The billboard advertising industry in the U.S. is a $32.22 billion market in 2022, according to Grand View Research. With over 300,000 billboards across the country, it’s a ubiquitous advertising medium that continues to captivate audiences. Getting into the billboard business may seem daunting, but armed with the right knowledge and preparation, an aspiring billboard company owner can get off the ground.
Billboards essentially rent out ad space in high-traffic areas to advertisers seeking broad reach. Billboard owners manage the structures, signage, lighting, maintenance, and relationships with land owners on whose properties billboards sit.
This guide will walk you through how to start a billboard business. Topics include market research, competitive analysis, registering an EIN, opening a business bank account, forming an LLC, and more.
1. Conduct Billboard Market Research
Market research is important to starting a billboard advertising company. It offers insight into your target market, trends among products and services, pricing details, and other useful advertising space information.
Several factors drive this consistent growth and make billboards an attractive business opportunity, including:
- The infrastructure for this advertising medium is substantial.
- Despite the digital disruption, out-of-home advertising remains influential as people continue driving and spending time away from home. This keeps outdoor advertising lucrative.
- Digital billboards are a growing market.
- From a segmentation view, smaller and more regional billboard companies lead in market share over the national giants.
- New companies could come in and use targeted, localized strategies to build regional strongholds.
- The top customer industries are services, healthcare, entertainment, and retail.
- As far as costs, while substantial, starting a billboard company does not require the overhead of something like a manufacturing plant.
- The average cost per standard billboard is around $5,000 to $50,000.
To enter and compete, the key barriers are relationships, impression data, the ability to offer integrated solutions, and customer service quality once established. But for the entrepreneur ready to hustle and build relationships regionally, the market trends, financials, and ease of startup point to billboards as an attractive business opportunity.
2. Analyze the Competition
When entering the billboard industry, assessing the competitive landscape is crucial. This analysis examines electronic billboards, traditional billboard companies, and the online presence within the outdoor advertising space.
Some ways to get to know competitors as you open your own billboard advertising company include:
- Identify direct billboard competitors in your target region.
- Drive the area and count competitors’ structures along key corridors to determine market saturation.
- Note factors like size, locations, type (static vs. digital), and which ads display for insights on customer base.
- Search industry databases like Out There Media for listings of regional players as well.
- Search online for these competitors and evaluate their websites and digital profiles.
- Review services, features, markets served, portfolio of boards and locations, and pricing if listed.
- Monitoring competitors’ social media also brings useful intelligence on things like customer engagement tactics and industry events participated in.
Combined with the on-ground billboard canvassing, this multidimensional online analysis paints a vivid picture of competitor strengths, weaknesses, and gaps. Knowing how many competing billboards are in your area gives you a better start as a newcomer.
3. Costs to Start a Billboard Business
For advertising agencies launching a billboard company, the upfront investments cover acquiring the physical billboard itself plus establishment costs. Let’s break down some of these billboard company expenses to see where they come from.
Start-up Costs
One billboard can range from $5,000 on the very low end for a small rural sign up to $50,000 for a larger highway-visible board. Other startup costs include:
- Structural engineering and surveys ($2,000)
- Application fees and permits ($3,000)
- Lighting installation ($5,000)
- Initial artwork/signage ($3,000)
- Land leasing for the space itself (typically 10-15% of projected ad revenue)
- Installation, construction, and transportation expenses add another $5,000-$10,000 as well depending on complexity.
For one standard billboard, expect around $40,000 in startup capital minimum. For a digital board, budget over $125,000.
Ongoing Costs
Administrative requirements like establishing the business entity, accounting, legal, and insurance needs cost roughly $2,000-$5,000 on top. While some fixed ongoing costs persist, the monthly expenses tend to be variable and scale based on several boards.
Expect another $300 per billboard for land lease or revenue-sharing payments. Maintenance costs add approximately $100 per standard board monthly, covering basic upkeep needs and sign rotations. Then lighting and utilities average around $50 monthly per board.
Digital boards come with higher monthly information technology and systems fees for the management software, cellular data plans, streaming capabilities, etc. These can run for $500 or more.
Insurance costs are typically 2-4% of gross revenue. Annual expenses like license renewals and local taxes amount to 1-3% of ad revenues as well.
With strong placement and client acquisition, these boards can generate over $1,000 per month in profits on average, making billboards a potentially lucrative local business play.
