Holiday Lighting and Decorating
| Have you been thinking of adding holiday lighting to your landscape business? If you haven’t, maybe you should. The demand is there; besides that, you already have your customers, you have the trucks, and you have the labor. Why not take advantage of it? Add an additional revenue and profit stream. “The margins can be between 40 and 60 percent, depending on how you pay your guys and do your product markup,” said Mike Marlow, vice president of Holiday Bright Lights, a manufacturer and wholesaler headquartered in Chicago, Illinois. |
“The first year, you’ll probably cap out at 30 to 40 projects, because of the learning curve. Say you’re charging $1,000 for each job; do 40 jobs, that’s $40,000 for three weeks’ worth of work.”
This service fits well with green industry operations. You already own trucks, and probably a couple of ladders as well. You have workers to put them up. All you need are the lights, and somewhere to store them. It’s a good way to keep your crews, and your banker, busy during the winter.
“We generally use our residential crews to hang lights,” said Lebo Newman, CEO of Signature Landscapes, Reno, Nevada. “Right about the time they’re done mowing, it’s time to start hanging lights. Sometimes there’s an overlap. If the weather gives us a longer mowing season, it can extend into lighthanging time.”
“Once the irrigation techs get everybody’s systems turned off, they start helping with lights. Taking them down usually takes most of January. By February, we’re gearing up for spring. So I don’t have to let guys go,” explains Lebo.
T.J. Houghtalen, managing partner at Green Vista Landscaping, Inc., in Noblesville, Indiana, got into holiday lights in 2001, originally buying into a franchise.
“We wanted to increase our late fall/early winter sales and cash flow. When it starts to cool down, people don’t want us to do landscape work, they’d rather just wait until spring. We did this as a way to continue a revenue stream. That was the biggest reason.”
There are a few different ways to go with this business. You can get lights from a distributor yourself, or buy into a franchise, as Houghtalen did. There are some advantages to going the franchise route, especially if you’re a newbie at this.
“We can take a guy, train him, support him, teach him how to market, sell and price the service, and operate as efficiently as possible, right out of the gate,” said Brandon Stephens, president of Christmas Decor, a holiday lighting franchisor in Irving, Texas.
“He can hit the ground running. He begins earning nice margins in year one, versus taking another five or six years to figure it out.”
Christmas Decor looks at your market and profiles the households that are most likely to buy, most likely to renew, and most likely to have the biggest tickets, targeting upscale customers who want a ‘white glove,’ all-inclusive service package.
In addition, there’s a formal training program that teaches franchisees everything they’ll need to know, including electrical power management, how to estimate and create proposals, and how to map out and measure jobs.
Franchisees also get an app. Using your tablet or smartphone, you can preload the pricing, take a picture of the client’s house, and ‘draw’ the lighting on the home. You can show the client what his house will look like at different price points. If he sees what $3,000 will buy him, but only wants to spend $2,500, you simply turn off decorating items until you get there.
Other companies have different business models. Holiday Bright Lights is a manufacturer and factory-direct wholesaler for professional holiday-light decorators.
“There’s no middleman; we work directly with the factories, and they use our specs,” said Marlow. Along with lights, the company offers help and advice so you can be successful.
Village Lighting is a West Valley, Utah manufacturer that sells lights throughout the U.S., through distributors who carry their products.
Vice president Mitch Hendricks says his company also offers help and advice.
Buying, leasing and storing
Some contractors lease holiday lights to their clients for the season. The contractor puts them up, takes them down, and retains ownership. Many contractors prefer instead to sell the lights to the clients, but will store them after takedown for a fee, or at no charge.
Eric Cole owns Holiday Help, LLC, in Bend, Oregon. “We sell our lights to the clients. We give them a price per foot, and custom-cut everything to fit the house or business. The first year costs more, because it includes paying for the lights.”
“Every year costs them less per foot. They have the option of storing them themselves, or letting us store them, at no charge. Most of them let us store them. We have more than 200 accounts, and we store for 195 of them.”
At the end of the season, everything is labeled and stored with a map of the property and notes, such as ‘Start here; beware of this,’ and so forth. When Cole’s crew returns the next season, everything’s ready to go. Even if the customer is storing his own lights, Cole’s guys package them up properly for him.
You can let a customer store his lights in his own garage. The risk with doing that is, the next year, he may decide to let Cousin John put them up, and you’ve lost that repeat business. But if they’re in your warehouse, he’ll have to call you.
Customers may ask you to put up their own collection of store-bought lights for them. Don’t do it. Once you’ve untangled the giant ball they’re in and get them up, you’re guaranteed lots of service calls.
Every return trip you have to make is like the Grinch that stole Christmas, money out the door.
There’s a world of difference between big-box-store holiday lights, and the commercial-grade professional products you’ll get from Holiday Bright Lights, Village Lighting, Christmas Decor and others. Commercial lights are made to last season after season. They come in reels of 1,000 and are cut to fit.
Who are the customers?
The nice thing about this business is that you won’t have to scramble to find prospects; you already have them. The same people whose yards you mow or irrigation systems you maintain are the first ones you should canvass.
