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How to Start a Billboard Advertising Business

Written by:

Carolyn Young is a business writer who focuses on entrepreneurial concepts and the business formation. She has over 25 years of experience in business roles, and has authored several entrepreneurship textbooks.

Edited by:

David has been writing and learning about business, finance and globalization for a quarter-century, starting with a small New York consulting firm in the 1990s.

How to Start a Billboard Advertising Business

Fast Facts

Investment range

$81,300 - $113,300

Revenue potential

$36,000 - $216,000 p.a.

Time to build

6-12 months

Profit potential

$18,000 - $108,000 p.a.

Industry trend

Declining

Commitment

Flexible

Have you ever driven by a billboard and wondered how it got there, who owns it, and who’s profiting? Well, probably not, but billboard advertising is a $9 billion industry, and an interesting one.

Billboard advertising companies usually lease a small plot of land from a landowner, build the billboard, and pay the landowner a percentage of the revenue that comes from selling the ad space on the billboard. The landowner gets a fully passive income from their land, and the billboard advertising company also gets a relatively passive income from the advertiser. 

Sounds like a good deal, right? You could get in on the action by starting your own billboard advertising company.

But before you go hunting for land, you’ll need to understand more about the business. Luckily, this step-by-step guide has you covered with all the information you need to start a successful billboard advertising business. 

Step 1: Decide if the Business Is Right for You

Pros and cons

Pros

  • Relatively passive income
  • Good growth potential
  • Highly profitable at scale

Cons

  • High startup costs
  • Billboard advertising market is declining

Billboard advertising industry trends

Industry size and growth

  • Industry size and past growth – The U.S. billboard and outdoor advertising industry is worth $9 billion in 2023 after declining 2.3% annually for the last five years.((https://www.ibisworld.com/united-states/market-research-reports/billboard-outdoor-advertising-industry/))
  • Growth forecast – The U.S. billboard and outdoor advertising industry is projected to decline 5.6% in 2023. 
  • Number of businesses – In 2023, 12,850 billboard and outdoor advertising businesses are operating in the U.S. 
  • Number of people employed – In 2023, the U.S. billboard and outdoor advertising industry employs 36,784 people. 
Billboard Advertising industry size and growth

Trends and challenges

Trends

  • Digital billboards, which can flip between advertisements, are being increasingly used instead of traditional static billboards.
  • Smart billboards have been developed that use AI to detect the features of passers-by and target the digital message to those people.

Challenges

  • The rise of online marketing has many thinking that billboard advertising is obsolete.
  • The effectiveness of billboard advertising is difficult to measure, making it a challenge to sell billboard advertising space.
Billboard Advertising Trends and Challenges

How much does it cost to start a billboard advertising business?

Startup costs for a billboard advertising business range from $80,000 to $115,000. Costs include your initial lease payment and the construction of the billboard.

Instead of leasing the land, you could purchase an easement on the landowner’s property from the landowner. This increases your upfront costs, but you’ll have a higher profit margin going forward since you won’t be making lease payments. 

Start-up CostsBallpark RangeAverage
Setting up a business name and corporation$100 - $500$300
Business licenses and permits$100 - $300$200
Insurance$100-$500$300
Website$500 - $1,000$750
Initial lease payment to landowner$5,000 - $10,000$7,500
Billboard construction$75,000 - $100,000$87,500
Sales and marketing budget$500 - $1,000$750
Total$81,300 - $113,300$97,300

How much can you earn from a billboard advertising business?

How much you charge for billboard advertising space will depend on the location. In a rural area you can expect about $1,500 per month, while for billboards in a mid-sized city can fetch $3,000 per month. In both these areas, you can expect to pay the landowner about 20% of what you bring in. Your overall profit margin after all expenses should be about 50%. 

These calculations will assume that you’ll start with one billboard that brings in $3,000 per month, which would mean $36,000 in revenue and $18,000 in profit. 

As you gain traction, you might add five new billboards to your portfolio for a total of six. With annual revenue of $216,000, you’d make a tidy profit of $108,000.

