How to open a magazine publishing firm?
Are you keen to open a magazine publishing firm but don't know where to begin? Then you're in luck because this guide will lead you through all the steps required to check if your business idea can be profitable and, if so, turn it into a reality.
Our guide is for prospective entrepreneurs who are thinking about starting a magazine publishing firm no matter how far they are in their journey - whether you’re just thinking about it or in the middle of market research this guide will be useful to you.
Think of this as your blueprint: we cover everything you need to know about opening a magazine publishing firm and what key decisions you’ll need to make along the way.
Ready? Let’s get started!
Understanding how a magazine publishing firm works
The very first step when exploring a business idea such as starting a magazine publishing firm is to make sure you understand how the business operates and makes money (which is what we call the business model).
This will not only give you an initial idea of how profitable the business can be, but it will also enable you to make sure that this is the right business idea for you, given your skills, start-up capital and family or personal lifestyle, in particular.
The best ways to get to grips with the magazine publishing firm's business model are to:
- Talk to magazine publishing firm owners with experience
- Work a few months in a magazine publishing firm already in operation
- Take a training course
Talk to magazine publishing firm owners with experience
Experienced magazine publishing firm owners have valuable insights and can provide practical advice based on their firsthand experiences.
They've likely encountered and overcome challenges that a newcomer might not anticipate. Learning from other’s mistakes can save you both time and money and potentially increase your venture’s chances of succeeding.
Work a few months in a magazine publishing firm already in operation
Obtaining work experience in the industry can be a crucial factor in confirming whether you truly want to start a magazine publishing firm, as it provides insight into the day-to-day activities.
For instance, if the working hours are longer than expected or if other business requirements don't align with your personal lifestyle or preferences, you might reconsider your entrepreneurial goals.
Even if you've decided that this business idea is a good fit for you, gaining work experience will still be valuable. It helps you better understand your target market and customer needs, which is likely to be beneficial when launching your own magazine publishing firm.
Take a training course
Obtaining training within your chosen industry is another way to get a feel for how a magazine publishing firm works before deciding to pursue a new venture.
Whatever approach you choose to familiarise yourself with the business, before going any further with your plans to open a magazine publishing firm, make sure you understand:
- What skills are required to run the business (compare this with your own skills)
- What a typical week in the business is like (compare this with your personal or family life)
- What is the potential turnover of a magazine publishing firm and the long-term growth prospects (compare this with your level of ambition)
- Your options once you decide to sell the business or retire (it's never too early to consider your exit)
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Assemble your magazine publishing firm's founding team
The next step to start your magazine publishing firm is to think about the ideal founding team, or to go in alone (which is always an option).
Setting up a business with several partners is a way of reducing the (high) risk of launching a magazine publishing firm since it allows the financial risk of the project to be shared between the co-founders.
This also allows the company to benefit from a greater diversity of profiles in the management team and to spread the burden of decision-making over several shoulders.
But, running a business with multiple co-founders brings its own challenges. Disagreements between co-founders are quite common, and these can pose risks to the business. That's why it's crucial to consider all aspects before starting your business.
To make an informed decision, we suggest asking yourself these questions:
- How many co-founders would increase the project's chances of success?
- Do you and your potential partners share the same aspirations for the project?
- What is your plan B in case of failure?
Let's examine each of these questions in detail.
How many co-founders would increase the project's chances of success?
The answer to this question will depend on a number of factors, including:
- Your savings compared with the amount of initial capital needed to launch the magazine publishing firm
- The skills you have compared with those needed to make a success of such a project
- How you want key decisions to be taken in the business (an odd number of partners or a majority partner is generally recommended to avoid deadlock)
Put simply, your partners contribute money and/or skills, and increasing the number of partners is often a good idea when one of these resources is in short supply.
Do you and your potential partners share the same aspirations for the project?
One of the key questions when selecting your potential partners will be their expectations. Do you want to create a small or large business? What are your ambitions for the next 10 or 15 years?
It's better to agree from the outset on what you want to create to avoid disagreements, and to check that you stay on the same wavelength as the project progresses to avoid frustration.
What is your plan B in case of failure?
Of course, we wish you every success, but it's wise to have a plan B when setting up a business.
How you handle the possibility of things not working out can depend a lot on the kind of relationship you have with your co-founders (like being a close friend, spouse, former colleague, etc.) and each person's individual situation.
Take, for instance, launching a business with your spouse. It may seem like a great plan, but if the business doesn't succeed, you could find yourself losing the entire household income at once, and that could be quite a nerve-wracking situation.
