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Organic Growth

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  • | 10:00 a.m. August 22, 2014
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When Sharon Bruckman became certified as a hypnotherapist in the early 1990s, she wondered how she'd find new customers.

Advertising in the daily newspaper in her hometown of Naples was too expensive. Besides, it wasn't targeted to the kinds of alternative health care customers who might need her services.

Bruckman thought there should be a better way to advertise than to drop cards and flyers in health food stores, so she created a magazine called Natural Awakenings that would appeal to health-conscious people and the businesses that cater to them. “We needed a resource to bring everybody together,” she recalls.

Today, there are 95 editions of Natural Awakenings all over the U.S. with a combined circulation of 1.5 million. You can find a free copy at one of 47,000 locations.

Each magazine has a local publisher who acquired a territory under a franchise agreement. A franchise costs a one-time fee of $49,900 and 7% of monthly gross sales.

The success of Natural Awakenings shows how print publishers can survive and even thrive in an era of information overload and competition from the Internet. The magazine focuses on local advertisers such as yoga studios and health food stores and includes local stories and a calendar of events for each area.

“When Sharon first started the magazine 20 years ago, no one knew what an organic apple was,” says Larry Levine, the president of Natural Awakenings Publishing Corp. “Meditation was for hippies.”

While there are national advertisers attracted to the overall circulation, Natural Awakenings remains focused on its communities. “Natural Awakenings isn't a national publication,” Levine says. “Publishers are visiting local advertisers.”

News sprouts
Bruckman, CEO of Natural Awakenings Publishing, never imagined she'd be running a publishing empire. She'd moved to Naples in 1981 from Michigan with an art degree and grew alfalfa sprouts out of her garage to make ends meet. “I still don't have a microwave,” she smiles.

Bruckman grew tired of the sprout business and earned a certification as a hypnotherapist. “I wanted a product that wasn't perishable,” she says.

To advertise her business and those of other holistic health businesses, Bruckman started Natural Awakenings in January 1994. She published 5,000 copies of a 32-page issue, distributing them at health food stores, libraries and doctors' offices.

Natural Awakenings was an instant success: The first issue had 40 advertisers. “There were a lot of small businesses that never advertised before,” she says. “I discovered there were a lot of people.”

Bruckman was careful about managing expenses. “We had them printed up in St. Pete,” she says. “We would rent a van to drive up and get them to save a couple hundred bucks.”

Four years later, in 1998, Bruckman started an edition of Natural Awakenings in Sarasota, dropping copies off as she drove back from the printer in St. Petersburg. That edition met with similar success. “Sarasota had become the prototype,” Bruckman says.

With the help of franchise executive John Voell, Bruckman began to plan for franchising the operation (Voell died last year). The first franchise expansion was Fort Lauderdale in January 2000 and it cost $25,000 to invest. “I didn't really know what I was going into,” Bruckman laughs.

Levine and Bruckman don't disclose financial performance for the company as a whole. “It's been steady growth over time,” Levine says.

Franchise publisher
Publishers who buy a Natural Awakenings territory pay a one-time fee of $49,900 and 7% of gross sales monthly. The company helps them get established with editorial content, production help, a website, accounting software and a lead-generating system.

For the first three months, Natural Awakenings will help new publishers produce the magazine, which includes picking a cover, generating editorial content and creating the layout of stories and ads. After that, the company provides up to 20 pages of editorial content, covers to choose from and a wide selection of stock photos to accompany stories.

Advertising rates depend on the local market. The company will help new publishers establish competitive rates, depending on the size of the market and what other publications charge. For example, a full-page ad costs $950 in the Naples-Fort Myers edition, with a 25% discount for advertisers who agree to a one-year run.

Because of franchise regulations, Natural Awakenings executives can't say how much publishers should expect to earn. But Bruckman says monthly sales for her own publication covering Naples and Fort Myers range from $25,000 to $30,000 depending on the time of year.

Bruckman says it costs her about $4,500 to print her local Natural Awakenings, her biggest expense. She says most publishers spend about $500 a month on editorial content, mostly from a well-established network of freelance writers. Publishers also print news submitted by the businesses that advertise, though Bruckman says advertisers cannot pay for editorial content. “I want people to read the magazine,” she says.

Circulation depends on the market. Generally, it ranges from 10,000 to 30,000 copies a month per market, but it can reach higher. Puerto Rico is the strongest publisher, with 65,000 copies.

Each magazine ranges in size from 32 to 108 pages. At a minimum, Natural Awakenings suggests publishers should have at least 300 distribution points, but some have as many as 1,000. The publishers distribute the magazines themselves, often selling ads as they visit different locations, or they hire individuals or distributors to do it for them. Wire racks for indoor use cost $20 each; outdoor racks cost $100 each.

When Natural Awakenings lands a contract for advertising across multiple magazines, the local publishers earn the revenues after a 25% commission. “They get the ad, place it, send us a tear sheet and get paid the next week,” Levine explains. “At a corporate level we try to attract national advertisers and we're doing that more and more.”

Although it now has 95 editions, the company continues to look for new markets. For example, it only publishes in two areas of California: San Diego and East Bay. “There's a huge number of markets,” Levine says.

Executive Summary
Company. Natural Awakenings Publishing Industry. Media Key. Stay focused on a market niche.


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