Billboard Advertising earning forecast

What barriers to entry are there?

There are a few barriers to entry for a billboard advertising business. Your biggest challenges will be:

  • Funding the startup costs
  • Finding suitable land to purchase or lease

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Step 2: Hone Your Idea

develop a business idea

Now that you know what’s involved in starting a billboard advertising, it’s a good idea to hone your concept in preparation to enter a competitive market. 

Market research could give you the upper hand even if you’ve got the perfect product. Conducting robust market research is crucial, as it will help you better understand your customers, your competitors, and the broader business landscape.

Analyze your competitors 

Research billboard advertising businesses in your area to examine their services, price points, and customer reviews.

  • Make a list of billboard advertising businesses that offer similar services. 
  • Review your competitors’ services – their features, pricing, and quality – and marketing strategies
  • Check out their online reviews and ratings on Google, Yelp, and Facebook to get an idea of what their customers like and dislike.
  • Identify your competitors’ strengths and weaknesses. 

This should identify areas where you can strengthen your business and gain a competitive edge to make better business decisions.

Why? Identify an opportunity

You’re looking for a market gap to fill. For instance, maybe the local market is missing a billboard advertising company that offers other types of ooh advertising such as bench or bus advertising. (ooh advertising is out of home advertising).  

You might consider targeting a niche, such as digital billboards.

This could jumpstart your word-of-mouth marketing and attract clients right away. 

What? Determine your services

In addition to billboard ads, you could offer bench ads or bus stop ads. Those would require less of an upfront investment. 

How much should you charge for billboard ad space?

Prices will be based on market prices in your chosen location. They should also be based on your costs to produce the ads.

Once you know your costs, use this Step By Step profit margin calculator to determine your mark-up and final price points. Remember, the prices you use at launch should be subject to change if warranted by the market.

Who? Identify your target market

Your target market will be business owners in your chosen location. You can connect with them on LinkedIn or call on them directly. 

Where? Choose your business premises

In the early stages, you may want to run your business from home to keep costs low. But as your business grows, you’ll likely need to hire workers for various roles and may need to rent out an office. You can find commercial space to rent in your area on sites such as Craigslist, Crexi, and Instant Offices.

When choosing a commercial space, you may want to follow these rules of thumb:

  • Central location accessible via public transport
  • Ventilated and spacious, with good natural light
  • Flexible lease that can be extended as your business grows
  • Ready-to-use space with no major renovations or repairs needed
Billboard Advertising Business idea rating

Step 3: Brainstorm a Billboard Advertising Company Name

Your business name is your business identity, so choose one that encapsulates your objectives, services, and mission in just a few words. You probably want a name that’s short and easy to remember, since much of your business, and your initial business in particular, will come from word-of-mouth referrals.

Here are some ideas for brainstorming your business name:

  • Short, unique, and catchy names tend to stand out
  • Names that are easy to say and spell tend to do better 
  • Name should be relevant to your product or service offerings
  • Ask around — family, friends, colleagues, social media — for suggestions
  • Including keywords, such as “billboard advertising” or “ooh advertising”, boosts SEO
  • Name should allow for expansion, for ex: “Beyond Billboards Advertising” over “Skyline Media Solutions”
  • Avoid location-based names that might hinder future expansion
  • Use online tools like the Step by Step Business Name Generator. Just type in a few keywords and hit “generate” and you’ll have dozens of suggestions at your fingertips.

Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these. 

Finally, make your choice among the names that pass this screening and go ahead and reserve your business name with your state, start the trademark registration process, and complete your domain registration and social media account creation. 

Your business name is one of the key differentiators that sets your business apart. Once you pick a name, reserve it and start with the branding, it’s hard to switch to a new name. So be sure to carefully consider your choice before moving forward. 

