Holiday Lights Make Good Cents
|By Russ Smith|
Who doesn’t want to do something special for the holidays? For many property owners that means long strings of bulbs festooning their rooflines, trees, and shrubs. Shopping centers and retail stores have always realized that holiday lights make for a festive atmosphere. Even municipalities are looking to spruce up their town centers.
That presents a great opportunity for a creative landscape contractor to make hay while the sun shines. Hanging holiday lights generates an additional revenue stream with very good profit margins. That said, if you’re looking for a way to bump up your revenues this holiday season, you should be thinking of lights.
If you’ve never considered holiday lighting for your business, hear from some contractors around the country who’ve incorporated it into their operations. Learn how you can use holiday lighting to keep your workers employed, increase your winter revenues, and even have some fun while you’re at it.
Bobby Dunn is the operations manager for A+ Lawn and Landscape in Des Moines, Iowa. His company’s workload would always start to slump around Thanksgiving. When some of their customers started inquiring about holiday lighting, A+ recognized it as the solution to their problem.
“We wanted extra work for our guys; we do everything we can to keep them on as long as possible,” Dunn said. When he and his team started responding to this demand, they found an untapped wellspring of new business. Three years ago, they lit up 35 homes in a season, but just last year they lit up 90. Just for a sense of scale, those jobs range from $650 to $2,900 each.
Dunn is following the industry trend of dropping incandescent lights and switching to LEDs. They are much longer-lasting than incandescent lights, and they’re lower volt age.
That means there’s less danger from electric shocks, and it’s considerably harder to overload the system and trip a breaker.
His customers were mostly getting LEDs anyway, but Dunn was still a bit nervous when he stopped quoting incandescents last year. “I thought that might be an issue; it does cost a little more for LEDs, but nobody balked. I didn’t lose a single customer,” he said.
Spending a little more on materials can make a big difference. “Don’t buy pre-lit, pre-measured strands from Home Depot or Lowe’s and try to make them fit,” said Dunn. Buying long spools of lights from the manufacturer lets you cut each job to length, saving you time, material, and a major headache.
Dunn carries some sample strands with him whenever he gives an estimate. This serves to show customers the color options, and educate those who may not know a warm white from a pure white. A brief display on their kitchen tables helps ensure customer satisfaction, and lets them fall in love with the beauty of their lights.
In Plano, Texas, most, but not all, of Flent Ballantyne’s clientele are dreaming of a white Christmas, envisioning clear lights on their rooflines, trees and shrubs. “You’ve got some people who want to be a little more creative,” he said. “Do their house in green, the bottoms of their trees in red, and the tops of their trees in green, that kind of thing.”
Ballantyne, the president of Jurassic Lawn Care, entered into holiday lighting in 2002, as a way to generate a little extra revenue. “We got into it because we needed money for marketing our lawn care business,” he said. “It worked out well, and so we continued.”
Ballantyne has one tidbit of advice for newbies: be careful about pricing. “There are a lot of people who get into this business and price themselves too low,” he said. “They lose money, and then they don’t service their customers. Those contractors feel like they got ripped off because it took a lot more time and money than they anticipated to put up the lights.” Even at the low end of this market, the customer is paying for convenience, and your business should be modeled accordingly.
You need to remember that every job carries some risk, so make sure that your insurance covers slips and falls. Safety rules vary from state to state, so it’s a good idea to look up the laws for your area. Some states will allow employees on roofs; some want you working from ladders only.
Mike Hendricks, vice president of Village Lighting Company in Riverton, Utah, says that he’s seen quite a few contractors achieve success with customers using a ‘cookie cutter’ approach. These contractors offer a fixed price of several hundred dollars for lights along the roofline, some garlands, and maybe some lighting along trees and shrubs. “They go through a neighborhood, and get five or six of those houses, then they knock them out in one or two days,” Hendricks said.
Offering holiday lighting doesn’t just represent an opportunity to cross-sell to your client base, it also brings the chance to get your foot in the door with new clients. A clearly written contract, followed by a timely, professional installation and take-down, makes a great first impression. On the flip side, if you don’t offer this service, you may be leaving the door open for a competitor to show their stuff.
According to Hendricks, there are two other major client bases in the holiday lighting market. One is the high-end residential market, upper income families who want their second and third homes lit up for the holidays.
In Spanish Fork, Utah, Zack Forbush, owner of Orion Holiday Lighting, specializes in this particular market. Forbush has more time than most to get everything in place; when other companies are starting to advertise in mid-September, he’s already installing.
It’s just as well, because there’s a lot of work to be done. These jobs can easily run into the tens of thousands of dollars, and call for a similarly epic volume of lights. Forbush has to balance his Thanksgiving deadlines against the natural timelines of deciduous trees. Installing 11,000 lights on a tree that hasn’t lost its leaves can be enough to keep it from going dormant, with disastrous effects.
