Jon Ukman: But remember, if ArtCalendar isn't her passion, she should sell it; it's a real option. She could stop growing the business, reduce expenses, and make her P&L look as strong as possible.
Gilgut: The thing I'd start doing immediately is training people. If she's sitting on $50,000 of deferred revenues, she could be hiring some of that help she desperately needs.
Vanni: I'd suggest she delegate the clerical things. I found that when I added people, the growth was geometric, not arithmetical. You can get tremendous surges when you add people and help them really use their talents.
* * *
Which growth strategies are smartest?
Lesa Ukman: Build circulation. At this point each new subscription is pure profit. Blakeslee should buy lots of lists, because even if her return is just 1.5%, she should still be making money.
Gilgut: Push renewal rates, too; 50% to 60% isn't good -- you have to replace too many readers each year. Send out eight or nine renewal solicitations before you give up on someone. With her Macintosh she can set up a mailing schedule fairly easily.
Jon Ukman: And raise the subscription price. If you're looking at 100% growth a year, you're leaving money on the table. Blakeslee has priced ArtCalendar like a consumer publication, but she's selling a business publication.
Lesa Ukman: She should not go after new markets like those gallery guides. She's already got an audience; selling to those 5,500 people is a lot cheaper than selling to a new audience entirely, having to reintroduce herself. She could do what we've done: start with a newsletter and add products such as directories, seminars, and legal guides. Leverage your existing audience. Why not add an annual directory? Blakeslee's already got the information; she could re-package what she has, sell advertising in it, and price it at $200.
* * *
Should the product itself be altered?
Gilgut: Maybe -- but instead of turning it into a magazine, I'd suggest a hybrid. Blakeslee can insert advertising: maybe a sheet of classified, a sheet of display ads, maybe go four-color. With inserts, she doesn't have to turn the whole newsletter four-color or change the way she produces it. And as long as her readers still get their 20 pages of editorial, they should accept the advertising. Making those additions gradually is the key.
Vanni: I'd caution her not to do anything with her product until she researches what readers want, need, and will pay for. As one person alone, you know your instincts have carried you. But things like a redesign are very, very big decisions and shouldn't be relegated to instinct.
* * *
Will these steps build equity?
Vanni: Partly, yes. Because when you are the business, the business is worth zero. My solution was to take on a partner. But I have to point out that my partner and I went crazy trying to value this business so he could buy in -- our respective estimates ranged from $750,000 to nothing.
Gilgut: When you're selling a newsletter -- realizing its equity, so to speak -- it's a matter of increase your subscriber base, increase your equity. Because in most cases an acquiring company can find a talented writer who can replace the founding editor. What Blakeslee will be selling is her subscriber list and proof that an arts-schedule newsletter is desirable.
What she doesn't have to do is reach 20,000 in circulation; she's already at a size that makes ArtCalendar an attractive publication. If she were to sell today, she could probably get eight times pretax earnings -- better than $150,000.
* * *
But what about personal and family goals? Can they coexist with a growing business?
Vanni: The problem is the idea that you can do it all. In my opinion, you can't. The fundamental question is, What balance do I strike between raising my children, nurturing my marriage, and being committed to my business? That should be the starting point for her, deciding what she really wants out of life.
What I did to explore my business options and their life consequences was to put together a network of advisers -- professional and personal intimates who acted almost like a board. And I talked to all of them about my goals, where I wanted to be personally and professionally, and got their advice. In the course of conversations, what I want and what my commitments are became clearer.
Still, when I found my partner, it was hard to make the decision to give up power. I've spent two years nurturing a staff, and I've been good at delegating, but it definitely is different with a partner. I had to do it, though, if I wanted to keep growing. Blakeslee may have to, as well.
Gilgut: If she's clever and brings on quality people, she can grow ArtCalendar and maintain her lifestyle. Since she seems to be doing everything pretty well, I'd be confident she could train a talented, competent person.
Vanni: She sounds like I've felt -- torn between a great business opportunity and an idea about being a mother that was formed in her head before this business entered the picture. The question is, is that the picture she's still committed to? Or has it changed?
