How to Value a Magazine Business

If you’re wondering what the long term business prospects are with a magazine business, look no further.

Our guide to valuing a magazine business is available to download – FREE – for everyone who requests our franchise information pack.

Magazine businesses are different to a lot of industry types.

Some of the most obvious differences are the intangible elements that accompany magazines.

For example: the main product sales come from advertising space, which is not a physical thing.

This is an advantage in terms of not requiring warehouse space, non depreciating and costs next to nothing to ‘manufacture’.

On the other hand, magazine advertising space can’t be re-possessed if your clients refused to pay you – so having a robust credit control and accounting system is essential. So many magazines go out of business being owed thousands by non-paying bad debtors.

ViVo Magazine has a successful credit control and accountancy model that has produced top class results in terms of generating prompt payments from our advertisers.

The media industry has been well known for paying inflated prices for certain acquisitions. But magazines – the printed kind – are in a state of flux. Unless, that is, you happen to be running a magazine in a high growth market sector – such as luxury or hyper-local!

Integrating digital media with traditional media is key to success.

Magazine readers still go online and people who go online still read magazines – so simply offering both audiences a ‘one or the other’ option is a flawed strategy. A joined up digital and traditional media delivery system is integral to producing solid long term results from your magazine business.

ViVo Magazine franchisees benefit from full media business training and access to the latest reports, technology and multi-media in order to always keep one step ahead of the game.

Should an exit via business sale form part of your plan, perhaps as an early retirement strategy, franchisees are entitled to sell their licence/magazine(s) as a going concern should they find a suitable buyer.

To give an indication of what your ViVo Magazine could be worth within just 3 years you need to factor in the anticipated turnover and profits plus the desirability of your client base and indeed your audience.

Media businesses, as a general rule, tend to be valued higher than businesses which carry stock or rely on large numbers of skilled staff so the potential for gaining a lucrative sale price is increased with a ViVo Magazine franchise. This is even more relevant when the business is part of a tried and tested franchise model, it decreases the risk profile for any potential buyer.

For the purpose of illustration, if you built your ViVo Magazine up to a portfolio of two publications plus a social networking website added to the mix, had a turnover of £250k, it is certainly realistic to place a valuation of at least 3 or 4 times annual earnings.

You could be selling your ViVo business for a six figure sum within a relatively short period of time, should you wish to do so, if you have been successful at building the financial profile of your franchise.

Alternatively, you may wish to recruit your own manager(s) and simply enjoy the profits of your early labour. There is absolutely no doubt, if you put the time and effort in with your ViVo Magazine business you should be very well off or in a position to never have to work again within just 5 years.

2010 limited availability promotion: Franchisees who sign up before March 2010 will pay 0% commission. Apply for your free franchise pack below.