Developing a magazine business plan.
Does your publication have a business plan? This was the latest question we posed to association publishers in our annual survey of magazine operations. Of the 10 association magazine publishers surveyed, six answered yes.
Is your association doing magazine business planning? If not, the experiences of these association professionals may help you decide whether you want to start the planning process. But before you do, Matthew J. Rowan, assistant deputy director, publishing and marketing, for the Water Environment Federation, Alexandria, Virginia, suggests making sure your strategic plan is in order.
According to Rowan, business planning is necessarily tied to strategic planning. "You must have a strategic plan in place in your organization, because you have to know where you're headed," he says. "A business plan would be hampered without a strategic plan in place."
However, the two plans are different. Keep your board of directors focused on the strategic plan - the forward-thinking, big-picture analysis of the organization, Rowan advises. The business plan, on the other hand, should be the staff-driven, here's-how-we're-going-to-make-it-all-come-together planning document.
Following is a look at how three association magazines are handling business planning.
Water Environment Federation (WEF). Rowan's division publishes a monthly flagship magazine, Water Environment & Technology, as well as eight other publications. For the past three years, the entire organization has undertaken annual business planning. Established before the association's budget, the business plan presents "program overviews and missions, core activities and new initiatives, and recent continuous improvements," explains Rowan, as well as resource requirements for new and continuing programs. Started primarily to foster improved budget forecasting, the business planning process has effectively "made the whole organization more conscious of the dollars being spent and the return we get Oil that investment."
From Rowan's office comes the business plan for all of WEF's periodicals. The strategic-initiative portion of the plan elaborates the particulars of any given project. For example, all initiative for 1998 may have been to launch a new weekly publication targeting industry executives. In this case, the business plan would elaborate on the new publication's mission, goals, target market, and financial performance measures.
Although the periodicals' plan comes from Rowan's office, business plan development isn't a single person's job. "It's a collaboration between the officer core, vice-president-level executives, and program directors," he says. Ideas on new projects and resources are generated from staff and members and compiled into the plan's first draft. The plan is then discussed with the executive leadership team, and from there a second draft goes to the officer core (called the executive committee in some organizations) along with a draft budget. All said, the process takes almost a year to complete, with the WEF board of directors approving the business plan and budget in the fourth quarter.
What makes the document effective? According to Rowan, the fact that the plan is agreed upon by all levels of the organization helps it work. "The business plan is a communication tool that aligns the organization," he says. Also, "because it's evaluated annually, it's a good performance-measurement tool."
Another reason it works: Staff know how to get their projects accomplished by working within the business planning cycle. "Everyone understands the business plan is the way to get new ideas and new staff approved and funded. With the business plan, there is a time in the year set aside to plan, evaluate, and discuss. The rest of the year is spent working the plan."
For WEE creating a plan that works didn't happen overnight. Initially, the plan was to be a three-to-five-year strategic plan, which according to Rowan looked too far into the future. However, after learning more about business planning, the organization now has a useful tool. "I think in the beginning we put way too much information, too much history, into the business plan. Now the document is half its original size and it's a much more effective, usable tool," says Rowan. "The last couple of plans we've completed have done what they are supposed to do - drive the day-to-day work of the organization."
Environmental Industry Associations. When your association's flagship magazine operates as an industry publication with "real" for-profit competition, business planning becomes more important, since your competitors likely operate under business plans. At least that's what John T. Aquino, editor-in-chief and publishing director of Waste Age Publications for the Environmental Industry Associations, Washington, D.C., says. Aquino explains: "Our monthly magazine, Waste Age, is owned by the association, but it's not a benefit of membership. It's designed to be run as a business and function as an industry publication . . . . It reports on the industry, not the membership."
For the seven-and-a-half years Aquino has been with the magazine, business planning has always been on the agenda. Updated once a year, the plan projects three years into the future and reviews three years prior to assess every aspect of the publishing program. For the magazine specifically, the assessment looks at the editorial content, circulation, advertising, marketing, and financial reporting, he says. The business plan also provides a market and competitor analysis.
Although business planning is often a time of self-assessment, Aquino says that "about once every three years we bring in outside consultants to review our operations and provide an objective perspective." For example, Aquino explains, "our last consultant was very helpful [in providing] advice about our design and in confirming our advertising approach." In addition, every two years the magazine conducts a third-party readership survey. Results from the survey also help shape the business plan. "Between internal review, readership surveys, and external review we spend a lot of time in self-assessment at various times of the year," Aquino adds.
Does so much self-assessment have any disadvantages? One possible pitfall is that an organization could spend too much time looking inward - self-assessing - and neglect to actively report on the industry, Aquino warns. The mission of any trade association magazine, he says, should be to help the readership do their jobs more efficiently, safely, and profitably through the reporting of industry news, business features, and company profiles. And, he adds, "if your mission is to help your readers do their jobs better, you have to know their jobs," and this knowledge develops by looking outward at the industry.
