Billboard Mastery Podcast: Episode 33

Why Strong Things Grow Slowly

I just talked to a guy named Tim who called to let me know he had just built his tenth billboard, and now was on-track to hit $50,000 per year in income. But it didn’t happen overnight. Tim has been assembling this sign portfolio for years. In this Billboard Mastery podcast we’re going to discuss why sometimes the best investment income is derived from assets that take years to assemble – and how this is actually a positive trait.

Episode 33: Why Strong Things Grow Slowly Transcript

A Burr Oak tree can grow less than a foot a year and it can live to be hundreds of years. A hackberry tree grows more than twice that amount, but it only has a lifespan of maybe 50 years. In fact, you find often repeated in nature over and over, and also with economics, that really strong things grow slowly. Now, why is that? Why can't we have fast rates of growth and strength? The problem is that it takes time to season a lot of the things we do. To do things well, to find the right opportunities to build those, to operate them effectively, to pay down debt, to obtain repeat advertisers over and over, these things all take time. And in this way, billboards are very much like trees: the faster you grow, typically not the stronger portfolio do you have as those that are grown over a longer frame of time. This is Frank Rolfe, with the Billboard Mastery Podcast. We're going to analyze why there's nothing wrong with growing your billboard portfolio at a slow but steady rate of speed.

I had a call today from a guy named Tim. Tim lives down in Texas and Tim called me proudly to let me know that he has just finished his 10th billboard. And he projects now that his 10 billboards will give him about $50,000 a year of income. My hat is off to Tim, but also to Tim's patience. It has taken Tim about five years to build that portfolio of 10 signs. He only built one at the rate of about one every six months. Now he has a full time day job, he does it just as a hobby. That's how he got interested to begin with. He was trying to find something he could do that would in no way take away from his regular career. And he very successfully stuck with it and got those signs done. But there's really nothing wrong with the way that he did it.

If you really look at it, those early signs that he built five years later virtually had their debt paid off, if not already fully paid. So they can help weather the storm, help to be used as collateral to build additional signs, because the risk is reduced. So when you build slowly, typically you have much less risk because you already have established things that are doing well to fall back on if anything should happen with a new thing that you're doing. So in this way, going slow is a safer route, which is good.

Also, going slow is much less capital intensive. If you've only got X dollars to spend and you save at a certain rate, then if you build slower, well, then you will not outstrip your capital nearly as quickly. So you'll feel much safer economically that you have the money in the bank to go forward to do the next sign. So in this way, again, going slow is a positive. Another positive of going slow, is that you learn as you go. You get better as you go. When I look back on my billboards, the earliest ones I did were some of the most foolish and stupid. Situations where I spent too much money building it or the location really wasn't perfect. I was just in such an almighty rush to get those signs up. But later on, I was much smarter, much better. I could negotiate much better. So really, time is also an asset to you as far as wisdom would go.

Really time if we really think about it and we're always as Americans in such a rush, always want to get everything done tomorrow, but a lot of times when you're in a rush time really isn't on your side. So if you want to go a little slower, if you want a methodical pace, there's certainly nothing wrong with that. Also remember that those slow going trees, the ones that only grow a matter of inches per year in those big, big storms they have, in the big tornadoes, things like that those are the ones that survive. If you look across that field, the tornado just blasted through, the trees that are still standing fully intact are those older, slow growing trees, like the Bur oak. You know, there's an oak tree in Canada that's 150 years old, it's documented and it's only four inches tall. Now, don't ask me how this is possible. But you know that wood is mighty dense on that tree. You could probably have an elephant step on it and it probably wouldn't break it off because it spent a huge amount of time growing and growing, and making that word denser and stronger. And again, that's kind of how it is with your billboard portfolio.

Now if you want to build a lot of signs quickly, that's fine too. But we should never criticize those who build slower. In many ways, they may be the smarter ones. Remember that life is not exactly like a foot race, it's like the tortoise and the hare. You might get out ahead going really, really fast. But if you do that only for a short while, the tortoise will ultimately beat you. And a lot of times it's that consistency, it's that persistence that you show when you grow at a much slower pace that really shines in the end, really is what led you to your success.

Now those who go slowly also had the benefit of always being on top and able to watch and see where trends are, they don't get stuck in a corner. If you build a lot of signs in one location, and it turns out suddenly the big employer in that area dies, you're kind of stuck. Those who go slower tend to have more diversity, their signs tend to be spread out more. They went after the opportunities as they saw them, they probably were a little bit more selective. So as a result, whereas a person who grew quickly might have all their signs on one strip of highway, those who go slower tend to have a spread out all over town or all over the market.

And when looking back at my competitors even the largest companies, the company I always liked and admired the best as far as being just so strong, was a company called White Co. They were an old, old company dating all the way back to the 1920s. They started out building wooden signs along the highway typically for Holiday Inns, and they just kept methodically building. Now there are other side companies out there that grew real, real fast. They were just slapping signs up everywhere. A company called 3M back then, man, they were just they had that monopole building equipment out there on the road. They were just building every day. But I noticed their locations weren't ever quite as good as the ones that White Co had because theirs had taken longer to get, and theirs were better established and better visibility, and everything else like that. And in many ways, at the end of the movie, even though 3M might have built more signs quickly, I'm not really certain they beat White Co in value.

So the moral to it all is there's certainly nothing with going slow and steady and persistent. If you can build a really knockout portfolio of 10 signs like Tim did, I'd rather have Tim's 10 signs than a poorly thought out, rapidly built, thrown together concoction of 50. Tim's will probably in the end win. Those signs might be up for decades and decades and decades, they'll stay completely full and being much better terms and much lower cost to build. So in the battle of the tortoise and the hare when it comes to billboards, there's certainly nothing wrong with being the tortoise, because the tortoise often is the big winner. And when you build that sign portfolio at a slow pace, it typically is stronger. This is Frank Rolfe, the Billboard Mastery Podcast. Hope you enjoy this. Talk to you again soon.