“The two demographics we sell to the most are young families that still have children at home,” said Newman. “They’re too busy to deal with putting up lights themselves, but they want them done for the kids. And the other is the retired, who don’t want to take the safety risk of climbing up on ladders at their age.”
“Every year, we get a few calls saying, ‘I just found out my grandkids are coming to town for the holidays—we have to get lights up real quick! How soon can you do it?’”
Michael Arhets, owner of Holiday Help, LLC, in Salt Lake City, Utah, started putting up holiday lights back in 1997. Back then, he didn’t know it was something he’d still be doing 19 years later. Nor did he know about things like liability insurance, worker’s comp, business licenses…all of which he has now, of course.
“My roommate and I were college kids looking for some extra money. It seemed adventurous, climbing up on people’s houses, figuring out how to put lights up on some of these very tall roofs people have here.
We’d get our rock-climber friends to help us out. It started out as a way to make money, and it became kind of fun.”
To make sure the fun doesn’t stop, be sure to inform your business insurance carrier that you are going to start hanging holiday lights. You may need an extra rider on the policy. Some underwriters will limit how high your crews can climb.
“You can get into a lot of financial trouble if someone gets hurt,” said Cole, who started hanging lights during his off-season as a minor league baseball player. He worked with Arhets, and later started his own company when he moved to Bend. (Their companies are both called Holiday Help, LLC, because they have future plans to franchise their operations together.)
“I also have a $2 million umbrella policy on my home and business, in addition to worker’s comp. If there’s a short or a spark, and we accidentally burn down someone’s house, we’re covered.”
The commercial market is especially lucrative. Houghtalen decorates whole strip malls every season, in addition to lots of local small businesses. Some contractors light up large shopping malls, both indoors and out. Municipalities that want downtown shopping districts lit up will hire you as well.
Arhets does several hotels and resorts in Park City, Utah, every season. “We did one for a large resort that billed $20,000 the first year, with the purchase of the lights, and renews every year after that for $10,000,” said Cole.
Get them up early
The holiday light season itself is only about six weeks, from the day after Thanksgiving until a week after New Year’s. Your clients want to be able to flip that switch as soon as the turkey cools. The more clients you have, the earlier you’ll have to get started.
In Park City, it’s common to find as much as seven feet of snow on a roof, especially at some of the resorts. Arhets says that if he doesn’t get the lights up in time, sometimes there’ll be no way he can get them up, because there’s too much snow and ice.
When Cole started his holiday lighting business, all the strings he installed were incandescents, because no one wanted to pay extra for LEDs. “We’ve really been pushing the LEDs because they’re so much better. They last a lot longer, like, 15 to 20 years. Now we’re about 75 percent LED-only.”
LEDs draw much less power, which Cole uses as a selling point. He tells his customers that if they keep using the lights for another two or three years, they’ll make the outlay back in the form of lower electricity bills.
“There are some people who just like the old-school incandescent look. Some of the LEDs have a little bit different glow to them, especially the multicolors.”
Just as it has with landscape lighting, LED technology has become much better than when they first hit the market. “One of the reasons we got an ‘in’ with a major theme park early on was that our ‘clear’ was a warm clear, not that bluish tint,” said Hendricks.
However, there are 64 different shades of ‘clear,’ according to Hendricks. He says that a good manufacturer will give you lights within a certain narrow range of Kelvin color temperatures, quality-controlled for a consistent look.
A cheaper manufacturer will give you lights that’ll be all over the place, some dimmer, some brighter, some yellowish, and so forth.
Clear lights have traditionally been most popular. “But every year, we sell a certain percentage of colored and multicolored light strands,” said Hendricks. “The hard thing is guessing which color is going to be ‘hot’ this year—red, blue, green? We start manufacturing in February, so we have to guess, and of course, it’s always wrong.”
A fun business
Putting up holiday lights is a happy thing. “I enjoy seeing the lights after we’ve put them up,” says Cole. “It gets everybody in the holiday spirit, and makes me want to go decorate my own house. It’s actually kind of fun.”
Every year, Newman lights up—at no charge—the homes of several active-duty military members who are deployed overseas and not expected home for the holidays.
“The soldier is usually the man of the house, and the one who usually hangs the lights,” he said. “So, we’ll do it for the family. A few times, the soldier unexpectedly gets to come home after all, and the family turns the lights on all together. It makes me choke up, watching it.”
Just do it
You’ll have to decide if hanging holiday lights is the right move for you in your market. Marlow says if you’re doing it and not making money, you’re probably doing something wrong.
“I go all over the country, holding training sessions. There’s probably an hour’s worth of hard details, calculations you need to know, and so forth. But then, I’ll see a lot of people who want to just sit there and talk and talk. They’ll go over every possible situation, but it’s usually the same five answers that’ll solve everything.”
“That’s the biggest mistake I see, people spending too much time fearing what they are supposed to do.
They need to just go out and do it! Learn what you need to know, and then go light your own house. You’ll realize how easy it is.”