By Dave Westburg, Co-Publisher, Billboard Insider.

I’ve had a hand in starting two out of home companies as well Billboard Insider and 6 funds which invest in the out of home industry.  Here are four things you need to ask yourself if you want to start your own out of home company.

Am I willing to put everything at risk?

Starting your own company involves financial risk.  You’ll need to fund the equity yourself.  You will almost certainly have to personally guarantee any debt which your out of home company incurs.  If you are unwilling to put all your assets at risk, don’t go out on your own – or at least don’t incur debt.

Am I willing to live within an hour of my out of home plant?

There’s a crazy idea that out of home companies can run themselves as passive income vehicles.   Billboards don’t sell themselves.  They don’t maintain themselves.  Permits don’t magically appear.  You need to be in the market to be able to sell the boards and to be able to know what needs to be maintained or where there may be growth opportunities.  Over the past 30 years of investing I’ve come to realize that it’s the locally managed out of home companies which thrive.  Remotely managed out of home companies suffer.   Remember one of John Arnold’s four rules for out of home: “Never build a board more than 100 miles from your house because it will always be the farthest board away which needs the most maintenance.”

Am I willing to do everything myself?

When you work for a large company you have a personnel department and an accounting department and a finance department and maybe even a personal assistant.  None of that exists when you start your own company.  To keep costs down and stay above breakeven you probably need to do everything yourself until you’ve assembled a large enough group of signs.  That means learning quickbooks, selling, setting up your website and maybe even building your own signs and changing your own vinyls.

What questions is it important to ask before you start your own out of home company?  Email davewestburg@billboardinsider.com and we’ll do a followup story.  Am also happy to talk with any readers who think they may want to some day start an out of home company.

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