Business Plan: EDGE Free IT MagazineGroup 5

Rizwan Chand

EDGE - Agenda1. Mission & Strategy2. Product Description3. Target Market4. Marketing Strategies5. Operational Plan6. Management & Administration7. Financial Projection & Funding8. Implementation

1. Mission & Strategy

Mission

Values

EDGE is a free megazine to deliver ideas, creativity and complete coverage of information world. An effective dynamic tool for advertiser to maximize exposure.

VisionTo become leading source of information in the field of Information technology.

Deliver Information, Ideas, Creativity & exposure to customers

ObjectivesCreate the wealth of owners and maximized Venture Capitalist investment in the company.

Strategies Stability (Pause & Proceed with Caution)

Goals Become leaders in Information Service Provider

2.1 General Description•A free of cost Magazine to provide

Information related to technology world.•Provide comprehensive information and

review about latest technology products and services.

•Provide guide, tutorial and tips to use different technology products (physical/software)

•Guide to social media online and how to be secure online.

•Interesting gadgets, websites and games available online and offline (free/paid).

2.1 General Description con’t•Letters to us•News•Social Media•Ask the expert (PC, Advice, Software etc )•Tutorials•Best Buy•Hints & Tips•Interactive•Practical (feature, expert, reader tips,

reviews) •Workshop•Freebies (software/players/offers)

2.2 Key Features•Wide range of content/topics•Easy to understand extensive

tutorials/guides •Lowest subscription charges•Readers can contribute and interact•Low price advertising space

2.3 Main Benefits•Easy to understand for beginner•Provide information to be smart online

and offline use•Provide guide to purchase

software/computers•Easy to subscribe•Available wide range of places (init.

Birmingham)•

2.4 Pricing PlanPrice £0.00 - Free of Cost

Subscription Charges £0.42p per issue

Free of cost first 6 issues and £5 every 6 months (12 issues, 42p per issue)

2.5 Competitors' Offerings•Direct Competitor

▫All Consumer Magazine•Indirect Competitor

▫Online Magazine

2.6 Competitive Assessment•Target to professionals•Not enough marketing•Very technical for normal user•Not much interaction•Focused on web technology

3.1 General Background• Audit Bureau of Circulations Report for 2009• Total UK magazine circulation during the period

was 75,367,795 - a drop of just under 2,000 compared to the second half of 2008

• Out of the 112 publishing sectors identified by ABC, only 29 managed a positive year-on-year circulation growth; eight recorded a double-digit growth.

• The PPA calculates that more than one billion magazines were sold in 2009 and that consumer paid-for circulation fell by 1.3 per cent in the second half.

3.2 Size, Segments & Trends• Total sales (and year-on-year percentage change) in key sectors in

the last six months of 2009:• Men's Lifestyle - 2,312,709 (-4.4%)• Music: Rock - 570,349 (-7.0%)• News & Current Affairs: Business & Finance - 1,724,966 (5.7%)• News & Current Affairs: Domestic - 557,513 (3.4%)• News & Current Affairs: International - 829,273 (0.0%)• News & Current Affairs: Science - 151,324 (-9.2%)• TV Listings: Radio & TV Guides - 4,845,410 (-5.8%)• Women's Interests: Women's Lifestyle/Fashion - 6,580,758 (4.7%)• Women's Interests: Women's Weeklies - 8,612,830 (2.9%)

• Paid-for circulation among the top 100 titles has dropped 17 per cent in the last decade. And that's a trend that's only going in one direction.

• But is still space for new launches: Conde Nast's Wired is on course to reach its target of a 50,000 average per-issue sale by its first anniversary in May - it recorded an average sale of 48,275 in the last half of 2009.

3.3 Review of Competition• 83 Titles in UK• Main Competitor

▫ PC Pro▫ User Active▫ Web User▫ Micro Mart

• Content▫ Mainly targeting IT professionals or readers

familiar with technology world and language• Price

▫ Pricing ranges from £1 - £3▫ Subscription charges around 6p first 6 months and

then almost the same price.

3.4 Customers/Users•Advertiser

▫Advertisers are the main customer ▫Wide range of advertiser market ▫Product Brands

Dell, HP, Apple, Xerox, Sony, Samsung etc▫Service Provider

Hosting & Domain, Design Agency, Web & Desktop Application Developers

▫Online Website Online retailers and service provider

3.5 Medium-Term Projections•Birmingham Local readers

▫(Café’s, Train stations and local retailers)•UK universities and higher education

institute▫(166 universities and 22 local colleges &

learning centers)•IT service providers

(25,000 IT service providers throughout UK)•Future Projections

▫Expanding to London local readers▫Other products retail stores▫Increasing subscription to 30,000

3.6 The Market Condition: Competitor Analysis

IT Magazine for sellFree magazines/

newspapersTo provide the updated IT News and product review

To provide local news and eventsObjectives

Differentiation Cost LeadershipStrategy

Key Strengths:- Have know how of IT Magazine- Knowledgeable in IT field

columnists and staffs - Strong connections within IT

industry

Key Weaknesses:- The limited number of readers since people tend to research online

Key Strengths:- Accessibility- High circulation (since it’s free)- Attractive to various ad buyers-Closely bond with local community

Key Weaknesses:-Difficult to identify the readers and the ad buyers

Resources &Capabilities

No reaction since we’re not the direct competitor. And, there’re the large number of advertisers. The competitor’s source of revenue might not be effected.

