M A RCH 14, 2014
BUSINESS PROPOSAL VICTORIA CARPENTER BA Applied Media, Year 3
THE LITTLE BOUTIQUE MAGAZINE CO
BUSINESS PROPOSAL VICTORIA CARPENTER BA Applied Media, Year 3
CONTENTS Q1: WHAT DOES YOUR BUSINESS DO? Q2: WHO MIGHT BUY THIS PRODUCT? Q3: WHAT DEVELOPMENT DOES YOUR IDEA NEED? Q4: WHY WILL CUSTOMERS BUY YOUR PRODUCT? Q5: ESTIMATE A PRICE FOR YOUR PRODUCT? Q6: HOW WILL YOU SELL YOUR PRODUCT? Q7: HOW MIGHT YOU MAINTAIN COMPETITIVE ADVANTAGE? Q8: WHAT IMPACTS MIGHT YOUR BUSINESS HAVE? Q9: WILL THE MARKET SUPPORT YOUR BUSINESS AMBITIONS? Q10: WHAT BARRIERS DO YOU NEED TO OVERCOME? Q11: WHAT LEGAL ISSUES APPLY TO YOUR BUSINESS? APPENDIX: FINANCIAL DETAILS
Q 1 : W H AT D O E S YO U R B U S I N E S S
DO?
THE LITTLE BOUTIQUE MAGAZINE CO
We produce bespoke digital and print customer magazines for small and medium businesses all around the UK.
INCREASING REVENUE, REDUCING COSTS
In the current media-soaked marketplace, businesses must compete for customers’ attention before they can compete for sales. Producing a brochure or magazine which has high impact headlines, compelling written content and beautiful photography is a proven way to attract and engage new customers. Many small to medium enterprises produce marketing material which fails to engage the customer. Professionally produced magazines material will get greater pick up, meaning fewer wasted copies and lower print costs for you. Photography and writing produced for the magazine can be used in other marketing materials and on your website, making your money go further.
A ONE STOP SHOP TO SAVE YOU TIME
Currently most small to medium businesses go to design agencies or printers to get their brochures produced. However, these companies will ask you to provide your own written or photographic content. This takes time, money and knowledge. Poor photography or writing will result in a poor quality, ineffective marketing product. We will combine high quality content with high quality design and images to create a professional and effective product.
DIGITAL MAGAZINES TO REACH MORE CUSTOMERS We produce digital magazines in harmony, or as an alternative, to the print magazine. Media rich content such as video or interactive maps can reach an even wider and rapidly growing market (7 out of 10 people in the UK currently own a smartphone). Distribution is widened and it is an eco-friendly option.
Q2: WHO MIGHT USE THIS SERVICE?
KNOW YOUR CUSTOMERS • Medium Enterprises with 50+ employees who may wish to divert money spent on advertising in other media, to producing their own. (There are over 30,000 in the UK). • SMEs who target an AB1 client base (households of professionals or managers at intermediate or high level) and who wish to clearly establish a high quality brand identity • Larger businesses with a marketing department which will outsource this work to a specialist agency. • Town and county councils, who can use a town trail magazine with an interactive digital version to promote their local area. We aim to make this an area of specialisation. • Membership-based institutions who want to communicate with their members and attract new members/customers.
HERE ARE SOME EXAMPLES OF COMPANIES WHO INVEST IN CUSTOMER MAGAZINES •
Holiday rental companies who wish to produce a one-off guide to the local area. We can enhance this with an interactive smartphone version for their customers.
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Food producers who wish to demonstrate through recipes and chef interviews the quality of their produce and the potential ways it can be enjoyed.
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Fashion retailers who would benefit from tap/click-and-buy technology in a magazine.
CORNISH SMES ALREADY INVESTING IN CUSTOMER MAGAZINES INCLUDE IROKA, UNIQUE HOME STAYS AND DASH
Q 3 : W H AT D E V E LO P M E N T D O E S YO U R IDEA NEED?
PRACTICE MAKES PERFECT
The following are areas of the business which need development and the steps being taken to achieve this. NAME AND BRANDING
I need to demonstrate strong awareness of the importance of design and branding. I am trialling three names through surveys and have been working on design identity, with specific fonts and colour palletes throughout my BA course.
WEBSITE
A strong web presence is important. I have qualifications and experience in web design, but will hire professional help to refine and to improve and maintain SEO. Social networking sites will be integrated. The website will include sample prices and samples of digital magazines.
MORE MARKET RESEARCH
I need feedback from potential customers. i am conducting an anonymous online survey as well as making discreet enquiries through networking to test demand and pricing and to clearly identify target customers.
