Magazine Journalist Business Plan

Write Bike is a home-based start-up business that provides cycling specific correspondent services in the form of written articles. Kraig Guthrie, the founder and sole employee will produce cycling related articles on a freelance basis for a variety of print and online magazines. By leveraging Kraig’s extensive industry experience, Write Bike will become a sustainable home-based business.

Services
Write Bike is able to produce a wide range of cycling related articles. Some of the articles will be product reviews. Through extensive testing and consistent criteria-based measurements, Kraig will be able to offer objective product testing. Write Bike also offers interviews, typically with professional racers as well as industry personalities. Kraig, having raced at the elite level in the past, is personal friends with many different racers and can offer written interviews to his different customer publications. Kraig will also sell reports from the annual bicycle industry trade shows, the premier place for new product launches. He will also be able to offer fitness and training articles, specific to cycling from his extensive riding experience and educational background. Write Bike will write articles either on demand or speculatively.

The Market
It was just several years ago when the only source of cycling information was either from the local bike shop or the printed magazine. With the proliferation of the Internet, there are many different cycling specific sites that act as online magazines. Write Bike will sell their articles either to the print magazines or the online magazines. Due to a consolidation phenomenon within the publishing industry, many different magazines are merging into larger units and many staff writers are being let go. This benefits Write Bike because it creates demand for freelance articles. The two target market customers: print and online magazines, comprise a total of 350 potential customers, 250 and 100 respectively. These two customer segments are growing at 2% and 8% annually.

Management
Kraig Guthrie brings a wealth of experience to Write Bike. Kraig received his undergraduate degree in Biology and Journalism from Brown University. While at Brown Kraig raced on their cycling team as well as wrote for the student newspaper. Upon graduation Kraig continued to pursue cycling, both at a competitive level as well as business related. Kraig participated at the Olympic Training sessions, riding as an elite cyclist. Additionally, Kraig managed a bicycle shop for several years. Kraig then went to work for Shimano America, the premier bicycle component manufacturer. Through a variety of jobs and responsibilities at Shimano, Kraig became intimately familiar with the industry and the people that make it up. Kraig’s expert knowledge of the industry will be invaluable in the production of articles.

1.1 Mission

It is Write Bike’s mission to produce well written articles about the bicycle industry. By leveraging Kraig’s extensive network of colleagues within the industry, Write Bike is able to offer a rare insight of the industry.

1.2 Keys to Success

• Create well written, insightful articles for the bicycle industry.
• Continue to develop a network of contacts, both as a source of information as well as to develop the market’s acceptance of Write Bike’s articles.
• Always remember the audience.

1.3 Objectives

• Develop regular, consistent article submissions with multiple publications.
• Create a profitable home-based business.
• Continue to develop and maintain a network of contacts within the bicycle industry.

Write Bike is a sole proprietorship that is located with the home of Kraig Guthrie. It was founded in January 2003. The business is based in Kraig’s home. Kraig pays a fixed amount of rent per month based on the square footage that his office occupies relative to the rest of the house.

2.1 Company Ownership

Write Bike is a home based business owned and operated by Kraig Guthrie.

2.2 Start-up Summary

Write Bike requires the following equipment for its article writing services.

• Macintosh G4 computer
• DSL Internet connection
• Scanner
• Laser printer
• Digital camera
• Microsoft Office, Adobe FrameMaker, Adobe PhotoShop, and Adobe Acrobat.

Write Bike is a freelance article writing service dedicated to the bicycle industry. Articles are either written upon request about a specific person or subject, or are written speculatively. The following article types are representative of the content that Write Bike produces:

• Product reviews: These are reviews of new products which have recently hit the market. Write Bike applies an objective, criteria-based system for evaluating products. Generally Kraig requires a period of a couple of weeks to have enough experience with the product to produce a comprehensive analysis.
• Rider and industry personnel interviews: These interviews are generally based on networking contacts that Kraig has developed over the years. The interviews can take place in person, on the phone, or via email. The topic of the interview is usually guided by the editorial slant of magazine that the interview will be submitted to.
• Trade show reports: Twice a year there are bicycle industry trade shows held for the U.S. market. These articles will be reviews of the “happenings” at the trade show. A large component of the trade show articles are preview photos of the up-and-coming new products.
• Fitness articles: These are generally physiology and training-based articles specific to cycling. Years of cycling experience and a biology undergraduate degree has provided Kraig with expert status for this type of article.
• Repair articles: These articles typically chose a specific topic of bicycle repair or maintenance and then provide a detailed, step-by-step, how-to guide for readers on that procedure.

Write Bike has identified two main target customer segments for submission of articles. The two market segments are each fairly large: printed magazines and online cycling specific websites.

Both monthly and bi-monthly magazines have a need for article content to supplement that produced by the staff writers. Some of the publications have a large staff of writers and only use a small percentage of articles from outside writers, other companies rely heavily on outside, freelance writers.

