How to Make a Fortune in Small Town Billboards
Many people think that only big cities can launch profitable billboard operations. And they are completely mistaken. Some of the finest, most profitable billboard plants in the U.S. are in small towns. As long as you adjust the economics of your billboards to meet the realities of advertiser budgets in towns as small as 1,000 population, then there is no reason you cannot attain financial security and independence as a small town billboard owner/operator.
Assume Lower Advertising Rents
Most small town advertisers do not have huge budgets, since a smaller population means lower sales volume. In smaller markets, advertisers will be unwilling to pay more than $200 to $300 per month for a billboard. Don’t argue with them. Use that budget as your roadmap to success.
Once you have established the going rate in that small market, the new target revenue will influence all of your other strategies.
Do Not Allow Ground Rents To Exceed 20% of Revenue
Going back to our example of $200 per month advertising rents, then you cannot pay more than $40 per month in ground rent, which equals about $500 per year. While that may sound embarrassing to a big city dweller, remember that the property owner in a small town pays greatly reduced costs as well, such as property tax. So $500, in relative terms, may mean as much to that property owner as $5,000 would in the city.
Build Only What The Economics Dictates
In some small towns, the income and expense numbers will limit you to a wooden sign that’s 8’ x 24’ in size (six sheets of plywood across on three wooden telephone poles). There is nothing wrong with that. Hopefully, the economics will allow for the construction of 12’ x 24’ “30 sheet” structures – which are a standardized size of the large billboard companies. Never build a sign structure that does not cash flow based on the lower ad revenues. Sometimes, development never catches up and the ad rents may remain at those levels for decades.
Remember That You Can’t Burn Any Bridges
Small towns have fewer advertisers than big cities. So you cannot afford to alienate anyone. Listen to what advertisers have to say, and always remain pleasant and thoughtful. If they turn you down today, that does not mean they’ll do so tomorrow. If there are 50 advertisers in your town, then you need all of them as potential customers. And when you do get one up on the sign, be sure to make sure the lights are working and that they are 100% happy. Remember about small town gossip. You want your reviews to always be favorable.
Like All Outdoor, It’s All In Volume
If you assume that one double-sided structure at $200 per month ad rents yields $3,000 per year of net income, then 30 of them would earn you around $100,000 per year. I know of a man who started building billboards in his retirement over in rural Illinois. He now has 100 of them, which net him around $300,000 per year in income. He told me that it was funny that he slaved away at a job he hated his entire life, and then struck it rich after he retired, doing something he enjoyed.
If you only had 10 double-sided signs, in this example, that would be $30,000 per year to you. Think of how $30,000 per year could affect your life, and improve your family’s financial security.
Use Big City Tricks To Rent Signs
In the big city, where signs cost much more, advertisers have labored over creative ideas to rent them in recessions. Use that knowledge in your small town. For example, find out which stores in town have access to matching “coop” dollars. For example, many western wear stores have access to up to 50% of the sign cost if they display the logos of such manufacturers as Levi and Stetson. And the same is true of grocery stores, sporting goods, and many other categories.
Another trick is to “combo” a sign – share it between two or three advertisers. Let’s say that there are three stores in a strip shopping center. None can afford even $200 per month by themselves. So why not combine them into one ad and pool their money. You’d promote the exit and location, and they split the sign up three ways.
Many billboard investors have no idea of the success that can be found in small town America. If you know what you are doing, and focus on translating the different economic realities to your billboard operation, you can do quite well in small town USA. Just ask Sam Walton. That’s where Wal-Mart began and flourished, long before it moved into urban areas. Don’t turn up your nose to small towns – you’ll be passing up a golden opportunity.