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Financial Benchmarks

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Published in: Economy & Finance, Business

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Transcript

  • 1. Financial Benchmark Ratios Sabatier Consulting LLC
  • 2. Finance
    • Please note that the benchmarks provided in the following slides are based on a normal economy…not a recession.
    • If, your publication is non-profit and your financial goal is break-even each year, then you are working toward a P/L of -0- vs. a positive.
  • 3. Finance
    • Sample Consumer Publication
    • Operating Ratios (dept expenses as % of total revenue)
      • Editorial & Design 8.0%
      • Gen & Admin 8.0%
      • Advertising 18.0%
      • Circulation 14.0%
      • Manufacturing 30.0%
      • Ex.'s % of Rev. 78.0%
      • Net profit 22.0%
  • 4. Finance
    • Sample B2B (trade) Publication
    • Operating Ratios (dept expenses as % of total revenue)
      • Editorial & Design 17.6%
      • Gen & Admin 8.6%
      • Advertising 25.7%
      • Circulation 10.2%
      • Manufacturing 22.0%
      • Ex.'s % of Rev. 84.1%
      • Net profit 15.9%
  • 5. Finance
    • Sample Association [member] Publication Operating Ratios (dept expenses as % of total revenue)
      • Editorial & Design 18.0%
      • Advertising 13.0%
      • Circulation 2.0%
      • Manufacturing 45.0%
      • Ex.'s % of Rev. 78.0%
      • Net profit 22.0%
  • 6. Creative Budgeting
    • Too often efficient management is identified with cost control. It is easy to forget that the primary objective is not to save money, but to make money.
    • This is particularly important when magazines are under pressure, as they are in today’s economy.
  • 7. Creative Budgeting
    • There’s a major difference in attitude between the publisher who sees his job as reducing spending by 10% and the publisher who sees his job as increasing earnings by 10%.
  • 8. Creative Budgeting
    • Budgets are frequently the principal instrument for introducing control from above. They are meant to be planning tools relating vision to verity.
  • 9. Creative Budgeting
    • An effective budget should:
      • Incorporate the budgeter’s goals and aspirations
      • Reveal the budgeter’s perception of the realities – money, people & circumstances
      • Propose a plan for using those realities to reach the objectives. Numbers are meaningless unless related to objectives and circumstances.
  • 10. Summary Report
    • Prepare a final evaluation report that includes:
      • Objective of Evaluation
      • Each Department-interviews, information request, findings, analysis, and recommendations
  • 11. Characteristics of profitable publications
    • Fill an information need/how to
    • Strong readership base
    • Endemic & healthy advertising base
    • Frequency of 6x year or higher
    • Diversified revenue sources [more than 1]
  • 12. Characteristics of Profitable Publications
    • Maintain tight ad/ed ratio
    • Positive growth trends
    • Continue to invest/improve the publication
  • 13. Characteristics of profitable publications
    • Good management team in place
    • Effective sales force
    • Staff support and resources
  • 14. Contact…
    • Sabatier Consulting [email_address]
    • 703.536.2635/212.213.1550
    • www.sabatierconsulting.com
    • This presentation is copyrighted by Sabatier Consulting.