Chapter Two (portions) of Publish Your Own Magazine,
Guidebook or Weekly Newspaper

Home-Town How-To: Niche Markets and How to Find Them
(Taken from various sections of Publish Your Own Magazine, Guidebook
or Weekly Newspaper)

`I

The Publishing Revolution
(Reprinted from Chapter II of
Publish Your Own Magazine, Guidebook
or Weekly Newspaper

This book contains detailed, step-by-step instructions. The person who studies and follows them will make money-- sometimes considerable amounts of money-- in the field of independent publishing. All that is required is the ambition, the know-how, and the latest desktop publishing equipment.

You have the ambition, or you would not be reading this book. You can purchase or lease the desktop publishing equipment you need for less money than it would take to buy a good used car. I have the know-how, and that's precisely what I intend to reveal to you in this book.

I can personally vouch for the workability and profitability of these publishing projects. I have carried each of them out myself. Each was easily manageable, even those undertaken while I was working full-time as a college professor. Each made real money. And each was begun with little or no up-front cash investment. These pages constitute a treasure map of the unknown territories of independent, home-based publishing.

Each chapter represents a doorway through which any ambitious writer, sales person, or business person can enter the world of publishing at the head of his or her own company-- with all the satisfaction and financial security that comes with owning your own business.

A Publishing Revolution
There is a revolution taking place in the publishing business today. One aspect of this revolution is a matter of scale. The large publishing companies are getting bigger and bigger, leaving the very lucrative local, regional, and specialized markets open to all comers. The big New York publishers have become "blockbuster" oriented, abandoning the sure but (for them) relatively modest profitability of the short run book or magazine to what used to be known as the "small presses," which are now referred to more and more frequently as the "independent publishers."

Coupled with this restructuring of the publishing business itself the truly revolutionary appearance of the astonishing new desktop publishing technology. Thanks to the new equipment that this revolution has spawned, independent publishing companies can now be run from any location in the country, from the kitchen or spare bedroom in your own home if necessary.

One of the most successful independent publishing companies I know of was started in a small apartment built in a former dry cleaning shop in a town of 200. My own office is in a 150 square foot spare bedroom, a former child's nursery. There I preside over my world-wide electronic empire. I routinely receive and transmit manuscripts by modem. I fax contracts and requests for quotes on publications in progress. I write, lay out and design more than 20 publications each year with a $2000 computer and laser printer. I do business with printers in Ann Arbor, color separation houses in Colorado, and book wholesalers in California.. In publishing, the much-heralded "electronic cottage" is very much a reality. And it works!

Immensely powerful and ever more affordable microcomputers, driven by very sophisticated page layout and typesetting software, have put into the hands of the entrepreneurial publisher the means to control planning and production of the product at every step of the way-sometimes even including printing. In the "publishing-on-demand" techniques developed and pioneered by my friend Carole Marsh of Gallopade Books, books are not even printed until the orders come in. At that point the laser printer grinds out the pages, which are then spiralbound in house and sent out. This procedure may not work on all -- or even most -- books or magazines, but it works very well indeed where it is appropriate. (See Chapter 10, Selling Information by Mail.) This new technology gives the entrepreneurial publisher advantages that were unheard of just 15 short years ago. Its use produces great savings in prepress production costs and, as a result, a substantial increase in profitability. Projects which once might have been financially marginal are now quite profitable.

A One-Person Business
Since it does so much, so well, desktop technology creates the possibility of operating a business single-handedly. One person can do almost everything. It permits more efficient schedule management. You are doing everything in-house, so there are almost no outside people whose work schedules, holidays, and down time you have to accommodate. It creates more efficient general operations, since the same computers that produce your books and maintain mailing lists can send bills and do all other necessary accounting operations, from accounts receivable to general ledger.

The SOB Factor
Another great benefit of the new technology is what I call the SOB factor. When you develop a new business there are three ways that you can finance yourself during the startup phase. You can use OPM (Other People's Money), by going to the bank and getting a loan which you immediately have to start paying back. You can use YOM (Your Own Money) by raiding the reserves of your hard-earned savings. Or you can use SOB (Sweat of Your Brow), by doing all of the work yourself until the business is up and running. It used to be that before you could get a publication on the street you had to pay designers, typesetters, paste-up people, and printers. Now you do it all yourself. It takes longer, but it's much easier on the pocketbook. You are converting the Sweat of Your Brow into equity in your business.

