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Welcome to the Billboard Mastery Podcast, where you will learn the correct way to identify, evaluate, negotiate, perform diligence on, select the construction type, build, rent the ad space and operate billboard signs. And now here is your host – the guy that built from scratch the largest privately-owned billboard company in Dallas/Ft. Worth – Frank Rolfe.
In the billboard business, we always think in terms of big. One of my very first billboards was a 20 by 60 foot sign face 120 feet in the air. And you might say, why so big? Well, the ordinance did not have a restriction on size or height, so I thought if I would just build the biggest sign in the Dallas-Fort Worth Metroplex, it would surely be the most valuable. Was I right? No. I was on Interstate 30 east of Dallas, not on the highest trafficked corridor. And later down the road, someone built a Motel 6 sign that partially clipped part of my right-hand read on the sign. But my mind was always built on big. Whenever I was building a sign, my first thing that would come to mind is, how tall can I go and how big can I make the ad face? But unfortunately, in some circumstances, it's not about big. Instead, it's about tiny.
This is Frank Rolfe, the Billboard Mastery Podcast. We're gonna talk about building tiny signs. What you need to know about going and shrinking that ad face down as small as you can get in order to get that permit to get the job done. Now, you might say, why in some cases do you have to build a tiny sign?
Well, there are some cities and towns in America that will allow billboards, but only roughly eight-sheet in size. And an eight-sheet is roughly about 5 by 10 feet, approximately. So when you're doing an eight-sheet, you're talking about a very, very tiny sign. You're talking a sign that is less than a tenth of the size of a 14 by 48, which is the big standard highway sign. Now, why do those small signs even exist? You might say, why are those even there? Well, they're there because decades ago, when advertisers wanted to reach people inside the urban market, typically to sell liquor and tobacco, that was the size that everyone agreed was acceptable. So a lot of cities and towns said, "Well, a sign that's that small, it isn't much bigger than the signs that Taco Bell has and the car dealer down the street. So I guess it's not obnoxious. I guess we can use that." And of course, the sign companies used their typical spiel, which was it will help out local business, it'll allow people to promote their things that they do and their cost specials.
And that was pretty much completely a lie back when that program really hit its heyday back in the '60s and the '70s. It was almost always just liquor and tobacco. But nevertheless, many of the laws were changed and modified, and that's where they ended up. Fast-forward to today and nobody wants to relax them, nobody wants to allow big signs to be built. So as a result, you can either build something that's eight-sheet sized or you can forget it. First time I came upon this was a sign location. It was down in Rowlett, Texas. And when I looked at the zoning maps of Rowlett, I found in the entire city there was only one parcel with the correct zoning for a billboard. And the maximum size a billboard could be was eight-sheet sized. Why do they even allow that? I have no idea. But you have to remember that the industry struggled at one point, people claiming they had a First Amendment right to build signs. And so I guess the city must have allowed this, assuming there wouldn't be any, because there was just one parcel in the entire city that had the correct zoning for a billboard. And the good news was it was right in the curve of the road, so that's a plus.
But the bad news was it was right in the middle of the curve in the road, so I could only make it a one-sided sign. So the question is, can you build it and make any money with it? Well, based on the rarity of it, I knew the sign would be worth probably at least $300 a month to the advertiser. But would the property owner let me build the billboard for the small amount of money I could allocate? Because as a single-sided $300 a month billboard, and you trying to keep it down to about 15 or 20% of ground rent, you could only pay out about $500-700 a year in ground rent. That was all. But the good news was it was on a farm. There was nothing there, just crops. And right where the sign would go, it was even better. There were no crops; it was just weeds. I guess because the way the tractor turned, they couldn't farm that part of the farm, so they just left it up to its own devices.
So I sent a presentation to the people that owned the farm and said, "Hey, I'd like to build a billboard on your property, and I'll give you 600 a year." And they called me pretty rapidly and said, "Hey, we'll take the 600 a year. Sure thing, you bet, no problem." But now the ball was thrown back in my court. Could I make a go of this sign, it being so small? But then again, eight-sheet kits are relatively inexpensive. So I was able to build a single-sided eight-sheet on its own little metal pole in that location for not a huge amount of money. Back then, I think it cost me about $2000. And I couldn't get any lights on the sign 'cause it was out in the middle of nowhere on a farm. So my only real cost of operations was putting the ad on, putting the vinyl on it, and repair and maintenance, insurance, and taxes. And if you took the $300 coming in and took out the money to the farmers and took it all out, the sign was making a couple hundred bucks a month, which based on the cost of construction was about 100% per year return. So on paper, it all looked fine.
And you know what else? When I went out to rent the sign, it was sold, rented almost immediately. It was not a hard sell because it was the only sign in the entire town. So there's a successful small sign story for you, but it's not the only one. There's many more out there, and there's a whole lot of abandoned eight-sheets out there that you can typically buy from the old people that owned them or take over some of the abandoned ones if you check out all of the rules and regulations. So there is a way you can make money with these small signs. They don't need to be ignored. You don't have to say, "Well, I can't make any money on anything smaller than 400 square feet," because it's simply not true. But here are some things you also have to know about small signs. Number one, they have to be right by the road. In the case of my small, small sign in Rowlett, I was right on the edge of that little two-lane road, which had a pretty good amount of traffic. But you can't put them in situations where you're on the interstate and the sign itself is sitting 50 to 100 feet off the interstate. You wouldn't be able to read it at all.
Another thing on a small sign is it will, in fact, limit the kinds of advertisers you can get on there because you don't have much room. You may be only able to get a logo and an exit number, like a Dairy Queen symbol and then like number 40, assuming they can understand where that is, or if you can put the word on there, maybe exit number 40. But you're not gonna be able to use on that sign people who are not well-known, people who are not a brand. You can't put some law office for personal injury law, the law office of Johnson and Smith. Not enough room on there to put all those letters. No one would ever know what it is. And when you have a small sign like that, each letter may have to be half of the height of the sign to even be visible. The bottom line is that small signs do, in fact, work. There are lots of opportunities for them across America. They can make money. They can make sense. Just keep your eyes open for those opportunities.
This is Frank Rolfe with the Billboard Mastery Podcast. Hope you enjoyed this. Talk to you again soon.