About three years ago, The Lighting & Landscape Co. acquired a small landscape lighting firm that came equipped with a few holiday lighting prospects. Little did Marcus Craig know but the service would quickly grow to comprise 40 to 50 percent of the company’s total business. “Holiday décor has proven to be a very solid aspect of our business,” says the vice president of the Niceville, Fla.,-based company. “From a small-business perspective, it’s a really easy sector to grow.”
Many landscape contractors agree holiday lighting and décor is a profitable service that, compared to some of the other off-season services, is relatively easy to offer clients. And the number of contractors who offer it grows every year, a trend that Scott Heese, president of Holiday Bright Lights, has seen firsthand. His company, which manufactures lighting products and provides training and marketing materials to holiday decorators, has witnessed membership to its holiday décor program grow by 40 percent since last year.
Requiring few pieces of specialized equipment and having a low learning curve, holiday lighting is a great way for contractors to generate supplemental income during the slow winter months. And, perhaps an even greater draw, it’s a fun service to offer. “We added the service about 10 years ago as another source of income when the market slows down in the winter,” says Todd Dilley, owner of Outdoor Environments, South Savage, Minn. “It’s an important aspect to our business financially, and it’s a fun aspect we look forward to.”
Holiday décor is a sustainable business as well, particularly in the commercial market. “Regardless of economic slows and peaks, most commercial establishments have some sort of holiday décor every year,” Craig says. “It’s a fairly viable business because there is a demand for it year after year.”
GETTING STARTED. Most contractors already have the equipment necessary to offer holiday lighting services, including ladders, hand tools and trailers for hauling. The one wildcard item is a boom lift, which is the most specialized piece of equipment a contractor needs to do the work. Because holiday installation is seasonal in nature, Craig finds it most cost effective to rent a 60- or 80-foot boom lift for $5,000 to $6,000 a year than to invest $60,000 to $100,000 into owning a boom unit. Dilley also rents a boom lift for about $400 a week. Contractors should be able to effectively enter the holiday lighting market for about $20,000, Craig says.
Of course, this cost varies from company to company. For example, some contractors choose to keep an inventory of holiday supplies while others invest on an as-needed, per-client basis. Each method has its merits. For example, companies that maintain an inventory will have the extra expense of storing the materials in the offseason, while companies that invest on an as-needed basis risk being unable to secure stock.
Like with equipment, most landscape companies already have the manpower for the work. Because of the low learning curve, mowing and maintenance crews are capable of adapting to holiday services. Training can be done in-house, but supplier-sponsored seminars are a solid source for assembly and design techniques.
For companies that require additional workers, the fall and winter are ideal times to solicit laborers who have been laid off from other landscape companies. Most of Craig’s large commercial jobs require 10 to 12 people on a crew, so he doubles his staff from October through January. Companies with smaller holiday divisions, like Outdoor Environments, make due with their established landscape crews, which remain on staff throughout the winter. Most of Dilley’s residential jobs are serviced by pairs of workers, and commercial jobs involve two or more pairs of installers.
Another thing contractors should consider is the electricity available to them, says Bill Mansoor, maintenance manager for Designs by Sundown, Denver. The company’s outdoor lighting supervisor visits each property prior to the installation to ensure electricity is available to support the lights. Tripped breakers and malfunctioning lighting displays can eat away at the service’s profitability. “A lot of companies provide proposals that look wonderful on paper, but they can’t keep the lights going throughout the holidays because they overextend the amount of lights that can be used,” Mansoor says. “Always use 80 percent of the electricity you have available and the lights will stay on.”
SET SCHEDULES. Haphazard scheduling can ruin a holiday lighting business. No client wants his decorations up too early or too late. In fact, clients want them up at the same time. Craig has implemented a precise internal scheduling system that has closely tracked productivity and efficiency throughout the years. Labor hours for each job during the previous season are examined and fine tuned and turned into next year’s schedule. “You have to be an expert in scheduling labor and processes or else you’ll have unhappy clients,” he says.
Depending on the commitment level, some companies’ holiday services are year-round routines. The Lighting & Landscape Co. initiates and finalizes contract proposals from February to May. The installation schedule is created and tweaked during the summer months. Commercial installations are completed in phases starting as early as September and residential installations begin in late November. Maintaining each property keeps crews busy through December, and take-down work is finished in February, just in time for contract season to begin again.
Making up 5 percent of its $242,000 in annual revenue, Outdoor Environments starts holiday lighting proposals in mid August and performs installs beginning Nov. 1. Take-down work is scheduled from late January to mid-February, depending on the weather.
Craig says weather should always be considered during the holiday lighting season and he factors “cushion days” into his crews’ schedules. These make-up days come in handy when the weather is uncooperative or a schedule becomes too hectic. Craig factors in one cushion day every three weeks, but suggests companies new to the holiday services market factor in one per week.
INTRICATE INSTALLS. When it comes to holiday lighting, commercial and residential installations are very different ballgames, Craig says, adding his client breakdown is 90 percent commercial, 10 percent residential. Most residential clients want all of their decorations up at once, while commercial clients are more willing to have their projects completed in stages. The Lighting & Landscape Co. begins with the lighting stage, when crews hang lights, sans extension cords, without plugging them in. “Commercial clients don’t mind because the lights aren’t noticed by the public,” Craig says.
The greenery phase follows, and includes garland, wreaths and other daytime décor. Depending on the size of the property and the job’s complexity, the phases of a commercial job can take three days to two weeks. “We try to coordinate based on the type of commercial establishment and any holiday events they might have coming up,” Craig says. “Some jobs also require more than just lights, which we have to factor in as well.”
The Lighting and Landscape Co. offers free maintenance services throughout the holiday season and guarantees to handle any issues within 24 hours. The company also takes a proactive approach by visiting properties every evening to make sure everything is up and running.
Like the installations themselves, pricing differs from commercial to residential holiday lighting projects. Craig prices his landscape lighting jobs based on labor hours for the install as well as the take-down work. Size and complexity of the project, as well as the price for renting a boom lift if necessary, are factored into the final price. The company has holiday lighting contracts ranging from $1,000 to several thousand dollars.
Outdoor Environments sees a profit margin of 7 to 12 percent on its holiday lighting services. Dilley prices his lighting services by the square or liner foot, depending on if he’s working on trees or houses. While it’s hard to determine an average price, the average residential project ranges from 1,000 to 2,500 square feet and the average commercial job is 3,000 to 5,000 square feet, he says.
While Dilley doesn’t have a scheduled maintenance program, his crews will troubleshoot any problems, like burned out lights and fallen Santas, free of charge.
SELLING SUCCESS. A savvy business sense is essential to operating a successful holiday lighting service, contractors say. “One of a contractor’s biggest mistakes is trying to simplify this business,” Heese says. “Without the proper tools and training, this add-on service can quickly become their biggest headache.”
To help clients see the service’s value, contractors should present themselves as a holiday lighting expert and stress the intricacy involved in doing the job right. “Christmas décor doesn’t sound that complicated, but it is really easy to do a lousy install job,” Heese says. “You have to demonstrate to clients that they can’t do this at the quality level that you can. If you can’t do that, then they won’t use you.” LL
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