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8 Critical Cash Management Tips for

Shweiki Media inc.
Shweiki Media inc. 7/12/2014 2:20:00 PM

8 Critical Cash Management Tips for New Publishers

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8 Critical Cash Management Tips for Publishers


graduating from the University of Texas, I had an idea to start a

magazine about all the cool, hip and fun things to do around campus for

the students. As I  was a government major,  I knew nothing about

business or publishing, but was very excited about the idea of starting a

magazine. I put out a couple issues and fell in love with what I was

doing. It was a fantastic creative outlet. But creativity that isn’t

tied to making money is just a hobby, and if I wanted to keep

publishing, I had to find a way to turn my magazine into a business.

gal shweiki 8 Critical Cash Management Tips for Publishers


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It’s been 25 years since I published that first issue, and

I’ve learned some important lessons about the magazine business along

the way. Here are eight important things for managing cash I think every

publisher should know.

1. Start Conservatively

When I started my publication, I needed $600 to pay my

printer, $275 to cover my rent, and about $425 for other miscellaneous

expenses.  I knew what I needed to sell to cover all my expenses, so I

didn’t stop selling ads until I hit that number. Adding even $100 to my

monthly expenses would mean I would need to sell more ads.  That was

hard to do, so I kept my expenses to a bare minimum.  Keeping expenses

down helped keep the publication going and allowed me to build and grow

the magazine.

2. Keep Overhead Low

I worked out of my apartment for two years. When I finally

moved into an office, it was so small it could only fit a desk, a chair

and a filing cabinet. Remember, cash is hard to get and easy to spend.

Even small expenses can add up and end up burning through your cash


3. Make Sure Every Employee Pays for THemselves

Typically, as a new publisher, you start by doing

everything yourself.  That’s what I did. As you grow, you will bring in

new people.  Make sure the people you bring in make you money or do

things that allow you to go out and make more money.  The first person I

hired was a graphic designer.  They were much more talented than I was,

and that freed me up to go out and sell more ads.

4. Don’t print more than you need

My first issue was an eight-page, two-color publication

printed on offset paper.  It took two years to grow to full color, then

another two years to print on glossy paper.

The cost of printing is your biggest expense.  Keeping that

cost under control is a key factor in the longevity and success of your

publication. Start small, and make sure your idea sells. Then grow your

magazine as your revenue grows.

5. Pay yourself first

When I started my magazine, I put every penny of profit

back into the publication. This is usually a required mindset in the

beginning, but it’s a high-risk behavior that must be reeled in as soon

as practical.

Twelve years ago, I joined an organization called YEO (Young Entrepreneurs Organization

now simply EO) which taught me a lot of about how to run a business.

One of the most important lessons was about building your personal net

worth so you can live on your own terms. To do that, you must extract

profit from the business and move it to your personal balance sheet. It

is easy to find ways to invest your profits back into your company

(nicer paper, more employees, marketing), but it is important to

maintain a cash reserve.

You need to create rules that force you to take profit and have the internal discipline to follow them.

6. A sale isn’t a sale until you collect the money

You must figure out how you are going to collect what you are owed.

If you extend credit, you are making a loan to your client

and you should treat it accordingly.  Just like a bank would do, you

need to determine whether customers are credit-worthy and find out in

advance how long they take to pay their bills. Protect yourself and

limit the damage. If a client is getting behind on their bill, do not

keep running their ad in your publication.

7. Don’t give away advertising

A couple years after starting the magazine, I started going

after larger national accounts without much success.  I thought giving

away premium space to national advertisers would lead to them eventually

signing up and paying cash. They never did. Giving away advertising

cheapens your publication. Don’t give out handouts and don’t trade for

product. You need cash to publish the magazine, so collect the cash.

8. Numbers run a business

The finance and accounting part of the magazine business

was never my favorite part, but it is critically important.  If you

don’t pay attention to your numbers, your publication will fail. Here

are the numbers you need to look at daily, weekly and monthly:

• Daily: Cash Balance

• Weekly: Cash Flow Forecast; Sales Forecast.

• Monthly: Profit and Loss; Balance Sheet.
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