The two principal shareholders of the small business stared back at me in disbelief as I calmly explained the simple rescue plan we would use to turnaround their ailing small business. Exhaustion and desperation were written all over their faces and in a way I felt pity for them.
The pair had already lost a small fortune in just one year of operation. The only reason why they had not shut down the damned thing was that they were hoping for some miracle that would recover at least half their life savings. Yes they had sunk in all their life savings in this floundering small business.
But then theirs is the story of hundreds of thousands of entrepreneurs the world over who continue to launch thousands of new magazines every year without the very special skills that are required to run this complex and yet potentially profitable business. Others launch a small business with every kind of system except a simple selling system to constantly generate sales which is the lifeblood of any business.
Taking stock of the small business I was supposed to help rescue, I quickly came to the realization that all they had left at this bankrupt magazine now was a small demoralized sales team ready to quit the moment they found jobs elsewhere. No reporters, no writers, no budget to get good writers on board. How do you rescue a magazine without quality content and without funding? It can actually be done with a selling system.
I quickly called a meeting and tried to inspire the shabby remnant, assuring them that the magazine was now in good hands and that things would improve. Luckily they did not sense the cold fear creeping up my spine nor did they seem to realize that I had already broken into a cold sweat. In business there are no guarantees – you win some and you lose others. What right did I have to make all these promises? What if I failed in this assignment?
I proceeded to swiftly train the handful of sales people and changed them from advertising sales persons into “reporters”. They were to go out and gather information.
Gather information!? When you need revenue so badly? Actually the first step to turn around any business is to gather lots of information. But let’s see how it panned out with the small business magazine.
The information gathering was part of a simple system I had quickly designed consisting of the following steps,
1) “Reporter” calls up a potential client and books an appointment for an interview.
2) I accompany them to the interview and I do both a thorough and professional job of it.
3) After the interview, we make an editorial decision whether the material merited a feature article in the magazine or not. And if it did whether the story would end up being positive or negative. (Any publisher will tell you that bad news sells much better than good news.)
If it merited a positive story, we would go ahead and write the story and then later approach the same client to book an advertisement so as to get a double maximum impact in the same issue. Alternatively they would have their advertisement appear in a future issue.
4) If the story was negative we would avoid approaching the source to place an ad in the magazine. We would instead go ahead and write our big story with a little additional research from other sources. The reporter would then approach a competitor to the business in question (who was not in the same mess) for a brief comment and an advertisement to take advantage of the focus on the industry
5) Other times an interviewer supplied us with a tip to pursue another company or organization for a lead story, which we would also do.
Using this simple system that maximized on the meager resources that were available, we literally killed two birds with one stone. The advertising space sales team were able to get very good quality leads for advertising sales and turned most of them into much needed solid sales. The big secret here is that they were able to use the writer’s interview session to build rapport with the client/news source.
Secondly, in the process we were able to do quality research work for all the stories we carried in the business magazine which improved our readership and the confidence of advertisers as well on the quality of the monthly business publication.
This was of course combined with some careful house-keeping where we kept a very careful eye on costs by designing a system that would monitor costs on a daily basis. Within 8 weeks the magazine was making a profit and in one year, if you came calling, you would not believe it was the same previously dying magazine.
Magazines can be very profitable. They can also be huge cash drains. It all depends on you doing the following;
- Creating workable systems for generating revenue through selling advertising and other systems for generating revenue from subscription and single copy sales. The systems you create must be so simple that the staff training required will be minimal.
It’s as simple as that. And that’s exactly how I turned around an ailing small business.
You can read another extremely useful small business turnaround article by the same author.