Similarly, starting a business partnership with a friend has its challenges. If the business doesn't work out or if tough decisions need to be made, it could strain the friendship.
It's essential to carefully evaluate your options before starting up to ensure you're well-prepared for any potential outcomes.
Is there room for another magazine publishing firm on the market?
The next step in starting a magazine publishing firm is to undertake market research. Now, let's delve into what this entails.
The objectives of market research
The goal here is straightforward: evaluate the demand for your business and determine if there's an opportunity to be seized.
One of the key points of your market analysis will be to ensure that the market is not saturated by competing offers.
The market research to open your magazine publishing firm will also help you to define a concept and market positioning likely to appeal to your target clientele.
Finally, your analysis will provide you with the data you need to assess the revenue potential of your future business.
Let's take a look at how to carry out your market research.
Evaluating key trends in the sector
Market research for a magazine publishing firm usually begins with an analysis of the sector in order to develop a solid understanding of its key players, and recent trends.
Assessing the demand
After the sector analysis comes demand analysis. Demand for a magazine publishing firm refers to customers likely to consume the products and services offered by your company or its competitors.
Looking at the demand will enable you to gain insights into the desires and needs expressed by your future customers and their observed purchasing habits.
To be relevant, your demand analysis must be targeted to the geographic area(s) served by your company.
Your demand analysis should highlight the following points:
- Who buys the type of products and services you sell?
- How many potential customers are there in the geographical area(s) targeted by your company?
- What are their needs and expectations?
- What are their purchasing habits?
- How much do they spend on average?
- What are the main customer segments and their characteristics?
- How to communicate and promote the company's offer to reach each segment?
Analyzing demand helps pinpoint customer segments your magazine publishing firm could target and determines the products or services that will meet their expectations.
Assessing the supply
Once you have a clear vision of who your potential customers are and what they want, the next step is to look at your competitors.
Amongst other things, you’ll need to ask yourself:
- What brands are competing directly/indirectly against your magazine publishing firm?
- How many competitors are there in the market?
- Where are they located in relation to your company's location?
- What will be the balance of power between you and your competitors?
- What types of services and products do they offer? At what price?
- Are they targeting the same customers as you?
- How do they promote themselves?
- Which concepts seem to appeal most to customers?
- Which competitors seem to be doing best?
The aim of your competitive analysis will be to identify who is likely to overshadow you, and to find a way to differentiate yourself (more on this see below).
Regulations
Market research is also an opportunity to look at the regulations and conditions required to do business.
Ask yourself the following questions:
- Do you need a special degree to open a magazine publishing firm?
- Are there necessary licences or permits?
- What are the main laws applicable to your future business?
At this stage, your analysis of the regulations should be carried out at a high level, to familiarize yourself with any rules and procedures, and above all to ensure that you meet the necessary conditions for carrying out the activity before going any further.
You will have the opportunity to come back to the regulation afterwards with your lawyer when your project is at a more advanced stage.
Take stock of the lessons learned from your market analysis
Market research should give you a definitive idea of your business idea's chances of commercial success.
Ideally, the conclusion is that there is a market opportunity because one or more customer segments are currently underserved by the competition.
On the other hand, the conclusion may be that the market is already taken. In this case, don't panic: the first piece of good news is that you're not going to spend several years working hard on a project that has no chance of succeeding. The second is that there's no shortage of ideas out there: at The Business Plan Shop, we've identified over 1,300 business start-up ideas, so you're bound to find something that will work.
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Choosing the right concept and positioning for your magazine publishing firm
Once your market research is completed, it's time to consider the type of magazine publishing firm you want to open and define precisely your company's market positioning in order to capitalise on the opportunity you identified during your market research.
Market positioning refers to the place your product and service offering occupies in customers' minds and how they differ from competing products and services. Being perceived as the premium solution, for example.
There are four questions you need to consider:
- How will you compete with and differentiate yourself from competitors already on the market?
- Is it better to start or buy a magazine publishing firm already in operation?
- How will you validate your concept and market positioning?
Let's look at each of these in a little more detail.
How will you compete with and differentiate yourself from competitors already on the market?
When you choose to start up a magazine publishing firm, you are at a disadvantage compared to your rivals who have an established presence on the market.
Your competitors have a reputation, a loyal customer base and a solid team already in place, whereas you're starting from scratch...
Entering the market and taking market share from your competitors won't happen automatically, so it's important to carefully consider how you plan to establish your presence.
There are four questions to consider here:
- Can you avoid direct competition by targeting a customer segment that is currently poorly served by other players in the market?
- Can you offer something unique or complementary to what is already available on the market?
- How will you build a sustainable competitive advantage for your magazine publishing firm?