4. Form a Legal Business Entity
When launching a billboard business, the legal structure carries important protections and tax implications. The four main options are sole proprietorship, partnership, LLC, and corporation. Each empowers and limits in different ways.
Sole Proprietorship
A sole proprietorship constitutes the simplest and most common small business structure. It involves merely operating under one’s identity with no distinction between business and owner. The ease of setup comes with unlimited financial liability, however—the owner’s assets can be seized to settle business debts.
Partnership
Forming a general partnership entails sharing ownership and management duties with another co-founder. This also exposes each partner to unlimited personal liability though. Partnership profits get taxed personally via pass-through taxation. The collaborative leadership can benefit Billboard’s client-driven operations but doesn’t shield personal assets.
Limited Liability Company (LLC)
Establishing a limited liability company (LLC) combines pass-through partnership taxation with the protection of owners’ assets and limited personal liability. Only each owner’s invested capital is at risk. Given billboards’ physical size, weather risks, and leased land liability, LLC status significantly shields owners. The setup process runs slightly more involved but provides a major upside.
Corporation
A corporation designation creates the greatest separation between business and owners personally through incorporation. This prevents the entrepreneur’s assets from getting tapped for company debts protecting home and belongings for instance. It also opens up ownership equity options. However, incorporating brings administrative complexity, double taxation, and reduced flexibility versus pass-through entities.
5. Register Your Business For Taxes
Before operating any business, owners must obtain an Employer Identification Number (EIN) from the IRS. Think of it like a Social Security Number for the business itself. It identifies your company as a unique entity for key financial and legal needs from paying taxes to opening bank accounts.
Applying takes just minutes online using the official IRS site. Simply navigate to the IRS website and search “apply for an EIN”. This launches a short Q&A that collects basic information like company name, owner names, and address. There is no cost to obtain the EIN.
You’ll receive your EIN immediately upon completing the form. Just save this number and the IRS confirmation notice in your permanent company records. The EIN then goes on your billboard business’ tax filings, permits, license applications, bank accounts, financing documents, and more.
Another key startup step is registering with your Secretary of State to collect sales tax on billboard ad services provided. The business structure you selected, like an LLC, gets filed here during this process. And you’ll receive a state business license number.
Neglecting these registrations risks penalties, rejected bank applications, limitations on future growth, and poor credibility with customers and partners. But the EIN and sales tax process truly takes less than an hour combined.
6. Setup Your Accounting
Proper accounting greatly matters for a sustainable billboard company. With multiple expenses like land leases, lighting utilities, and changing creative assets, closely tracking finances prevents chaos. Professional-grade accounting also lends credibility with ad clients, financiers, and the IRS.
Accounting Software
Getting set up with small business accounting software provides the foundation. Platforms like QuickBooks integrate with bank accounts to automatically import and categorize transactions, generate invoices, and produce financial statements. This level of process automation simplifies record-keeping considerably.
Hire an Accountant
While handy, software alone cannot eliminate all accounting headaches. Hiring an experienced accountant remains highly advisable to handle essential functions like monthly reconciliations, cash flow analysis, quarterly sales tax filings, and annual income tax preparation. Expect costs between $200 to $500 monthly for more robust small business accounting support.
Open a Business Bank Account
Separating business and personal finances also grows in importance with a dedicated billboard enterprise. Maintaining distinct business banking and credit accounts simplifies record keeping and protects assets should the company face a lawsuit. Applying for company credit cards also relies on the business’s financial profile rather than personal creditworthiness.
7. Obtain Licenses and Permits
Before installing that first billboard, properly permitting it proves mandatory. Find federal license information through the U.S. Small Business Administration. The SBA also offers a local search tool for state and city requirements.
Navigating the specific permitting steps remains critical when identifying potential sites. Always consult zoning regulations for that county and municipal district first. Expect restrictions on aspects like billboard square footage, height maximums, border and road setbacks, spacing between other signs, etc. Those parameters determine search areas.
Also, confirm the land lies outside any protected state/federal vistas where billboards get prohibited altogether such as designated wilderness zones or historic districts. Search databases like the Scenic America site detailing scenic byways with bans in place.
Applications for sign permits follow with forms requiring details on dimensions, construction materials, lighting wattages, electrical specs, engineered drawing stamps, and land owner authorizations Start this 6+ month process before negotiating any land lease deals.
