Start a christmas lights installation business by following these 10 steps:
You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple guide to starting your christmas lights installation business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
Check out our How to Start a Business page.
STEP 1: Plan your business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
Luckily we have done a lot of this research for you.
What are the costs involved in opening a christmas lights installation business?
The startup expenses involved in opening a Christmas lights installation business include:
- a vehicle for transporting crews and lights to customers’ sites
- ladders for installing lights
- commercial-grade lights
- insurance
Because a Christmas lights installation business is usually started to complement another seasonal business, most business owners who get into this line of work already have a vehicle, ladders and insurance from their other business. For instance, a painter or landscaper likely already has the equipment and insurance they need.
Some business owners may be tempted to purchase inexpensive lights to save money starting out, but this strategy often backfires. Cheap lights are more likely to break than commercial-grade ones, and the labor costs of replacing lights that break often exceed any savings the less expensive lights offer.
Instead of purchasing low-quality, inexpensive lights, businesses should invest in a few samples of high-grade lights. Representatives can use these samples to show customers what the lights look like, and then customers’ initial payments can be used to actually purchase the lights that will be used in displays.
Finally, some business owners may want to invest in a franchise. Opening a Shine holiday lighting franchise costs between $10,000 and $15,000. While franchises can offer some nice benefits, business owners don’t have to start their business as a franchise. Many open independent businesses that are successful.
What are the ongoing expenses for a christmas lights installation business?
The ongoing expenses for a Christmas lights installation business include storage costs for lights during the year, employees’ salaries and equipment costs. Storage costs are typically factored into customers’ quotes. Employees’ salaries and equipment costs are normally covered by another seasonal business during the rest of the year.
Who is the target market?
While most Christmas lights installation businesses have lots of residential customers, a business’ ideal customer is another business. Businesses frequently are willing to spend more on displays than individuals are able to, and most businesses don’t have employees to install lights for them. Lots of individual homeowners prefer install their own lights, making individual homeowners a less reliable source of regular business.
How does a christmas lights installation business make money?
A Christmas lights installation business makes money by charging customers for to install, service and take down decorative lights during the holiday season. Most customers are given individual quotes based on the size and complexity of their display.
How much can you charge customers?
The average cost of a Christmas light installation is $1,500, but some jobs run as high as $15,000 or $20,000. Many businesses don’t take on displays for less than $500 or $1,000.
How much profit can a christmas lights installation business make?
A Christmas lights installation business can bring in $50,000 or possibly $100,000, according to Stephen Lisk of Stephen Lisk Landscape Management in New Jersey. This is in addition to any revenue earned by another seasonal business.
How can you make your business more profitable?
A Christmas light installation business can generate more revenue by offering decorative lighting services at other times of the year. Some individuals may be willing to pay for Halloween decorating, and many people will hire a professional service for weddings or other special events.
What will you name your business?
Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Christmas Lights Installation Business Name Generator
If you operate a sole proprietorship, you might want to operate under a business name other than your own name. Visit our DBA guide to learn more.
When registering a business name, we recommend researching your business name by checking:
It’s very important to secure your domain name before someone else does.
STEP 2: Form a legal entity
The most common business structure types are the sole proprietorship, partnership, limited liability company (LLC), and corporation.
Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your christmas lights installation business is sued.
Read our Guide to Form Your Own LLC
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Have a Professional Service Form your LLC for You
Two such reliable services:
You can start an LLC yourself and pay only the minimal state LLC costs or hire one of the Best LLC Services for a small, additional fee.
Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services. You can choose to hire a registered agent or act as your own.
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It’s really easy and free!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
Learn how to get an EIN in our What is an EIN guide or find your existing EIN using our EIN lookup guide.
Small Business Taxes
Depending on which business structure you choose, you might have different options for how your business will be taxed. For example, some LLCs could benefit from being taxed as an S corporation (S corp).
You can learn more about small business taxes in these guides:
There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.
