After coming up with the idea, the next step in starting your own roofing business should be to write a business plan.  This is a document that will be requested by banks, potential partners, investors, and sometimes, employees. It will help you navigate where you want your business to go and help you to hold yourself to a high standard, and guide you to hit your targets.

Have your business plan established so that you can lay out in front of you your competition and see what sets you apart from them. Additionally, it will help with keeping track of your financial targets.

Related: How to write a business plan

Deciding on a company name can greatly impact whether you achieve success or not. Choosing a good name that resonates with potential customers can help to build a recognizable brand. A few tips for choosing a name include it being easy for customers to spell and ensuring it isn’t being used elsewhere. It’s also beneficial to get feedback from outsiders on the name. Some business owners will conduct polls on their Instagram or Facebook stories once they’ve narrowed down their options to gain honest feedback from their followers.

A business entity refers to how a business is legally organized to operate. There are four primary business entities to choose from, which include the 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.

When deciding on which business entity is best for a solar panel installation business, it normally comes down to the sole proprietorship and Limited Liability Company.

A partnership opens the owners up to unnecessary personal liability because if a partner does something to get the business sued, or runs off with cash from the business, the other partners are personally liable to repay. The corporation can be a good choice because it separates the business assets from the owner’s assets. If the corporation is sued or certain business debts can’t be paid back, the owners aren’t personally responsible to repay them. The downside to the corporation is that it is more complicated than all the other entities and requires more administration than the LLC. If you plan on raising a lot of investment though, the corporation is usually the better choice.

That leaves the sole proprietorship and LLC.

The sole proprietorship is the least expensive and easiest entity to start which is appealing. The downside is the owner is personally liable should anything happen to the business, which is an important consideration. The LLC offers the ability to operate as a sole proprietorship with the liability protection of a corporation. Depending on the state, the cost to form an LLC runs from $40 – $500, which is pretty inexpensive for protecting the owners from business-related lawsuits and certain debts.

Related: 3 steps to forming your LLC
 

Since the work of installing solar panels is at the client’s home, a solar business can be a home-based business, or it can operate out of a storefront.  In either case, having a secure location to store the company vehicle, tools, solar panels, etc., is important to protect from theft.

Having a physical storefront offers an established appearance and a place for customers to look at products and discuss the project. Lease costs will vary according to location and the size of the space available. If a storefront isn’t in the budget, or the business will initially operate as a part-time business, starting as a mobile installer may be the way to start.

Be sure to factor in utilities, property taxes, maintenance, and other related expenses.

Related: Choosing a business location

Several states require a plumbing, roofing, and/or electrician’s license to perform solar installation work. Before starting any work, it’s important to check both state and local regulations, as many cities will have different requirements for contractors.

Additionally, there are general requirements many for many new businesses such as obtaining a business license,  sales tax permit, Employer Identification Number, among others.

Also, obtaining certification may be beneficial for a solar installation business to gain professional knowledge in addition to building the business’s credibility. The North American Board of Certified Energy Practitioners (NABCEP) is a recognized organization.

Related: Common business licenses, permits, and registrations by state

How will you finance a solar installation business? Personal savings accounts or getting a small business loan are a couple of options for entrepreneurs to find funding. One finance option that many forget about is pulling cash out of the equity of their home. Mortgages come with low-interest rates in comparison to credit cards or personal loans. Just make sure you explore all options and list the pros and cons of each once you get quotes.

Related: Finding the money to start a business

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.
Documentation such as a business license, business tax number, owner’s driver’s licenses are typically a few requirements of opening a business bank account.

Marketing is easier than ever now, with the internet right at everyone’s fingertips. Leveraging marketing for your business allows you the opportunity to create growth and skyrocket your sales. It keeps customers up to date or in the loop with the latest updates you have.

According to a study by Business News Daily, 86% of consumers said they are more enticed to pay more to shop at a small business, so don’t forget to put a face to your business so that you stick out and don’t seem like a large corporate robot. In addition to social media marketing, you may want to consider advertising in local newspapers and tv, in addition to sponsoring and being involved with local community events and partners like the local Chamber of Commerce.

Related: Low-cost ideas to market a new business

Property, liability, workers’ compensation, and auto are a few types of insurance policies that a company installing solar panels should consider. The type of coverage will be largely dependent on the state requirements, so just make sure you do your due diligence and research before providing services.

Related: Common types of insurance a business may need

There isn’t a shortage of people wanting to find work in the solar industry, as the U.S. has over 242,000 solar workers. That’s more employees than the oil, natural gas, and coal industries when you put them all together. Kansas has the fastest-growing solar market with a 66% growth rate from 2017 to 2018!
Related: Hiring your first employee

An accounting system for your business will help keep finances organized and give you visibility on the business profits. Not to mention, it keeps things easier for tax purposes. Considering a solar installation business is unlikely to have smooth operations with just the business owner doing everything, there will likely be several employees which makes an accounting system key for payroll purposes.

Related: Setting up the accounting for your business