Step 4: Create a Billboard Advertising Business Plan

Every business needs a plan. This will function as a guidebook to take your startup through the launch process and maintain focus on your key goals. A business plan also enables potential partners and investors to better understand your company and its vision:

  • Executive Summary: Summarize your Billboard Advertising business plan, highlighting the objectives, target market, and unique value proposition.
  • Business Overview: Provide an overview of your Billboard Advertising business, including its mission, vision, and the geographical areas you plan to serve.
  • Product and Services: Describe the types of billboard advertising services you’ll offer, such as digital billboards, traditional billboards, and any additional services like design or content creation.
  • Market Analysis: Analyze the outdoor advertising industry, identifying trends, market size, and potential clients, while also considering factors like location and demographics.
  • Competitive Analysis: Assess your competitors in the billboard advertising space, highlighting your agency’s strengths, pricing strategy, and any innovative features.
  • Sales and Marketing: Explain your marketing and sales strategies, including how you’ll attract advertisers, build relationships, and promote your billboard spaces.
  • Management Team: Introduce key team members responsible for managing your Billboard Advertising business, emphasizing their expertise in advertising, sales, and operations.
  • Operations Plan: Detail the day-to-day operations of your business, from acquiring billboard locations to maintenance, scheduling, and client management.
  • Financial Plan: Present financial projections, including startup costs, revenue forecasts, and profitability, and outline your pricing strategy for billboard rentals.
  • Appendix: Include any supplemental materials, such as billboard location data, advertising contracts, or case studies, to support your Billboard Advertising business plan.
what to include in a business plan

If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist to create a top-notch business plan for you.

Step 5: Register Your Business

Registering your business is an absolutely crucial step — it’s the prerequisite to paying taxes, raising capital, opening a bank account, and other guideposts on the road to getting a business up and running.

Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business! 

Choose where to register your company

Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you are planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to billboard advertising businesses. 

If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state. 

Choose your business structure

Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your billboard advertising business will shape your taxes, personal liability, and business registration requirements, so choose wisely. 

Here are the main options:

  • Sole Proprietorship – The most common structure for small businesses makes no legal distinction between company and owner. All income goes to the owner, who’s also liable for any debts, losses, or liabilities incurred by the business. The owner pays taxes on business income on his or her personal tax return.
  • General Partnership – Similar to a sole proprietorship, but for two or more people. Again, owners keep the profits and are liable for losses. The partners pay taxes on their share of business income on their personal tax returns.
  • Limited Liability Company (LLC) – Combines the characteristics of corporations with those of sole proprietorships or partnerships. Again, the owners are not personally liable for debts. Here’s how to form an LLC.
  • C Corp – Under this structure, the business is a distinct legal entity and the owner or owners are not personally liable for its debts. Owners take profits through shareholder dividends, rather than directly. The corporation pays taxes, and owners pay taxes on their dividends, which is sometimes referred to as double taxation. Read how to start a corporation here.
  • S Corp – An S-Corporation refers to the tax classification of the business but is not a business entity. An S-Corp can be either a corporation or an LLC, which just need to elect to be an S-Corp for tax status. In an S-Corp, income is passed through directly to shareholders, who pay taxes on their share of business income on their personal tax returns.
types of business structures

We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using an online LLC formation service. They will check that your business name is available before filing, submit your articles of organization, and answer any questions you might have. 

Form Your LLC

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Step 6: Register for Taxes

The final step before you’re able to pay taxes is getting an Employer Identification Number, or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN. 

Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.

The IRS website also offers a tax-payers checklist, and taxes can be filed online.

It is important to consult an accountant or other professional to help you with your taxes to ensure you are completing them correctly.

Step 7: Fund your Business

Securing financing is your next step and there are plenty of ways to raise capital:

  • Bank loans: This is the most common method but getting approved requires a rock-solid business plan and strong credit history.
  • SBA-guaranteed loans: The Small Business Administration can act as guarantor, helping gain that elusive bank approval via an SBA-guaranteed loan.
  • Government grants: A handful of financial assistance programs help fund entrepreneurs. Visit Grants.gov to learn which might work for you.
  • Friends and Family: Reach out to friends and family to provide a business loan or investment in your concept. It’s a good idea to have legal advice when doing so because SEC regulations apply.
  • Crowdfunding: Websites like Kickstarter and Indiegogo offer an increasingly popular low-risk option, in which donors fund your vision. Entrepreneurial crowdfunding sites like Fundable and WeFunder enable multiple investors to fund your business.
  • Personal: Self-fund your business via your savings or the sale of property or other assets.