TEST RUN PROJECTS
To get a clear idea of logistics, including costs, timescales, design and print issues and client feedback I have been making mock-up magazines: • TRURO TRAIL A mock-up magazine, print and digital issue, plus website, integrated and created for the Royal Cornwall Museum to assist with a funding application. www.trurotrail.com • CHARITY MAGAZINE I am making a magazine for the charity Made for Life, founded by Spiezia owner Amanda Barlow. My aim is to try out potential team members, assess costs and work out a process of product creation which satisfies the customer. Also to test print materials.
Q4: WHY WILL CUSTOMERS BUY THIS?
MORE FOR YOUR MONEY 6 good reasons to invest in your own customer magazine
A large UK study revealed the following statistics. Customer magazines:
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• Are twice as popular as all other forms of direct marketing e.g. direct mail • Increase brand loyalty by 32% • Increase share of wallet by 8% • Provoke response – 44% of readers were found to interact with a brand as a direct result of reading a customer magazine • Engage readers for an average of 25 minutes – a time period other media can only dream of! It’s the same as 50 30-second TV slots or 187.5 poster views
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Increase sales: Make your catalogue or price list into a magazine and you will boost sales. Save money: Fewer copies will be wasted as more customers will pick them up, saving print costs. Re-useable material: photography and words are yours to use on websites and other marketing content. Boost your brand: Stand out in a crowded market. Long term benefits: A takehome magazine will engage customers long after they have left your premises. Digital benefits: online magazines are environmentally friendly, have no geographical boundaries and are a cheap way of distribution. You can add audio, animation, video and ecommerce options, as well as direct links to your website.
(Sources: DMA; APA; Billetts Media Auditing; the Branded Content Marketing Association)
WHAT ARE THE ALTERNATIVES? ADVERTISING IN CONSUMER PUBLICATIONS
“Why spend €40,000 a page to advertise in Vogue when, for the same amount of money, you can publish an entire magazine?”
Alice Litscher, communication professor at the Institut Français de la Mode in Paris.
The figures may differ but the point which Alice Litscher makes is the same if you are advertising in the West Briton or Cornwall Life as if you are advertising in Vogue. In Cornwall, many SMEs spend £5,000+ on yearly advertising in just one publication. We can offer a bespoke, tailor-made digital and print magazine for the client for half the cost. GRAPHIC DESIGN AGENCIES AND PRINTER DESIGN STUDIOS
The quality of the product we provide for the customer will be better because the writing and photogaphic content is professionally produced and commissioned by our team of experienced editors. Coming to us rather than a design studio or printer saves the client time in sourcing and editing the writing and photography and gets better results. The combined costs for design, photography and writing are also very competitive.
PR AND CREATIVE MEDIA AGENCIES
PR and creative media agencies do not specialise in creating magazines and rarely have the staff with relevant expertise in this area. Our team of editors has over 50 years worth of experience in editing consumer magazines. We know how to write the best headlines, how to target content to the right customer and how to use words, photography and design to powerful effect.
OTHER CUSTOMER MAGAZINE PUBLISHERS
Of course there are companies out there who make customer magazines. Most cater for bigger clients and do not offer this service to SMEs at an affordable level. Most are based in London, where running costs are higher. We will offer an extremely high standard of product and customer care and competitive pricing.
“Why spend €40,000 a page to advertise in Vogue when, for the same amount of money, you can publish an entire magazine?” Alice Litscher, communication professor at the Institut Français de la Mode in Paris.
Q 5 : E S T I M AT E A PRICE FOR YO U R P R O D U C T
HOW MUCH? DESCRIPTION
A4 OR 210X210MM MAGAZINE 300 GSM GLOSS COVER 170 GSM SILK PAGES, 24 PAGES
A5 MAGAZINE 300 GSM GLOSS COVER 170 GSM SILK PAGES, 16 PAGES
DIGITAL ONLY
500
COPIES+ DIGITAL
1000 COPIES+ DIGITAL
5000 COPIES+ DIGITAL
£2450
£3,300
£3,750
£4,750
£1585
£2,100
£2,250
£2,500
PRICING
Price here based on costs plus a minimum 20% return. If priced too low, it may suggest value product rather than bespoke, high quality product. Competitive? £2,400 is the cost of 4 page adverts in a local glossy magazine or 4 half page adverts in a local newspaper.
COSTS
See Appendix 1 for a full break down of assets, costs, cashflow projection and a break even analysis. YEAR 1
YEAR 2
Q6: HOW WILL YO U S E L L YO U R PRODUCT?
