, and in this webinar, he shares important tips…
Here is a look at some of the magazines Lawo founded or managed in a variety of markets. As one might expect, almost all encountered problems of one kind or another. Lawo explains how many of those problems were recognized and what publishers can do when they encounter the same types of problems.
10 Signs Magazine Publishers Need Help–Where to Get It and What to Do About It?
This webinar is primarily directed to entrepreneurs and small to medium-sized publishers who entered the industry without a strong business background and have limited experience, specifically in magazine publishing. However, the concerns and suggestions are certainly not limited to these types of companies and individuals.
At one time or another, everyone will come up against matters in business that they are not prepared for. This could be due to inexperience in a particular area, market changes, economic concerns or other matters beyond one’s control.
When you’re faced with such matters, give it your all to address them, but I urge you, don’t be reluctant to ask for help. Don’t think you can always handle everything.
Magazine Publishers Shouldn’t Get Too Comfortable
So, to stay on the right foot and hopefully avoid danger, don’t get too comfortable.
Recently, a friend asked me to review his notes for an upcoming presentation. After looking them over, I told him I thought he was headed in the right direction, but there were a couple of misspelled words and a questionable statement or two. I thought this was simply the result of his working too fast and that he would make changes for his final draft. But after I mentioned it, I found he actually didn’t know how to spell the words and had no intention of further checking his statements. I asked why he didn’t look up the words, run spell-check or do further fact-checking.
“Because I had no reason to,” he said. “I thought the words were spelled correctly and the statements were also correct.”
Interesting, isn’t it! He was just comfortable with it, and there was apparently nothing to alert him to the concerns. This kind of situation, of course, has happened to all of us.
Common Situations Where Publishers Get Too Comfortable:
- We think we have the best contracts possible with our suppliers. Why review them?
- We think our financials are in order and that we have the best accountant ever. Why take a closer look?
- We love our sales team. They’ve always done well—previously. Why explore changes?
- We make a profit from print—though dwindling— Why explore other platforms?
In many cases, we’ve all been too comfortable in one form or another or failed to have our businesses structured so that problem-areas would be red-flagged early on, or we simply lacked the necessary experience to manage well.
Being Too Comfortable Has Consequences
- We don’t update our Business Plan or explore new revenue streams or look into new platforms because we’re too comfortable with our traditional business model.
- We write off large amounts of receivables because we don’t keep up with outstanding debts because we don’t want to upset our relationships with advertisers or others—even when we face shortfalls and have to borrow.
- We don’t account for lost circulation and waning reader engagement or significantly reduced newsstand draws.
- We don’t look into new software or update what we have.
- We pay too much for printing and other services, but we like our printer and don’t want to change.
- We overpay —or underpay — staff and outsourced services.
The Publishing Industry is Changing
This “comfort level,” which is more prevalent than you may think, can lead to serious problems over time, if not in the short term—and then it may be too late! Unfortunately, in the last few years, it’s been too late for numerous publishers who have seen their businesses die. Some recognized the problems they were facing and tried to turn matters around, but it was too late. Others faced conditions beyond anyone’s control, and still others never knew what hit them.
Many conditions changed more quickly than publishers were able to meet.
- Profits (if there were any to start with!) dwindled as revenue and expenses both became problems.
- Companies began moving advertising in other directions (digital, mobile, video online, events, social media), and buys did not go as deep into markets as previously.
- Consolidation reduced the number of advertisers in various markets.
- Postal rates increased.
- Traditional business models did not hold up well.
- New technology became more prevalent.
- Newsstands and bookstores faced major distribution changes.
This is where help was needed—and is needed. And whatever the concern, there’s always help available, but it’s not always apparent. You just have to know what to be aware of, then find the right help for your needs.
So, what signs do you look for? Here are 10 and the assumptions that go with them:
You are consistently getting away from your Business Plan (or you don’t have a business plan!).
Assumption: You have a good, market-specific plan that you have been able to rely on to keep you on target to your goals. There’s nothing wrong with making reasonable changes, and you do want to keep your plan up-to-date, but if you’re not sure how to do so or how to get back on track, you need help.
You are having cash flow problems.
Assumption: You are sufficiently capitalized and aren’t consistently trying to overcome a less-than-sufficient capitalization. You have reliable financial statements, which you know how to use, and other essential reports with appropriate metrics.
Most companies can deal with occasional short falls, but if a problem is recurrent or developing beyond a brief period of time, you need to address it.
Your revenue is falling, and your sales people can’t tell you why.
Assumption: Overall sales have been good or at least competitive and satisfactory. You have been satisfied with your sales staff, and they have been in touch with advertisers, sponsors, and others sufficiently so to tell you why they were not getting certain business and why they did. Now they’ve hit a wall, and you don’t know what adjustments to make.
Your circulation and subscription renewals are consistently down, and distribution channels are an increasing concern.
Assumption: Overall circulation and renewal rates have been acceptable.
You’re repeatedly late in closing issues and making deadlines.
Assumption: You have almost always been on time and have a capable editorial and production staff.
Your editorial is becoming stale, and you are losing reader-engagement.