“Instead of hand-unwrapping the strands off of a tree or a roof, they just go in with shears, and cut the strands every two feet,” said Hendricks. “Then from there, to strip it off a tree is quick and easy.” That time savings may not mean much on a small scale, but over the course of several large jobs, it can make all the difference. Weighed against the risk of a scheduling screw-up that switching to LED would bring, it’s a small wonder that they’re slow to change.
The final segment of the holiday lighting market is commercial; business owners who are looking to create an attraction and bring in holiday shoppers. For some of these commercial and municipal customers, incandescent lights are still king. Large contracts are often multi-year, and the contractors who win them have had time to get their designs and schedules all dialed in. For them, incandescents offer convenience and speedy takedowns.
Even so, Carrie Erzinger, holiday décor manager for Kinnucan Tree Experts and Landscape Company in Lake Bluff, Illinois, persists in recommending LED lighting to her clients.
For her, the benefits outweigh the slower pace. “It’s cheaper electricitywise; you can connect numerous strands together—it just makes life easier,” she said.
Her company started getting into lights when the founder, Bob Kinnucan, helped set up a local shopping area. Now they offer wreaths, garlands and winter interest pots, in addition to the usual array of lights.
According to Erzinger, some of the municipalities she contracts with can spend a fortune on holiday decorations for their downtown areas.
“They can be spending $50,000 a year; that would be a whole downtown or a village, all their public trees,” she said.
Most of these large contracts go to bid during the summer. For smaller, residential contracts, she usually starts marketing after Labor Day. She sends out door-to-door direct mail, postcards targeted along postal routes, places ads in local magazines and papers, and email campaigns.
When the calls start to come in, the biggest risk factor in Erzinger’s estimation is the weather; snowstorms can easily mess with her schedule. Furthermore, if the connections or the electrical boxes aren’t watertight, there’s a slight chance that water-heavy snows can breach them and blow fuses.
Sadly, there isn’t a good fix to this problem. A waterproof container over the electrical box is a good start, but it only covers one point of failure. Taping the connections in place sounds intuitive, but just isn’t feasible for a 250-strand tree decoration.
When the weather gets wet, expect more service calls.
David Rykbost, owner of Dave’s Landscape Management in Hudson, Massachusetts, sought help in starting the holiday lighting arm of his business. He bought into a holiday lighting franchise—Christmas Decor. “What sold me on it was the opportunity to keep my guys productive a little bit longer,” said Rykbost. “My irrigation guys were typically wrapped up with their blowouts by early November, and they’re paid too much money to suck and blow leaves.” He already had the men, the ladders and even a bucket truck, so it made perfect sense to start installing holiday lights.
In return for a fee and a percentage of the revenue, a franchise offers training, access to product lines, and a complete business plan. They take some of the risk out of starting a new business, in return for a cut of the profits.
With the initial training in Lubbock, Texas, plus attending one of four annual trainings, webinars, a conference in July, and a series of Youtube videos, Rykbost has all the teaching tools he needs. “You can give the new guy an assignment to watch all these videos on how to do rooflines and trees and shrubs and everything else,” he said. “He can sit there and watch them online at home, and get a good idea of how to do the job before his first day at work.”
Rykbost is one of a growing number of contractors who allows clients to lease their lights, instead of buying them outright. Leasing offers customers a lower initial cost, lessening the sticker-shock effect, and ensures repeat business. Rykbost stores the lights during the off-season, thereby avoiding the Gordian knot of tangled wire that inevitably results from customer storage.
According to Hendricks, leasing offers one more advantage for the creative contractor. Some of his clients are using the extra flexibility in leasing to offer property owners a choice of colors every year. “Twenty percent of the customers that I know are adopting some form of that, whether it’s 100 percent of their business, or just something a few of their customers need from them,” he said.
If you aren’t interested in buying a franchised territory, there are plenty of other options for training. “There are some DVDs that you can purchase online,” said Hendricks, “and there are training programs.” A discussion with your manufacturer or local distributor should be all it takes to point you in the right direction.
Holiday lighting is a chance to grow your business at a time of the year when most landscape companies are going into hibernation. The contractor who’s willing to put in the time to expand their repertoire can generate additional revenue, expand their client base, and keep their best workers safe from poaching during the winter wait. Still, there’s one more reason to check it out, and it’s the most compelling of all.
The real wonder of holiday lighting is in the joy it brings. From the beginning, winter holidays have represented defiance in the face of Mother Nature’s yearly assault. When the summer daylight is a distant memory, you’re providing your customers with a beacon in the darkness. You’re sharing in their celebration, and that’s enough to warm the hearts of employees and clients alike.