A PRODUCT WHICH SELLS ITSELF? The following are key sales strategies • ONLINE High quality website, with strong SEO. To include sample prices. • DIRECT TARGET MARKETING identifying potential clients through networking and research and sending out a special marketing magazine with a cover designed specifically for that client. This gives a physical example of what a client’s magazine could look like, fiilled with relevant research, testimonials and sample ideas for that business. Estimate one lead per 20 direct marketing pitches. • BUSINESS EVENTS Attending business events, with examples of our work, testimonials and examples of poor quality brochures and magazines to compare with our own products. Introductory offers for start-ups. • SALES AND MARKETING FREELANCER I have a sales and marketing executive friend with experience in magazines who I intend to hire to help at events, and to convert leads to sales via face to face pitches (around the UK). • TELEPHONE We can staff a phone five days per week. • INNOVATION CENTRE Hire meeting rooms for pitches and client meetings
Q7: HOW MIGHT YO U M A I N TA I N COMPETITIVE A D VA N TAG E ?
WHO WE ARE AND HOW WE DO IT The Little Boutique Magazine Co will maintain competitive advantage through:
SKILLS AND EXPERIENCE
GEOGRAPHY
CREATIVE GENIUS
CUSTOMER CARE
With 20 years of experience as a journalist, editor and photographer, I have the skills to ensure that the quality of the products is excellent. I also have a team of 2 more editors, designers and photographers with excellent skills and experience in consumer magazine publishing.
Being based in Cornwall offers competitive advantages. Lower running costs and a wealth of creative talent emerging from local colleges and universities. There are also lots of start-up support and EC funds available for creative businesses in this region.
Other competitors might copy our basic model but I’m confident that innovative ideas and creative talent will enable us to stay ahead of the competition. Our digital products, for example www.trurotrail.com, allow for really innovative thinking.
We will offer the very best in customer care. Maintaining prompt and effective communication with the client is key for the business model, as it reduces unnecessary costs.
NICHE POSITIONING
Strong relationships with local printers will help us to improve quality and profit margins. We can trade services with some business partners, for example printers by making magazines for them in return for lower print costs.
Lots of customer content publishers branch out to building websites, social media content and other related content.. We will stick to a clear market position and establish ourselves as specialists in making really beautiful interactive and print magazines for companies. We will offer this service nationally.
BUILDING PARTNERSHIPS
WE CAN BE FLEXIBLE
As a small company with no red tape or lengthy approval procedures, we can adapt quickly and be flexible.
Q 8 : W H AT I M PAC T W I L L YO U R B U S I N E S S H AV E ?
POSITIVE IMPACT
With careful planning, our business will have strong positive impacts on those involved, and the wider community SUSTAINABILITY
Our business model has inbuilt incentives to sustainable business practice. Digital magazines are offered at the best price, and our service in itself reduces the amount of paper, ink and other resources used in the print process. We also offer eco-friendly print options.
BOOSTING LOCAL BUSINESS
Cornwall has high levels of unemployment and traditionally, young talented residents feel they must leave the county to obtain employment. We want ot be part of establishing Cornwall as a centre of creative excellence. We aim to offer employment and training opportunities for people of all ages. By bringing in revenue from around the UK we aim to grow the business with a trickle down effect for local suppliers, including printers, designers and photographers.
CUSTOMER PERKS
We passionately believe the service we offer will improve the profitability and brand strength of our customers. Their carbon footprint will shrink, their profits will rise and their costs will reduce.
HOME WORKING
Where possible, employees will work from home on flexitime. We believe this is beneficial to the environment, to family life and to the efficiency of our business model. As home workers we’ve often observed irrational reasoning for insisting on too much office space and strict hours.
CHARITY = MOTIVATION
We believe that if your success really improves the lives of others and has meaningful results, you will be more motivated than by money and prestige alone. For this reason, from year three we aim to set aside profit share to produce fundraising products for local Cornish charities.
Q9: WILL THE MARKET SUPPORT YO U R B U S I N E S S AMBITIONS?
WHAT ARE OUR MILESTONES? • • • •
TO TO TO TO
ATTAIN FIRST MAJOR CLIENT WITHIN 3 MONTHS ACHIEVE £50K TURNOVER/£14K PROFIT BY YEAR 1 ACHIEVE £600K TURNOVER/£250K PROFIT BY YEAR 3 EMPLOY A STAFF OF 10 BY YEAR 5
These milestones have been set based on profit margins and early market research. Also, I studied case studies of members of the Content Marketing Association, whose members comprise 90% of agencies producing customer magazines. GETTING STARTED I have photographers, writers and designers who are willing to invest their time for free to help us get this business started. In addition I have secured £2,000 of funding to help fund a first major order. My husband and I have invested £3,000 in vital equipment and software so we are ready to go, once I have graduated. EXIT STRATEGIES The current planned exit strategy is to buy out our investor by year 3 and sell the business in 10 years time to an interested party. Franchise is another possible option if we establish a strong brand identity.
