Throughout history, amazing things have happened from small acts that are repeated over the over. Giant buildings have been built one brick at a time, and the giant oak tree starts from just an acorn. In this same way, fortunes have been made from simple billboard signs. In this Billboard Mastery podcast, we’re going to review the process in which you can grow your desire to build an additional stream of income from just an idea, to grow that stream of income into a river, and how you can ultimately achieve all your goals one billboard at a time.
Episode 15: Anything Is Possible With Scale Transcript
Bill Marriott, the chairman of Marriott hotel corporation once said, it's a small things that make the big things possible. This is Frank Rolfe of the Billboard Mastery podcast. We're going to be talking today about that very thing, taking small repetitive tasks and building those into something really large and worthwhile. Now we use the word scale. All the time, we talk about scaling up a business. What does scaling mean? Scaling is defined as a linear transformation that enlarges an object. Basically what it means is taking something however small and building it with repetition into something much, much larger. Look at the Oak tree out in your yard. That Oak tree started as a tiny acorn. How did it grow to such giant stature? Well, it repeated the same exercise over and over, building the cells inside the wood and growing and growing. And that's how it becomes that giant tree.
Well, the same thing is true of your Billboard business. So how do you do it? How do you take those repetitive small things and make those into something big? Well, first you have to learn how to go about buying or building a Billboard. You have to learn about the laws. The Highway Beautification Act on the national level and how it applies to your state. And then what your local sign laws are. Because remember that in America, you have one of two camps, you're either inside the city with its own zoning and its own sign laws. Or you're outside in a County, which you go under the state's mandate for end zone commercial property. So you've got to know the laws.
Number two, you have to get out in the field and actually find those potential Billboard sites or Billboards that you can buy. Again, a small task, a repetitive task. But nevertheless, those are the building blocks of getting to where you want to get as far as building that additional side income, or side hustle, or whatever it is you're trying to achieve.
Next, you have to learn the various steps of actually building or buying a sign. In the case of building a sign, how to do a ground lease, how to get the permit, how to decide what size and what height to build, what materials to build the sign out of. Same with if you're looking at buying a sign, what are the steps there? Buying the sign, with the build of sale, getting an assignment of the ground lease, getting an assignment of the permit. You have to understand those key building blocks.
And then once you have the size, you have to learn how to rent the ad space on them, how to find prospects, how to price it, how to go ahead and make the sale with those prospects. Understanding the 10 different ways used to rent a Billboard. Knowing what correct artwork looks like, knowing how big to make the lettering and what colors to make the letter and make it all tied together. Now from there, once you've gotten those basics down, once you've learned the basics of how to find a Billboard to build or buy and how to build a Billboard to buy, then you simply apply that over and over and over.
So let's then reflect for a moment on what it means as far as scaling up those skills. Let's assume in your area, you say I'm going to focus on wooden Billboards, the old original, the old fashion, the way the industry began. Wooden telephone pole Billboards out in more rural settings, typically on state highways, but even sometimes on interstate. Those types of signs are the least expensive to build. You can build them for as little as two to $4,000. And then what happens with them? Well, those signs can produce about a 50% rate of return on what you paid.
So let's say you paid $4,000 to build the sign. Well, it can probably make $2,000 a year. Maybe even more. That means in the first two years you pay your debt off. And thereafter, let's say you've got $2,000 a year per sign. If you could build 10 of those, you'd have 20,000 a year. 20 would give you $40,000 a year. I know someone who owns 100 of them. That's $200,000 a year. Let's say, instead, you want to build big steel Monopoles in the city. Those signs are much more expensive, but much more income producing. And let's assume one of those signs can produce a $1,000 dollars a month of income to you. Well, what if you had 10, that'd be $10,000 a month.
So really if you're trying to build something big here in America in 2021, the key item for you is going to be thinking small. Because it's those repetitive small tasks that build into that big ending. What's also good about this is that you kind of grow as you learn. You seem to get better all the time. When I got in the Billboard business, I was at my worst when I started. And I was at my best years into it. Years into it, I was much more skilled at cutting ground leases. Much more skilled at buying things, negotiating, understanding what I was doing. So as you go, as you grow, you're going to get better at what you do and your portfolio will only get better. Additionally, it lowers your risk. Because with each item you still have finite risk because you're adding it all together.
There's two types of business models out there. There's what's called adding a wing on the hotel and betting the farm. When you bet the farm on a business, what happens is you don't really know if it's going to work or not. And then you try it and hopefully it does. But if it fails, you fail miserably. When you add a wing on the motel, you start with a motel and then you rent up all those rooms. And once you've perfected it, then you add on to the motel. And you just keep doing those skills that you've already perfected with the original motel. So many way, Billboards are the ideal thing to get into if you're trying to build something big, because you can start small. There's some businesses you can't. If you want to open a McDonald's, it will cost you roughly $1 million today to open a McDonald's.
Now, most people don't have a million dollars, so they have to borrow to do it. And then when they get into that, McDonald's, let's assume things don't work out for them. Well, then it is a disaster. With Billboards however, you can get into the business and even if you screw up and one or two Billboards, it will not sink you. That's another beauty of scale is the idea of portfolio diversity. So the more Billboards you have, the less reliant you are on any single sign. Let's assume you had 20 wooden Billboards that were making you $40,000 a year, a windstorm blows through and blows one down. Now, where are you at? Well, your still at $38,000 a year. It's not a total disaster. That's the beauty of having all those small little pieces.
So the bottom line is if you trying to build a really significant side income, side hustle, additional stream of income, whatever you want to call it, Billboards are a really good place to start. Because if you're starting with lower mass of capital, and you want to do it safely with as little risk as possible, you really just can't beat the Billboard business model. It's reflection, it's focused on scale is also what protects you. It's also what insulates you from having that barrier to entry. So there's really just not enough good you can say about the Billboard industry and all the opportunities in it. But it all ties back to scale, that linear transformation, that enlarges an object. You start small, learn what you're doing, and repeat it over and over again until you hit your goal.
If you look back historically at all, the big Billboard companies in America, you'll find they all began with just one second sign. If you look back on such companies as Lamar, Clear Channel, their early origins began with an individual. He had a dream of building a business. He started with just one sign and he scaled from there. It's not rocket science. It makes complete sense. The problem is some industries do not allow you to do it in that manner. You couldn't start FedEx with just one truck. You had to have a fleet of trucks and planes. When they opened the doors, who knew what would happen? Fred Smith, the founder was as afraid as anybody that might crash and burn and everyone will lose all of their investment. But Billboards give you a greater sense of security. And a much more sane business plan to get from point A to point might B.
The bottom line is, if you want to get into a business here in 2021, and there's every reason you should, based on how unstable America has become, then you really should consider Billboards for the simple fact that it ties to something so basic, so time proven, starting small and building it from there. It gives you security. It gives you diversity, and it's just the best way to go. This is Frank Roth, the Billboard Mastery Podcast. Hope you enjoyed this. Talk to you again soon.