Billboard Insider is running a series featuring Tom Giesken who just retired after 30 out of home advertising including 25 years running his own billboard company. Last week Tom talked about building signs. Today he talks about bank financing and managing through tough times.
Getting Bank Financing
I’ve been fortunate. I’ve had a partner/friend – Chris Stark. In the beginning I tried to talk to my bank about how you build an I-beam structure for $10,000-15,000. I said you get the right hand read sold usually for 100% of the time and the left hand read would be sold 75% of the time. That was my business plan and that was usually the case. I told the bank that if I build the sign for $15,000 I get these two contracts on there(100% & 75%) I said that’s it’s a $45-50,000 billboard. They could not understand that because all they wanted to do is value the sign at steel cost and depreciate it like a car.
I was telling Chris Stark about my difficulty with the bank and he says “have them call me…I’ve got hundreds of deals that we’ve done that I can show them so they’ll know what the value is.” So, they gave Chris a call and they got everything they needed and next thing you know I got financed and that opened the floodgates for me to get stuff done. Up until that point I had to use my fully restored 1931 Harley as collateral along with anything else they would take.
Handling Recessions and COVID
I worked diligently to get longer term contracts even if you’re giving it to them cheaper. It saves time and means fewer sales trips. I remember when COVID hit. We had these wealthy doctors that were advertising on a group of my Lima, OH boards… and then you know I had McDonald’s agency…all of them were backing out…they said we’re not paying you…we’re going to need you to reduce us down to 20%. I’m like you guys would not do that for me…I’m not doing it for you. I lost clients after that when things came back in the economy but I felt justified by it.
I had most of my boards in Detroit during the recession of 08 and 09. Boy, that was the hardest. Even worse than COVID. I’m not kidding. My wife and I talk about it. I would go on 100 sales calls and get 1 contract and I literally would come home with a bottle of champagne and tell my wife, “I’ve got a contract!” My brother who’s this incredible C-Suite salesman would say, “I don’t know how to do it” but I had to feed my family and I just kept going. I actually hired a bankruptcy attorney and when we’re ready to file I backed out. I said, I can’t do it. My dad would be having a fit if he were here. I made it through and it paid of really well 15 years later!
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