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Start a christmas lights installation business by following these 9 steps:
You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple guide to starting your christmas lights installation business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
STEP 1: Plan your Business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
- What are the startup and ongoing costs?
- Who is your target market?
- How long it will take you to break even?
- What will you name your business?
Luckily we have done a lot of this research for you.
What are the costs involved in opening a christmas lights installation business?
The startup expenses involved in opening a Christmas lights installation business include:
- a vehicle for transporting crews and lights to customers’ sites
- ladders for installing lights
- commercial-grade lights
Because a Christmas lights installation business is usually started to complement another seasonal business, most business owners who get into this line of work already have a vehicle, ladders and insurance from their other business. For instance, a painter or landscaper likely already has the equipment and insurance they need.
Some business owners may be tempted to purchase inexpensive lights to save money starting out, but this strategy often backfires. Cheap lights are more likely to break than commercial-grade ones, and the labor costs of replacing lights that break often exceed any savings the less expensive lights offer.
Instead of purchasing low-quality, inexpensive lights, businesses should invest in a few samples of high-grade lights. Representatives can use these samples to show customers what the lights look like, and then customers’ initial payments can be used to actually purchase the lights that will be used in displays.
Finally, some business owners may want to invest in a franchise. Opening a Shine holiday lighting franchise costs between $10,000 and $15,000. While franchises can offer some nice benefits, business owners don’t have to start their business as a franchise. Many open independent businesses that are successful.
What are the ongoing expenses for a christmas lights installation business?
The ongoing expenses for a Christmas lights installation business include storage costs for lights during the year, employees’ salaries and equipment costs. Storage costs are typically factored into customers’ quotes. Employees’ salaries and equipment costs are normally covered by another seasonal business during the rest of the year.
Who is the target market?
While most Christmas lights installation businesses have lots of residential customers, a business’ ideal customer is another business. Businesses frequently are willing to spend more on displays than individuals are able to, and most businesses don’t have employees to install lights for them. Lots of individual homeowners prefer install their own lights, making individual homeowners a less reliable source of regular business.
How does a christmas lights installation business make money?
A Christmas lights installation business makes money by charging customers for to install, service and take down decorative lights during the holiday season. Most customers are given individual quotes based on the size and complexity of their display.
How much can you charge customers?
The average cost of a Christmas light installation is $1,500, but some jobs run as high as $15,000 or $20,000. Many businesses don’t take on displays for less than $500 or $1,000.
How much profit can a christmas lights installation business make?
A Christmas lights installation business can bring in $50,000 or possibly $100,000, according to Stephen Lisk of Stephen Lisk Landscape Management in New Jersey. This is in addition to any revenue earned by another seasonal business.
How can you make your business more profitable?
A Christmas light installation business can generate more revenue by offering decorative lighting services at other times of the year. Some individuals may be willing to pay for Halloween decorating, and many people will hire a professional service for weddings or other special events.
What will you name your business?
Choosing the right name is very important. Read our detailed guide on how to name your business. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.
After registering a domain name, consider setting up a professional email account (@yourcompany.com). Google's G Suite offers a business email service that comes with other useful tools, including word processing, spreadsheets, and more. Try it for free
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC prevents you from being personally liable if your christmas lights installation business is sued. There are many business structures to choose from including: Corporations, LLC's, and DBA's.
Form Your LLC
Read our Guide to Form Your Own LLC
Check out the Top Business Formation Services from our friends at StartupSavant.
You should also consider using a registered agent service to help protect your privacy and stay compliant.
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It's really easy and free!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
STEP 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Open a business bank account
- This separates your personal assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Recommended: Find the right bank for you, read our review of the Top 5 Banks for Your Small Business
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment later on.
STEP 5: Set up business accounting
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
STEP 6: Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate a Christmas lights installation business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
For information about local licenses and permits:
- Check with your town, city or county clerk’s office
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
In businesses where services are provided on an extended basis, a services contract is often put in place outlining terms and conditions of service. You may wish to require clients to sign a services agreement before starting a new project. This agreement clarifies client expectations and minimizes risk of legal disputes by setting out payment terms and conditions, and service level expectations. Here is an example of one such services agreement.
Recommended: Rocket Lawyer makes it easy to create a professional service agreement for your christmas lights installation business when you sign up for their premium membership. For $39.95 per month, members receive access to hundreds of legal agreements and on call attorneys to get complimentary legal advice.
Certificate of Occupancy
A Christmas lights installation business can be run out of a large storefront. Businesses operating out of a physical location typically require a Certificate of Occupancy (CO). A CO confirms that all building codes, zoning laws and government regulations have been met.
- If you plan to lease a storefront:
- It is generally the landlord’s responsibility to obtain a CO.
- Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to a Christmas lights installation business.
- After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommended to include language in your lease agreement stating that lease payments will not commence until a valid CO is issued.
- If you plan to purchase or build a storefront:
- You will be responsible for obtaining a valid CO from a local government authority.
- Review all building codes and zoning requirements for you business’ location to ensure your Christmas lights installation business will be in compliance and able to obtain a CO.
STEP 7: Get Business Insurance
Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.
There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.
Learn more about General Liability Insurance.
Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
How to promote & market a christmas lights installation business
Since most Christmas lights installation business owners have established seasonal businesses, they already have a market to advertise decorating services to. Business owners can inform their current customers of the new services they’re offering, and some may sign on for holiday decorating. Berns says 70 percent of his holiday decorating customers were first landscaping customers he served.
How to keep customers coming back
A Christmas lights installation business can keep customers returning by selling lights to customers. Once lights are sold to customers, they’re more likely to work with the same business year after year. They’ve already made an initial investment, and switching to another holiday decorating business would probably require another large upfront purchase of lights.
STEP 9: Establish your Web Presence
A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers.
Start A Christmas Lights Installation Business In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
Is this Business Right For You?
Many Christmas lights installation businesses are started by painters, landscapers and other contractors who have a slow period around the holidays. The holiday decorating season is extremely short, lasting only a few months at the most, so it’s difficult to run a stand-alone Christmas lights installation business that offers no other services during the rest of the year. Such a business, however, is a potentially lucrative sideline business that can complement other seasonal businesses, such as exterior painting and landscaping.
What happens during a typical day at a christmas lights installation business?
The daily activities of a Christmas lights installation business revolve around the holiday decorating season. The season for actually displaying lights usually runs from Thanksgiving through the first week of January. The work involved extends beyond both these dates, though:
- Leading up to the season, representatives help customers design their displays and crews test lights to make sure they’re working properly.
- Through November and the first week of December, crews install light displays.
- From Thanksgiving through the first week of January, crews service any lights that break or go out.
- After the first week of January, crews take down lights and put them in storage.
Because there are only a few weeks to get as many light displays up as possible, Jim Berns of Michigan-based Berns Landscaping Services, Inc. recommends starting to put displays up soon after Halloween. Displays can be installed but not turned on. When customers want them turned on, a technician can come and set the timers—which takes much less time than putting in an entire display. This helps businesses serve as many customers as possible in the week or two after Thanksgiving, which is when most customers want to start turning on their lights.
What are some skills and experiences that will help you build a successful christmas lights installation business?
While putting up holiday lighting might seem like a simple process, installers need to know how the lights they’re putting up will impact the circuits the lights are on. For example, they need to know:
- how many lights a circuit can maintain
- why different types of LEDs can’t be used on the same circuit
- when it’s necessary to use a silicone connector
Many holiday lighting manufacturers and suppliers offer classes that cover information like this, and all installers should be signed up for such a class. For more advanced training, business owners can pursue one of the certifications offered by the Association of Outdoor Lighting Professionals.
Business owners also need to know how to manage and grow their Christmas lights installation business. For this, typical business skills such as business management, financial planning, and customer service skills will all be required.
What is the growth potential for a christmas lights installation business?
Most Christmas lights installation businesses start out small, serving just a local area. Several, however, grow to have franchises throughout a region or across the country. For example, Chris Fischer grew a Christmas lights installation business that had one location into a franchise that has 21 franchise locations and plans on opening 10 more. (Fischer’s business also offers window-washing services.) Christmas Decor is a national business that works with local decorators in 48 different states. One decorator the company works with is the Christmas Decor of NJ by Triple R Lighting.
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Take the Next Step
Find a business mentor
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
Resources to Help Women in Business
There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:
If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.
What are some insider tips for jump starting a christmas lights installation business?
Before starting a Christmas lights installation business, business owners should carefully calculate how many customers they can realistically service. As a business grows, Christmas Designers notes, it can be tempting to take on more customers than the business can reasonably handle. Overextending a business can be disastrous, as upset customers are apt to leave reviews that tarnish a business’ reputation and hamper future growth. Controlled growth offers more long-term potential for success.
Business owners should also contact a tree service company in their area before officially opening. Some customers may have trees that are too tall for a Christmas lights installation business to put lights on, but this work could be outsourced to a tree service company that’s equipped to work on tall trees. The Christmas lighting installation business could still do the rest of the work, and it may even make a commission on the outsourced tree decorating.
How and when to build a team
Businesses only have a few weeks to install holiday lights, so it’s important to have a crew of employees ready to do installations as soon as a business opens. Most business owners already have a crew of employees available from their other seasonal business.