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Selecting the finance Options

If you’ve followed the steps presented in the last chapter, you are probably ready to get started with your magazine’s creation.  However, before you do this, you need to think about how you’re going to fund everything.  Otherwise, the hours spent working on your publication would be a waste of time, since you won’t have money to distribute it.  

So, what kind of costs can one expect to pay when they begin a magazine?  It will depend on several factors, each of which are discussed in the section below.

Factors Determining the Cost of Your Magazine

  1. Physical Size

The standard sizes for magazines are 5 ½ x 8 ½ and 8 ½ x 11.  And, as you might expect, magazines that are 8 ½ x 11 are usually much more expensive than those that are 5 ½ x 8 ½.  However, since the majority of magazines tend to go with this larger size, you may want to think twice before using anything different.  This is especially the case for paid publications.  

Of course, if your budget is really tight sticking with 5 ½ x 8 ½ is better than nothing.  Yes, your layout will be skinnier, but at least you still get an opportunity to get things in print.  

  1. Number of Pages

The next factor that determines your magazine’s cost is its number of pages.  Usually, the minimum number of pages you can have is 8, though most major publications will have much more.  But, if 8 is all you can afford, you’re going to have to learn to work with what you have.  Just keep in mind you need to dedicate some space for your advertisers, since they will make up a large percentage of your revenue.  

  1. Whether or not You Use a Printing Company

On the surface, it may seem cheaper to handle printing yourself, since printing companies are still looking to return a profit.  And with many laser printers costing less than $500, getting started is not all that expensive.  However, you must also factor in the cost of paper and ink, as well as the amount of time it will take to get your magazine printed and bound.  In fact, when you think about the time issue, it is probably still better paying a little more and getting your magazine printed by a professional company.

If you do go that route, you can pay as little as $134 for 50 magazines, (assuming they are 8 pages and 5 ½ x 8 ½).  Best of all, you won’t have any issues with your magazine’s quality.  This may not be the case if you’re doing things yourself since you still need to learn how to get both the layouts and the binding correct.

  1. The Extent of Your Advertising Campaign

For many magazine entrepreneurs, the costs of their advertising campaign could

actually, supersede their printing costs.  This is especially the case if one advertises their publication through more expensive venues such as television, radio or billboards.  Even cheaper advertising alternatives such as Internet marketing and direct-mail can run you hundreds if not thousands of dollars.  So, no matter how you look at it, even if you spend very little on the magazine itself, you’re still going to need some money to get the word out that it even exists.

  1. Staffing

Do you plan on making your magazine a one-man operation or are you going to hire employees?  If you do the latter, you’re going to need more money upfront.  However, there are ways of cutting corners, whether it’s asking for free articles or looking for Internet writers/editors to handle your content.  You’ll learn more about this in the next chapter.

  1. Software

At the very least, you’re going to need word processing software to begin your magazine business.  And, if you get Microsoft Word, you’ll need to pay around $100.  The only exception is if you get Open Office, a free word processor available at http://download.openoffice.org/index.html.  It is capable of reading Word files, though it doesn’t have as many features.

Yet, be aware that even Word is not automatically designed to handle magazine layouts.  You will have to either create a layout yourself by manipulating Word’s tables or you will have to use a template.  The latter option is much easier, though you lose some creative control.

Of course, if you have advanced graphic design skills, you can also use magazine layout software to create your publication.  Examples of such software include Quark and Adobe Indesign.  Both are very effective, though they do cost money.  Expect to pay $650 or more for these packages.

  1. Distribution

Distribution is another area where magazine entrepreneurs could find themselves spending thousands of dollars… at least if they want to use newsstands and bookstores to circulate their publication.  Not only will they need to pay the distributor, but they will also have to produce the magazine en mass.  They may have to print out tens of thousands of copies before the distributor could even consider an agreement.  And, when you do the math, producing this many copies upfront could force you to pay an insane amount of money.