- Do you have the resources to compete with well-established competitors on your own, or would it be wiser to explore alternative options?
Also, think about how your competitors will react to your arrival in their market.
Is it better to start or buy a magazine publishing firm already in operation?
An alternative to opening a new business is to take over a magazine publishing firm already trading.
Purchasing an existing magazine publishing firm means you get a loyal customer base and an efficient team. It also avoids disrupting the equilibrium in the market by introducing a new player.
A takeover hugely reduces the risk of the business failing compared to starting a new business, whilst giving you the freedom to change the market positioning of the business taken over if you wish.
This makes buying an existing magazine publishing firm a solid alternative to opening your own.
However, buying a business requires more capital compared to starting a magazine publishing firm from scratch, as you will need to purchase the business from its current owner.
How will you validate your concept and market positioning?
Regardless of how you choose to establish your business, it's crucial to make sure that the way you position your company aligns with the expectations of your target market.
To achieve this, you'll have to meet with your potential customers to showcase your products or services and get their feedback.
Deciding where to base your magazine publishing firm
The next step to opening a magazine publishing firm is deciding where you want to set up your business.
Choosing the right location for your business is like finding the perfect stage for a play. Without it, your business may lack the spotlight it deserves.
Whilst there is no “perfect” location for your magazine publishing firm, one that meets as many of the following factors as possible could be ideal:
- Visibility and foot traffic - This is important for a magazine publishing firm as it allows for greater exposure to potential customers and can increase sales.
- Parking space, road and public transport accessibility - This is essential for employees and clients to easily access the business location, especially for magazine publishing firms that may have a larger number of employees and visitors.
- Proximity to target customers - Being close to the target audience can help with distribution and marketing strategies for the magazine.
- Competitor presence - It is important to consider the presence of competitors in the chosen location to assess the level of competition and make necessary adjustments to stand out in the market.
This list is obviously not exhaustive and will have to be adapted to the particularities of your project.
Once you’ve considered the factors above, it’s important to think about the budget that your startup has at its disposal. You’ll need to find a location that meets your business requirements but is affordable enough, especially short-term.
If you opt for renting instead of buying your premises, make sure to take into account the terms of the lease, including aspects such as the duration, rent increase, renewal, and so on.
The lease contractual terms vary greatly from country to country, so be sure to check the terms applicable to your situation and have your lease reviewed by your lawyer before signing.
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Choosing your magazine publishing firm's legal form
The next step to open a magazine publishing firm is to choose the legal form of your business.
The legal form of a business simply means the legal structure it operates under. This structure outlines how the business is set up and defines its legal obligations and responsibilities.
Why is your magazine publishing firm's legal form important?
Choosing the legal form for your magazine publishing firm is an important decision because this will affect your tax obligations, your personal exposure to risk, how decisions are made within the business, the sources of financing available to you, and the amount of paperwork and legal formalities, amongst other things.
The way you set up your business legally will impact your taxes and social contributions, both at a personal level (how much your income is taxed) and at the business level (how much the business's profits are taxed).
Your personal exposure to risk as a business owner also varies based on the legal form of your business. Certain legal forms have a legal personality (also called corporate personality), which means that the business obtains a legal entity which is separate from the owners and the people running it. To put it simply, if something goes wrong with a customer or competitor, for example, with a corporate personality the business gets sued, whereas without it is the entrepreneur personally.
Similarly, some legal forms benefit from limited liability. With a limited liability the maximum you can lose if the business fails is what you invested. Your personal assets are not at risk. However, not all structures protect you in such a way, some structures may expose your personal assets (for example, your creditors might try to go after your house if the business incurs debts and then goes under without being able to repay what it owed).
How decisions are made within the business is also influenced by the legal form of your magazine publishing firm, and so is the amount of paperwork and legal formalities: do you need to hold general assemblies, to produce annual accounts, to get the accounts audited, etc.
The legal form also influences what sources of financing are available to you. Raising capital from investors requires having a company set up, and they will expect limited liability and corporate personality.
What are the most common legal structures?
It's important to note that the actual names of legal structures for businesses vary from country to country.
But they usually fall within two main types of structures:
- Individual businesses
- Companies
Individual businesses
Individual businesses, such as sole traders or sole proprietorships, are legal structures with basic administrative requirements.
They primarily serve self-employed individuals and freelancers rather than businesses with employees.
The main downside of being a sole trader is that there's usually no legal separation between the business and the person running it. Everything the person owns personally is tied up with the business, which can be risky.
This means that if there are problems or the business goes bankrupt, the entrepreneur's personal assets could be taken by creditors. So, there's a risk of personal liability in case of disputes or financial issues.
