Entrepreneur's entrepreneurial attitude: in a competitive market, a small-business magazine stands out for its willingness to take risks

Folio: The Magazine for Magazine Management, Feb 1, 1995 by Tony Silber

Karen O'Neill, promotion manager at Entrepreneur, was explaining why the American Entrepreneurs Association, a trade group for small businesses started by her company early last year, is a great opportunity both for her magazine and for entrepreneurs: "It's a natural because everyone calls us for information anyway," she says. "We're instant-access information, and I think that's an advantage we have over any other institution."

True, launching a trade association for small businesses is risky. Small-business people might well opt for the larger, better established Washington, D.C.-based National Association for the Self Employed. But if anyone can make it work, it's probably Entrepreneur.

The association is just one of a raft of recent spin-offs from the Irvine, California-based Entrepreneur Magazine Group, which for the last year or more has been extraordinarily aggressive in expanding its franchise--whose core mission is to provide information to owners of businesses with fewer than 20 people. The 19-year-old, 385,000-circulation flagship title has itself become a player in a field that includes competitors like Inc., Success and the major business magazines on one flank, and magazines such as Independent Business and Income Opportunities on the other.

Entrepreneur wants to be a one-stop source of information, and it is practicing what it preaches--it's as entrepreneurially inclined as its readers. "We're doing what other people are talking about doing," says Neil Perlman, vice president and general manager of Entrepreneur Magazine Group. "We finally realized what we have."

And that's paying off. The company's revenues were projected to be about $35 million for 1994, up from about $28 million for 1992. Of the total, 22 percent came from sources other than the magazine, compared to 15 percent from ancillary sources in 1992.

Ad pages have hovered around the 2,000 mark for four years running, peaking at 2,018 in 1992. Through November 1994, the magazine ran 1,769 pages, up 1 percent from the same period in 1993. Pages may have hit a plateau, but that's not necessarily bad: In 1993, according to Publishers Information Bureau, Entrepreneur sold more ad pages than any monthly in the country except Vogue.

Ad revenue has increased more dramatically. PIB reports that advertising income has grown from $14 million in 1989 to $27 million in 1993. Circulation has gone from 340,000 at the end of 1991 to a ratebase guarantee of 385,000 today.

Given the interdependence of publishing, it's not surprising that the relaunched association (it first appeared in the late seventies, but fell dormant in 1989) is showing strong vital signs. It has about 25,000 members now, with growth projected at a rate of 2,000 to 3,000 per month through 1995.

In addition to the association, in the last year and a half, EMG has created the following products:

* Two new lines of books. One is a small-business-adviser series and the other is a business opportunity series. Both are due this spring.

* International editions. In 1993, the company launched a Spanish-language version of Entrepreneur in Mexico, with a monthly circulation of 21,000. That magazine is now profitable, company executives say. In April 1994, a South African magazine, Finansies En Tegniek, began running stories from Entrepreneur. Its parent and Entrepreneur are close to a deal to publish an English-language version of Entrepreneur in South Africa.

* A series of regional trade shows called the Entrepreneur Small Business Expos. There were five in 1994, and plans call for nine expos in 1995.

* An online presence on CompuServe, featuring an interactive forum, a database of business opportunities and a section selling Entrepreneur products.

These all come in addition to various themed special issues of the magazine; a four-year-old companion magazine called Business Start-Ups that has just brought in a new editor and gone monthly; longstanding ancillary products like the roughly 200 business start-up manuals and a small-business encyclopedia; CD-ROM versions of the manuals and the encyclopedia; and the launch last month of a syndicated television show called "Getting down to business with Entrepreneur magazine." There's even a sponsored racing-car team whose driver is Entrepreneur's owner, Peter Shea.

Says Shea, who has owned the company since 1987: "Using Entrepreneur as the engine, the base, we're going to see just how far we can grow it." And for editor in chief Rieva Lesonsky, whatever growth occurs will be due in part to management's support for the editorial product. "Everything we do revolves around our name--everything we grow comes from the editorial of the magazine."

Tough times

Entrepreneur launched as a newsletter for aspiring small-business owners in 1973. It became a magazine within a few years, and in 1987 was acquired by Shea and two partners, whom he subsequently bought out. The magazine struggled through a serious cashflow problem around 1990, with debt exceeding $15 million. In 1992, Shea was forced to shut down a four-year-old spin-off, Entrepreneurial Woman.