It’s Time to Get Into Holiday Lights
In the middle of winter, landscape contractors across the country typically hit a big freeze. As temperatures dwindle downward, they frequently take landscapers’ revenues with them. Clients have less need for your services at a time when plants and turf go dormant. To keep business hot year-round, some landscape contracting companies have turned to installing holiday lighting for a range of residential and commercial clients, taking advantage of a short install and dismantle season—lasting from early november through mid January—that is rife with big potential.
“This is kind of a way to diversify and fill in the slow time for us,” says rick Longneker, whose Buds & Blades Landscaping of east Olympia, Washington, will be taking on holiday light jobs for the first time this season. “It’s also a way to reach out to a different set of customers, or new customers who don’t know about us.”
The good news about the holiday lighting business is that, after the initial training, it is more or less self-sustaining. Contractors can rely on their existing client list for leads, and market themselves using relatively inexpensive, but effective, methods, such as custom fliers. Word-of-mouth referrals can also be an effective tool, and fortunately don’t cost a thing.
When Oscar Welch of Welch Creative Lighting in Windermere, Florida, expanded his business into holiday lighting, he first approached his preexisting landscape lighting clients. It worked well for a while, until he decided to think bigger. “We realized it’s an even better business if we went at it from the commercial side,” he says. “We now try to specialize in only the largest jobs we can find. Some of our jobs run 20 grand, and we won’t do anything less than about six thousand anymore.”
But while the larger projects carry greater profit margins, they are also more complex, which can be daunting without the proper training. “We’ve all done a little bit of holiday lighting with our parents, but you find out when you do it professionally, that as you build these displays, they become pretty complex,” Welch says. “And if you don’t follow a specific set of rules, you’ll trap yourself and the lights will never go on—or they won’t stay on—and people become extremely irritated when they’ve paid you thousands of dollars to get the job done.”
Learning from the pros
To learn the ropes, Welch and his crew put themselves through an extensive training regimen, attending a number of seminars. Welch even developed his own homegrown lighting seminar to train new staff. “We went out and rehearsed on palm trees, treating them as if they were columns on a house, and we would light them and experiment until we got pretty good at it,” he says. “Flash to several years down the road, and now we’re really good at it—it’s almost like you can walk up to a place and do the design and start figuring out lengths in your head.”
Welch also received help when he was first starting out from the Association for Outdoor Lighting
Professionals (AOLP), which hosts an annual meeting and expo. Welch attended sessions on holiday lighting at the conference and networked with seasoned professionals, picking up a number of tricks of the trade. “You’re hanging out with people that do this for a living, and who usually live someplace else,” he remarked. “They don’t view you as a competitor so they’re willing to share their secrets.”
Landscape contractors can get started through a variety of training programs and practice simulations that will help prepare for a multitude of install jobs. Some companies offer training classes, strategies, and software packages to help new businesses start off on the right foot.
These companies can also help with mapping out the fundamentals, such as pricing, since the scope of the job invariably dictates the price. Training classes, through your distributor, not only will help you get to know him better, but they can assist with timely product shipments and troubleshooting when needed.
Knowing how many jobs to tackle at first can be overwhelming, and will likely involve some trial and error. It is dependent on a number of factors, including the size of your staff, inventory, and efficiency. In the past, a gigantic commercial install would take Welch seven days to complete. Through experience and tricks of the trade, he’s managed to shave it down to four long days, allowing him to take on more jobs throughout the short season.
“We’ve done as many as 60 jobs and we’ve done as few as 15,” Welch says. Today, he prefers to tackle only the biggest jobs he can find, referring out the smaller ones, or the ones that are too far away, to other companies.
Tony Snider, of Holiday Lights Decorating in Phoenix, Arizona, has been in the business for more than 20 years, and now performs as many as 170 jobs each season, a mix of residential and commercial. How many does that usually break down to each week? “It’s hard to say—every week is different,” Snider explains. “Some jobs take a week, some residential jobs take three hours.”
For his first season, Longnecker isn’t setting his sights too high, anticipating that growth will come from experience and a thorough understanding of how the planning and installation process works. “I’d be really happy if, in our first year, we did between $30,000 and $50,000 in business,” he says.
Keeping a reliable electrician on hand to help out with any problems that may arise, especially when just starting out, can also help speed up jobs that don’t run as smoothly as anticipated. In his first year of operations, Welch subcontracted with an electrician to install all the special electric components and the controls used to turn the displays off and on.
Longnecker also has a plan in place for his first season.