It is also not possible to raise equity from investors with these structures as there is no share capital.
Despite the downsides, being a sole proprietorship has some advantages. There is usually very little paperwork to get started, simpler tax calculations and accounting formalities.
Companies
Companies are all rounders which can be set up by one or more individuals, working on their own or with many employees.
They are recognized as a distinct entity with their own legal personality, and the liability is usually limited to the amount invested by the owners (co-founders and investors). This means that you cannot lose more than you have invested in the business.
This separation ensures that in legal disputes or bankruptcy, the company bears primary responsibility, protecting the personal assets of the founder(s) and potential investor(s).
How should I choose my magazine publishing firm's legal structure?
Deciding on the legal structure is usually quite straightforward once you know how many co-founders you'll have, whether you'll have employees, and the expected revenues for the business.
A good business idea will be viable whatever the legal form you choose. How businesses are taxed changes every year, therefore one cannot rely on specific tax benefits tied to a particular structure when deciding to go into business.
One easy way to proceed is to take note of the legal structures used by your top five competitors, and assume you're going with the most commonly chosen option. Once your idea is mature and you're prepared to formally register the business, you can validate this assumption with a lawyer and an accountant.
Can I switch my magazine publishing firm's legal structure if I get it wrong?
You can switch your legal setup later on, even if it involves selling the old one to a new entity in some cases. However, this comes with extra costs, so it's better to make the right choice from the beginning if you can.
Can your business idea be profitable?
Just enter your data and let The Business Plan Shop crunch the numbers. We will tell if your business idea can generate profits and cash flows, and how much you need to get started.
Calculating the budget to open a magazine publishing firm
The next step to opening a magazine publishing firm involves thinking about the equipment and staff needed to launch and run your business on a day-to-day basis.
Each project has its own characteristics, which means that it is not possible to estimate the budget for opening a magazine publishing firm without building a complete financial forecast.
So be careful when you see estimates circulating on the Internet. As with all figures, ask yourself these questions:
- Is my project similar (location, concept, size, etc.)?
- How recent is the information?
- Is it from a trustworthy source?
Startup costs and investments to open a magazine publishing firm
For a magazine publishing firm, the initial working capital requirements and investments may include the following elements:
- Printing Press: As a magazine publishing firm, you will need to invest in a high-quality printing press to produce your magazines. This is a significant capital expenditure, but it is essential for ensuring the quality and consistency of your publications.
- Computers and Software: In today's digital age, a magazine publishing firm cannot function without the necessary technology. You will need to invest in computers and software for tasks such as graphic design, layout, and content creation.
- Office Equipment: A well-equipped office is crucial for the smooth functioning of your magazine publishing firm. This may include items such as desks, chairs, filing cabinets, and other office supplies.
- Camera and Photography Equipment: Depending on the type of magazine you are publishing, you may need to invest in a high-quality camera and other photography equipment. This is especially important for fashion, lifestyle, or travel magazines.
- Distribution Vehicles: If you plan on distributing your magazines physically, you will need to invest in vehicles to transport them. This could include vans, trucks, or even bicycles, depending on the size and location of your target market.
Of course, you will need to adapt this list to your company's specific needs.
Staffing plan to operate a magazine publishing firm
To establish an accurate financial forecast for your magazine publishing firm, you will also need to assess your staffing requirements.
The extent to which you need to recruit will of course depend on your ambitions for the company's growth, but you might consider recruiting for the following positions:
Once again, this list is only indicative and will need to be adjusted according to the specifics of your magazine publishing firm.
Other operating expenses required to run a magazine publishing firm
You also need to consider operating expenses to run the business:
- Staff costs: This includes salaries, benefits, and payroll taxes for all employees, including editors, writers, designers, and administrative staff.
- Accountancy fees: You will need to hire an accountant or accounting firm to handle your financial statements, tax returns, and other financial tasks.
- Insurance costs: As a publisher, you will need various types of insurance, such as liability insurance, property insurance, and workers' compensation insurance.
- Software licenses: You will need to purchase licenses for various software programs used in the publishing process, such as graphic design software, layout software, and content management systems.
- Banking fees: This includes fees for maintaining a business bank account, wire transfers, and other banking services.
- Printing costs: This includes the cost of printing physical copies of your magazine.
- Advertising and marketing expenses: You will need to allocate funds for advertising and marketing your magazine to attract readers and advertisers.
- Distribution costs: This includes the cost of shipping and delivering physical copies of your magazine to newsstands, subscribers, and other outlets.