For this reason, you may want to consider smaller-scale distribution using Internet marketing.  With this approach, you would use a website to attract a few subscribers at a time.  If you reach your limit, you can either distribute online or put a hold on everything until you get more funds.  Sure, it may not be as dignified as putting your magazine on newsstands, but it does allow you to control your production costs.  

So, taking each of these 7 factors into consideration, what is the minimum amount an entrepreneur would need to launch a magazine?  Well, if you’re handling your own distribution and you don’t mind printing the smallest magazine possible, you’ll need at least $1,000.  And this is assuming that you’re distributing just a few dozen magazines at a time.

If you want to create a more ‘normal’ magazine, while still handling your own distribution, you will need around $5,000 upfront.  At this amount, you can use a cheap printing company to produce 2,500 20-page magazines.  The rest of the monies would go for content creation, advertising and mailing.  

For a larger scale operation, you will need around $100,000+ upfront.  This will allow you to print thousands of magazines at one time.  In addition, you will have more marketing options, whether it’s working with newsstands and/or advertising your magazine on cable television, radio or billboards.

All in all, you’re going to need to have some money to work with, no matter what level you’re on.  And, if you’re like the majority of middle-class people, even coming up with $1,000 might be a bit much, especially since this is usually a month of rent for many people.  Coming up with $5,000+ becomes even more challenging.  

But don’t fret just yet.  Believe or not, even if you’re making minimum wage, there are still a plethora of ways you can fund your magazine business.  And it’s not always getting a business loan.  In fact, as a person who doesn’t really like going through that process, I would say try to avoid using a business loan unless you have a solid business plan you can present to the bank.  If you get approved, you’ll get tons more money to work with, but there’s no guarantee you’ll ever get to that step.  Plenty of people with excellent credit and superb business plans still get denied loans, which can be really disheartening.  

That’s why it’s best to think outside of the box when it comes to funding your magazine.  Yes, you won’t have the money to produce the next Vogue, but you will have enough funds to return a profit and get your name out there.  And, in the long run, that’s what matters more.  Remember, depending on what you charge, even a few dozen loyal subscribers and advertisers could be enough for a job-free lifestyle.

With that being said, look at the section below to get an idea of some alternative funding options you can use to create your magazine.  

Easy Funding Options

  1. Tax Refund/Stimulus Payment

Tax refunds are one of the best ways to fund a business.  They usually come in larger amounts and they require no interest payments.  The only downside is that you’ll have to wait until tax season before you can take advantage of them.  

But try to make the best of the time you have.  Read up on what type of deductions you can use to optimize your return.  And make sure you save your receipts so you can actually take advantage of them.

Also consider lowering your exemptions.  In fact, an exemption of zero is optimal, because it will allow you to get a larger amount back.  But if your budget can’t afford this, see what an exemption of ‘1’ can do for you.

  1. Credit Card

Even if you live on a modest salary, if your credit is average, you should have no problems getting a credit card of $1,000.  Use this money to start your magazine business, but try not to charge up everything at once.  Remember, with a credit card you have to make interest payments, so you need to spend with caution.  

Now, if you have bad credit, your credit card options are more limited though they are still there.  It’s just that you will need to consider getting a subprime credit card.  With these types of cards, you’ll have to pay a higher interest rate.  You may also get a smaller amount of funds upfront.  So, it’s not an ideal situation, but if you don’t have any other money stowed away, it will still be enough to at least get you started.

  1. Mortgage Refinancing

If you own a house, you can try for mortgage refinancing.  Most homeowners do this at

some point anyway, because it allows them to make payments at a lower interest rate.  In the process, homeowners sometimes get thousands back.  If this situation applies for you, the money can go for your magazine business.  

And, like credit cards, there are subprime mortgages available for people with bad credit.  One type almost guarantees acceptance… it is known as a hard-money loan.  The way it works is simple.  The lender finances up to 65% of your property’s appraised value.   As a result, you get a more affordable payment as well as cash cushion up front.  

However, be careful with hard-money loans, since most tend to be short-term.  At the end of the term, you would have to make a balloon payment.  This means you would have to pay the full amount of your house.  If you don’t, your house will be foreclosed on.

