Media: My plunge into publishing

A good magazine is bound to make a profit. Isn't it? Graeme Gourlay took a deep breath and found out the hard way...

I REMEMBER throwing the magazine I was reading across the bathroom and thinking I could do a better job than that. The object of my derision was a boring, badly written and dull magazine about scuba diving. The reverie that followedwas one familiar to most journalists: why not quit my stressful job and launch my own magazine?

In early 1995 I was still in my thirties (just) and an assistant editor at The Sunday Times. I was not particularly relishing another 20-odd years sliding up and down the greasy pole of executive journalism. Diving in this country was booming. The magazines in the market were editorially weak; there seemed to be a clear gap for a well-produced, quality title.

The more I looked at it, the pluses outnumbered the minuses. Of course, if I'd known then what I know now, three years later, I'd have paid more attention to those minuses.

I thought I could launch a monthly magazine on my limited capital, plus, if I could wangle it, a pay-off from Rupert Murdoch. I reckoned it would take only about three months for its editorial wit and verve to win over enough readers and advertisers to break even.

I told the doubters that magazine publishing was not capital-intensive but revenue-led, so if you got the title right you shouldn't need much money. If you got it wrong you could get out before losing your shirt. There is some logic to this, especially in niche sectors, but it is far from the complete truth. What now amazes me is that no one seriously disabused me of my optimism. Perhaps I just never heard their warnings.

At this point came the first of a series of lucky breaks: I persuaded The Sunday Times to pay me off. Now I had no excuse. A friend, the journalist and author Jonathan Margolis, had an office with a spare store-room under the roof. Rain poured in, so we had to cover the Macs with bin-liners; the floors sloped; noisy pigeons roosted in the rafters; but it was cheap, and it had a certain charm. It was, however, a culture shock. For nearly 10 years I had been a senior executive in national newspapers. I was used to a small army of reporters and researchers. Now I had a rickety office, a couple of Macs and little else. Thank God my wife, Joanne O'Brien, was a brilliant commissioning editor, but she was heavily pregnant and gave birth a week after the first edition. We also had the help of Gordon Beckett, the art editor of The Sunday Times, who fancied the idea of designing a magazine - he even came up with the title, Dive International.

The first edition came out in November 1995. It secured a reasonable amount of advertising, but had cost much more than I had expected, both financially and in terms of effort.

Our first employee was an art editor straight out of art school. For more than a year that was it, as the awesome economic realities of magazine production struck home. Each month we trimmed our print run to match our sales, and I was introduced to that awful distribution concept they call "gravity" - as fewer shops stock you, you have less and less chance of reversing the trend. So much for my confidence in the winning allure of editorial excellence.

I also realised the error in using an outside agency to sell our advertising space. Each month we cajoled a team of ad salesmen who knew nothing about diving to land fewer and fewer ads. The only thing that kept us going was the response of the few but loyal readers.

Then came another stroke of luck. I was offered the job of travel editor of the Sunday Express on a four-day a week basis. Joanne would edit day to day, and we employed a nanny.

Six months later, Lord Hollick, in a move he is now paying a lot of money to reverse, decided to cut and burn the Express group, folding the Sunday staff into the daily and offering 80 journalists redundancy. My letter was first on the managing editor's mat. Another lifeline at just the right moment.

On the magazine's first birthday, things were definitely getting better. We had survived, we were nearly making some money, and WH Smith had regraded us to be stocked in all of their stores. And, perhaps most importantly, I was learning that there was more to being a publisher than words and pictures. I was starting to understand figures, and appreciate that my bank manager was a human being.

The worst moment came when the office was broken into; the computers were stolen and our files trashed. Equally memorable was the time when a wall of shelving fell on my desk - 10 minutes earlier and I would have been decapitated.

But we kept coming out and to our delight the response from readers got ever stronger. And we started to receive submissions from the world's leading marine photographers.

Tantalisingly, we were nearly there on the business front - some months breaking even, others just 5 or 10 per cent off. But the full meaning of the insight that publishing was a revenue-led business came into effect - a 10 per cent loss on turnover was a significant sum and a few months of such losses were taking their toll. The choice finally came down to selling the family home - now our only asset - or throwing in the towel and losing a six-figure sum. We sold the house and within a few months the business moved into profit. By the second birthday we were no longer worrying about survival but talking about growth.

We were still working absurd hours for a pittance, and had forgotten what a holiday was like, but it was nearly all ours (76 per cent, in fact, as friends and family had chipped in through an enterprise initiative scheme). Then came the big breakthrough. We won the tender to provide the 40,000 members of the British Sub-Aqua Club (BSAC) with a monthly magazine, bringing a guaranteed market.

Last week we launched the first edition of the revamped magazine, Dive, with a ritzy party in the West End. The company employs 12 people, I'm still married, and we're wondering what title to launch next. And it's still fun.