- Website hosting and maintenance: You will need to pay for hosting services and website maintenance to keep your online presence up and running.
- Office rent and utilities: You will need to rent office space and pay for utilities, such as electricity and internet, to run your publishing firm.
- Research and development: You may need to invest in research and development to improve the quality of your content and stay ahead of industry trends.
- Travel expenses: This includes the cost of business travel for meetings, conferences, and other events related to your magazine publishing firm.
- Professional fees: You may need to hire lawyers, consultants, or other professionals for specific tasks, such as legal advice or market research.
- Office supplies: This includes the cost of office supplies, such as paper, ink, and other materials needed for day-to-day operations.
- Subscriptions and memberships: You may need to subscribe to industry publications or join professional organizations to stay informed and connected within the publishing industry.
This list will need to be adapted to the specifics of your magazine publishing firm but should be a good starting point for your budget.
How will I promote my magazine publishing firm's?
The next step to starting a magazine publishing firm is to think about strategies that will help you attract and retain clients.
Consider the following questions:
- How will you attract as many customers as possible?
- How will you build customer loyalty?
- Who will be responsible for advertising and promotion? What budget can be allocated to these activities?
- How many sales and how much revenue can that generate?
Once again, the resources required will depend on your ambitions and the size of your company. But you could potentially action the initiatives below.
Your magazine publishing firm's sales plan will also be affected by variations in consumer demand, like changes in activity during peak holiday seasons, and the dynamics within your competitive environment.
Can your business idea be profitable?
Just enter your data and let The Business Plan Shop crunch the numbers. We will tell if your business idea can generate profits and cash flows, and how much you need to get started.
Build your magazine publishing firm's financial forecast
The next step to start your magazine publishing firm: putting your financial projections together.
What is the financial forecast for a magazine publishing firm?
A forecast is a quantified decision-making document that shows the initial investment required to open a magazine publishing firm and the company's potential profitability and cash flow generation over the next 3 to 5 years.
As you think about your magazine publishing firm idea, the main role of financial projections will be to help you decide whether it makes sense to create the company.
Building a financial forecast helps determine the amount of initial financing required to start your magazine publishing firm.
In fact, creating financial projections is the only way to assess the amount of initial financing you'll need to open your magazine publishing firm, and to make sure your project makes economic and financial sense.
Keep in mind that very few business ideas are financially viable. At The Business Plan Shop, we've seen nearly a million business start-up ideas, and we estimate that less than one in four is economically viable.
Your forecast will therefore require your full attention and constant revision, as your project matures. It's also a good idea to simulate different scenarios to anticipate several possibilities (what happens if your sales take longer than expected to ramp up, for example), so you're ready for all eventualities.
When seeking financing, your forecast will be incorporated into your business plan, which is the document you will use to present your business idea to financial partners. We'll come back to the business plan in more detail later in this guide.
Creating and updating your magazine publishing firm's forecast is an ongoing process. Indeed, having up-to-date financial projections is the only way to maintain visibility over your company's future cash flow and cash position.
Forecasting is, therefore, the financial management tool that will be with you throughout the life of your company. Once you've started trading, you'll need to regularly compare the difference between your actual accounts and your forecasts, and then adjust them to maintain visibility over your future cash flows.
What does a financial projection look like?
The following financial tables will be used to present your magazine publishing firm's financial forecast.
The projected P&L statement
Your magazine publishing firm's forecasted P&L statement will enable you to visualise your magazine publishing firm's expected growth and profitability over the next three to five years.
The projected balance sheet of your magazine publishing firm
The projected balance sheet gives an overview of your magazine publishing firm's financial structure at the end of the financial year.
The cash flow projection
A cash flow forecast for a magazine publishing firm shows the projected inflows and outflows of cash over a specific period, providing insights into liquidity and financial health.
Which solution should you use to make a financial projection for your magazine publishing firm?
Using an online financial forecasting tool, such as the one we offer at The Business Plan Shop, is the simplest and safest solution for forecasting your magazine publishing firm.
There are several advantages to using specialised software:
- You can easily create your financial forecast by letting the software take care of the financial calculations for you without errors
- You have access to complete financial forecast templates
- You get a complete financial forecast ready to be sent to your bank or investors
- The software helps you identify and correct any inconsistencies in your figures
- You can create scenarios to stress-test your forecast's main assumptions to stress-test the robustness of your business model
- After you start trading, you can easily track your actual financial performance against your financial forecast, and recalibrate your forecast to maintain visibility on your future cash flows
- You have a friendly support team on standby to assist you when you are stuck
If you are interested in this type of solution, you can try our forecasting software for free by signing up here.