Prediction

4.1 Key Marketing Strategies•Key marketing strategies Attracting advertisers based on high

distributions and targeting on wide range of readers which are interested in any IT and computer tech

•Marketing - Targeting: All companies which related to IT

and computers - Pricing : Setting relatively cheaper ad space

than paid magazines which have big

circulation - Products : Contents which covered wide range

readers from beginners to skilled readers

4.2 Sales Forecasts•Ad space prices and estimated sales

EDGEDistribution 50,000 copiesTotal 50 pagesAd 15 pages (30% of whole magazine)

Main Ad (per issue) no. of ad page price salesfront cover - - 2,200 2,200inside front cover - - 2,400 2,400inside back cover - - 2,300 2,300outside back cover - - 2,500 2,500

full 4 4 1,000 4,0001/ 2 page 12 6 600 7,2001/ 4 page 20 5 350 7,000

15 27,600Small Ad (per issue) no. of ad page price salessmall ad page 24 1 150 3,600

Sales (per issue) 31,200Sales (per month) 62,400

5.1 Operational Plan

Printing House

Delivery

15,000 GBP

Office Location

Liberty Place – Sheepcote Street, Birmingham, B16 8AE(1,333 GBP per year)

1. Must deliver from printing house to magazine stands.Lease 2 trucks for 400 pounds per month, 12 months contract2. Post to University Libraries across UK (50 P delivery fee TBC)

Magazine stands in

Birmingham

102 physical Locations in Birmingham & mail to other city - 161 Colleges & Universities in whole uk- 21 Colleges & Universities- 20 Train stations- 1 Birmingham Central Library- 20 Learn Direct schools- 18 Internet Café - 9 Currys stores- 30 Chained coffee shop - 6 Caffe Nero/9 Starbucks/ 10 Costa/ 5 Pret A Manager

5.2 Operating Cost Projection

Item Type First Month Cost (GBP) Monthly Cost (GBP)

Office Space Rental Operating Expense 111 111

Office Expense Operating Expense 1,000 1,000

Office Suppliers Operating Expense 316 290

Delivery Cost Cost of Sales 800 800

Printing Cost Cost of Sales 15,000 15,000

Megazine stand Cost of Sales 15,000  

Total 32,227 17,201

6. Management & Administration: Annual Pay roll

Position Monthly Salary Number Total

Editor 3,167   -

In-house writer 1,583   -

Freelance writer     6000

graphic designer 917   -

web developer 1,500   -

Total Editorial Department 6000

Managers      

- Operation 2,500   -

- Sales & Marketing 2,500   -

- HR 2,500   -

- Business Development 2,500   -

Staffs 1,250   -

Total Other Department -

7. Financial Projection & Funding                 

  First 6 months revenue  

    Jan Feb Mar Apr May Jun  

  Sales 62,400 62,400 62,400 62,400 62,400 62,400  

  Cost of sales *1 32,400 32,400 32,400 32,400 32,400 32,400  

  Gross Margin 30,000 30,000 30,000 30,000 30,000 30,000  

  Total Operating Expense *2 32,211 20,711 20,711 20,711 20,711 20,711  

  Income from Operation -2,211 9,289 9,289 9,289 9,289 9,289  

  Other income, interest *3 0 0 0 0 0 0  

  Net Income before tax -2,211 9,289 9,289 9,289 9,289 9,289  

  Tax (30%) 0 2,787 2,787 2,787 2,787 2,787  

  Net Income -2,211 6,502 6,502 6,502 6,502 6,502  

   

  *1: printing cost, salary of Editorial department (6 staffs+2 editors??)  

  *2: All other cost that's not cost of sales  

  *3: We will have to borrow money from bank. The interest rate per month is 0.88% (Lloyds TSb)  

  borrowing 1,000GBP rate 0.88% Payback 1year  

   

                 

First YearPre-launch▫ 1 month for setup and hiring▫ 2 month publication startsLaunch▫ Streamline next issue▫ Marketing & Subscriber

Sub-sequent YearExpand to other cities (London, Manchester)Increase Quality of Content & No. of Pages

8. Implementation

Thank youGroup 5