Billboards for Education founder Matt Richman is running a series about starting, running and selling an out of home company.  Today he talks about how to find and lease good locations.

How did you find locations?

I asked a lot of questions from people who had been in the industry.  I was working a full time job.  At night I’d put my kids to bed and my wife would go to bed and I’m on google maps, studying sign ordinances, then during the day for my job when I had to drive around I was looking for signs.  There were a lot of dead ends but its a numbers game.

What makes for a good location?

I wanted digital signs.  I would always try to figure out where can I put a sign in a really busy urban area right at a traffic light.  I never put any digitals on the interstate.  First, in Dalton and then in Chattanooga I was able to put up a great digital at the busiest intersection in Chattanooga and then I did that in Cleveland.  I knew I couldn’t have the most signs but if I have a few of the very best I can keep them full.

What was permitting like?

It was a lot harder than I had anticipated.  I chased down a lot of sites and it turned out that they didn’t work in some way.  I didn’t measure enough or didn’t look at everything.  Early on it was a steep learning curve.

Leasing was easy.

Once I found a site which could be permitted leasing was pretty easy.  When you approach landowners and say I want to pay you money they think that’s great.  They’ve hit the jackpot.  So many of the large billboard companies who have had billboards for years and years and years.  If I approach the landlord and offer even a little bit more they are so excited.

Lease Terms

I tried to get twenty to thirty years.  A few landlords didn’t want to go past ten.  I needed twenty years.

How did you decide what the pay?

I asked people what I should expect costs to be.  I looked at what lease costs averaged as a percentage of revenues at the public companies.  People said if you can keep lease costs under 20% of revenues you’re in a pretty good spot.  That’s where I tried to stay at.  Some people wanted $5,000/year.  Some people wanted a percentage rent so we’d say you can have the greater of x amount or a percentage rent.  I liked a percentage rent.  It might end up going up be would stay under a percent.

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