Choose a name and register your magazine publishing firm
The next phase in launching your magazine publishing firm involves selecting a name for your company.
This stage is trickier than it seems. Finding the name itself is quite fun; the difficulty lies in finding one that is available and being the first to reserve it.
You cannot take a name that is similar to a name already used by a competitor or protected by a registered trademark without inevitably risking legal action.
So you need to find a name that is available, and be able to register it before someone else can.
In addition, you will probably want to use the same name for:
- Your company’s legal name - Example LTD
- Your business trading name - Example
- The trademark - Example ®
- Your company’s domain name - Example.com
The problem is that the procedures for registering these different names are carried out in different places, each with their own deadlines:
- Registering a domain name takes only a few minutes
- Registering a new trademark takes at least 12 weeks (if your application is accepted)
- The time taken to register a new business depends on the country, but it's generally fast
You will therefore be faced with the choice of: either registering everything at once and hoping that your name will be accepted everywhere, or proceeding step by step in order to minimise costs, but taking the risk that someone else will register one of the names you wanted in the meantime.
Our advice is to discuss strategy with your legal counsel (see further down in this guide) and prioritise your domain names and registered trademarks. You'll always have the option of using a trade name that's different from your company's legal name, and that's not a big deal.
To check that the name you want is not already in use, you should consult:
- Your country's business register
- The relevant trademark registers depending on which countries you want to register your trade mark in
- A domain name reservation company such as GoDaddy
- An Internet search engine
In this area too, your legal counsel will be able to help with the research and formalities.
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Deciding upon the corporate identity of your magazine publishing firm
The next step in opening a magazine publishing firm is to look at your company's visual identity.
Your company's “visual identity” plays a crucial role in shaping your brand image. It helps you to be recognizable and to stand out from your competitors.
Although you can define your visual identity yourself, it is generally advisable to call on the services of a designer or marketing agency to achieve a professional result.
At a minimum, you will need to define the following elements:
- Logo
- Brand guidelines
- Business cards
- Website theme
Logo
Your magazine publishing firm's logo allows others to quickly identify your company. It will be used on all your communication media (website, social networks, business cards, etc.) and official documents (invoices, contracts, etc.).
In addition to its design, it's important that your logo is available in a variety of colors, so that it can be seen on all media (white, dark background, etc.).
Brand guidelines
Having brand guidelines enables you to maintain consistency in formatting across all your communications media and official documents.
Brand guidelines define the font (family and size), design and colours used by your brand.
In terms of fonts, for example, you may use Roboto in size 20 for your titles and Lato in size 14 for your texts.
The colours used to represent your brand should generally be limited to five:
- The main colour,
- A secondary colour (the accent),
- A dark background colour (blue or black),
- A grey background colour (to vary from white),
- Possibly another secondary colour.
Business cards
Designing business cards for your magazine publishing firm is a must, as they will allow you to communicate your contact details to your customers, suppliers, partners, potential recruits, etc.
In principle, they will include your logo and the brand guidelines that we mentioned above.
Website theme
In the same way, the theme of your magazine publishing firm website will be based on your logo and the brand guidelines we mentioned above.
This involves defining the look and feel of your site's main graphic elements:
- Buttons,
- Menus,
- Forms,
- Banners,
- Etc.
What legal steps are needed to start a magazine publishing firm?
The next step in opening a magazine publishing firm is to look in detail at the legal and regulatory formalities.
Although it is possible to do the formalities yourself and draft some of the documents detailed here, The Business Plan Shop recommends that you seek advice on these aspects from a law firm.
Registering a trademark and protecting the intellectual property of your magazine publishing firm
One of the first things you need to do here is to protect your company's current and future intellectual property.
One way of doing this is to register a trade mark, as mentioned earlier in this guide. Your lawyer will be in a position to do the formalities for you and to help you select the classes (economic activities) and jurisdictions in which you have an interest in obtaining protection.
Your law firm can also advise you on other ways of protecting your company's intellectual property.
Preparing the legal documents for your magazine publishing firm
Your magazine publishing firm will need a set of legal and contractual documents to operate on a daily basis.
Your exact needs in this respect will depend on the country in which you are launching your magazine publishing firm and the size and legal form envisaged for the company. Once again, we highly recommend having these documents prepared by your lawyer.
As a minimum, we recommend that you have the following documents prepared:
- Employment contracts
- General terms and conditions of sale
- General terms and conditions of use for your website
- Privacy Policy for your website
- Cookie Policy for your website
- Invoices
- Etc.
Applying for licences and permits and registering for various taxes
Here too, the list of licences and business permits required for your business to operate legally will depend on the country in which you have decided to start your magazine publishing firm.