Assumption: Previously, your content has been well received, and you have reliable metrics to support engagement.
Your staff is not engaged.
Assumption: They have been engaged. Now you see a marked difference in behavior and attitude day-to-day. People are coming in late; there are increased absences; excuses are piling up; turnover is increasing; “extra effort” is missing. Things are just not what they should be.
You are resistant to new ideas, new media and innovation.
Assumption: Previously your traditional business model has served you well. However, you’re not sure it will keep you on the right track in the future. You see a change in the ways that advertising is being sold and bought. You’re not comfortable with it. You also see new technology and new platforms introduced and used, and you don’t understand things as well as you should. Consequently, your business remains virtually static.
Your market is changing.
Assumption: Previously there has been only ONE path to your goals. The number of advertisers and total accounts in your market are now shrinking due to several factors, including consolidation, corporate pressure to reduce certain ad spending, advertising for products and services going in a new direction, etc. And your audience has more options for their information and entertainment.
Your anxiety over business matters exceeds its “normal” level.
Assumption: You don’t know whether to borrow or invest more money, hire or fire more people, look into selling, get psychological help, or exactly what. You just don’t know which way to turn!
So, now that you know the signs, how will you recognize them?
Recognizing Danger Signs
Some should be self-evident. Or there should be some kind of warning sign, a “bell ringing,” a “red flag” waving or some other, perhaps, more subtle alert.
First of all, you should be organized so negative matters come to your attention quickly. Most problems and concerns are obvious if you are alert and active in the day-to-day operation of your business. However, if you’re not or you depend on department heads, managers or others at least one step or more removed from you, you must stay in close touch. You should also have regular reports and communication to provide the necessary alerts.
Now let’s continue with the assumption that you are able to determine that you do need help according to any of the points itemized.
Where Will You Get Help?
The first place to look, of course, is within your own organization. Do you personally have the capability to address the concerns? Are there those on your staff who can? Do you belong to any associations that have individuals or programs that could help? Would you trust discussing things with a colleague at another company? Could your printer help? Your banker? Your accountant?
Consultants provide another source of help. Unfortunately, they are sometimes misunderstood to be too expensive. While this can sometimes be true, most independent consultants price their services reasonably and competitively (usually well below large corporate consultants). And based on their experience, they can often find solutions quickly and provide a fresh, unbiased, timely and objective course of action, saving you both time and money overall.
And when you are considering consultants, be sure to interview those with industry-specific experience. Certainly general business principles apply, but the magazine business has its own set of concerns, and you want someone who has been in your shoes, or is at least familiar with the concerns you have.
Regardless of which way you turn, don’t wait so late in getting help that regardless of the source, it’s too late. The phrase “It’s never too late” does not apply!”
So, now that you’ve determined how you can get help, just what can you do about it?
Let’s look at concerns point by point with suggestions to get you headed in the right direction and tackle your concerns. Keep in mind that these suggestions are not going to fit every situation, and that they are in no way intended to be complete. They are to help you get started in working with whatever source you choose. It should be obvious that you will have to delve much deeper into each concern and that you use sources specifically in those areas of expertise that they provide … and that fit your concerns.
So, let’s start with your Business Plan. And I’ll refer to the slides as 1-A, 2-A, etc., to correspond with the earlier slides on the same points.
1-A. You are consistently getting away from your Business Plan (or you don’t have one!).
If you don’t have one, produce one, even if you’ve been in business for several years. You should understand your business and what you want to do and, for the most part, how you’re going to do it better than anyone, and your plan should in great part be a product of your making, at least in concept.
You may say you have it all in your head. Still, it should be written and shared with your staff. Get it on paper.
This is not just a tool for investors. It’s your game plan and should be your map to success. You should refer to it often to be sure you are staying on track and update it reasonably.
You might start with a simple Action Plan, which will become a part of your larger Business Plan. If you’re not familiar with form or structure, you can get help from one of the sources previously mentioned. And be sure your plan is realistic and not just something to produce and tuck away so you can say you do have one.
2-A. You are having cash flow problems.
The first thing to determine, of course, is where things stand financially and why there is a problem. Do you have a revenue problem or an expense problem, or both? Negative cash flow can result from waning revenues, slow collections or out-of-line expenses, all of which need close examination.
Look at your financial statements for insight, typically your income statement, balance sheet, and cash flow statement. Be sure you know how to use your statements. Don’t depend entirely on someone else’s interpretation. Be sure you are keeping up with the Key Performance Indicators (KPI) in the basic operation of your business.
What are you doing to increase sales, profits, margins, reduce expenses, expedite collections, innovate? Do you have a reliable model to gauge percentages of what’s being spent in each category? Are your finances in line for each category—advertising & marketing, issue production, circulation & distribution, G & A, etc.? Are you staying on top of your billings and collections? Are your credit terms in line with the average time it takes you to collect receivables? Do you have a specific approach to deal with late receivables? (Ad agencies are notoriously slow in paying.) Are you paying bills on time? (You should negotiate the longest term possible for your payables without incurring late fees.)
