Insider is often approached by people who want 100% financing for their first billboard.  Here’s what he tells them.

• Build your first board with your own money.  Nothing like a cook eating their own cooking.  If you are super confident your project is going to be a success take out a second mortgage and go for it.  Don’t ask a lender to take all the risk for a 10%/year return.  Don’t ask an investor to put up all the money for a minority interest.  When private equity firms put most of the money into a project they end up 80-90% of the equity and management keeps 10-20%.  Most lenders and private equity firms won’t talk to you until you’ve got a track record.

• Build a static board first.  A two sided 14 by 48 static steel monopole billboard costs approximately $65,000.  Less if you’ve got good soil and do some of the work yourself.  A two sided digital billboard and structure costs approximately $300,000.  Why not make a small commitment while you learn the business?  It your static board is sold out you can always convert it to a digital board later.

• Make sure you can sell.  A board won’t sell itself.  A board won’t sell itself.  A board won’t sell itself.  Can I be more specific?  In order to succeed you must be willing to ask people for advertising dollars.  It’s a rare sign that sells itself.  The best signs have rents which are high enough that you must work to find clients.  If you don’t like sales you need to reconsider whether you should be in the out of home advertising business.

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