If applications meet codes, the permitting fees often run 1 to 2% of expected sign construction costs. These permits require renewal every 1 to 5 years depending on location. Plans also commonly demand minor alteration during review to satisfy officials. Navigating follow-up needs relies on strong relationships with zoning administrators.
While permitting governs the structures themselves, also consider business licenses, sales tax protocols, DOT regulations if along federal highways, and even FAA clearances within flight path zones. Identify and initiate all that apply before operations. It saves extensive delays and headaches resulting from overlooked compliance obligations down the road.
8. Get Business Insurance
Securing proper business insurance coverage keeps billboard owners shielded from major financial threats that could otherwise cripple operations. Given the high-value physical assets and liability risks involved, coverage merits priority status before installing that first sign.
Without protection, scenarios like storm damage, falling tree limbs, electrical fires, or auto impacts could destroy a $100,000 digital billboard. The repairs and lost ad revenue might exceed the owner’s ability to pay out of pocket. But with the right insurance, the costs get covered so business continues.
Lawsuits also loom as a risk if a faulty structure causes a passing motorist injury. One seven-figure settlement could bankrupt most small business owners. Though with liability insurance, the policy handles such legal claims up to defined limits, sparing personal assets.
Other risks like employee injuries, cyber crimes, or contractor errors also gain coverage through tailored plans. Identifying threats unique to billboards lets owners then obtain quotes for customized protection. Costs often run 2% to 5% of gross revenue based on claim history.
The easiest next step is to visit sites like CoverWallet that allow instant business insurance comparisons across 20+ top providers. Just answer a quick questionnaire about your billboard company profile and location. It then serves up tailored rates to make that essential risk transfer simple and affordable. Protect the enterprise now before issues arise.
9. Create an Office Space
Operating a billboard advertising business relies heavily on building client relationships through consistent communication and service. An office space establishes a professional anchor for conducting sales meetings, housing design production, and driving regional operations even if much time gets spent in the field. Weighing options comes down to needs and budget.
Home Office
A basic home office outfitted with a desk, computer, phone system, and file storage can minimize costs for under $2,000. Meetings just require planning for offsite venues. This allows bootstrapping the business while testing expansion feasibility before signing any lease. However, home offices lack the credibility factor for bigger ad buyers.
Coworking Office
Coworking spaces like WeWork provide contemporary offices fully outfitted with furnishings, business-grade WiFi, conference rooms, and front desk staff. The flexible terms and ability to scale from private offices to entire floors save committing. Expect to budget $300-$800 monthly based on market and space. The creative, collaborative community culture also lends an innovative sheen when entertaining clients.
Commercial Office
For larger billboard operators, signing a long-term lease on stand-alone commercial office space allows custom buildouts like ground floor production design studios with meeting areas upstairs. While costing $15-$30 per square foot in renovation and rent, the image aligns with major agency status.
10. Source Your Equipment
Structurally, major raw materials for installing billboards encompass steel I-beams, metal sign surfaces, wood bracing, LED lighting, and cabling. Sourcing spans buying new from manufacturers, using from other owners, and renting, or lease-financing equipment.
Buy New
New billboard materials, ready for customization, come from major suppliers like Monster Steel ranging from $5,000 to over $100,000. Buying new ensures perfect condition and specifications matching needs. Expect to cover 50% down with the balance upon installation.
Buy Used
Used materials find availability by purchasing old signs getting dismantled or through industry liquidations. Look for billboard materials used from eBay or Craigslist.
Rent
Renting materials appeals best for short-term campaigns and flexible iterations. Digital mobile billboards are also rented through vendors like AllOver Media for rolling targeted ad campaigns.
Lease
Lease financing proves ideal for new companies with less upfront capital access and credit history barriers. Billboard leasing functions similarly to vehicle leasing for gradual payments over several years. Just cover sales tax upfront then monthly lease amounts including maintenance. Buyout clauses give future ownership potential.
11. Establish Your Brand Assets
Establishing a strong brand builds awareness and trust that drives business growth for a billboard advertising startup. From visual identity to online properties, aligning branded touchpoints cultivates connection and recall with potential advertisers.
Get a Business Phone Number
Securing a unique local or toll-free business phone number enables listing on signs, ads, and websites. Services like RingCentral deliver call routing, voicemail transcriptions, unlimited calls, and vanity numbers starting under $30 monthly to project professionalism.