If you’re not sure about certain items, discuss them in detail with your accountant. Remember, your statements should be organized on an industry-specific basis to give you the specific information you need. Structure in this regard is most important.
And cash flow is a critical part of your business. I cannot overemphasize this fact!
3-A. Your ad sales and revenue from other streams are consistently falling.
Which of your product offerings are affected? Print, digital, mobile, video, events, other?
This is not something that should have happened overnight. You probably have been aware of this for a while, so what are you doing about it? Determine whether you have a market problem or a sales problem or both.
And why can’t your sales people tell you what the problem is? Are they well trained about your products and how they should be sold in today’s changing market place? Do they have the latest sales tools to compete and provide the information buyers want and need today? Do they know how to use these tools? Could their presentations be improved? Are you facing a shrinking market? Is there a new competitor on the scene? Are you facing misperceptions in the market place?
4-A. You’re losing circulation.
From an economic and structural standpoint, be sure you have the lowest but most effective and most competitive circulation as your target. (You don’t want to pay for circ that doesn’t provide a corresponding benefit.)
Assuming you’re in line in this regard, is falling circ a product of your lack of effort or reluctance to spend to maintain it or is all circ in your market falling? Do you know the universe of the audience in your market?
The key to managing the situation is understanding why circ is falling—which could be said about all of the signs of trouble. Circulation numbers can be almost solely a product of how much is spent to acquire and maintain them, assuming a market is viable and effective.
Do you have a reliable fulfillment program? Where is your audience? Are they getting your content elsewhere? Do you have reliable information in this regard? Have you been tracking subscription renewals? Single copy sales? Are your online marketing metrics in order? Are you measuring unique visitors? Page views? Visitor engagement? Conversion rates?
Recognize, too, that markets do dry up, and in certain situations, no amount of money can make a difference in the long run. Be sure you are using all appropriate tools available to reach your audience (email, websites, direct mail, wraps, retail newsstands, online newsstands, social media, apps, agencies). And that you are testing your concepts and creative packages and conducting independent reader studies.
5-A. You’re late in closing issues and making deadlines.
This can be a very damaging matter to your audience and advertisers and is something you should be able to fix internally. It should be immediately telling, and based on assumptions made earlier, I’m tempted to say, “Just fix it,” and let it go at that. This should not be a complex matter. Work backwards from your deadlines—further assuming there is no problem with your production staff—and identify the problem and enforce your deadlines.
Too often, they are simply not enforced.
6-A. Your editorial is becoming stale.
What do you do to evaluate your editorial? Have you conducted independent audience surveys? How often? Have they provided useful information? Have you acted on this information? When was your last redesign? Do you have metrics to compare the performance of issues, quarters, seasons, year-over-year? If not, you should develop them in some form.
Do you promote your editorial? Do you regularly read competing magazines? What are your competitors doing you are not? Review your concerns with your staff.
7-A. Your staff is not engaged.
Do you have a written statement of policy regarding hours, production, behavior, etc. In other words, an Employee Manual? Do your employees have a copy? Do you enforce it? Have you let concerns slide in the past?
Talk to your staff individually about your concerns. Don’t just dictate. Communication is key—two-way communication. Be sure you understand their concerns, and they understand and buy into your plans. Sharing your Business Plan can help.
8-A. You are resistant to new ideas.
Without getting into how to use what’s new, let’s focus briefly on why you’re resistant to new ideas, including new technology. And to go forward, you need to admit that you have been resistant. Being resistant is often the result of not understanding how things work. Don’t let time catch up with you! Getting and staying up to date on new ideas, opportunities, and technology is a must for publishers who expect to grow and succeed. And it’s important to recognize what you don’t know and understand—and to find ways to catch up.
Among them are these:
- Help from those of your staff or other colleagues or friends who are technically proficient
- Online training videos and webinars (many free)
- Trade shows, seminars
- Local college and tech schools, special and advanced (or basic) classes
- Industry newsletters
- Library, books (yes, books—which can be online)
- Your printer and other suppliers
- A personal coach or consultant
9-A. Your market is changing.
Markets have changed for a variety of reasons, foremost being a weak economy, which has resulted in a smaller base of accounts with fewer ad dollars to spend, particularly in print. You may very well be facing this. Additionally, your audience may be shrinking or getting more of its information and entertainment from tablets, smart phones, and the like.
At one time or another, some markets have been hit harder than others, such as real estate and housing, electronics and science, trucking, home fashion, music and entertainment, teen, women’s, and children’s. All of these and more have contracted in one way or another and continue to face serious concerns.
Determine what your advertisers want and how your audience wants information delivered and decide how you can best address these concerns. Be aware that whatever changes you make may require an updated Business Plan.
10-A. Your anxiety over business matters exceeds “normal.”
Of course, we can all debate what “normal” is in this crazy business, and I’m not sure I have a good answer to that. I’d love to hear yours. The magazine business itself has gone through substantial changes in the last several years and continues to change. You must adapt. And part of doing so includes your continuing education. web services Publishers in different markets are faced with varying sets of problems and concerns, of course, and must recognize what these changes are and take action.
Remember, action relieves anxiety. Just be sure to take action in the right direction.