Holiday Lighting Brightens Your Business
My stepdad was king of doing things ‘the lazy man’s way.’ A full decade before coffeemakers came equipped with clocks, he plugged our electric percolator into a lamp timer so he could wake up to fresh-brewed Joe made the night before. (Sadly, he never got credit for inventing that ‘lifehack.’)
One January, he announced that he was tired of taking down our holiday lights—so he didn’t. For years, he got a kick out of turning them on to help people find our house. “Just look for the one with the Christmas lights on in June,” he’d say.
As the years passed, the lights grew sparser and sparser as bulbs broke or burned out and weren’t replaced. Finally, my mother insisted that he take them down. After that, he was too old to climb ladders anymore.
I share this story because it illustrates some of the reasons why hanging holiday lights has become such a lucrative business for landscape contractors. There are lots of people out there who are too busy, too elderly, too afraid of heights, or who simply don’t want to put up holiday lights. They are more than happy to let someone else put up and take down their electric holiday cheer.
Should that someone be you? Mike Marlow, vice president of Chicago, Illinois-based Holiday Bright Lights, a wholesale importer and manufacturer, thinks so. He adds, “Holiday lighting is a money-making machine.”
It has been one for Ken Divers, coowner and partner in Pennsylvania Lawn & Landscape, of Allentown. He’s been in business since 1988, and has hung holiday lights for 20 years, starting in 1997. Initially, he wasn’t motivated by money, as much as the desire to retain good employees by giving them year-round work.
Snow removal wasn’t quite doing it.
“We do a lot of snow removal work, when there’s snow to remove,” said Divers. “But it’s something you can never bank on, because every winter is different.” Holidays, on the other hand, happen every year without fail, and the revenues are higher than the ones he gets from pushing snow.
Who are your customers?
Anyone who wants to decorate his home for the holidays, but can’t or won’t do it himself. It includes people with very large estate homes, ‘Boomers’ who are reaching the age where they don’t feel safe on ladders anymore, and younger people with families, who are just too busy to fit one more thing in.
It’s quite affordable, especially now that the economy is better. Jobs range anywhere from a few hundred dollars to the tens of thousands, depending on the size. Gary Fouts, owner of Christmas Decor by Principle Lighting Inc., and The Ground Guys of New Lenox, Illinois, said his average residential customers are mostly the owners of higher-end homes.
“But I’ve also knocked on someone’s door thinking, ‘There’s no way we’re selling holiday lights to this person,’ and it ends up being a big job. I think it’s because this is an emotional business,” tied in with childhood memories and feelings of nostalgia.
Start by marketing to your existing clients, with an email blast or door hanger. Direct mail works great for this, too, says Marlow. Send them a nice postcard, showing one of your more impressive displays.
Marketing to commercial clients is a bit different. “It involves a lot of networking,” says Marlow. He suggests getting involved with business groups, such as the local Chamber of Commerce, and even doing cold calls at property management companies, malls or HOAs.
Making sure you’re easily found on the internet is important, too. Have a separate page on your company website dedicated solely to this service.
Franchise, or go it alone?
There is a learning curve with this service. For one thing, you’ll be taking employees who are used to working on the ground, and having them climb ladders and splice wires. They’ll need training, especially in safety.
To get a quick start, some contractors opt to go with a franchise. Financially, this entails a nominal initial investment, and then a royalty every year, usually around five percent.
“Signing up with a franchise can jumpstart a company onto the fast track, get you up and rolling in year one,” said Brandon Stephens, president of The Decor Group, Inc., in Irving, Texas. It is the parent company of franchisor Christmas Decor.
“It’s very intense training, but you learn everything you need to know to get up to speed in one week,” said Fouts. “It helps you avoid rookie mistakes.”
Divers chose the franchise path, and after 20 years, is still with the same company. “I’ve seen people fail, who thought they could do this on their own, without any support or education,” he said. “The training you get through a franchise is just tremendous. They teach you the math, the safety stuff, and help you develop your design skills.”
But perhaps, the most important thing Divers derives from franchising is the connection with other contractors. “Being able to network with companies throughout the entire U.S. is really valuable.
When we run across a situation, there’s a good chance that one of the other franchisees has experienced the same thing, and can advise us.”
Of course, many contractors do it on their own, quite profitably. James Winget started Tuxedo Yard Care of Ogden, Utah, in 2005. About two years ago, he decided to start offering holiday lighting, and tried to get involved with a franchise, only to find that all the territories in his area had been taken.
He pursued it independently, and though he’s just started, he’s already had success. “It hasn’t become a huge moneymaker for us yet, because we’re not as efficient at it as we will be,” he said. “Still, the first year, we did quite a few houses, and the next year, we doubled that, and we’ll probably double that again this year.”
Sell or lease?
Some contractors sell the lights to the customers, but store them on the company’s premises. Others choose to let clients store the lights in their personal garages or basements. Still others lease lights to clients on a year-to-year basis, retaining both ownership and storage.
There are advantages and disadvantages to all of these approaches.
For instance, if you let a customer store his own lights, what stops him from going to a competitor of yours the following year? Or doing it himself?
When you store lights for a customer, he has incentive to call you the next year, because you’ve got his lights. “You always want to store for the customer, no matter what,” said Marlow. “And add a storage fee.”
“That helps you control your business. The last thing you want is to be running around the next year trying to find all those products. If the customer forgets to set his lights out for you, then you’re sitting there not getting any work done.”
