Business Essentials: A cottage industry for export to the US

A firm that helps set up community magazines wants to know how to crack the American market

Three years later, more than 700 magazines have been set up in the UK with the company's assistance. It has established franchises in Australia, France and Spain, and also has a couple in the US. MyMag is now working towards a full Stateside launch and wants advice on how to tailor the product to the American market.

MyMag works by providing all the information and guidance needed to set up a community title, along with everything from editorial content, written by journalists, to word puzzles and cartoons.

It all started when Mrs Botterill set up her own magazine, which not only became profitable but part of the fabric of her community in Solihull. It soon became clear that she could sell her expertise to others and the business grew rapidly. Her husband, Nigel, gave up his own marketing consultancy business to come on board and MyMag now has 15 staff.

"The titles are a cross between a parish magazine and the Yellow Pages, with a typical distribution of 2,500," he explains. "It isn't a radical concept but it is a particularly popular venture among mothers. Other people do it alongside another business and we also have 'mini Murdochs' who run four or five of them full-time. Some people generate profits of £6,000 to £7,000 a month."

Plans to expand in the US came about after Mr Botterill gave a marketing presentation in New York last year. "I brought up the story of MyMag and I couldn't believe the response," he says. "Over 100 people at the event contacted me, expressing an interest in getting it working in the US."

It dawned on him that America could be the perfect market. "They are so big on community over there," he explains. "In fact, when one US magazine ran a story on how MyMag could work for stay-at-home mums, we got several hundred readers making enquiries."

It helps that MyMag recently launched an online dimension in the UK. "We've already got 64 towns covered and will have 250 by next Easter. 'The combined magazine/ internet package would be ideal in the US."

But Mr Botterill is unsure where to start. "Doing everything ourselves is one option," he says. "Having rewritten our materials, we could get a company in the US to print and des- patch them. We could find some American writers to provide the content and set up 0800 phone numbers that are answered in our offices in England."

But he suspects it would be better to have someone actually working in the US. "If I go down that road, how should I manage them?" he asks.

"A further alternative would be to license MyMag. But how would I do that in such a big country and would I risk losing control?"

He adds: "It's frustrating when you know the potential is there, but you don't know to exploit it."

www.mymaguk.com

WHAT THE EXPERTS SAY

Richard Holden, Head Of Franchising, Lloyds TSB

"MyMag should invest now in getting the right advice to avoid costly mistakes. The overseas section of the British Franchise Association and the International Franchise Association in Washington will be able to provide details of affiliated consultants with the right local knowledge. These professionals can offer invaluable knowledge and support.

"One possibility for careful consideration with advisers is a "master franchise licence" - selling the rights to a chosen licensee who then recruits American franchisees and pays royalties back to MyMag.

"The potential downside to this is that MyMag loses control over the franchise and could see the quality of the brand diluted.

"Another possibility is setting up a department in the US. This would enable the firm to retain control, but at the cost of money, resources and time.

"MyMag should also take steps to protect intellectual property rights, not just in the UK and US, but worldwide too. The US market will be a big diversion and it is important the management team does not lose focus on the existing business while trying to set up overseas."

Giles Warner, Director, Deloitte Consulting

"The Botterills' focus should be on the following: Who will buy the product? How will MyMag differentiate itself? How will the firm organise distribution?

"Mr Botterill's feeling that there is demand for his service makes sense, but he should validate this through research, especially into the 'first adopters' who will champion the company.

"He should also assess competitors, and MyMag's overlap with their services. Given that there are certainly similar outfits in the US, the Botterills need a strategy to beat them - better content and pricing, for example, or ease of set-up.

"And finally, distribution. The US is huge, and without local promotion and sales, MyMag could easily fail. The internet is one fix - 'viral marketing' through first adopters could be key - but a longer-term partner should be considered."

Stewart Masterton, Adviser, Business Link for London

"Expanding into new markets requires a clear development strategy backed up by research. Initially, perhaps, trial MyMag in one area - Florida or New England, for example - where there is a large expatriate community. The concept can then be rolled out and tweaked depending on how it is received.

"A joint venture with someone who is known in a specific community may be worth considering, as this will provide a basis on which to check if the idea is transferable. It will also give MyMag someone on the ground in the US and the benefit of shared knowledge and experience. Furthermore, it will enable the firm to set up a US-managed operation with US content, production, while the UK end can provide the intellectual skills.

"Choose a partner very carefully. Seek professional help and legal advice."