Did you know that according to the U.S. Census Bureau, there are 4.2 million veteran-owned businesses in the U.S.? Neither did Chris Hale and Rich McCormack, co-founders of Coraopolis, Pennsylvania-based Victory Media, until they sat in on a veteran business owners outreach meeting where a beleaguered VA rep was getting pummeled with questions from a room full of disgruntled veteran business owners. The source of their frustration was a program introduced by the federal government in 1999 that allowed service-disabled and veteran-owned businesses the same opportunities to compete for government contracts as minority and women-owned businesses. The veteran portion of the program was only meeting .15 percent of its $9 billion worth of yearly contracts;revealing a vast disconnect between the VA, its constituency, and federal agencies that were required to outsource three percent of their procurement budget to this group. "Rich and I turned to each other and said, ﾑThis looks like a magazine opportunity,’" says Hale.
A Major Untapped Market
Hale, who had started Victory Media and a magazine called GI Jobs in 2001, left that meeting determined to find out more about veteran-owned businesses and why federal agencies and contractors were falling short of their mandated contracting arrangement. "We looked at the market and found that minority and women small business interests were well-represented in the print-media market," says Hale. "The magazines were providing outreach for them. The flip side of that is, and more important from a business model perspective, is they were providing the federal government and all of its prime contractors, who are required to meet that three percent goal, with a vehicle to help them better meet that goal. In other words, to run advertising."
Hale set aside about $300,000 of existing capital to launch Veterans Business Journal in April 2004 as bimonthly with a ratebase of 30,000. He leveraged channels already established with GI Jobs, such as newsstand distribution into military bases where, says Hale, 25 percent of retired veterans still visit the exchanges. Of the 30,000, one-third were piped into these outlets, while the rest were delivered through veteran business development centers and procurement technical assistance centers.
Top line revenue ramped up quickly, shooting up 101 percent in 2005 versus 2004, and another 45 percent in 2006. The magazine broke even by its fifth issue. "We launched into a market that was already proven for women- and minority-owned businesses," says Hale. "And the issues surrounding veteran-owned businesses were getting more national attention. Those two things aligned and helped us break even pretty quickly."
Government agencies were the magazine’s first advertising target, with a pool of about 15-20 available. Hale’s team quickly maxed out the potential there and turned to Fortune 1000 companies, most of which have a supplier-diversity department. "Their role, much like recruitment diversity, is to make sure that the suppliers are also diverse," says Hale. "Veterans are now a goal that’s starting to be adopted nationwide by a lot of Fortune 1000 companies regardless of how much business they do with the federal government."
The corporate supplier diversity market became the fastest growing advertising segment for the magazine. In 2006, VBJ averaged about 24 ad pages per issue, with 34 unique advertisers.
More recently, Hale convinced the government to consolidate its veteran-targeted conferences into a partnership with his Veteran Owned Business Expo. "It’s a strange partnership, but one that we think is going to work very well," Hale says. "We produce the expo side;the booths, sponsorships and matchmaking events;and keep the revenues associated with that. The government will produce the breakout sessions and content."
Hale adds that much of the vendor market is conditioned to face-to-face interaction, which he thinks he can gradually turn into more print advertising. "[The expo] gives us a way to get to that customer who maybe hadn’t historically done print advertising," he says. "If we could get to know them better by having them participate in events, then we could get them to do both."
Keep Expanding Your Ad Pool
Veterans Business Journal maxed out its primary ad pool at 15 federal agencies, but quickly moved to target the corporate supplier diversity market.
Look for a Proven Market
Veterans Business Journal launched into a market that had already been proven by like-minded, but not overlapping publications.