“As far as electrical codes or anything, we don’t have to worry about that in our local jurisdiction—we can pretty much just hang them up and plug them in,” he says. “However, we do have an electrical contractor that we can work with, if we do have a problem or something that doesn’t seem right. And that’s going to be something we can tell the homeowner, ‘Hey, if you have a problem here, you should call this person.’ We’re not going to get too involved in that end of it.”
Making good time
When it comes to success as an installer of holiday lights, timing really is everything. To help keep costs as low as possible, it’s necessary to know when to start planning, buying and marketing for the season. “Everyone wants [decorations] up before Thanksgiving, or right after, but you can’t do it that way because you have so many accounts,” Snider says. “We install a lot of them before then, but we don’t turn them on until later.” Frequently, switching on the lights at a later date is a painless process that can be as easy as plugging it in and resetting the timers.
But you will need to start preparing for the season long before the first plastic reindeer or string of lights is hung. “I think the biggest thing to recognize is that if you’re going to be in the business, you need to make that decision no later than August, and then you need to know where you stand by the middle of September, because that’s really the last time you can buy anything at a decent discount,” Welch says. After that point, lighting jumps in price— usually at a rate of 3% every two weeks—until the end of the season.
“Ideally, what you want to do is go to the market in January, and buy what you anticipate you will use. But buy it under the condition that you don’t have to pay for it until June, when you take delivery,” Welch says.
Snider suggests starting the research process early, in June or July if possible. The time between the summer and the first installation can then be spent finding clients and advertising your services. “It’s a lot of hitting the pavement, getting out there, and letting people know—from malls to property managers to dealerships to resorts,” he says. In Snider’s experience, residential clients usually come via word of mouth, although mailed fliers have also worked well.
The first few years he was in business, Welch took smaller jobs and offered big discounts. “Our first year, we offered 25 percent off any new holiday decor, if you committed to us no later than September 1st,” he says. Today, his company builds decor costs into the first year’s price. In subsequent years, he charges half the original cost, making replacements and alterations as necessary.
Buying and leasing decorations to clients are both viable options, although the greater profits may be in leasing, since clients will have to return to you for their inventory each year. Another approach is to give your clients both options. Leasing is cheaper for clients on a year-by-year basis, but overall they will spend more money if they decide to lease every year, instead of buying outright the first year.
According to Snider, the decision as to whether to let clients lease or buy their new decor is mainly just a convenience for them. “We will still have to store the decorations during the off season. I won’t allow them to store it themselves, because it’s kind of a hassle to get clients to store something,” he says. “And who knows where they’re going to put it. The storage is so cheap, they can’t beat the price. It’s a way to help us save money and make sure it’s put away right.”
Discovering which type of product is right for your business will also require some research. Contractors have relied on strands of traditional incandescent lights for years, but the emerging popularity of long-lasting light-emitting diodes, known as LEDs, is a new trend worth looking into.
Made of durable plastic, unlike incandescent bulbs, LEDs use up to 90 percent less power and are difficult to break. The energy savings are undoubtedly appealing to clients, but perhaps even more you, the installer. You won’t need to worry as much about whether or not the total voltage of the lights being installed exceeds the total amount of electricity available.
LEDs, however, are priced higher than incandescent bulbs, which may cut into your profit margins. “You can’t make nearly the markup you can on incandescent,” Welch says. “We still don’t do much LED holiday lighting because it’s still expensive.”
While LED quality has increased over the years, Welch says it’s still worth checking to see that you’re getting quality product. “There is a thing called color temperature in lighting and you have to make sure you have the proper color temperature of a mini light—the kind you would wrap a Christmas tree with, or an outside bush. If the color temperature isn’t right, the light will look blue; that’s what LED lights looked like for the longest time.”
Overall, outdoor decorations have gotten better over the years, Snider says. “Not just LEDs,” he says, “but incandescent lights as well. The way they’re made, the quality has gotten better.”
Longnecker admits that one reason for getting into the business, even though times are tough, is to help drum up some new business that he hopes will turn into yearround revenue. He is hoping that these new clients he’s reaching will open new doors for his landscape business. “Maybe we can use it as a way to offer them landscaping services as well,” he says.
In good times, the business owners say holiday light installations can be profitable and low-risk. But even in a shaky economy, businesses and affluent residences still need help getting their outdoor spaces into the holiday spirit.
“I haven’t seen it slow down; it’s been okay,” Snider says. “Last year I was scared, but I had a good year.” His only caveat is that while business has remained brisk, collections have been slower than usual. Some clients, he adds, may choose to scale back or even skip a year, although the numbers still add up to healthy profits, even in lean times.