Memo From Frank
The 4th of July is our nation’s celebration of independence. But it’s also the month that marks the start of the second half of the year. When you add them together, perhaps the message is that you should devote the second half of 2019 to advancing your financial independence. So how can you do that? I would suggest you examine the possibilities in building a billboard business. You can grow that sideline into a replacement for your day job, or just a stream of additional income to supplement your day job and give you greater peace of mind and financial security. And there’s more to independence than just money – it also includes having complete control over your time and future.
Have a Happy 4th of July!
The Beauty Of Residual Income And Scale
Have you ever looked into owning the kiddie rides at a mall or shopping center? It’s a pretty neat concept, except for the realities of maintaining the rides, their upfront cost, and the difficulty of finding a decent location that has not already been taken. Building an income stream is much easier with billboards, but it’s the same general plan.
Safest way to build a business
There’s no better way to build a business than a little bit at a time. Billboards give you the ability to start small and grow as you learn and get more proficient. It also greatly reduces your risk because you build the business at the same rate of speed that you are comfortable expanding.
Lowest entry cost
You can build a wooden billboard for around $5,000 or less. You can buy an old 8-sheet for $1,000. You can take over an abandoned billboard for nearly nothing but the cost of the vinyl. There are few opportunities in America at this low a price point.
Greatest portfolio diversity
Billboards offer great portfolio diversity since the signs are located all over the place. Different locations equal different sets of advertisers and traffic. If one area becomes less attractive, you don’t have your eggs all in one basket.
Ability to do partial liquidation
One great thing about billboards is that they are not an all-or-nothing proposition. It’s more like a group of assets that you are free to sell off one or more at any time without having to give up the others – kind of like selling shares of stock in your portfolio. You can sell signs that you feel no longer have additional upside and keep the ones that you are still grooming.
Billboards allow you to build significant streams of income in a very attractive manner. They excel in portfolio diversity, the ability to have controlled growth, and low entry cost.
Would A Billboard Work Here?
There are no billboards along this stretch of country highway. Why is that? That’s the question all billboard owners ask themselves. The answer unlocks the potential opportunity.
What’s the traffic count?
You can get the traffic count on almost any section of highway in the U.S. from the state Department of Transportation. The minimum traffic count required for a successful billboard is several thousand viewers per day. That equates to about 1,000 to 2,000 cars per day. That may sound like a lot, but big interstate highways all have over 100,000 cars or so per day. A traffic count of 1,000 cars per day equates to a little less than 1 car per minute – that’s not really that much.
Where’s the road heading?
To have a ready market of advertisers, the billboard has to reach traffic heading in the general direction of businesses – restaurants, hotels, gas stations, etc. If the road is heading away from town, it can be very hard to find a legitimate advertiser that will benefit from the sign. Sometimes you have the right traffic count, but there’s simply not a single advertiser for 100 miles, and there’s no demand for the ad space.
Is it legal?
If you have the right traffic and it’s in the right direction, the next question is if that location is legal. In all states you have to have a certain spacing from other billboards and correct zoning. This can be figured out by calling the city (if it’s in the city limits) or the Department of Transportation if it’s in the county.
What’s the market rent?
There’s no point in building a billboard if the ad rents don’t support it. Here’s the basic math. You typically pay 20% of revenue to the property owner and another 20% in advertising installation, electricity, insurance, etc. So working backward, your net income is roughly 60% of total revenue. So if you determine the market rent is $500 per month per ad face, then you would net $600 per month ($500 x 2 x 60%) and then you work backwards to see what cost billboard that would support. If the note payment on building a billboard in this location is $300 per month (or anything $600 per month or lower) then you have all the raw material you need.
This is the methodology that all billboard owners use when they see areas of highway that have no billboards. Sometimes the final analysis yields that there is a huge opportunity that nobody has yet tapped.
The Ultimate Billboard Boot Camp
How to Find a Billboard Location
How to Buy a Billboard
How to Build a Billboard
How to Operate a Billboard
How to Rent Ad Space on a Billboard
How to Sell a Billboard
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Billboards And Truckers: A Long-Standing Relationship
There’s an interesting and long-term relationship between billboards and truckers. But most people never even think about this unusual bond the two share.
Nobody’s on the road more than truckers – or buys more food, gas and lodging
When you talk about billboards, most people think all about cars and families going to McDonald’s and Holiday Inn, but truth is that there’s an equally large universe of truckers that are served by the directional qualities of billboards. When you’re on the highway, just look at the sheer number of trucks – on some highways it’s 50% or more of all traffic.
An entire industry is based upon their needs – and those are major billboard advertisers
One of the largest users of billboards in the U.S. are truck stops. These emporiums of everything from gasoline to truck washes buy huge number of billboards, from distances as far as 100 miles away. The general rule of thumb with truck stops is to advertiser from very far away because truckers start thinking filling up long ahead of cars due to the dire consequences of running out of gas. So they may use three signs in both directions to reach this traffic plenty ahead. Other advertisers that cater to truckers include restaurants and lodging.
Unique attributes of billboards that cater to truckers
Trucking can be a very boring profession. So billboards give truckers something to look at. They also give directional information that’s easy to use – even when driving a giant 18-wheeler. Another factor that is important to trucker-oriented signs is to illuminate them 24 hours a day. Whereas most billboards that appeal to regular households have lights from dusk until midnight, billboards for truckers are lighted all night long – since truckers tend to drive all night long.
Truckers and billboards have gone together like peanut butter and jelly since the industry began. And it’s a very healthy relationship as it increase the potential advertiser pool for any sign by a wide margin.
Can I Put A Billboard On That Pole?
You will often see giant poles along highways and major city streets with nothing attached to them. At one time there was a sign on the top, but that was long ago. You may think “can I install a new billboard and frame on that pole”? Well, here are some answers to that question.
The basics of monopole design and safety
Let’s start off with the primer on how steel billboards are engineered. There are two things that hold a sign up. One is the diameter and thickness of the pole. The other is the foundation (depth and diameter). When you add wind load and weight to a pole, it’s transferred down to its weakest link. So the first issue in putting a new sign on the top of that pole is if it is structurally sound.
Determining the amount of weight and windload
You cannot determine the science of engineering as a hobbyist. You have to hire an actual engineer to do the calculations. This will determine what size sign you can safely mount on the top of the column. Since safety is your #1 priority, you have to do exactly what the engineer tells you. Sometimes you can make minor alterations to the foundation or column to make a larger sign possible. You need to know those options, as well.
Huge cost savings if possible
The most expensive part of any steel monopole billboard is the pole and foundation. In these cases, you have avoided this cost, and this will have a huge impact on the total price of the sign as well as its rate of return. It’s a very efficient situation and a win/win for the property owner who recycles an ugly pole and starts to earn income again.
Many examples across America
There are many billboards in the U.S. that were built utilizing an existing abandoned pole. These stand as a testament to the workability of this concept. It’s not really a complicated concept – but you have to do it properly.
When you see an abandoned pole, consider the fact that it may be an opportunity to create an inexpensive monopole sign structure. You’ll need engineering to confirm your desire, but the massive cost savings can make these type of opportunities hugely profitable.