Starting a billboard business is a rewarding venture that combines real estate know-how and sales skills with sharp business savvy. The out-of-home advertising market is a multi-billion dollar industry, fueled by steady demand from local businesses, national brands, and event promoters.
This guide will take you through the practical steps of validating your business concept, selecting the right locations, obtaining necessary permits, and securing funding to help you launch a successful billboard business in the U.S.
Step 1: Validate your business idea and plan your finances
Begin by physically scouting your target area. Drive the main roads and highways to map every existing billboard. Note its location, size, type (static or digital), and current advertiser. This gives you a real-world view of the market that no database can replace.
Next, supplement your field research with data. Check your state's Department of Transportation website for traffic count maps. You can also browse the public locators of major players like Lamar and Outfront Media to understand their footprint and pricing in your region.
A frequent oversight is focusing only on high-traffic roads without checking local zoning ordinances first. A perfect spot is useless if you cannot get a permit for it, so a preliminary check with your city or county planning department is a smart move.
Break down your startup costs
Your primary expenses will be the structure, land lease, and permits. A traditional static billboard can cost between $25,000 and $100,000 to build. Digital billboards require a larger upfront investment, often ranging from $150,000 to over $300,000.
Land leases vary greatly by location, from $1,500 to $15,000 annually. Permitting fees can add another $500 to $2,000 per sign. Remember to also budget for liability insurance, which typically runs $1,200 to $2,500 per year.
Here are 3 immediate steps to take:
- Drive your target market and create a spreadsheet of all competing billboards.
- Visit your local Department of Transportation website to find official traffic count data.
- Draft a preliminary budget that estimates your costs for construction, land leases, and permits.
Step 2: Secure your legal structure and licenses
You should consider forming a Limited Liability Company (LLC). This structure protects your personal assets from business liabilities. A frequent misstep is mixing funds, so open a separate business bank account as soon as your LLC is approved by your Secretary of State.
With your legal entity in place, you can now tackle permits. The process involves multiple government levels. Your main points of contact will be your state's Department of Transportation (DOT) and your local city or county planning department.
Navigate the permit process
Expect to apply for a state outdoor advertising permit, which can cost $500 to $2,000 per sign and take 60-120 days for approval. Local zoning permits add another layer. Check your city's specific ordinances, as they dictate placement, size, and lighting rules.
While you deal mostly with state and local offices, federal law sets the foundation. The Highway Beautification Act governs billboards along Interstate and federal-aid primary highways, so your state's rules are designed to comply with these federal standards.
Here are 3 immediate steps to take:
- File for an LLC with your state's Secretary of State office.
- Download the outdoor advertising permit application from your state DOT website.
- Review your local municipality's zoning code for sign-specific regulations.
Step 3: Secure your insurance and manage risk
You will need a few key policies. General liability insurance covers third-party claims, like someone getting hurt near your structure. A $1 million to $2 million policy is standard, with annual premiums often between $1,200 and $2,500.
Property insurance protects the billboard itself from damage. A frequent mistake is to insure only the build cost. You should get coverage for the full replacement value, which accounts for demolition and debris removal costs that can increase the total expense.
If you hire staff for installation or maintenance, you must have workers' compensation insurance. You might also consider professional liability coverage, which protects you if an error in an ad display leads to a client dispute.
Find a specialized insurance provider
You can get better rates and coverage from an agent who understands the outdoor advertising industry. A general agent may not fully grasp the specific risks, such as liability from structural failure or electrical fires in digital units.
Look for providers like Philadelphia Insurance Companies or Veracity Insurance Solutions. You can also check for programs endorsed by the Outdoor Advertising Association of America (OAAA), as they are tailored for this business.
Here are 3 immediate steps to take:
- Request quotes for a $1 million general liability policy and property insurance that covers your billboard's full replacement value.
- Contact an insurance provider specializing in outdoor advertising, such as Philadelphia Insurance Companies or one recommended by the OAAA.
- Review policy details to confirm coverage for wind damage, vandalism, and electrical malfunctions.
Step 4: Select your location and source your equipment
Your search for a location starts with zoning maps from your local planning department. Billboards are typically restricted to commercial or industrial zones. You will also find strict spacing rules, often requiring 500 to 1,500 feet between signs and away from parks or residential areas.
