How Much Does It Cost To Start A Billboard Business?

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How Much Does It Cost To Start A Billboard Business?
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How Much Does a Billboard Business Cost?

Billboards are one of the first and most successful advertising tools out there. And, it is currently a $ 6.5 billion industry. Although traditional advertising methods have all but died out with the birth of digital media, billboards continue to play an important role in advertising. They bring a high level of visibility for a relatively low investment and minimal upkeep. But if you’re looking to generate some extra income, you’re probably wondering “How much does a billboard business cost?”

How Much Does a Billboard Business Cost?

When it comes to owning your own billboard business, you have two options: buy an existing structure or build your own. Each one comes with its own set of pros and cons. Here are a few considerations when you look at how much a billboard business will cost you.

Building Costs

  • Land Purchase and Ground Leases
    • Since you need to advertise near motorways, you will either need to purchase the land or lease the grounds from the current owner. If you plan on building on land you already own, you have to make sure it meets billboard eligibility requirements in your state. If you decide to rent, your ground lease shouldn’t exceed 20 percent of your business’ revenue.
  • Liability Insurance
    • All businesses should carry liability insurance to protect you against damages or unlawfulness.
  • Construction costs
    • If you’re building a new structure, you’ll need to hire a billboard construction company. The prices can range anywhere between $ 26,000 and $ 300,000 depending on the materials you decide to use. And with the increased cost for building materials, it is even higher than usual. Based on average prices for a 14 x 48 billboard, wooden billboards would fall on the cheapest end of the spectrum. Steel billboards range between $ 40,000 and $ 100,000. Meanwhile, digital billboards can cost you well over $ 150,000.
    • Static boards are cheaper since they only need a vinyl covering which runs $ 0.50 per square foot.
    • LED billboards are more expensive because they have more electrical components. But, they also allow you to advertise multiple companies and increase revenue.

Operational Costs

Once the billboard is complete, there are additional operating costs you must take into account. Some will be a one-time expense while others may be recurring payments.

  • Permits and Taxes
    • Many states and cities’ ordinances require you to have a permit and pay taxes. In addition to this billboard business cost, there are also fees if they lapse or go unpaid.
  • Hiring a Graphic Artist
    • Although some companies offer software training after they finish construction, it is not an industry standard. If you have design skills, you can save money by buying graphic software and creating your own. Otherwise, you’ll need to hire a graphic artist to come up with bold and eye-catching designs to show potential customers.
  • Lighting
    • This expense is drastically different for traditional and electronic billboards. While they all need an external light source to illuminate them at night, more advanced displays have more electrical components. This can also lead to more repair costs.
  • Maintenance and Repairs
    • All billboards will degrade over time, no matter what material you use. Beyond the usual weathering, billboards also incur damages during bad weather. If you purchased an existing structure, ensuring that it has been well-maintained could save you a huge headache and high repair costs later on.

Buy an Existing Billboard Business

The easiest option is to buy existing billboards, permits, and ground leases from an established company. But, the convenience will cost you. Since everything is already in place, the startup costs are much higher. However, if you want to see what your options are, you can contact a business broker to see if any billboard businesses are for sale in your area.

How Much Can You Earn?

The amount you can make directly depends on how much traffic the nearby road sees on a daily basis. According to AZ Central, even remote locations can generate $ 5,000 a month. Busier areas average about $ 20,000, and the most heavily trafficked sites bring in over $ 100,000. On average, billboard owners can charge anywhere from $ 800 to $ 5,000 a month to run advertisements. However, this amount is much lower in small towns ($ 200- $ 300) because there is less traffic and visibility.

The ideal locations are near busy expressways, highways, and major roads. But, they also come with a higher price tag which undermines profits. They begin to drop the further outside the city center you go. Even if a location does not have huge visibility now, it will gain more exposure in the future if it is near a growing city. A wise investment now could lead to good returns later on.

What Are the Local Laws?

Before you buy into the billboard business, you should brush up on the local laws. The federal regulations outlined in the Highway Beautification Act could also affect your operating costs. And, be sure to obtain the correct permits from the State’s Department of Transportation.

Local zoning authorities can answer all your questions about the legalities and billboard business cost in your district and surrounding counties. Be aware that laws vary by jurisdiction. In some locations, electronic signs are prohibited because of light emissions. Others have strict rules for display time and duration between ads. Knowing the restrictions ahead of time could save you from a costly mistake.

Know Your Competition

Although there are millions of billboards out there, industry consolidation has drastically reduced the number of competitors. Large corporations like Outfront, Lamar, and Clear Channel already have prime real estate and could make it difficult to find a suitable location. However, there is less competition outside major urban areas.

If you want to make your billboard business profitable, you need to know your competition. Not only will this help you set comparable rates, but it could also help you recognize opportunities when they come along.

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