Why are so many of association media professionals unaware of what it costs to produce the publications that they work on daily?
I once attended a conference session where the association executive talked about having orders from the CEO for everyone to cut their budgets drastically. Yet, in the next breath she talked about how she went on site visits to the three printers she was considering during this same time.
Business travel is often the first line item cut during belt tightening, so I was puzzled about this. And, it’s these kinds of decisions that get questioned during the budget process.
I have a secret: I’ve worked on five association magazines, received kudos from members about the content, and won awards from peers for writing, content, and design — yet I’ve never been on a press check. Ever. And I have never visited any printer that I have used to print a magazine. Why? There was no cost justification for it.
Justifying your budget is not complicated if you do three things:
- Know what the market should bear in terms of cost for the services you seek.
- Always ask: “If this were my money, would I pay $XX for this service and why?”
- Run your draft budget by the CFO first.
Most of us work our way up the publishing ladder until one day we manage a budget. Most of us do not have any formal or on-the-job training in this area, but all of us shop at some point in our lives. Whether it’s groceries, furniture, clothing, cars, homes, or boats, we have all spent money in our personal life. Hopefully, we are all generally aware (or at least a website click away) of how much goods cost.
If this is the case, then why are so many of association media professionals unaware of what it costs to produce the publications that they work on daily? Because we are unaware, our budgets can often be inflated with items that are not necessary or are necessary, but are overinflated. Here are some tips on creating budgets.
1. Know your market pricing. I am not a huge proponent of bidding out work on a scheduled basis just because. There is a lot of work at your end to create an RFP and even more work at the vendor’s end to respond. That said, if you have not received pricing on your services in three to five years, it’s probably time to send out a simple RFP.
If you can’t remember the pricing ranges from the last time you received an RFP, then either find the paperwork or be prepared to send one out. You should absolutely know what your costs are for every aspect of your publication. You should also know how much it costs per unit to produce. Is it $1.25? $3.50? $5.00? You get the idea. It’s only when you are armed with information that you can make smart decisions about your current or future budget.
2. If this were my money, would I pay for this service? As an association publisher, I have been pursued by printers, designers, digital providers and mail houses. Most of it was unsolicited, but sometimes I would go ahead and let someone provide me with a bid. Why? Because not only did I want to reconfirm that my current pricing was fair, but I also wanted to find out what the market ranges were. And vendors always seem to act like it’s not a big deal to provide a quote.
It was always eye opening to see the proposed costs for services that I was already using. In one instance, a printer wanted to charge me $120,000 more per year than I was already paying. In another instance, a designer wanted to charge me double my annual budget for the award-winning design services that I was already using. Did I take either of these vendors up on their proposals? No. Why? There was no cost justification for it. Just like there is really no cost justification for visiting printers.
3. Run your budget draft by your CFO before it actually has to be presented. If you don’t already have a relationship with this person, this will help you begin one. Who doesn’t like to be asked to use their expertise to help a colleague? He or she will be able to prep you with questions that will likely crop up so that you can either find the answers or be prepared to answer them when the time comes. You want to avoid upper management tossing out comments like: “Why don’t we just stop printing the magazine? We could save a ton of money.” Or, “Why don’t we use our internal designer to design the magazine. Aren’t the templates done?” Or, “We can just get members to write for free and lay off the writing staff or stop paying freelancers.”
These three tips will provide you with the tools you need to create and justify your budget.