Many websites are maintained by bicycling enthusiasts and so rely almost exclusively on freelance articles.

4.1 Market Segmentation

Write Bike has segmented the target market into two broad categories, print and online magazines.

Print magazines

Regional publications
These magazines are typically city or state based journals. Sometimes they use glossy paper in magazine format, more often than not, as a function of the smaller readership levels, the regional printed magazines use inexpensive newsprint. The regional ‘zines typically use a higher percentage of freelance writers. This is easily explained by the fact that the regional ‘zines have smaller budgets and consequently must maintain lower overhead, using freelance writers. The freelance writers both submit articles unsolicited as well as by request of the publication. Examples include:

• Oregon Cycling
• Boston Biking
• Seattle Cycling

National publications
These magazines are almost exclusively printed on glossy paper, magazine formatted and bound, have national circulation readership levels, and have a staff of writers. However, they also contract freelance writers for specific pieces or they accept speculative pieces. Generally the freelance work is on requested topics. Examples include:

• Bicycling
• Mountain Bike
• Mountain Bike Action
• Bike
• Velo News
• Dirt Rag

Online magazines/Websites
With the recent explosion of popularity and use rates of the Internet, there have been a number of different websites that offer bicycle specific content. The advantages of the online sites is their ability to have far more current content as well as a much larger geographic coverage. Some of the sites offer paid content, however, the majority of them offer free content with the bulk of their revenue coming from advertisers on the site. Some of the online sites are extensions of a printed magazine, others are solely Internet based. Examples include:

• Cycling News
• VeloNews.com
• MTB Review
• Cycling.com

4.2 Target Market Segment Strategy

Write Bike has chosen to to target both printed and online magazines. These target customers have been chosen because of their need for articles. While some of the magazines have less of a demand for freelance writers, all magazines at some level require freelance writers. Freelance writers are an effective means for managing money, a scarce resource for magazines. Freelance writers present a level of flexibility that most staff writers, as a function of the business organization, cannot meet. Additionally, the demand for articles occurs somewhat regularly, generally at monthly or bi-monthly intervals.

The advent of online magazines and email provides a new and exciting market for articles by eliminating geographic limitations. In the past the writers would often have to be located near the publishing headquarters. Now with the Internet and email, a writer can be based in Bali and be producing work for a magazine in New York.

4.3 Service Business Analysis

The bicycle magazine/publishing industry is a large and geographically dispersed industry. There are publications through out the U.S., however, there is general concentration in the larger metropolitan areas. In the United States, there are 24 million unique readers of cycling specific publications. The industry generates $428 million in revenue annually. The printed side has stagnated a bit with the growing popularity of the Internet. Consequently, the Internet-based cycling sites have grown at encouraging rates. The bicycling magazine industry is a source of information for many different people. Other sources of information are local bicycle shops as well as clubs and local and national associations.

4.3.1 Competition and Buying Patterns

The competition takes the form of staff writers as well as other freelance writers.

• Staff writers: Staff writers are a form of direct competition because ultimately it is the editor’s choice as to whether to use a staff writer or a freelancer. The editors make decisions on who to use based on numerous variables such as: price, availability, time frame for article production, quality of writing, and the chosen business model that determines the ratio of staff writers to freelance writers.
• Freelance writers: There are other freelance writers, some of whom are specific to the cycling industry, and many others who are information generalists. As mentioned above, they can be distinguished by price, availability, production speed, quality, and area of expertise.

Write Bike faces competition from the two previously mentioned sources, other freelance writers and staff writers. Write Bike will leverage Kraig’s competitive edge of extensive experience and wealth of contacts within the industry. Write Bike will undertake a marketing campaign that uses networking as a source of new jobs. This will be quite valuable because of the depth of Kraig’s contacts. The sales campaign will concentrate on delivering quality, expert level writing on time and at fair prices. By providing these aspects of a product, Write Bike should be able to win over most publishers after their first interaction, building a constant flow of future projects.

5.1 Competitive Edge

Write Bike’s competitive edge is Kraig’s comprehensive level of industry experience. This level of expertise is manufacturer, retailer, and individual racer based. Typically, someone in the industry comes from one area, they either have worked for a manufacturer or they are a racer, or they have managed/owned a retail establishment. It is very rare for one individual to have such a deep cross-section of experience and perspective. By drawing experience from a variety of sources, Kraig can offer a comprehensive service that has significant depth of perspective.

Kraig’s personal relationships provide him with ready access to the industry and different riders. As the industry has grown in size, it has lost to some degree, its close knit familiarity and camaraderie. Over the years Kraig has developed an extensive list of personal contacts, people whom he can use for personal favors as well as help in establishing his freelance writing company.

