After graduating from the University of Texas, I had an idea to start a magazine about all the cool, hip and fun things to do around campus for the students. As I was a government major, I knew nothing about business or publishing, but was very excited about the idea of starting a magazine. It’s been 25 years since I published that first issue, and I’ve learned some important lessons about the magazine business along the way. Here are eight important things for managing cash I think every publisher should know.
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8 Critical Cash Tips for New Publishers
1. 8 Critical Cash Management Tips
for New Publishers
Gal Shweiki, CEO Shweiki Media, Inc.
Friday, April 25, 14
2. After graduating from
the University of Texas I
had an idea to start a
magazine...
It’s been 25 years since I published my
first magazine and I’ve learned some
important lessons about the business
along the way.
Friday, April 25, 14
3. 1. Start Conservatively and
Have a Budget
When I started my publication, I needed...
• $600 to pay my printer
• $275 to cover my rent
• $425 for other miscellaneous expenses
• I didn’t stop selling ads until I covered my expenses
• Keeping expenses down helped keep the publication going and allowed
me to build and grow the magazine.
Friday, April 25, 14
4. 2. Keep your overhead low
• I worked out of my apartment for two years.When I finally moved into an office,
it was so small it could only fit a desk, a chair and a filing cabinet.
• Remember, cash is hard to get and easy to spend.
• Even small expenses can add up and end up burning through your cash reserve.
Friday, April 25, 14
5. 3. Make sure every employee pays
for themselves
• As a new publisher, you start by doing everything yourself.As you grow you will bring in
new people.
• Make sure the people you bring in make you money or do things that allow you to go out
and make more money.
• The first person I hired was a graphic designer. They were much more
talented than I was and that freed me up to go out and sell more ads.
Friday, April 25, 14
6. 4. Don’t print more than you need
• My first issue was an 8 page two color publication printed on offset paper.
• It took two years to grow to full color, then another two years to print on glossy paper.
• The cost of printing is your biggest expense. Keeping that cost under control is a key
factor in the longevity and success of your publication.
• Start small, and make sure your idea sells.Then grow your magazine as
your revenue grows.
Friday, April 25, 14
7. 5. Pay yourself first
• When I started my magazine, I put every penny of profit back into the publication.This is
usually a required mindset in the beginning, but it’s high risk behavior that must be reeled
in as soon as practical.
• Build your personal net-worth so you can live on your own terms.To do that you must
extract profit from the business and move it to your personal balance sheet. It is easy to
find ways to invest your profits back into your company: nicer paper, more employees,
marketing, however it is important to maintain a cash reserve.
• You need to create rules that force you to take profit and have the
internal discipline to follow them.
Friday, April 25, 14
8. 6. A sale isn’t a sale until you
collect the money
• You must figure out how you are going to collect what you are owed.
• If you extend credit you are making a loan to your client and you should treat it
accordingly. Just like a bank would do, you need to determine whether customers are
creditworthy and find out in advance how long they take to pay their bills.
• Protect yourself and limit the damage. If a client is getting behind on their
bill, do not keep running their ad in your publication.
Friday, April 25, 14
9. 7. Don’t give away advertising
• A couple years after starting the magazine, I started going after larger national accounts
without much success. I thought giving away premium space to national advertisers would
lead to them eventually signing up and paying cash.They never did.
• Giving away advertising cheapens your publication. Don’t give out handouts and don’t
trade for product.You need cash to publish the magazine, so collect the cash.
Friday, April 25, 14
10. 8. Numbers run a business
• The finance and accounting part of the magazine business was never my favorite part but it
is critically important. If you don’t pay attention to your numbers, your publication will
fail. Here are the numbers you need to look at Daily,Weekly and Monthly.
• Daily: Cash Balance
• Weekly: Cash Flow Forecast. Sales Forcast.
• Monthly: Profit and Loss. Balance Sheet.
Friday, April 25, 14