A publisher makes a splash in the ranks of small business
He was a small-business man who couldn't find a magazine or newspaper with ideas to help him run his business. But unlike many of his fellow entrepreneurs , Bernard Goldhirsh had an advantage: His small business was publishing a magazine -- for sailing enthusiasts.
So, with the help of revenue from his Sail magazine, Mr. Goldhirsh did some research and found he wasn't the only one who needed a magazine aimed at the thousands of small but growing companies that were experiencing the problems growth can bring.
Proving again, then, that necessity is the mother of invention, Mr. Goldhirsh launched Inc. magazine's first issue in April 1979. He printed -- and gave away -- 400,000 copies. Today, from his offices in a recently-renovated building on Boston's waterfront, he is still publishing 400,000 copies of Inc. every month, but he is only giving away half of them.
In addition to a growing list of subscribers, Mr. Goldhirsh is gathering a growing number of advertisers who are paying increasingly higher rates. He is also gaining the praise of a number of magazine industry observers.
"He found exactly the right niche and exploited it beautifully," Robert Gardner, senior vice-president of the Magazine Publishers Association, said of Mr. Goldhirsh. "He had a clear idea of what was needed and executed it very well."
In doing so, Mr. Goldhirsh followed the pattern of many of the magazines that have started in recent years and managed to survive past their first birthday: He defined a specific audience and aimed his editorial content and advertising at it.
Many new magazines fail, Mr. Goldhirsh believes, because they either put too much emphasis on the periodical's editorial content or on its advertising. "You have to ask yourself," he says. "How big is the market of people interested in reading my magazine . . . and how big is the universe of advertisers interested in reaching them?"
With a few exceptions, like Time Inc.'s People, almost all of the magazines started in recent years have been targeted at a narrowly defined group of readers, including apartment dwellers, joggers, working women, sailers, sports fans, the elderly, and roller skaters.
According to one estimate, some 200 to 350 new magazines are announced every year. Most of these never see a first issue, and of those that do, less than 10 percent are expected to succeed.
Mr. Goldhirsh started his first magazine, Sail, in 1970 and promoted it by personally carrying copies to boat shows around the country. The need here, he felt, was for a magazine useful to people who were unfamiliar with sailing terms , equipment, and techniques long familiar to usually affluent people raised with sailboats.
Nine years later, with $2.5 million of his earnings from Sail and with mailing lists of potential subscribers, Mr. Goldhirsh published his first issue of Inc. He also had a comprehensive survey to measure potential reader and advertiser interest. That study, by researchers at the Massachusetts Institute of Technology's Sloan School of Management, "confirmed the need for a magazine that confronted the problems small businesses run into," he says.
Over 230 advertisers helped Inc. meet this need by filling 648 pages of ads and bringing the magazine more than $5.8 million in its first year, Mr. Goldhirsh says. The April 1980 issue showed a 32.2 percent increase in advertising pages over the April 1979 issue. The May issue, now at the printer, will carry 78.8 percent more advertising than its May 1979 counterpart, associate publisher Norman Raben notes. The magazine has been operating in the black for three months.
Inc. is known in the trade as a "service" magazine, as opposed to one devoted to "news." Recent tables of contents listed stories about how seven small companies cut energy consumption, how a financial consultant helped a wire company avoid production jam-ups, simplified tax laws that can help save money on pensions, approaches to raising capital, how a roller-skate manufacturer is planning for the end of the roller-skating fad, how to survive a product recall, shopping for an investment banker, controlling worker compensations costs, and an interview with an expert who advises small companies how to increase productivity by touring their plants.
A look through its pages leads one to the conclusion that many of its advertisers think the most important thing small-business men need is small computers. More than any other product, the ads show a variety of video display terminals, keyboards, and printers.
The magazine is not aimed at the small "mom and pop" businesses, such as a corner grocery store operated by a couple, Mr. Raben said. "Generally we have an audience of businesses that have from $1 million to $25 or $30 million a year in sales," he said.
"But a small business really is more of a mind set," editor Paul Kellam said. The top man in this kind of enterprise usually makes a far broader range of decisions than his counterpart in a large corporation. These decisions can range from five-year planning for the firm's direction to what kind of office copier to buy, Mr. Kellam added.