Bank and SBA loans are probably the best option, other than friends and family, for funding a billboard advertising business. You might also try crowdfunding if you have an innovative concept.  

types of business financing

Step 8: Apply for Licenses/Permits

Business Licenses and Permits

Starting a billboard advertising business requires obtaining a number of licenses and permits from local, state, and federal governments.

You’ll have to comply with all federal and state regulations regarding highways. 

Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), health licenses and permits from the Occupational Safety and Health Administration (OSHA), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits.  

You may also need state-level and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more. 

You could also check this SBA guide for your state’s requirements, but we recommend using MyCorporation’s Business License Compliance Package. They will research the exact forms you need for your business and state and provide them to ensure you’re fully compliant.

This is not a step to be taken lightly, as failing to comply with legal requirements can result in hefty penalties.

If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.

Step 9: Open a Business Bank Account

Before you start making money, you’ll need a place to keep it, and that requires opening a bank account.

Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your billboard advertising business as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.

Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account. 

Step 10: Get Business Insurance

Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.

Here are some types of insurance to consider:

  • General liability: The most comprehensive type of insurance, acting as a catch-all for many business elements that require coverage. If you get just one kind of insurance, this is it. It even protects against bodily injury and property damage.
  • Business Property: Provides coverage for your equipment and supplies.
  • Equipment Breakdown Insurance: Covers the cost of replacing or repairing equipment that has broken due to mechanical issues.
  • Worker’s compensation: Provides compensation to employees injured on the job.
  • Property: Covers your physical space, whether it is a cart, storefront, or office.
  • Commercial auto: Protection for your company-owned vehicle.
  • Professional liability: Protects against claims from a client who says they suffered a loss due to an error or omission in your work.
  • Business owner’s policy (BOP): This is an insurance plan that acts as an all-in-one insurance policy, a combination of the above insurance types.
types of business insurance

Step 11: Prepare to Launch

Launching a Business

As opening day nears, prepare for launch by reviewing and improving some key elements of your business. 

Essential software and tools

Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks.  

You may want to use industry-specific software, such as SignDash, or Ad Sales Genius, to manage your contracts, billboard space inventory, and invoicing. 

Accounting

  • Popular web-based accounting programs for smaller businesses include Quickbooks, Freshbooks, and Xero
  • If you’re unfamiliar with basic accounting, you may want to hire a professional, especially as you begin. The consequences for filing incorrect tax documents can be harsh, so accuracy is crucial.

Create a website

Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism. You can create your own website using services like WordPress, Wix, or Squarespace. This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech-savvy, you can hire a web designer or developer to create a custom website for your business.

Your customers are unlikely to find your website, however, unless you follow Search Engine Optimization (SEO) practices. SEO will help your website appear closer to the top in relevant search results, a crucial element for increasing sales. 

Make sure that you optimize calls to action on your website. Experiment with text, color, size, and position of calls to action such as “Buy Ad Space Now”. This can sharply increase purchases. 

Online Marketing

Starting a Billboard Advertising Business can be a lucrative venture, and success hinges on effective marketing strategies. Here are practical tips to help you thrive in this competitive industry.

