Shweiki worked out of his apartment for two years. It’s important to save money where you can, start conservatively, and remember that cash is hard to get and easy to spend.
The cost of printing is the biggest expense for a publisher, and keeping that cost under control is a key factor in the longevity and success of a publication. One should start small and make sure their idea sells. Then grow the magazine as revenue grows.
Austin, TX (PRWEB) April 30, 2014
After graduating from the University of Texas, Gal Shweiki had an idea to start a magazine about all the cool, hip and fun things to do around campus for the students. A government major, he knew nothing about business or publishing, but was very excited about the idea of starting a magazine, and after putting out a few issues, he had fallen completely in love with what he was doing. It was a fantastic creative outlet, but creativity that isn’t tied to making money is just a hobby, and if he wanted to keep publishing, he had to find a way to turn the magazine into a business.
Now, 25 years after publishing that first issue, Shweiki—the founder and president of Shweiki Media Printing Company—presents publishers with eight tips for managing cash in this must-watch webinar.
1. Start Conservatively
When Shweiki first started his publication, he needed $600 to pay the printer, $275 to cover rent, and about $425 for other miscellaneous expenses. He knew what he needed to sell to cover all expenses, so he didn’t stop selling ads until he hit that number.
Adding even $100 to his monthly expenses would mean he would need to sell more ads. That was hard to do, so he kept expenses to the bare minimum. Keeping expenses down helped keep the publication going and allowed him to build and grow the magazine.
2. Keep Overhead Low
Shweiki worked out of his apartment for two years, and when he finally moved into an office, it was so small it could only fit a desk, a chair and a filing cabinet. It’s important to remember that cash is hard to get and easy to spend. Even small expenses can add up and end up burning through one’s cash reserve.
3. Make Sure Every Employee Pays For Themselves
Typically, as a new publisher, one will start by doing everything by themselves and bring in new people as the company grows. It’s important for one to make sure when bringing in new employees that they either make money or do things that allow the publisher to go out and make more money. The first person Shweiki hired was a graphic designer, who was more talented than he was and freed him up to go out and sell more ads.
4. Don’t Print More Than Necessary
Shweiki’s first issue was an eight-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 the biggest expense for a publisher, and keeping that cost under control is a key factor in the longevity and success of a publication. One should start small and make sure their idea sells. Then grow the magazine as revenue grows.
5. Pay Yourself First
When Shweiki started his magazine, he 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 it's practical.
Twelve years ago, Shweiki joined an organization called YEO (Young Entrepreneurs Organization, now simply EO), which taught him a lot about how to run a business. One of the most important lessons was about how one should build their personal net worth so they can live on their own terms. To do that, it’s necessary to extract profit from the business and move it to one’s personal balance sheet. It is easy to find ways to invest profits back into the company (nicer paper, more employees, marketing, etc.), but it is important to maintain a cash reserve.
It’s important for one to maintain rules that force them to take a profit and important to have the internal discipline to follow them.
6. Don't Count a Sale as a Sale Until Money is Collected
When it comes to sales, it's crucial for one to figure out how to collect what’s owed. When extending credit, one is making a loan to the client and should treat it accordingly. Just like a bank would do, one needs to determine whether customers are credit-worthy and find out in advance how long they take to pay their bills. It’s crucial to protect oneself and limit the damage. If a client is getting behind on their bill, it’s important not to keep running their ad in the publication.
7. Don’t Give Away Advertising
A couple years after starting the magazine, Shweiki started going after larger national accounts without much success. He thought giving away premium space to national advertisers would lead to them eventually signing up and paying cash, but they never did. Giving away advertising cheapens the publication. One shouldn’t give out handouts or trade for product. Cash is needed to publish the magazine, so it’s necessary to collect the cash.
8. Remember Numbers Run a Business
The finance and accounting part of the magazine business was never Shweiki’s favorite part, but it is critically important. If one doesn’t pay attention to the numbers, the publication will fail. Here are the numbers to look at daily, weekly and monthly:
- Daily: Cash Balance
- Weekly: Cash Flow Forecast; Sales Forecast.
- Monthly: Profit and Loss; Balance Sheet.
Click here to watch the webinar now!
Shweiki Media's mission has always been to help publishers improve by providing the most profitable, hassle-free printing experience possible. This includes guaranteeing the highest quality product, exceptional customer service and on-time delivery--whether printing magazines, flyers or anything else.
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