5.2 Marketing Strategy

Write Bike’s marketing strategy is based on the wealth of networking contacts that Kraig has developed during the years of his comprehensive involvement with the cycling industry. Kraig is able to use his network contacts to generate interest in his availability as a freelance writer. His contacts know his depth of knowledge as well as his intelligence so they are able to offer a glowing recommendations both for Kraig and his articles. The old saying “you scratch my back and I’ll scratch yours” is quite accurate within the bicycle industry. If you have a positive relationship with someone they are generally willing to go out of their way to assist you. In conclusion, Kraig will use his contacts and the contacts of his contacts as a way to get writing assignments.

5.3 Sales Strategy

The sales strategy will focus on Write Bike’s commitment to consistently produce high quality writing products on time and on price. There is a somewhat limited list of desirable customers and it will be Kraig’s need to impress each of them with his first assignments. The sales effort will therefore concentrate on impressing first time customers enough that they funnel a future stream of projects to Write Bike. This will be an effective strategy because it takes into account the reality that it requires a lot more time and money to attract a new customer than it does to impress a current customer and transition the current customer into a long-term source of revenue. The conversion of customers into long-term assets will use Kraig’s work products as well as a feedback mechanism to capture valuable information regarding the customers’ needs.

5.3.1 Sales Forecast

The sales forecast indicates that growth in revenue will be steady but slow. This is a reality since the marketing effort is based on networking. Inherent in the use of a networking system is the time necessary for it to develop. This is analogous to the building of a spider’s web. It is a somewhat slow, methodical process, but each block builds on the prior one and the end product is a widely dispersed foundation that is quite strong and valuable. There will be a couple of articles sold within the first couple of months, with the number of articles sold increasing over time. Because this is a home-based business, measures of profitability are somewhat inaccurate since the bulk of the overhead costs are absorbed in the household expenses.

5.4 Milestones

Write Bike has established a set of milestones which will serve as ambitious yet achievable goals or benchmarks. If met they will be positive indications of a healthy business.

Kraig Guthrie has been involved in the bicycle industry for ten years. Kraig attended Brown University for an undergraduate degree in Biology and Journalism. While at Brown, Kraig raced on the cycling team and was an active writer for the student newspaper.

Upon graduation Kraig moved to Boston and worked in a bicycle shop for four years. The first year was in a sales/mechanic capacity. Kraig’s intelligence and skill set quickly became noticed and he moved into a manager’s position for his three remaining years at the shop. While working at the shop he continued to ride and write. Kraig was an excellent rider, both on the road and off road. On road he was a Category One racer and off road he raced Professional.

During his first year after graduation, Kraig cycling talents became noticed and he was invited for summer training at the Olympic Cycling Center in Colorado Springs. It was here that Kraig raced and became friends will all of the leading American cyclists. The relationships that Kraig developed were quite personal and he would remain friends with these future professional cyclists throughout his life. At the same time Kraig began to do some freelance writing for a few cycling magazines.

After four years Kraig left the bike shop and moved to a position at Shimano America. Shimano is the largest and one of the most prestigious bicycle component manufacturers. Shimano works with every major production and custom bicycle manufacturer in the USA. Kraig accepted a project manager position at Shimano.

Initially his projects were the introduction of new products. Eventually Shimano moved Kraig in to a position doing outside Public Relations. Kraig traveled extensively, meeting with manufacturers, retailers, racers, and end consumers and updating them on new gruppos, parts, accessories, technical procedures, and corporate marketing, and sponsorship activities. This was an great experience for Kraig, building a network of contacts that would soon prove to be invaluable.

The travelling took its toll however. Kraig was spending less and less time with his family. After six years Kraig decided to consider other ways to make money within the cycling industry that would provide him with more time with his family. Because Kraig had been still writing freelance articles for the last 10 years, albeit somewhat infrequently, Kraig began to work on business plan to determine the feasibility of being a full-time freelance writer. After more and more contemplative thought and analysis, it became obvious that there was a reasonable likelihood of success and that he would give it is a shot.

6.1 Personnel Plan

Write Bike is a home based business with Kraig as the single employee. As the only employee it will be Kraig’s responsibility for sales, marketing, accounting, and WRITING. Kraig’s wife Marie will help out with the business when Kraig is working in the field, however, Kraig will be doing pretty much everything. Because his work will be freelance, Kraig will have the flexibility to accomplish all the necessary activities.

The following sections will outline important financial information.

7.1 Important Assumptions

The following table details important Financial Assumptions.

7.2 Break-even Analysis

The Break-even Analysis indicates what monthly revenue will be needed to reach the break-even point.

7.3 Projected Profit and Loss

The following table and charts displays Projected Profit and Loss.

7.4 Projected Cash Flow

The following table and chart presents the Projected Cash Flow.

7.5 Projected Balance Sheet

The following table shows the Projected Balance Sheet.

7.6 Business Ratios

Business Ratios for Write Bike are shown in the table below using the NAICS code 711510 for Independent Writers.