Negotiate your land lease
Aim for a long-term lease of 10 to 20 years with options to renew. You can propose a flat annual fee or a percentage of the sign’s gross revenue, usually 15-20%. A percentage model can be more attractive to landowners as it offers them higher potential income.
A frequent misstep is signing a lease before your permits are approved. Always include a contingency clause in your agreement. This allows you to terminate the lease without penalty if you fail to secure the necessary state and local permits for your sign.
Source your billboard structure
The two main components are the steel structure and the sign face. A local steel fabricator can build the monopole or I-beam support. For digital displays, you will work with specialized manufacturers like Daktronics or Watchfire. These companies provide the LED screen and its operating software.
Here are 3 immediate steps to take:
- Identify three potential sites in commercially zoned areas and confirm their setback requirements with the city.
- Draft a letter of intent for a landowner that proposes a 15-year lease with a permit contingency clause.
- Request quotes from a steel fabricator for a monopole and from a supplier like Daktronics for a digital display.
Step 5: Set up your payment and billing systems
Most advertisers pay monthly in advance. It is standard practice to require the first month's payment upon signing a contract, which typically runs for 3, 6, or 12 months. This secures the ad space and protects your cash flow.
A mistake many new owners make is manually tracking payments. Set up an automated recurring billing system from day one. You can use accounting software like QuickBooks or FreshBooks to send invoices and track payments, which saves you from chasing down clients.
For billboard businesses that need to accept payments on-site or on-the-go, JIM offers a streamlined solution. With JIM, you can accept debit, credit, and digital wallets directly through your smartphone. Just tap and the payment is done.
At just 1.99% per transaction with no hidden costs or extra hardware needed, it's particularly useful for securing a new advertiser's first payment on the spot. This rate is competitive, as many other payment solutions charge between 2.5% and 3.5% per transaction.
- Get Started: Download JIM app for iOS
- Make a Sale: Type the sales amount, hit sell, and ask your customer to tap their card or device on your phone
- Access Funds: Your money is available right on your JIM card as soon as the sale is done - no waiting for bank transfers
Here are 3 immediate steps to take:
- Draft your standard advertising contract with 3, 6, and 12-month term options.
- Choose an accounting software like QuickBooks or FreshBooks to manage recurring invoices.
- Download the JIM app to be ready to accept on-the-spot payments from new clients.
Step 6: Secure your funding and manage your finances
Traditional banks can be hesitant to fund new billboard ventures. You might find more success with SBA-backed loans. The SBA 7(a) program can provide $150,000 to $500,000, which helps cover construction and initial operating costs. Expect interest rates around Prime + 3-5%.
If you plan to install a digital billboard, equipment financing is a strong option. Lenders in this space use the sign itself as collateral. This can simplify the approval process compared to a conventional business loan. The loan terms often align with the expected lifespan of the display.
Calculate your working capital
Many new owners get caught by the delay between construction and consistent ad revenue. You should have at least six months of operating expenses in cash. This buffer, typically $15,000 to $30,000, covers your land lease, insurance, and utilities before payments from advertisers stabilize.
Here are 3 immediate steps to take:
- Contact an SBA-preferred lender to discuss the 7(a) loan application requirements.
- Create a six-month cash flow projection to calculate your specific working capital needs.
- Request quotes from equipment financing companies if you are considering a digital sign.
Step 7: Build your team and streamline operations
You can run a lean operation at first, handling sales and management yourself. As you grow to 5-10 faces, you will want to hire. Your first key hire is often a commission-based salesperson to keep your ad space filled.
Assemble your core team
An Account Executive will manage client relationships and sell ad space. You might offer a base salary of $40,000 to $60,000 plus a 10-15% commission on sales. This structure incentivizes them to keep your billboards booked solid.
For installation and maintenance, you can use a certified contractor. Look for someone with crane operation and electrical certifications, especially for digital signs. This avoids the overhead of a full-time employee until you have a larger portfolio of signs.
To manage your sales pipeline, you can use a CRM. A system like HubSpot's free CRM helps you track leads and follow-ups without an initial investment. Many new owners make the mistake of tracking clients in spreadsheets, which quickly becomes unmanageable.