  1. Local Partnerships and Sponsorships: Forge alliances with local businesses and events for mutual benefit, offering discounted rates or sponsorships in exchange for increased visibility on your billboards.
  2. Targeted Social Media Advertising: Utilize social media platforms to showcase your billboard locations, engage with local communities, and run targeted advertising campaigns to reach potential clients and advertisers.
  3. Creative Content and Design Competitions: Encourage local artists and designers to submit billboard content, hosting competitions that not only generate buzz but also provide fresh, eye-catching designs for your advertising spaces.
  4. Data-Driven Location Selection: Use demographic and traffic data to strategically choose billboard locations, ensuring maximum exposure for your clients and attracting advertisers looking for specific target audiences.
  5. Mobile Billboard Services: Offer mobile billboard services for special events, parades, or high-traffic areas, providing a dynamic and attention-grabbing advertising option that sets you apart from static billboard competitors.
  6. Seasonal and Themed Campaigns: Align your marketing efforts with seasonal trends and themed campaigns, offering special packages and discounts to advertisers looking to capitalize on specific events or holidays.
  7. Customer Referral Programs: Implement referral programs that incentivize existing clients to refer new advertisers, creating a network effect that expands your client base through word-of-mouth marketing.
  8. Interactive Technology Integration: Invest in technology that allows for interactive billboard experiences, such as QR codes or augmented reality, enhancing engagement and providing additional value to advertisers.
  9. Community Involvement and Events: Attend local community events, fairs, and trade shows to build relationships with potential advertisers, demonstrating your commitment to the community and showcasing the impact of billboard advertising.
  10. Performance Metrics and Reporting: Provide transparent performance metrics to advertisers, showcasing the effectiveness of their campaigns and building trust, ultimately leading to repeat business and positive word-of-mouth.

Focus on USPs

Unique selling propositions, or USPs, are the characteristics of a product or service that sets it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your billboard advertising business meets their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire. 

Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your billboard advertising business could be: 

  • Best locations, best prices
  • Get noticed by 20,000 people a day
  • Prime locations, prime results
unique selling proposition

Networking

You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running a billboard advertising business, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in billboard advertising for years and can offer invaluable insight and industry connections. 

The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in billboard advertising. You’ll probably generate new customers or find companies with which you could establish a partnership. 

Step 12: Build Your Team

Building a Team for a New Business

If you’re starting out small from a home office, you may not need any employees. But as your business grows, you will likely need workers to fill various roles. Potential positions for a billboard advertising business include:

  • Salespeople – sell ad space
  • Marketing Lead – create and implement marketing strategies
  • General Manager – accounting, scheduling

At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need. 

Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed, Glassdoor, or ZipRecruiter. Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent. 

Step 13: Run a Billboard Advertising Business – Start Making Money!

Running a Business

Billboard advertising is not dead!  It’s still an effective way for businesses to get brand exposure and a $9 billion industry. You could start your billboard advertising business on a small scale, and eventually have billboards all across the country. The potential is huge. 

Now that you understand the business, you’re ready to find your prime location and get your billboard advertising business going!

Billboard Advertising Business FAQs

Is a billboard advertising business profitable?

Yes, a billboard advertising business can be profitable. The profitability of the business largely depends on factors such as the location of the billboards, the number of advertisers, and the demand for outdoor advertising in the area. High-traffic locations with a strong demand for advertising can generate substantial revenue for the business.

What is the growth potential of a billboard advertising business?

The growth potential of a billboard advertising business can be significant. As long as there is a demand for outdoor advertising, the business can expand by adding more billboards in strategic locations. Additionally, advancements in technology, such as digital billboards, offer new opportunities for revenue growth and increased flexibility in delivering targeted advertising content.

What type of business is a billboard advertising business?

A billboard advertising business falls under the category of outdoor advertising or out-of-home (OOH) advertising. It involves owning, operating, and managing billboards or other outdoor advertising structures to provide a platform for advertisers to showcase their products, services, or messages to a wide audience.

Can you start a billboard advertising business on the side?

Starting a billboard advertising business on the side is possible, but it can be challenging due to the investment required and the need for ongoing management and maintenance. Successful billboard advertising businesses typically require a significant initial investment in acquiring or leasing billboard locations, constructing or purchasing the billboards themselves, and marketing the advertising space to potential advertisers.

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How to Start a Billboard Advertising Business