Design a Logo
A logo synthesizes identity into an instantly recognizable signifier of excellence. Bold, minimalist designs suit billboard brands wanting high visibility from afar. Online logo makers like Looka generate thousands of concepts incorporating favored visual styles, imagery, and text elements ready for selection and export.
Print Business Cards
Business cards are exchanged easily on sales calls, industry events, and neighborhood canvassing. Matching the colors, logo, and messaging to the website and signage builds fluid brand recognition. Vistaprint offers affordable, high-quality cards with fast turnaround.
Buy a Domain Name
Securing matching domain names has massive amplification potential online long-term. Opt for .com over alternates and align names to the billboard business for consistency across marketing channels. Specialists like Namecheap facilitate registration and management.
Design a Website
Building out that online presence lets a billboard broker better showcase service areas, available inventory, and advertiser testimonials. Code-free website builders like Wix accelerate launch with professional templates, SEO guidance, and eCommerce add-ons for under $20 monthly. Hiring web developers on freelance marketplaces like Fiverr costs around $500-1500.
12. Join Associations and Groups
Tapping into local billboard owner associations, industry meetups, and niche online groups accelerates growth through shared knowledge and relationships. Surrounding the business with this support community pays dividends.
Local Associations
Local associations like the Out of Home Advertising Association and Texas Sign Association (TSA) offer regional policy advocacy, compliance insights, buyer prospect lists, and networking with area billboard operators. The reputational endorsement helps open sales doors wider into lucrative ad accounts.
Local Meetups
Attending trade shows and area meetups also sparks future partnerships. Scanning event sites like Meetup uncovers gatherings specifically for those in billboards, signage, and out-of-home media fields to connect, exchange ideas, and forge alliances. The face-time fuels trust to cooperate on client campaigns demanding broader ad network reach.
Facebook Groups
Delving into billboard owner Facebook groups including Home and Small Business Advertising US & Canada and Advertising your Ads link entrepreneurs coast-to-coast. Members share planning strategies, new municipal regulations, sales tactics, plus alerts on equipment auctions useful for cost-savings. Crowdsourced intelligence keeps operations sharp.
13. How to Market a Billboard Business
Promoting a fledgling billboard advertising business relies first on tapping personal connections and delivering such phenomenal service that clients eagerly refer others. As momentum builds, layering in advanced digital and traditional marketing expands reach even further.
Referral Marketing
Early on, niche operators can incentivize advertisers to share positive experiences through referral rewards. Offering 10% off their next campaign for sending new accounts keeps conveying quality and value from trusted voices.
Digital Marketing
Digitally, Google and Facebook paid ads target nearby companies by industry, ad spend budgets, and other attributes using advanced analytics for qualified leads. YouTube video testimonials also build social proof.
- Run Google Search, Display, and Video campaigns locally
- Create Facebook ads optimized for conversions
- Launch a YouTube channel showcasing advertiser results
- Blog about regional industry trends and local events
- Send email newsletters with company updates and advertiser spotlights
Traditional Marketing
Traditional options like printed mailers, Chamber partnerships, event sponsorships, and creative street marketing also facilitate valuable exposure despite higher costs.
- Print full-color brochures for neighborhoods and local retailers
- Sponsor a booth at the county fair to engage residents
- Provide pricing for a local radio giveaway in return for mentions
- Park a mobile billboard downtown wrapped in branding
The omni-channel approach meets advertisers however they consume information to convey expertise and catalyze growth.
14. Focus on the Customer
Delivering phenomenal customer service proves crucial for any digital displays advertiser. It helps you draw in potential customers, retain accounts, and trigger referrals. Unlike buying commodities, advertisers here invest in a trusted partner promising exposure that delivers sales.
Exceeding expectations at every touchpoint earns reputation and referrals. Responding quickly to inquiries, aligning creative direction closely with campaign goals, suggesting prime placements based on traffic analytics, and handling production/installations promptly conveys deep partnership.
Following up post-campaign with result summaries and future recommendations also shows commitment beyond the sale. Even offering flexibility if economic factors shifted budgets shows good faith.
This level of service has advertisers proudly advocating on the billboard company’s behalf, referring colleagues facing sales declines and knowing their trusted advertising consultant would make an impact. Outstanding customer service cementing billboard advertising as a sales accelerator for clients keeps pipelines growing through word-of-mouth.