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Billboard advertising companies purchase or rent small lots of land to erect billboards that are used to display ads for their customers. Other types of outdoor billboard advertising include signage on public benches and buses. These businesses also buy billboards from other companies and resell the advertising space for a higher price. They perform a valuable community service by enabling property owners to earn income by leasing an unused portion of their land to provide advertising space for businesses.
Who is this business right for?
This is a great business for those who enjoy making mutually beneficial connections between landowners and entrepreneurs. Billboard advertising business owners play an important role in increasing the visibility and success of businesses. Those who prefer to perform a wide variety of duties in a number of different work environments both indoor and outdoor, thrive exceptionally well in this business. Community-minded individuals are well-suited for meeting the challenge of matching the right location with the right advertiser at the right price.
What happens during a typical day at a billboard advertising company?
- Meeting with business owners, real estate developers, graphic designers and advertisers
- Researching local zoning laws to determine the best potential sites
- Measuring land and billboard space
- Negotiating land use contracts and prices for advertising
- Overseeing the safe construction of regular and electronic billboards
- Conducting inspections, performing maintenance and making necessary repairs
- Bookkeeping and accounting
What is the target market?
Customers are business owners who want to increase public awareness of their goods, services, and locations. Clients may also be landowners seeking to make a profit by allowing advertising displays on their property by leasing a portion of it to your company.
How does a billboard advertising company make money?
A billboard advertising business makes money by selling outdoor advertising space on billboards, benches, or vehicles. Many also make money by selling their leases and permits to competitors for a profit. Prices can range from $5,000 to $200,000 or more, depending upon the location, the degree of visibility, and the amount of traffic it receives.
What is the growth potential for a billboard advertising company?
Billboard advertising is a growth industry and there are many franchise opportunities available. Some provide extensive training, mentoring and ongoing support.
What are some skills and experiences that will help you build a successful billboard advertising company?
- Communication and interpersonal skills for building strong business relationships and negotiating leasing contracts and advertising prices
- Accounting skills for budgeting, accounts receivable and accounts payable
- Computer skills for maintaining a website with information about your services and locations. There are classes available for learning these skills.
- Graphic design skills for creating customized billboard advertising for customers. These skills can be acquired through classes as well.
What are the costs involved in opening a billboard advertising company?
The cost of constructing a billboard can range from $26,000 to $300,000, which often requires financing from banks or, more often, an outdoor leasing company. In some states and cities, a license is required, the average cost of which is approximately $200 per year. To find out the requirements of your city, you can inquire at city hall. You’ll need to purchase zoning maps and a measuring device designed to measure long distances. A vehicle is also necessary for traveling to and from sites to gather measurements and perform regular maintenance.
What are the steps to start a billboard advertising company?
Once you're ready to start your billboard advertising company, follow these steps to ensure that your business is legally compliant and avoid wasting time and money as your business grows:
- Plan your business. A clear plan is essential for success as an entrepreneur. A few important topics to consider are your initial costs, your target market, and how long it will take you to break even.
- Form a legal entity. Establishing a legal business entity prevents you from being personally liable if your billboard advertising company is sued.
- Register for taxes. You will need to register for a variety of state and federal taxes before you can open for business.
- Open a business bank account. A dedicated checking account for your billboard advertising company keeps your finances organized and makes your business appear more professional to your customers.
- Set up business accounting. Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
- Obtain necessary permits and licenses. Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
- Get business insurance. Insurance is highly recommended for all business owners. If you hire employees, workers compensation insurance may be a legal requirement in your state.
- Define your brand. Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
- Establish a web presence. A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers. Save 15% when you create a business website with Weebly.
Select your state below for an in-depth guide on completing each of these steps in your home state.
Where can I find a business mentor?
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
How to promote & market a billboard advertising company
One of the best ways to promote your billboard advertising business is by keeping abreast of new developments within the industry and the creative ways in which competitors are using them. Creating a blog on your website that features a profile of a different local business each month is a good way to demonstrate your knowledge of and dedication to the community. Advertisers love to take advantage of holidays to offer their customers great sales promotions and savings. Sending out pre-holiday promotion offers of your own is a good way to maintain consistent contact with existing customers as well as develop new business relationships.
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How to keep customers coming back
Visiting your local chamber of commerce is a good way to meet business owners who can benefit from the advantages of billboard advertising. Attending and sponsoring community events is another. When prospecting for new customers, it’s important to have a portfolio that illustrates your best work as well as statistics demonstrating the correlation between billboard advertising in a specific location and an increase in sales figures as a result. Creating a loyalty program that offers savings for long-term contracts is a great way to ensure a steady stream of income while you cultivate new prospects.
How and when to build a team
It is important to build a team before you start your business. Your initial team will consist of financiers, city and state officials, property owners, business owners, and advertising agencies. Some billboard advertising businesses also include graphic designers on their team. Maintenance personnel are also important team members.
Federal Business Licensing Requirements
Billboard advertising companies must comply with federal and state laws related to the Highway Beautification Act of 1965. A list of laws by state can be found here.
State & Local Business Licensing Requirements
In certain states, business permits and licenses may be needed. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
In addition, certain local licensing or regulatory requirements may apply. For more information:
- Check with your town, city or county clerk’s office
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.
Maintain Personal Asset Protection
Don’t think that just forming an LLC, or any other type of business, will save your personal assets in case of a lawsuit or other matter by itself.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your LLC is sued. In business law, this is referred to as piercing your corporate veil.
Two of the simplest steps that will protect your business, and yourself, are to:
Open a business bank account
- This separates your personal assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment later on.
How much can you charge customers?
The amount you can charge customers depends on a number of factors, including the location and type of billboard. Billboards in areas with higher traffic are in greater demand than those with less visibility. Prices are also determined in part by the length of the contract with the advertising company. For regular billboards, prices can range from $1,500 to $100,000 per month. Electronic billboards rotate advertising for multiple customers. Small to medium sized billboards can earn $300 to $2000 per month, while large ones can command prices between $1500 and $30,000.
What are the ongoing expenses for a billboard advertising company?
Ongoing expenses for this type of business include:
- Property rental or lease costs
- Liability insurance
- Electricity costs for billboard lighting and electronic billboards
- Maintenance and repairs
- Construction costs for the erection of new billboards
- Transportation to potential sites and meetings with business associates
How much profit can a billboard advertising company make?
For the top four billboard advertising companies, the industry average for annual revenue in 2015 was 3.69 billion dollars. Profits generated by billboard companies can reach up to 50% before depreciation, taxes, amortization and interest. It commonly takes between 7 and 10 years to pay off the initial cost of the purchase of land and the construction of a billboard. Once that has been accomplished, profits increase significantly.
How can you make your business more profitable?
Creating and following a good business plan is one of the best ways to make your business more profitable. That plan should include expansion because many advertising companies require a minimum amount of billboards before they will agree to work with a new business. Another way to increase your profits is by designing the billboards rather than hiring another company for that part of the process.