Most small billboard companies operate with a very small team. It is common for a single owner-operator to manage up to $500,000 in annual revenue before bringing on a full-time operations manager. Focus on sales first, and outsource technical work.
Here are 3 immediate steps to take:
- Draft a job description for a commission-based Account Executive.
- Research and vet local contractors with electrical and crane certifications.
- Sign up for a free CRM like HubSpot to start organizing your sales leads.
Step 8: Market your billboards and get clients
Your first task is to create a professional media kit. This one-page document should feature high-quality photos of your billboard, its exact location, traffic counts from the DOT, and key demographic data for the area. This is your primary sales tool.
Next, develop a rate card. Prices are typically quoted for a four-week period and can range from $1,500 to over $5,000 depending on traffic and location. Offer discounts for longer commitments, such as 5% for six months and 10% for a full year.
Find your first advertisers
Do not wait for clients to find you. Actively prospect for them. Start with businesses located within a five-mile radius of your sign. Car dealerships, real estate agents, lawyers, and healthcare providers are excellent first targets. Use your media kit to make a direct pitch.
A common mistake is to neglect your own online presence. Create a simple website that showcases your billboard locations on a map. Include your media kit and a clear contact form. This gives you a professional base for potential clients who find you online.
Here are 3 immediate steps to take:
- Create a one-page media kit with traffic counts, location details, and photos.
- Develop a rate card with pricing for 3, 6, and 12-month advertising terms.
- Build a prospect list of 20 local businesses to contact for your first sales push.
Step 9: Develop your pricing strategy
You will price your ad space in four-week periods, known in the industry as “flights.” Your rate is a direct reflection of the location’s value. Key factors are traffic counts, visibility, and demographics. A sign on a major highway could fetch $2,500 to $5,000 per flight.
Set your rates and discounts
Create a formal rate card that lists your prices. For a board with a daily traffic count of 40,000, you might set a base rate of $3,000 per four weeks. This becomes your starting point for any negotiation with a potential advertiser.
It is tempting to slash your price to land your first advertiser, but this move can hurt you later. It sets a low precedent and devalues your ad space. Instead, use discounts to incentivize longer commitments. You can offer 10% off for six months and 15% for a year.
After covering your fixed costs like the land lease and insurance, a well-managed billboard can achieve a profit margin of 40-60%. To gauge competitor pricing, revisit the online locators of major companies or call the number on a local competitor's sign and inquire about rates.
Here are 3 immediate steps to take:
- Create a rate card with pricing for 4-week, 24-week, and 52-week terms.
- Calculate the monthly break-even cost for each of your billboard locations.
- Call two local competitors to inquire about their advertising rates for a comparable sign.
Step 10: Maintain quality and scale your operations
Your reputation rests on the quality of your signs. A torn vinyl or a burnt-out light reflects poorly on your advertiser and you. You should conduct monthly physical inspections of each sign to check for damage, graffiti, or lighting issues and address them within 48 hours.
Measure your performance
Your occupancy rate is the most direct measure of success. This is the percentage of your ad faces that are sold. A healthy billboard business should maintain an 80-90% occupancy rate. Also, track your client retention. A renewal rate over 75% indicates you are delivering value.
Know when to grow
Once you consistently hit 85% occupancy and have a waiting list of advertisers, it is time to expand. A frequent misstep is to build new signs before filling the current ones, which can strain your cash flow. Growth should be fueled by demand, not just ambition.
When you manage 5-10 signs and can no longer handle sales yourself, hire a commission-based salesperson. As your inventory grows, you can use industry software like Blip or Apparatix to manage ad scheduling and availability across all your locations.
Here are 3 immediate steps to take:
- Calculate your current occupancy and client retention rates.
- Create a monthly inspection checklist to assess each billboard’s physical condition.
- Review billboard management software like Blip or Apparatix to see if it fits your future needs.
You now have a roadmap for the billboard business. Remember that success hinges on persistence with permits and leases, a ground game that rewards patience. With this plan, you are ready to build your first landmark.
As you sign clients, make payments easy. JIM lets you accept cards on your smartphone with no extra hardware for a flat 1.99% fee, helping you secure that first payment on the spot. Download JIM to get started.
