Magazines Register

Finding Funds for a Magazine Launch

In our previous articles in this series, we explained how to develop your audience for your magazine launch, how to craft a content plan to meet their needs, and how to develop your advertising plan and sell ads to support your new publication. At this point, you’ve solidified your magazine concept, identified who’s in your niche and how to give them the content they want, and understand how advertising plays a role. In this article, we’ll explore additional financing options for magazine publishers that go beyond ad sales alone.

Estimating costs

estimate costsBefore launching your magazine, you’ll need to do your research to determine approximately how much money you will need to put together your first — and subsequent — issues. Consider in-house costs such as writing, editing, and graphic design expenses as well as buying or renting production space; paper, printing, and distribution if in print; as well as sales and marketing. Most new publishers greatly underestimate costs for advertising and selling their magazines. Most publications take months — even years — to become profitable, so you’ll need to have enough financial resources to carry you until then.

Revenue sources

One of the most obvious revenue sources is the price of the magazine itself. Subscriptions are the most profitable vehicle because recurring sales don’t require further marketing costs. That’s why it’s so important for publishers to cultivate relationships with their audience members.

Individual sales from newsstands and retail outlets also help, but after you figure in production costs, delivery, and newsstand commissions, there is very little profit for single-copy sales. It’s difficult for a new launch to get large enough circulation numbers to cover initial production costs, especially if you have a niche title with a limited audience. You must decide whether you can cover the deficit until you can increase circulation.

Ad sales are another major source of revenue for magazine publishing but, of course, until you’ve built up a strong circulation, advertisers may be reluctant to invest. Classified ads at the back of a magazine for which you can sell space by word or line can be another significant source of revenue. Publishers can also consider offering advertisers branded content opportunities.

Going digital is another attractive option because of reduced online magazine production and distribution costs. If you already offer a print magazine, bundle a digital version with the price of a print subscription. You can also sell digital copies or subscriptions for mobile devices through Apple’s App Store and Google Play. Once your magazine app is on a mobile device, buying the latest copy is just a tap away for readers. Digital and mobile editions can also help you gather valuable demographic data for analysis.

going digital

Some publishers also create online stores to sell related products while others host events to bring in revenue as well as network with advertisers and readers.

Securing capital

Another start-up funding path is to amass capital. For some, this means personally investing in the effort by liquefying assets or borrowing from a life insurance policy or retirement fund. Crowdfunding has become an option for some magazine launches. If you can get enough supporters from sites such as Kickstarter, you might not have to dig so deep into your own pockets or those of friends and family. Another option is to find a benefactor passionate about your niche to finance your magazine. Angel Investor Groups provide a similar solution and are definitely worth looking into. Another option is to find a publishing mentor or benefactor passionate about your niche to finance your magazine. 

Lack of funding is one of the biggest roadblocks to a successful publication. If you’re publishing a small niche magazine, don’t depend on circulation revenue to cover your startup costs. Ad sales can provide a good portion of your revenue but typically requires hiring experienced professionals. Starting with a digital production is less expensive and can be an option for those without strong funding sources. The bottom line? Make sure you have a realistic estimate of launch costs, ensure you can cover at least the first few issues, and don’t expect to be profitable right away.

Contact your Sheridan representative or visit our contact page to ask how Sheridan experts can help streamline and simplify your publishing processes.

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