  1. Personal Budgeting

If you can save $85 a month, in a year you would have $1,020.  This is just enough to start a low-end magazine.  Of course, you will have to wait until the money accumulates, but in some ways this is a good thing.  Why?  Well, you can use the extra time to begin developing your content.  And, if you don’t use any ghostwriters, you won’t have to pay anything to create your articles.  Plus, assuming you can write just 2 articles a month, by the time your bank account reaches $1,020, you will have 24 articles ready to put in your magazine.

  1. Selling Things

If you’re willing to part with your flat screen television, leather sofa and other more expensive belongings, you should be able to easily come up with the minimum amount needed to fund your magazine.  You might be able to get even more money if you’re willing to sell a second or third car you’re not using.  Indeed, if you get yourself into the right mindset, you’d be surprised at how much money is available through your personal possessions.  

Now, if you don’t have enough money to place classified ads, you can use sites like Craigslist or US Free Ads to place free ones.  Also, don’t forget the power of eBay and other auction sites.

  1. Friends and Family

If your friends and family are strapped for cash, chances are they’re not going to be able to give you $1,000… at least individually.  So, what you could try to do instead is an attempt to get loans of $50 from 20 family members or friends.  Some people may still say no, but others may think about it, since $50 is a lot easier to lend out.

  1. Odd Jobs

Do you have a talent for website design or Internet writing?  If so, you may be able to collect funds by doing jobs for online marketers.  You can advertise your services on free classified ads or you can pay $20 and post a WSO (Warrior Special Offer) on Warrior Forum.  The latter should bring you the quickest results, though be aware that you will need to make several relevant posts before you are able to post a WSO.  To be on the safe side, I would recommend around 150.

  1. Business Cash Advance

This is an option for entrepreneurs who are accepting credit card payments for an existing business, (doesn’t matter what industry it is in).  And, if these credit card payments total at least $2,500 per month, a lender will probably feel the business is secure enough to offer a cash advance.  No monthly payments are required because all monies get paid out through each credit card transaction that is made.

Sound too good to be true?  Well, lenders don’t mind doing this because they’re basing their advance on the strength of a business’s stability.  Remember, unlike many business loans, business cash advances are given to enterprises that are already making money.  That’s why they are so much easier to get.  In fact, some lenders even brag about their high approval rate for these advances… rates that sometimes go over 90%!  

  1. Grants

Grants, especially those from the government, can be almost as difficult as business loans, but I would say you should still try for them.  Why?  Well, with a grant, you are getting free money.  You are not obligated to pay a grant back, even if your magazine business fails.  But with a business loan, you are still responsible for the payment, whether you return a profit or not.  The only exception is if you file bankruptcy, which leaves a horrendous mark on your credit report.

  1. Pre-Advertising

Finally, there’s the option of trying to acquire funds through ‘pre-advertising.’  What is

‘pre-advertising’?  It involves offering a business the promise of ad space in your magazine.  When the magazine is printed, you will fulfil your promise by actually including whatever ad the person ordered.

Now, trying to get funding through this method is not going to be easy, mainly because as a beginning magazine company, you don’t have anything you can show your clientele.  That’s why if you’re going to things this way, you will want to try your best to produce your first issue… even if you have to write and design everything yourself.  From there, you can show this issue to your clients, so they can get an idea of what your magazine is about.  If they think your magazine is appealing enough they may not mind risking their money.

As far as the clients themselves, you should probably go for people like you… other entrepreneurs looking to make money from their home businesses.  The above-mentioned Warrior Forum has tons of people like this, though you can find others on at-home message boards or through online classified ads.  

Anyway, appeal to their emotions by being honest with them.  Also, whet their appetite by offering a price that is insanely low… maybe $20.  If you can get 100 responses, that’s $2,000, which is a profit of $1,000.  Granted, it’s still not what the big boys make, but remember you’re not on their level yet.  Once you have secured your base of subscribers, you can work with ad agencies to obtain contracts worth 10 times more.  But for now, just work with what you got.


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