Your law firm will be able to advise you on all the regulations applicable to your business.
Likewise, your accountant will be able to assist you and take care of the formalities involved in complying with the tax authorities.
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Writing a business plan for your magazine publishing firm
The next step in opening a magazine publishing firm is to draw up your business plan.
What is a magazine publishing firm's business plan?
A business plan serves as a comprehensive roadmap outlining the objectives, strategies, and key components of your venture.
There are two essential parts to a business plan:
- A numerical part, the financial forecast we mentioned earlier in this guide, which highlights the amount of initial financing needed to launch the business and its potential profitability over the next 3 to 5 years,
- A written part, which presents in detail the project of creating a magazine publishing firm and provides the necessary context to enable the reader of the business plan to judge the relevance and coherence of the figures included in the forecast.
Your business plan helps guide decision-making by showcasing your vision and financial potential in a coherent manner.
Your business plan will also be essential when you're looking for financing, as your financial partners will ask you for it when deciding whether or not to finance your project to open a magazine publishing firm. So it's best to produce a professional, reliable, and error-free business plan.
In essence, your business plan is the blueprint to turn your idea into a successful reality.
What tool should you use to create your magazine publishing firm business plan?
If you want to write a convincing business plan quickly and efficiently, a good solution is to use an online business plan software for business start-ups like the one we offer at The Business Plan Shop.
Using The Business Plan Shop to create a business plan for a magazine publishing firm has several advantages :
- You can easily create your financial forecast by letting the software take care of the financial calculations for you without errors
- You are guided through the writing process by detailed instructions and examples for each part of the plan
- You can access a library of dozens of complete startup business plan samples and templates for inspiration
- You get a professional business plan, formatted and ready to be sent to your bank or investors
- You can create scenarios to stress test your forecast's main assumptions
- You can easily track your actual financial performance against your financial forecast by importing accounting data
- You can easily update your forecast as time goes by to maintain visibility on future cash flows
- You have a friendly support team on standby to assist you when you are stuck
If you're interested in using our solution, you can try The Business Plan Shop for free by signing up here.
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Financing the launch of your magazine publishing firm
Once your business plan has been written, you’ll need to think about how you might secure the funding required to open your magazine publishing firm.
The amount of initial financing required will of course depend on the size of your magazine publishing firm and the country in which you wish to set up.
Financing your startup will probably require you to obtain a combination of equity and debt, which are the primary financial resources available to businesses.
Equity funding
Equity refers to the amount of money invested in your magazine publishing firm by founders and investors and is key to starting a business.
Equity provides your company with stable, long-term (often permanent) capital. It also demonstrates the commitment of the company's owners to the project, since these sums can be lost in the event of bankruptcy.
Because the equity invested by the founders may be lost if the project doesn't succeed, it signals to investors and other financial institutions the founders' strong belief in the business's chances of success and might improve the likelihood of obtaining further funding as a result.
In terms of return on investment, equity investors receive dividends paid by the company (provided it is profitable) or realise capital gains by reselling their shares (provided they find a buyer interested in the company).
Equity investors are, therefore, in a very risky position. They stand to lose their initial investment in the case of bankruptcy and will only obtain a return on investment if the business manages to be profitable or sold. On the other hand, they could generate a very high return if the venture is a financial success.
Given their position, equity investors are usually looking to invest in business ventures with sufficient growth and profitability potential to offset their risk.
From the point of view of the company and its creditors, equity reduces risk, since equity providers finance the company and are only remunerated in the event of success.
From a technical standpoint, equity consists of:
- Share capital and premiums: which represent the amount invested by the shareholders. This capital is considered permanent as it is non-refundable. In return for their investment, shareholders receive shares that entitle them to information, decision-making power (voting in general assembly), and the potential to receive a portion of any dividends distributed by the company.
- Director loans: these are examples of non-permanent capital advanced to the company by the shareholders. This is a more flexible way of injecting some liquidity into your company than doing so as you can repay director loans at any time.
- Reserves: these represent the share of profits set aside to strengthen the company's equity. Allocating a percentage of your profits to the reserves can be mandatory in certain cases (legal or statutory requirement depending on the legal form of your company). Once allocated in reserves, these profits can no longer be distributed as dividends.
- Investment grants: these represent any non-refundable amounts received by the company to help it invest in long-term assets.
- Other equity: which includes the equity items which don't fit in the other categories. Mostly convertible or derivative instruments. For a small business, it is likely that you won't have any other equity items.
The main sources of equity are as follows:
- Personal contribution from the founders' savings.