II

Home-Town How-To:
Niche Markets: What They Are and Where to Find Them
Taken from Various Chapters in Publish Your Own Magazine, Guidebook
or Weekly Newspaper

by Dr. Tom Williams

Kitchen-Table Publishers identify and exploit niche markets. This is what makes them successful. Often they may go even further and develop a niche within a niche. But what is a niche market? How do you recognize one? How do you estimate its potential for profit?

Three Criteria:
A niche market is composed of individuals or businesses:

A potentially profitable niche market will also have one other indispensable element: a broad base of businesses ready and willing to buy advertising space in order to reach the individuals who comprise the niche readership. Writer's Digest magazine, for instance, is a niche market publication. Advertisers buy space in it because they want to reach the niche market of beginning writers who comprise its readership.

Another Example
I met a young man recently who had just cranked up a very successful tabloid called Hospital Business News. He publishes this bi-weekly in the Miami-Fort Lauderdale area, a massive metropolitan market. He had identified this niche himself and had seen that he had virtually no competition in it. He also recognized immediately that he could target both readers and advertisers with great precision. Furthermore, the potential advertisers he had in mind all had a great deal of money budgeted for the purchase of advertising space. This publisher had discovered a niche market that met each of the three success criteria described above.

If you are a book publisher rather than a periodical publisher, you might specialize in titles targeted toward interest groups: antique collecting, doll making, scuba diving, home business start-ups -- any number of areas. Readers interested in these fields can be reached through specialty shops, mailing lists of members of interest groups, mailing lists of purchasers of related products, mailing lists of subscribers to special interest magazines, etc. Further, as you sell one book you will be building your own mailing list of satisfied readers who will purchase other titles in their field of interest as you publish them.

Or you might choose to specialize in titles that will appeal to a much broader base of readers, but in a limited geographical area. You might publish, for instance, The Outer Banks Shell Book; Surfing Guide to the Outer Banks; Hang Gliding at Nag's Head; or the Insider's Guide to the Outer Banks (an actual title), and so on.

The Importance of Specialization
The more specialized your niche market the better off you are, so long as the market is large enough for you to generate the volume of business that you need. A specialized market can be more easily mastered by a small organization. Every nook and cranny of it can be plowed and farmed, like a small, fertile plot of land.

One of the most successful independent publishing companies in business today is that of Dan Poynter, author of a how-to book on hang-gliding. Too narrow a market? You might think so, but it didn't turn out that way. Dan sold tens of thousands of his self-published hang-gliding books under his own Para Publishing imprint. The fact that his book was highly targeted to a specific readership of persons with a shared interest made marketing it feasible for a one-man company such as his. (Dan has told others how to repeat his success in his fine book, The Self-Publishing Manual. See the resource guide in the back of this book for details.)

There was a finite number of hang-gliding shops in the country. Dan was able to contact each of them and place his book on sale in them. Had his topic been more general, selling it would have been much more difficult because the potential readership would have been more diffuse and harder to target. A far greater amount of capital, time, and highly speculative up-front marketing costs would have been involved.

How I Discovered a Niche
I had a similar experience when I first ventured into the publication of real estate guides. The field of real estate publications is a broad one. Further specialization is needed -- a niche within a niche.
The niche I chose was that of apartment comparison guides. Even in a large market like the state capital of a major southern state (where I brought out such a guide), the number of apartment management companies handling apartment complexes was limited. There were some 350 apartment complexes, but fewer than 20 major management companies. Some of these handled as many as 30 or 40 different units.

Now, this was a true niche. It offered intensive sales in a limited geographical area and to a highly targeted clientele. I could call on this number of clients myself, if need be, and in the beginning I did just that. Because we published semi-annually I was also able to handle all photography, ad design, production and distribution, with a minimum of free-lance help. The apartment guides themselves were easy to produce, but each of them contained up to $100,000 in advertising.

Niche Markets Are Manageable
A niche market is important because it is manageable: you can easily get your mind around it, your pocketbook around it, and your hands around it. It is also much easier to create the necessary visibility for your own company within a limited segment of the business community. After I had made a preliminary call on the most important management companies and generated a few news articles in the business pages of the daily newspapers, I was pretty much known and talked about. All that remained was for me to prove to potential advertisers that my magazine was more affordable, more widely distributed, better designed, and therefore more effective than the publications of my competitors.
From the very first my apartment comparison guides showed a profit. This profit continued to grow issue-by-issue until I sold the business some five years later.

