Are you the person on the block that always has the best Christmas light decorations and is envied by your neighbors? Opening a Christmas light installation business could be a great way for you to make some extra money during the holidays.
A Christmas light installation business puts up and takes down Christmas lights for people who don’t want to do it themselves or are unable to do it. For a fee, the installer will hang lights and set up other decorations as requested by the customer.
According to IBIS World, the seasonal decorations industry is $26 billion as of 2021 and has grown 2.3% for the last 5 years. There is little information about the Christmas light installation industry available because it comprises small, private companies.
Disposable income is expected to increase, which is expected to increase the seasonal decorations industry. Elderly people are a customer segment of the Christmas light installation business, and the rising aging population could be an opportunity to increase the market size.
Your target market will generally be homeowners who enjoy Christmas lights and holiday decorations but don’t want to deal with climbing ladders and light-stringing.
A secondary market includes commercial clients.
Skills, Experience, and Education Useful in Running a Christmas Light Installation Business
There are several specific skills that you will need to open a Christmas light installation business.
- Experience. You just need experience installing Christmas lights so that you’re good at it!
- Business knowledge and experience. You will need to have at least some basic knowledge of marketing, finance/accounting, and human resources.
- People skills. You’ll need to be able to build rapport with your customers so that you retain them as customers and keep them coming back.
Costs to Start a Christmas Light Installation Business
Here are the typical costs you will face when you open a Christmas light installation business.
- Ladders and small tools $1,000
- Insurance $200 – $600
Steps to Starting a Christmas Light Installation Business
Step 1: Write your Business Plan
After coming up with the idea, the next step in starting your Christmas light installation business should be to write a business plan. The business plan will make you focus on some important aspects of the business, such as who your customers are, how you plan to reach them, projecting sales and expenses, your value proposition to use for marketing, and more. You’ll also need to do some research to calculate exactly what your startup expenses will be and what your ongoing expenses will be.
Not only will a bank require you to have a business plan if you need financing, but multiple studies have shown that having a good business plan increases the odds of starting a successful business. Writing the plan helps you think through all the aspects of the business and then serves as a guide as you begin.
Step 2: Name the Business
Finding the perfect Christmas light installation business name can be challenging. Not only does the name have to reflect what you do and be appealing to customers, but it also has to be available to use. You can check your state’s website to see if the name is available and register your name. Your name should make you stand out, reflect your brand, and tell potential customers exactly what you do.
Step 3: Form a Business Entity
A business entity refers to how a business is legally organized to operate. There are four primary business entities to choose from, which include a sole proprietorship, partnership, corporation, and Limited Liability Company (LLC). Each type of entity has its own pros and cons, such as liability exposure, costs, and administrative requirements.
Related: Comparison of Business Entities
Step 4: Select your Location
Since a Christmas light installation business is very seasonal, it is typically run from the owner’s home. Be sure to have enough dry and secure storage for the lights after the season.
Related: Choosing a business location
Step 5: Apply for Business Licenses and Permits
In some instances, an electrician’s license may be required in addition to general requirements such as a sales tax permit, Employer Identification Number, and others.
Step 6: Find Financing
Coming up with a good business idea and having the skills to run it are one thing, but getting the funding to start a Christmas light installation business is another. In order to get a loan, the borrower(s) will need to have good credit and be able to invest 15-25% of their money towards the total start-up costs.
Step 7: Open a Business Bank Account
Keeping your business and personal finances in separate business bank and credit card accounts makes it easier to track the income and expenses of the business.
Step 8: Get your Marketing Plan in Place
A Christmas light installation business will need to set aside a budget to cover marketing costs prior to the holiday season. Common marketing techniques for a Christmas light installation business include social media marketing and online advertising, as well as brochures and flyers. Developing a website can be a significant expense, but it can also give your Christmas light installation business greater visibility online.
Step 9: Get Insurance
A Christmas light installation business needs several types of insurance for full coverage:
General liability insurance can help protect you from third-party claims of bodily injury and property damage.
Professional liability insurance protects you from claims of professional errors or negligence that result in a financial loss.
Worker’s compensation insurance covers expenses like medical bills and legal fees that a business might face if an employee were ever hurt while working.
Insurance policies will vary. To get the most accurate idea of what to budget for insurance, request quotes from multiple providers. When comparing the quotes, consider not only the premiums but also how the plan exclusions, coverage limitations, and deductibles compare.
Step 10: Hiring Employees
You may need employees to help you run your Christmas light installation business, or you may choose to be a one-person show. Make sure that you select a crew with appropriate experience.
In addition to salary costs, your budget will also need to include other employee-related expenses. Workman’s comp insurance, unemployment insurance, and paid time off are common expenses that a business will need to cover when hiring staff.
Related: Hiring your first employee
Step 11: Set up an Accounting System
Setting up an accounting system for your Christmas lighting business is critical to the long-term success of your business.
Staying on top of taxes not only keeps the business out of trouble with the government but the numbers can be used to track and monitor trends and cash flow in the business and maximize profits.
How Much Can You Potentially Make Owning a Christmas Light Installation Business?
The price for installation will vary depending on the home size and the extent of the desired lights, but the average will be around $400. If you install lights on 50 homes during a season, you could make $20,000.
Things to Consider Before Starting a Christmas Light Installation Business
Running a Christmas light installation business or any business will have its challenges. You need to be prepared and make sure that you know what you’re getting into.
Marketing and acquiring customers will be your biggest challenge and an ongoing expense. You will face competition, so your marketing will need to make you stand out, and your prices will need to be competitive.
Owning a Christmas light installation company can be a great seasonal business for landscapers, window cleaners, painters, gutter cleaners, etc. Some businesses are very busy during the spring and summer months but are not busy during the holiday season that typically runs from November through January. Some Christmas light businesses strive to stay open the rest of the year by also installing party, backyard, and wedding lights.
Your business will obviously be seasonal. If you want to make it a full-time business, consider offering decoration services for other holidays.
Talk to other business owners for tips on starting a business and do your homework to determine costs. Research other Christmas light installation businesses to see what they offer and what prices they charge.