Entrepreneurship the Opportunity That I Research Paper

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Not only is it a niche product but as there is a stigma associated with the disease, asking people to buy the magazine at a grocery store or newsstand may result in people who want the magazine not wishing to do so in such a public setting. With a mail order business model, marketing would need to be aggressive. Publishing costs would be around $5 per issue (at least $2 for writing/editing alone); mailing costs $1 and the allocated fixed costs to each issue around $0.50. This requires the company to earn a minimum of $6.50 per issue at 15,000 just to break even. A cost of over $7 would be difficult to manage, as that is a point where price sensitivity increases for magazines. Revenue from sales under this scenario would be $105,000. Ad rates for 15,000 targeted consumers could be potentially decent -- around $25,000 per issue -- depending on the layout.

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This is because the ads would be for drugs, clinics and other high value products/services. Our magazine would allow these advertisers access to a market that is traditionally difficult to access.

The result of these revenue drivers, based on a bi-monthly publication run, would be an income statement as follows:

Income Statement

Revenue, ads

150,000

Revenue, subscriptions

630,000

Total Revenue

780,000

COGS

450,000

Mailing costs

90,000

Gross Margin

240,000

Fixed costs

45,000

Net Profit

195,000

The profit is derived almost entirely from the ad sales. The cost of the magazine is set only $0.50 above the publishing price, generating just $45,000 in profit for the year. This illustrates the importance of generating advertising revenue. As the cost of the magazine increase, circulation decreases, but so does the advertising revenue. However, if the price of the magazine drops below $6.50, the company will lose money.....

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https://www.aceyourpaper.com/essays/entrepreneurship-opportunity-543
   

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