Four and a half years ago, in the middle of a recession, Output was created with the idea of being a new voice in the visual communications space. Employing a young team, the magazine made a small profit for its first three years of trading. Yet just a year later, having been refused crucial funding to enable the growth that the publication needed, it was on the verge of closing.
However thanks to the generosity of a host of people, businesses and even competitors it lived to fight another day within 24hours and the team are now in talks to put the company on a solid footing and grow.
Monday February 23rd the editor-in-chief of the title announced to his staff that apart from the wages for the month aside, there was nothing left in the coffers and they would have to close at the end of that week. Determined not to go down without a fight, the team decided to tell their story and highlight the difficulties that SMEs are currently facing.
Their plight was by no means out of the ordinary. According to research from the ONS, only 57.1 per cent of business started in 2010, the same year as Output, made it past the three year mark, due largely to challenging economic conditions and a 14 per cent decrease in SME and individual lending over the last five years.
The reasons why they were refused the credit that would have helped them grow sustainably were the same that affect many smaller businesses.
Being an independent publication with a young managing director meant that they had no physical collateral to use as security for a loan and as a service-based, rather than manufacturing,the company itself didn’t have and assets to offer as collateral. As banks and alternative lenders use assets as their main criterion, this makes it all but impossible for such businesses to raise the money they require.
Upon notice that the closure of Output was imminent, the reaction from the communities that the title served was huge.
The industry it serves rallied behind them, with individuals, small businesses, organisations and even rival publications chipping in to steer them away from the brink. The sense of community was great as the companies problems had clearly struck a chord and many of them were determined not to see another business fail. Within 20 hours the company had reached their target to keep operating.
Speaking about the campaign Editor Ben McCabe said: ” The publicity from the campaign – 4,576,140 impressions and more than half a million Twitter users reached – helped persuade four potential investors to come forward and begin discussions with us on how to take the company forward. Were it not for this project, I would be sat applying for jobs rather than creating content for a vibrant, provocative magazine – something that I now hope we will continue to keep doing for a long time to come.”
“The support we received from the Crowdfunder team was incredible, explaining our options and helping to push the message out further. Regardless of where a business is, whether it is just starting out or looking for extra funding to push it on to its next stage, Crowdfunder is a platform that everyone should consider as an option for helping their companies or organisations grow.”
Chairman of media investment company Audere Capital, (owner of Business Matters parent Capital Business Media) Richard Alvin said: “I was alerted to Output’s plight via Twitter and reached out to the team to see if there was something we could do to support them. When they told me about their Crowdfunding campaign I was sceptical but also took that as an enhanced proof of concept so to speak for their brand. I was so pleased to see them pass their milestone and the challenge with flying colours and we, and I know others equally impressed by their story, are in discussions to hopefully secure the long term future of the company and return it to growth by providing them with much needed capital.”