Starting a Christmas Light Business: Year One

I worked for The Christmas Light Professionals, a Christmas light installation company, during my time at the University of Utah in Salt Lake City. I made around $16k during a 10 week period as an employee. The money was decent for a college student and was more than enough to pay room and board for two semesters. After graduation, I spent two seasons managing operations for the company in Denver, Colorado. By 2011, I figured I would put that “B.S. in Entrepreneurship” to work. I had knowledge and experience installing Christmas lights, had a Christmas lighting website with great rankings, and needed to be profitable. Starting a Christmas lighting business seemed like a logical fit for my first business experience.

I had experience and knowledge from working six seasons in Salt Lake and Denver. This knowledge was essential when starting the business, especially a Christmas lighting business that only generates revenues during a six-week period. Of course there were many aspects of running a business that I had not learned, but that’s why I started Atlanta Loves Christmas Lights: to learn.

I chose to start my business in Atlanta for three reasons: 1) The weather is great since installing lights in inclement weather is difficult; 2) There is a large population with high household incomes where many customers are in the target market; 3) I have extended family in Atlanta and relatives are a great asset when starting a business.

Throughout September, 2011 I prepared to start the business. I needed to pick a name, create a website, design a logo, develop print materials, determine pricing, buy a van and equipment, etc. This is why people choose to buy franchises, but to me, that’s not entrepreneurship. Buying a franchise is buying a job, I didn’t want a job. I wanted to develop a business. Besides, I already had the experience and knowledge necessary, and through my website, I even had advisors and other companies to learn from. For those who are new to the field and simply want to make money, buy a franchise, or something similar. Starting a successful Christmas light installation business is not a task that you can easily accomplish on your own.

In the first year, I operated out of one van with an employee I found on Craigslist. I gave estimates in person, and over the phone, or through email. This venture was definitely a one-man-operation. The employee only contributed perhaps 20 percent of the installation work. I should have replaced him sooner, but I was busy with installs, sales, service calls, etc. Operating in such a small window does not allow time to make adjustments in the business model, or even daily operations.

Leads started to arrive towards the end of September. I don’t have an exact count of the leads I received (many phone calls went unanswered), but the real number is over 200. By the end of the season, I installed Christmas lights for 52 homeowners. Average revenue per customer was $780 making total revenues of $40,560 with 43% profit margins yielding a net income slightly over $17,500. I believe these numbers are a realistic maximum an individual, operating without prior knowledge or assistance, can obtain in year one.

Installations completed during each week of the 2011 season. These installs are not unique customers; some customers have multiple installations.

My first install was scheduled for November 8. This is a bit late to start the install season, but the new leads always think any day before Thanksgiving is too early for Christmas decorations. Existing customers are more likely to be schedule installs in the beginning of November. In year one, I obviously didn’t have any of these prior customers.

I only averaged one job per day during those first two weeks. This I will attribute to a lack of leads and an install crew who’s still learning how to install lights. Atlanta homes are not like the homes in Salt Lake City or Denver. They are much larger, taller, and have steeper roofs. I believe the difficulty of working on these homes is the primary reason there are few professional Christmas light installation companies in Atlanta.

Location of each customer plotted on a map.

Leads came in from all over the city. That’s typical with internet marketing. Anyone who identifies with the Atlanta metropolitan area will find my website and request a lead. I cannot pick and choose who finds my website or submits an estimate request. I can be more selective when closing sales, but when one is unfamiliar with the geography and closes the easier deals, the above distribution of jobs occurs.

I could increase the density of my leads by marketing to individual neighborhoods through direct mail, HOA newsletters, yard signs, door knocking, etc. This would have taken time and money. I couldn’t justify the expense when I was receiving free leads from the website, even though they were randomly dispersed around the city.

In retrospect, I was happy with my first year of operations. I learned a lot of new and valuable information. My income was slightly higher than it would have been had I worked for another company. Most importantly, I recognized the potential for growth and could spend the entire spring and summer preparing to handle the influx of new leads.