Another shortcoming of the magazine business plan is that it doesn't measure the intangibles. "Even an association publication that's run as a business provides exposure for the association - and that's something that isn't tracked in a business plan," Aquino explains. "A business plan is extremely important, but you also have to acknowledge that there are intangibles such as goodwill, name recognition, and trademark value - that's all a part of the value of a magazine even if you're not trying to sell it."
American Automobile Association (AAA). No matter how important magazine business planning may seem, it's important to remember that the planning document means nothing if it's not realistic. Car & Travel magazine, published by AAA, Heathrow, Florida, learned this lesson the hard way. The magazine was launched in 1995 with 18 regional editions as the official magazine for 12 AAA clubs around the nation. The magazine's 1994-1998 business plan had several objectives. It called for an aggressive recruitment of additional AAA clubs to use the magazine, a new design, and a name change (from AAA World to Car & Travel) to help generate enthusiasm for the magazine among the clubs and the membership. The association succeeded on those fronts and in 1995 the premier issue of Car & Travel was published. "We changed our name, added five clubs, and went from 2.5 million to 5 million in circulation," says Marianne Camas, editor in chief of AAA's Car & Travel. However, one key component of the business plan was unsuccessful. The advertising revenue goals projected in the business plan were not met. That, coupled with other internal challenges, including a division divestiture (which ultimately led to the magazine's loss of seven editions and nearly half its circulation), signaled trouble for the magazine. "The interesting thing," Camas says, "is that there was a business plan in place and the plan covered the contingency of losing the divisions, but it did not account for the failure to sell the projected advertising." The result: "The magazine will no longer be produced by the national office by the end of the year," Camas says. "The board of directors of AAA has decided to get out of the magazine publishing business."
What, if anything, could have been done to avoid this business planning snafu? Hindsight reveals that slow reaction to change was one culprit. "In our particular plan, the ad rates were much too high. Therefore, no one was buying much advertising," Camas explains. "As soon as we realized the problem, we should have cut the rates - we should have cut our losses then and there. But by the time a decision was made to cut the rates, it was too late; the word was out not to buy Car & Travel."
But the turn of events at AAA hasn't turned Camas against magazine business planning. In fact, she says, "I think you have to have a plan in order to succeed, but the plan has to be fundamentally sound. There were things in our plan that worked very well. It's just unfortunate that the linchpin didn't." Aside from modifying their business plan to accommodate changes in the advertising projections, Camas also believes that an outside perspective may have changed their outcome. "We should have had an outside consulting firm look at our plan. I think having an outsider's view, someone who didn't have an emotional stake in things, would have helped."
If you're just beginning magazine business planning, here are some keys to planning success.
* Don't expect perfection. "Expect that your third business plan is one you'll be happy with. The first two will be a lot of work and you might not be happy with them. By the third one you'll start to get something that's useful." - Rowan
* Keep it realistic. "A plan is only as good as your ability to carry it out. If your plan is based on unrealistic expectations, then you can expect problems down the line." - Camas
* Modify, modify, modify. "You have to be able to modify your business plan. If something is not working, you have to fix it." - Camas
* Don't count on increased revenue. "I don't think that there is a guarantee that doing a business plan will help you generate revenue. There are too many day-to-day variables that can affect your revenue. But without a business plan, you will never be competitive." - Aquino
* Express your association's culture. "Your business plan should be adapted to your association, your style. Consequently, there are no forms to fill out." - Aquino
* Give it plenty of time. "If you're going to write a business plan, give it more time than you think you need. Once you start the process, you'll find that there's a lot more to it than there first appears." - Camas
All said, whether or not structured magazine business planning is a good fit for your organization, one attribute of business planning can be helpful to any association: It carves out time to think. "A business plan requires you to think about why you're doing what you're doing," Aquino says. "The thing about magazine publishing is that sometimes the publication just has to get out. We all do the 'get the job done' aspect of our work, but the stepping back, analyzing the best way to do it or even why we're doing it, is something we have to make an effort to do."
Key to Survey Respondents
* American Jewelry Manufacturer, Manufacturing Jewelers and Silversmiths of America, Providence, Rhode Island
* The American School Board Journal, National School Boards Association, Alexandria, Virginia
* Arthritis Today, Arthritis Foundation, Atlanta
* ASSOCIATION MANAGEMENT, ASAE, Washington, D.C.
* Car & Travel, American Automobile Association, Heathrow, Florida
* Marine Electronics Journal, National Marine Electronics Association, New Bern, North Carolina
* School Foodservice & Nutrition, American School Food Service Association, Alexandria, Virginia
* Sonoma County Physician, Sonoma County Medical Association, Santa Rosa, California
* Waste Age, Environmental Industry Associations, Washington, D.C.
* Water Environment & Technology, Water Environment Federation, Alexandria, Virginia
LaRonda R. Miller is editorial assistant for Association Management.
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|Author:||Miller, LaRonda R.|
|Date:||Jul 1, 1998|
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