STEP 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Additionally, learning how to build business credit can help you get credit cards and other financing in your business’s name (instead of yours), better interest rates, higher lines of credit, and more.
Open a business bank account
- This separates your personal assets from your company’s assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Recommended: Read our Best Banks for Small Business review to find the best national bank, credit union, business-loan friendly banks, one with many brick-and-mortar locations, and more.
Open net-30 accounts
When it comes to establishing your business credit, net-30 vendors are considered the way to go. The term “net-30,” which is popular among vendors, refers to a business credit arrangement where the company pays the vendor within 30 days of receiving goods or services.
Net-30 credit terms are often used for businesses that need to obtain inventory quickly but do not have the cash on hand.
Besides establishing business relationships with vendors, net-30 credit accounts get reported to the major business credit bureaus (Dun & Bradstreet, Experian Business, and Equifax Business Credit). This is how businesses build business credit so they can qualify for credit cards and other lines of credit.
Get a business credit card
- This helps you separate personal and business expenses by putting your business’ expenses all in one place.
- It also builds your company’s credit history, which can be useful to raise money and investment later on.
Recommended: Read our guide to find the best small business credit cards.
STEP 5: Set up business accounting
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
STEP 6: Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate a Christmas lights installation business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
For information about local licenses and permits:
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
For information about local licenses and permits:
Services Contract
In businesses where services are provided on an extended basis, a services contract is often put in place outlining terms and conditions of service. You may wish to require clients to sign a services agreement before starting a new project. This agreement clarifies client expectations and minimizes risk of legal disputes by setting out payment terms and conditions, and service level expectations. Here is an example of one such services agreement.
Recommended: Rocket Lawyer makes it easy to create a professional service agreement for your christmas lights installation business when you sign up for their premium membership. For $39.95 per month, members receive access to hundreds of legal agreements and on call attorneys to get complimentary legal advice.
Certificate of Occupancy
A Christmas lights installation business can be run out of a large storefront. Businesses operating out of a physical location typically require a Certificate of Occupancy (CO). A CO confirms that all building codes, zoning laws and government regulations have been met.
- If you plan to lease a storefront:
- It is generally the landlord’s responsibility to obtain a CO.
- Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to a Christmas lights installation business.
- After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommended to include language in your lease agreement stating that lease payments will not commence until a valid CO is issued.
- If you plan to purchase or build a storefront:
- You will be responsible for obtaining a valid CO from a local government authority.
- Review all building codes and zoning requirements for you business’ location to ensure your Christmas lights installation business will be in compliance and able to obtain a CO.
STEP 7: Get business insurance
Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.
There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.
Learn more about General Liability Insurance.
Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers’ Compensation Coverage.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
If you aren’t feeling confident about designing your small business logo, then check out our Design Guides for Beginners, we’ll give you helpful tips and advice for creating the best unique logo for your business.
How to promote & market a christmas lights installation business
Since most Christmas lights installation business owners have established seasonal businesses, they already have a market to advertise decorating services to. Business owners can inform their current customers of the new services they’re offering, and some may sign on for holiday decorating. Berns says 70 percent of his holiday decorating customers were first landscaping customers he served.
How to keep customers coming back
A Christmas lights installation business can keep customers returning by selling lights to customers. Once lights are sold to customers, they’re more likely to work with the same business year after year. They’ve already made an initial investment, and switching to another holiday decorating business would probably require another large upfront purchase of lights.
Still unsure about what kind of business you want to start? Check out the latest Small Business Trends to help inspire you.
STEP 9: Create your business website
After defining your brand and creating your logo the next step is to create a website for your business.
While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.
Here are the main reasons why you shouldn’t delay building your website:
- All legitimate businesses have websites – full stop. The size or industry of your business does not matter when it comes to getting your business online.
- Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
- Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.
Using our website building guides, the process will be simple and painless and shouldn’t take you any longer than 2-3 hours to complete.
Other popular website builders are: WordPress, WIX, Weebly, Squarespace, and Shopify.
STEP 10: Set up your business phone system
Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.
There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use.