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Funding Sources For Your Magazine Publishing

Aug 29, 2008
What is the minimum amount an entrepreneur would need to launch a magazine? Well, if you're handling your own distribution and you don't mind printing the smallest magazine possible, you'll need at least $1,000. And this is assuming that you're distributing just a few dozen magazines at a time.

If you want to create a more normal magazine, while still handling your own distribution, you will need around $5,000 upfront. At this amount, you can use a cheap printing company to produce 2,500 20-page magazines. The rest of the monies would go for content creation, advertising and mailing.

For a larger scale operation, you will need around $100,000+ upfront. This will allow you to print thousands of magazines at one time. In addition, you will have more marketing options, whether it's working with newsstands and/or advertising your magazine on cable television, radio or billboards.

Here are some of the funding sources you may want to consider :

1. Tax Refund/Stimulus Payment
Tax refunds are one of the best ways to fund a business. They usually come in larger amounts and they require no interest payments. The only downside is that you'll have to wait until tax season before you can take advantage of them.

But try to make the best of the time you have. Read up on what type of deductions you can use to optimize your return. And make sure you save your receipts so you can actually take advantage of them.

Also consider lowering your exemptions. In fact, an exemption of zero is optimal, because it will allow you to get a larger amount back. But if your budget can't afford this, see what an exemption of 1 can do for you.

2. Credit Card
Even if you live on a modest salary, if your credit is average, you should have no problems getting a credit card of $1,000. Use this money to start your magazine business, but try not to charge up everything at once. Remember, with a credit card you have to make interest payments, so you need to spend with caution.

Now, if you have bad credit, your credit card options are more limited though they are still there. It's just that you will need to consider getting a subprime credit card. With these types of cards, you'll have to pay a higher interest rate. You may also get a smaller amount of funds upfront. So, it's not an ideal situation, but if you don't have any other money stowed away, it will still be enough to at least get you started.

3. Mortgage Refinancing
If you own a house, you can try for mortgage refinancing. Most homeowners do this at
some point anyway, because it allows them to make payments at a lower interest rate. In the process, homeowners sometimes get thousands back. If this situation applies for you, the money can go for your magazine business.

And, like credit cards, there are subprime mortgages available for people with bad credit. One type almost guarantees acceptance it is known as a hard-money loan. The way it works is simple. The lender finances up to 65% of your property's appraised value. As a result, you get a more affordable payment as well as cash cushion upfront.

However, be careful with hard-money loans, since most tend to be short-term. At the end of the term, you would have to make a balloon payment. This means you would have to pay the full amount of your house. If you don't, your house will be foreclosed on.

4. Personal Budgeting
If you can save $85 a month, in a year you would have $1,020. This is just enough to start a low-end magazine. Of course, you will have to wait until the money accumulates, but in some ways this is a good thing. Why? Well, you can use the extra time to begin developing your content. And, if you don't use any ghostwriters, you won't have to pay anything to create your articles. Plus, assuming you can write just 2 articles a month, by the time your bank account reaches $1,020, you will have 24 articles ready to put in your magazine.

5. Selling Things
If you're willing to part with your flat screen television, leather sofa and other more expensive belongings, you should be able to easily come up with the minimum amount needed to fund your magazine. You might be able to get even more money if you're willing to sell a second or third car you're not using. Indeed, if you get yourself into the right mindset, you'd be surprised at how much money is available through your personal possessions.

6. Friends and Family
If your friends and family are strapped for cash, chances are they're not going to be able to give you $1,000 at least individually. So, what you could try to do instead is attempt to get loans of $50 from 20 family members or friends. Some people may still say no, but others may think about it, since $50 is a lot easier to lend out.

7. Doing Odd Jobs
Do you have a talent for website design or Internet writing? If so, you may be able to collect funds by doing jobs for online marketers. You can advertise your services on free classified ads.

8. Business Cash Advance
This is an option for entrepreneurs who are accepting credit card payments for an existing business, (doesn't matter what industry it is in). And, if these credit card payments total at least $2,500 per month, a lender will probably feel the business is secure enough to offer a cash advance. No monthly payments are required because all monies get paid out through each credit card transaction that is made.

Sound too good to be true? Well, lenders don't mind doing this because they're basing their advance on the strength of a business's stability. Remember, unlike many business loans, business cash advances are given to enterprises that are already making money. That's why they are so much easier to get. In fact, some lenders even brag about their high approval rate for these advances rates that sometimes go over 90%!

9. Grants
Grants, especially those from the government, can be almost as difficult as business loans, but I would say you should still try for them. Why? Well, with a grant, you are getting free money. You are not obligated to pay a grant back, even if your magazine business fails. But with a business loan, you are still responsible for the payment, whether you return a profit or not. The only exception is if you file bankruptcy, which leaves a horrendous mark on your credit report.

10. Pre-Advertising
Finally, there's the option of trying to acquire funds through pre-advertising.What is pre-advertising? It involves offering a business the promise of ad space in your magazine. When the magazine is printed, you will fulfill your promise by actually including whatever ad the person ordered.
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