- Private investors: business angels, friends and family.
- Crowdfunding campaigns to find investors or collect donations (usually in exchange for a gift).
- Government initiatives such as loans on favourable terms to help partners build up their start-up capital.
Debt funding
Another option for partially funding your magazine publishing firm is to borrow.
By definition, debt works in the opposite way to equity:
- Debt needs to be repaid, whereas equity is permanent.
- Lenders get a contractually guaranteed return, whereas equity investors only generate a return if the company is a success.
When a company borrows money, it agrees to pay interest and repay the borrowed principal according to a pre-established schedule. Therefore, lenders make money regardless of whether the company is profitable and their main risk is if the company goes bankrupt.
To limit their risk, lenders are usually conservative and cautious in their approach. They only finance projects where they are confident that they will be repaid in full.
Companies borrow in two ways:
- Against their assets: this is the most common way of borrowing. The bank finances a percentage of the price of an asset (a vehicle or a building, for example) and takes the asset as collateral. If the company cannot repay, the bank seizes the asset and sells it to limit its losses.
- Against their future cash flows: the bank evaluates the company's financial forecast to estimate its borrowing capacity and assesses the conditions (amount, interest rate, term, etc.) on which it is prepared to lend, taking into account the credit risk posed by the company.
It's difficult to borrow against future cash flow when setting up a magazine publishing firm, because the business doesn't yet have historical data to reassure lenders about the credibility of the forecasted cash flows.
Borrowing against assets is, therefore, often the only option available to entrepreneurs. What's more, the assets that can be financed with this option must be easy to resell, in the unfortunate event that the bank is forced to seize them, which may limit your options even further.
In terms of possible sources of borrowing, the main sources here are banks and credit institutions. Bear in mind, however, that each institution is different, both in terms of the risk it is prepared to accept and in terms of how the risk of your project will be perceived and what items it will agree to finance.
In some countries, it is also possible to borrow from private investors (directly or via crowdlending platforms) or other companies, but not everywhere.
Things to remember about financing a magazine publishing firm
There are various ways you can raise the initial financing you need to open your magazine publishing firm. A minimum amount of equity will be needed to give the project credibility, and bank financing can be sought to complete the package.
Track your actuals against your forecast
You've reached the end of the road and are ready to launch your magazine publishing firm.
Congratulations and welcome to the fantastic world of entrepreneurship! Celebrate the work you've done so far, and get back to work quickly, because this is where the real work begins.
Your first priority will be to do everything you can to make your business sustainable (and thus avoid being one of the 50% of start-ups that fail within five years of launching).
Your business plan will be your best ally to ensure that you're on track to achieve your objectives, or to help rectify the situation if necessary.
The key to financial management is to regularly compare your actual accounting data with your magazine publishing firm forecasts, in order to be able to :
- Quantify the gaps between what you planned and what you achieved
- Adjust your financial forecasts as the year progresses to maintain visibility over your future cash flow
No one can predict the future with certainty, but by closely monitoring the variances between actuals and forecasts, regularly adjusting your forecasts and simulating several scenarios, you can prepare your magazine publishing firm for the worst while hoping for the best.
It's the only way to keep an eye on your cash flow and actively manage the development of your magazine publishing firm, ultimately reducing the risk to your company.
There's nothing worse than waiting for your company's annual accounts to close, which can be many months after the end of your financial year (up to nine months in the UK for example), only to realize that you've fallen far short of your forecasts for the past year, and that your magazine publishing firm urgently needs a cash injection to keep going.
That's why it's strongly recommended to use a financial planning and analysis solution that integrates forecasting, scenario analysis, and actuals vs. forecast tracking, like we do at The Business Plan Shop with our financial dashboards.
Need inspiration for your business plan?
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Key takeaways
- To open a magazine publishing firm you need to go through each of the 15 steps we have outlined in this guide.
- The financial forecast is the tool that will enable you to check that your project can be profitable and to estimate the investment and initial financing requirements.
- The business plan is the document that your financial partners will ask you to produce when seeking finance.
- Once you have started trading, it will be essential to keep your financial forecasts up to date in order to maintain visibility of the future cash flow of your magazine publishing firm.
- Leveraging a financial planning and analysis platform that seamlessly integrates forecasts, business plans, and real-time performance monitoring — like The Business Plan Shop — simplifies the process and mitigates risks associated with launching a business.
We hope this practical guide has given you a better understanding of how to open a magazine publishing firm. Please do not hesitate to contact our team if you have any questions or if you would like to share your experience of setting up your own business.
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Founder & CEO at The Business Plan Shop Ltd