MARKET OVERVIEW • • • •
Research into the UK market shows the market for customer media is the fastest growing market, after the Internet. The average promotional budget of SMEs with employees between 50 and 200 is £87,200 pa in the UK. (b2b international.com) There are over 30,000 businesses in the UK which employ between 50 and 200 staff. The public sector are key customers for our business.
Q 1 0 : W H AT BARRIERS DO YO U N E E D T O OVERCOME?
MEETING OUR GOALS
Barriers and how I plan to overcome them ENSURING CASHFLOW
MAKING FIRST SALES
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Persuading first customers to invest in a magazine with few examples of work and no established reputation. Also, it is a relatively new concept in this local area. • Strong brand design and identity • High quality website, professional SEO • High quality examples of work, including charity magazine • Investing in professional sales exec to join and consult for initial pitches
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Target customers carefully to ensure I could fund a potential order Establish costs and timescales of payment clearly Clear supplier and purchaser payment contracts Chase payments promptly Research potential customers for reliability and average payment times Regular cashflow forecasts Basic survival strategy: part time work allowing enough income to fund all my basic expenses and costs ongoing whilst allowing three days per week on the business Friends and family willing to supply skills and time to fulfill early orders
GROWING THE BUSINESS • • •
Budget time for marketing and promotion Budget finance for marketing and advertising Spend time networking
MEETING CLIENT EXPECTATIONS Clients may have expectations which exceed their budget, or there may be several layers of staff who must each approve the project. • Establish good proofing process and show printing standards with prototype • Ensure that client brief is clearly agreed and set time limits for clients to sign off work at each stage. • Use client feedback to refine the procedure.
Q 1 1 : W H AT L E G A L ISSUES MIGHT A F F E C T YO U R BUSINESS?
LEGAL ISSUES?
The following areas are key in my business plan COPYRIGHT
Photographers and writers will need to sign all rights to the business. The business will be selling all rights to the client so they can use the content in their business. It is important to ensure that suppliers adhere to copyright law.
DEFAMATION
PURCHASER CONTRACTS
Purchaser and supplier contracts will be needed to ensure that both meet their obligations to us, and our obligations to them are clear. A clear contract of proofing approval procedures and schedules needs to be set out for printers and clients.
The publisher of content which injures the reputation of an individual or commercial interest is liable for damages. If, for example, a client gave us information which was incorrect about a rival business, that rival could sue my company for publishing that information. Our writers and editors would need to employ due diligence to check information is accurate. My husband and I are trained in defamation law and will continue to update that training. As a member of the British Association of Journalists I am also able to access free legal advice in this area,
PAYMENT TERMS
INSURANCE
LIMITED COMPANY
The company would need Professional Indemnity Insurance to protect against lawsuits for defamation.
These must be clear and enforced by prompt chasing and following correct legal procedure in the event of default, We would need to employ due diligence to ensure clients and suppliers were financially sound.
EMPLOYEES
We plan to use freelance workers at first, but if and when we take on employees, we will need to be aware of and meet health and safety regulations, tax and employment law.
I would set up a limited company at an early stage to reduce risk of personal assets.
APPENDIX 1: SHOW ME THE MONEY S TA R T U P C O S T S £ AC C O U N T I N G 1 0 0.0 0 L E G A L 1 0 0.0 0 WEBSITE 7 5 0.0 0 I T 1 0 0 0.0 0 T O TA L 1 9 5 0.0 0
HOW MUCH INVESTMENT?
FIXED COSTS PER YEAR £
Personal £5,000 Required £5,000 In return for 10% of the business
AC C O U N T I N G 4 0 0.0 0 L E G A L 4 0 0.0 0 S O F T WA R E S U B S 1 8 0 0.0 0 SEO & ADVERTISING 4 2 0 0.0 0 I N S U R A N C E 2 0 0.0 0
Estimated ROI: 400% in 3 years
T O TA L 7 0 0 0.0 0 VA R I A B L E C O S T S P E R AV E R AG E UNIT £ E D I T I N G 2 5 0.0 0 W R I T I N G 2 0 0.0 0 P H O T O G R A P H Y 3 0 0.0 0 D E S I G N 4 0 0.0 0 A D M I N 5 0.0 0 T O TA L 1 , 2 0 0.0 0
BREAKEVEN ANALYSIS YEARS 1 TO 3
YEAR 1
YEAR 2
YEAR 3
CASHFLOW PROJECTION BASED ON £50K TURNOVER IN YEAR 1
viki.wilson@btinternet.com
0788 7441480 / 01326 231993
www.vikiwilson.co.uk