Here’s a short course on who wants to be paid when during billboard construction. This matters because it means you’ll need to put up your capital several months before the billboard is generating cash.
- Permit costs – Paid up front before issuance of permit.
- Steel fabricators – 50% deposit when you order a steel structure, 50% when steel is delivered to site.
- Digital billboard manufacturers – 50% when you order a digital billboard, 50% when the billboard arrives on the construction site.
- Installer – When work is complete.
- Electrician/Lighting – Sometimes progress payments. Sometimes payable in full when work is complete.
- Legal fees – typically billed monthly in arrears. Some attorneys may require a retainer in advance for new clients.
Let’s assume you are putting up a two sided digital billboard. The digital head is $250,000. The steel is $75,000. The install is $15,000. Electric is $10,000. The permit is $1,000. This means that you’ll have the following capital commitments before the sign is operating.
The lesson is clear. Have your build funds in hand before you sign a contract for a new sign. Tomorrow we’ll look at what the financials might look like once the billboard is operating and why you need to budget some working capital to give the sign a chance to become cashflow positive.
How does this match your experience. Email davewestburg@billboardinsider.com or use the comment form below.
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