From Business Editor to Business Owner

By Henry Dubroff
April 1, 2008 11:49 AM

I started the Pacific Coast Business Times in 1999 with a leased Saab, a checkbook and a business plan.

I still have the Saab and the checkbook.  The business plan, albeit a bit dusty, is still a good read. But making the transition from business editor to business owner didn’t exactly happen overnight.

The ownership alternative takes time and it’s not for everybody. Still, on good days, it’s unbelievably liberating to run your own show.

Perhaps that’s why there are nearly 8 million small business owners in the U.S. that report payrolls. We account for virtually all of the job growth and most of us resent authority about as much as the average beat reporter. We typically owe our success to carving out some sort of market niche.

In the case of the Business Times, our specialty is local business news in the Santa Barbara-Ventura-San Luis Obispo corridor of coastal California. The niche was there before I arrived, but building an organization with 12 full-time employees who collect $21,000 in pay every two weeks took years of patient, persistent effort.

That’s why, before you strike out on your own, your first move should be to give yourself a serious reality check. Talk to trusted friends and family. Take a management class, particularly one that assesses your skills for communications and leadership. You will need these in order to survive.

Second, really shore up your personal finances.  You will want reserves that can both replace your salary and at least partly fund the company in an emergency. When I was forming the Business Times, I told my parents to hang on to their cash. But when the 2001 recession hit, I asked them to step up and they did. I matched their investment—giving the company’s sagging bank balance a big boost.

Finally, you will need an advisor who can be trusted with the ugliest details of what’s going on. As I was packing up the Saab in Denver that snowy October day, my vice chairman, John Huggins, casually suggested that I should “call if I needed help.” A thousand phone calls and countless emails later, John’s cell is still No. 1 on my speed-dial.

If you decide to go solo, you will learn that successful niche companies have some traits in common. I’ve tried to identify these in a new book I’m writing called “Battling Big Box: How Nimble Niche Companies Can Win Against Giant Competitors.” Here’s a sneak preview of what co-author Susan Marks and I found:

First, you’re going to have to empower people. When you are small you can’t afford backups. That means turning people loose; letting them experience success and taste failure. You need to keep tabs and you can intervene in extreme situations, but most of the time, you will be too busy to get involved.  At the Business Times, after six months I turned advertising sales over to George Wolverton, a former news producer who had owned his own training company. He’s now our publisher, his golf game is way better than mine and he happily leads a five person sales team.

Second, you will need to innovate relentlessly. As the innovator-in-chief, I work hard at staying connected through journalism organizations. I want to stay constantly aware of approaches to stories, new content ideas and design tweaks that make us competitive in print and, increasingly, online. I am always looking for a way to make things fresh—and exclusive.

Third, branding is going to be a big factor in your success.

To get our name in front of area businesses, the Business Times supports economic forecasts, chamber trade shows, investor forums, NPR stations and even classical music events. But the message also matters. If I am giving a talk and I say “the Business Times is the local weekly business journal,” eyes glaze over. But if I say we have “the largest financial news team between Los Angeles and the Silicon Valley,” people pay attention.

Fourth, somebody must get a grip on cash flow. Publishing requires heavy up front expenses but advertisers don’t turn around your invoices on a dime. To complicate things, revenue can vary widely from issue to issue.

At the Business Times, we were approaching breakeven on an annual basis after about 18 months. But breakeven still required us to use our credit line to fund payroll in lean times. To sleep better at night, I developed a one-page spreadsheet that forecasts our weekly cash flow and creates a mini-plan to meet expenses. These days, the credit line is zero and my goal is to keep it that way.

Founding and operating a niche publishing company has its scary moments but the freedom that comes with being your own boss makes it hard to think about working for someone else.  With all the problems confronting daily newspapers and general business magazines, I can see more of us flying solo as “find the niche” becomes the name of the publishing game.

Please enter your friend's e-mail address

Please enter your e-mail address

If you would like to include a message, please add it here:

Copyright © 2008 Donald W. Reynolds National Center for Business Journalism