Other Niche Successes
Intensive sales in a limited geographical area and to a targeted pool of advertisers: these qualities of a publication are the touchstone to success in small time publishing. You can measure the viability of virtually any idea against them when you understand these three factors fully.
Some examples: The Independent, an excellent arts and entertainment tabloid published in the university town of Durham, North Carolina, is a niche market publication. It targets young, well-educated, liberal men and women in a limited geographical area. It then sells advertising to people who want to reach precisely this segment of the population. The Independent operates out of an old house in a less-than-thriving part of town. It owns little equipment and has virtually no overhead beyond personnel and printing costs. Start-up costs for a tabloid like The Independent can be quite small.
The South Florida Business Journal, a tabloid published in Dade and Broward counties, Florida, and targeted toward the business community, is a niche market publication. It started out with just a few thousand subscribers. It still claims fewer than 20,000 paid subscribers, but it is nevertheless a very successful business publication.

Even a novel can be a niche market publication. One title, for instance, might appeal to all environmentalists (a readily identifiable group). Another might appeal to all tourists visiting Savannah, Ga. (a limited geographical area). Both are niche market publications.

Remember: The Market Comes First
Sometimes entrepreneurs get things backward. They have an idea that excites them. This will be a good publication, they assure themselves, and they go ahead with it. But the question is, will it excite potential advertisers as well? Will anyone buy it? Who? Why? Is there a market for the idea? (For a complete discussion of market analysis, see my book Kitchen Table Publisher.)
It is axiomatic in publishing (and in any other business) that market always precedes product. When you forget this fact you can get into trouble. A case in point is the recent history of the failed Southern Magazine. The initial edition was published with high hopes. Yet the gloomy future could have been predicted. Was there a market need for this magazine? No. Were advertisers crying out for another channel to reach this group of readers? The answer was no again. Was the readership highly targeted? Not at all. What there was, was a group of young editors and writers who simply wanted this magazine to become a reality and to succeed. A business plan was developed; meetings were held with potential investors.

Eventually the project was capitalized at a reported (according to a conversation I had with the first editor) five million dollars. Two or three years later this entire sum (and more) had been spent and the magazine foundered. It changed its name and tried again, but still with little success.
The creators of this publication started with an idea and then tried to make the market like that idea. But the successful publishing entrepreneur analyzes the market first, decides what it needs and what it will accept, then creates a specific niche-market magazine or book that will satisfy a specific niche-market need.

Market Position
Publishers of advertising-intensive periodicals, especially, will have to wrestle with the problem of market position -- the defining of your image and the precise customer benefits that you offer relative to all those competitors who are attempting to occupy the same niche.

You do this for two reasons: To develop a clear public image for your own business so that potential customers know why they should do business with you rather than with someone else, and to develop a clear image for yourself of precisely who your customers are so that you can develop a successful sales and marketing campaign based on this knowledge.

When my partner and I set out to publish an apartment comparison guide in a major North Carolina metropolitan area we first surveyed the market. Vacancy rates, we found, were quite high. Furthermore, we discovered that the major player already in this market (a well-established, full-color apartment guide) had just increased its publication schedule from three times yearly to four times yearly. Moreover, they had done this without lowering the price of advertising space. To advertise regularly in this publication, therefore, now cost a third again as much as it had cost formerly. A full page ad cost about $1200. Prior to the increased publication schedule, a full year's advertising had cost $3600. Now, at four times a year, the same space, on an annual basis, cost $4800.

I felt that we could go into this market and come out twice yearly. Since we would print more than twice as many magazines per print run as our competitor (in order to top their yearly circulation figures), our per-unit production cost would be far lower than theirs. We could match the high quality of the competing publication and charge $1600 for a twice-yearly full-page ad ($3200 per year). In this way we could provide the same total circulation and help our advertisers maintain their budgets at levels that they had become used to and budgeted for.

We therefore positioned ourselves as the only company that understood our customers' budgetary problems and that was willing to work within them. We became the company that tried harder, worked with more imagination and always went the extra mile to serve our clients' needs.

That was our market position, our niche within a niche. We understood it clearly, built on it, and it worked. This whole story is found in the chapter, "How to Make Money Publishing Apartment and Real Estate Guides," in Kitchen-Table Publisher.

Do you see niche market opportunities around you? Is there a well-defined group of readers that advertisers want to reach? Can you devise a publication that will appeal both to these readers and to your base of potential advertisers? Is so, you may have discovered the opportunity you are looking for.

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