Mitch Hendricks is vice president of holiday lighting product distributor Village Lighting Company in West Valley City, Utah. He says that leasing makes you more money over time. Marlow agrees, saying, “Leasing increases your gross profit margin by at least 25 percent over a five-year period.”
Here’s why. Say you decorate a client’s house for $1,000. The next year, you charge that same customer $1,000 again, using the same lights you bought last year. Your profit is much higher that second year, because you didn’t have to buy new product.
If the client purchases the lights, the cost of them is lumped into his first years’ payment. But each subsequent year, he’ll pay less.
Leasing also gives the homeowner more options. The next year, he can change colors, or get strings featuring the latest technology. If he moves away, or cancels, you just take his lights and restock them.
James Mink, co-owner of Precision Sprinklers and Outdoor Lighting, Shining Nights, and Christmas Décor of Butler, New Jersey, has done it both ways, and thinks both models are viable. “I know of a lot of companies that sell the lights to customers, and all of them are very profitable.”
It’s all about LEDs now
Most contractors, at this point, stock almost 100 percent LED strings. While they cost more, they last much longer — about five years, on average.
The complaint that people had about the first generations of LEDs was that their color was not as warm as they remembered from their childhoods. Though that problem has been solved, there are still a few holdouts who cling to incandescents, contending they can see a difference.
Such clients might be swayed by the lower power bills they’ll have if they switch to LEDs. A standard C9 incandescent bulb draws seven watts of power; its LED equivalent needs just 0.45 watts.
Installers love LEDs, because they’ve made things much easier for them. “When we put up incandescents, especially at older homes, it was very difficult to keep from blowing breakers,” said Sean Bush, division manager, green services for ABC Home & Commercial Services, an Austin-based landscape and irrigation company. “Since we converted to LEDs, we can pretty much carry any design on one 20-amp breaker.”
However, the fact that LEDs are so much easier to install has unfortunately encouraged a lot of newbies to jump into this business, trying to get in on the gravy train. Many of these folks don’t know what they’re doing, and some cut corners and use old, cheap or unsafe products.
“LEDs have made things much more dummy-proof, because you don’t have to think as much about how many lights you can put on one line, or that can go into a 15- or 20- amp breaker,” said Mink.
You can fight these fly-by-nighters by showing potential clients that you cost more because you’re worth more. Mink tells them about the high quality of the products he uses, the fact that his people are welltrained, insured and OSHA-certified, and that he has 17 years of experience doing this. He’s not going to burn anyone’s house down.
“You’re always going to get some people who just shop for price, though,” he says. “That’s the nature of our business, whether you’re putting in rotary sprinkler heads or a string of holiday lights. We’re not looking for that type of customer.”
Some people say that they can see a difference in the quality of the lights. Mink says that’s because “the LED industry is unregulated. Some companies are buying very cheap product, and they just don’t have the same look.” Contractors who purchase lights from a franchisor or major distributor won’t have this problem.
As for color, warm white still seems to be king. “But, LEDs are so vibrant that the colored lights have made a huge comeback,” said Mink. And now, there are LEDs that change color, and ‘light-drop’ tubes that simulate snowfall.
LEDs have become available that use advanced technology, such as surface-mounted diodes (SMDs) that produce higher lumens. “SMD C7s and C9s are the way to go,” said Marlow. “They have the highest number of lumens out there. And the waterproofing is much better than it was five years ago, when we had a lot of moisture-related failures.”
‘Rice cluster’ LEDs have become popular recently, used by decorators to wrap tree trunks and garlands in clouds of tiny white lights. Wall washers that project different colors onto surfaces are catching on, too.
But the really hot new kid on the block is the RBG (red/green/blue) LED set. Each bulb combines the three basic hues to produce a wide palette of other colors.
These strings are paired with phone apps, allowing the client to change color schemes and motion patterns at will. These sophisticated displays are very much in demand, even though they come at a premium price point.
Get those lights up!
Holiday lights are a perishable service, with a window of about six weeks in which to enjoy them. Most people want them ready for turn-on by the day after Thanksgiving. You need to be well-organized to make sure everyone gets serviced by then.
To ensure efficiency, Bush’s company “has a strict anti-Clark Griswold policy’” (referring to the inept, decorating-obsessed dad played by Chevy Chase in National Lampoon’s Christmas Vacation). No tangled balls of lights or pratfalls allowed. Strings are carefully wrapped and labeled clearly, so that even a new crew knows where each design starts and stops.
Letters are sent out in early October, offering a ten percent discount for installation before Halloween. “That helps us with our first big push, which is from October 1st through the 31st,” said Bush.
“The most insane time is the week before Thanksgiving and the week after.
But for families with college kids, or military members coming home on short notice, we’ll work all the way up until Christmas Eve.” David Brix, CEO of Emerald Lawn Care in St. Cloud, Minnesota, has a word of advice for contractors who’ll be doing both snow removal and holiday lights. “There’ll be days when you won’t be able to do lights, because you’ll be busy doing snow. You can’t count on having every day before Thanksgiving clear. You need to build in a buffer.”
If you think this service might be for you, “don’t overthink it,” advises Hendricks. “Most of the contractors I talk to have a million questions, trying to figure it all out ahead of time. Then they get on the jobsite and learn that it’s really not that hard.”
“I tell them, ‘Just go do your own house. If you screw up, you screw up.’ Once you have an installation or two under your belt, then you either go into it or revisit the training programs, and things will make much more sense.”
Happy (and profitable) holidays!