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Profits Glow

Kelly Speed | Landscape Lighting

For nearly every landscape contractor, the spring and summer months are the hottest months, in terms of business. As the weather cools, contractors are faced with the issue of having enough work to keep their staff on through the off-peak months. Laying off staff saves money short-term; but what about the long-term?

In years past, you never thought twice about laying off your crews in the slow periods. Possibly, you would keep your key people on the payroll year-round, just so you wouldn?t lose them. You trained your crews and hoped that when the next season opened up, most of them would come back.
Over the years, you tried to find other avenues of generating revenue so that you could keep your crews for longer periods of time. Some landscape companies provide snow-blowing, and snow removal during the winter months. Some contractors do keep their crews, but just break even. Now there?s another option to keep your business going and employees working through the slow season.

However, there?s an initial cost involved: that?s the cost of equipment. With more and more companies realizing the increased demand for holiday decorating services, landscape contractors are able to turn these otherwise difficult months into very lucrative ones. A growing trend in today?s competitive market is for landscape contractors to provide holiday lighting. It provides additional revenue to the company and establishes some bottom line profits, but equally as important, it keeps your crews working. Adding holiday lighting services onto an existing business can make sales skyrocket. Here?s an opportunity to get in on the ground floor.

Is holiday lighting just a fad for landscape contractors that will fade in a few years, or is it here to stay? ?The holiday decorating business has been a tremendous growing nationwide trend because it provides landscape contractors with additional cash revenue at a slow time of year,? said Debra Holder, executive vice president of the Associated Landscape Contractors of America. ?It helps keep employees year-round when they otherwise would be laid off, and the employers can easily add this onto their existing services. Even though there is a minimal upfront cost, landscape contractors are not going to get involved unless there is foreseeable profit associated with the investment. In speaking with a variety of contractors, they have been extremely pleased with the results so far. Obviously, certain areas are easier to sell, but the overall sales volume has been positive for everyone.?

Selling holiday decorations provides a smooth transition from the landscaping season through the slow winter months. While installation starts around the end of October or early November, takedowns are the first two to three weeks of January. Within just a few short years, a business can expand into as much as a 100-day season. Customer service is one of the most important factors to a successful market.

?For years we were subcontracting our crews to do holiday work, but now we have our own full-time holiday manager,? said Jeff Oxley, director of operations for Swingle Tree and Landscape Company in Denver, Colorado. ?We created the full-time position last year in response to the growing demand.?
Just how much can you expect to make from this add-on business? ?When we started the holiday business as an add-on to the landscape business, we made $220,000 in total sales. Today, just three years later, those figures are up to $750,000 in total sales, with 30 to 55 percent in gross profit,? Oxley added. ?We have approximately 17,000 active customers on the landscape side. Now, with the holiday business, we can cross-market into that existing customer base. Instead of just providing irrigation and landscaping to those customers, we are now able to provide them with these additional services. During the winter months, we were only doing dormant pruning and tree trimming. This has been a great add-on business for us. We are currently employing 120 full-time people. By offering this business, we are positioning ourselves a bit better in the marketplace. We have a better chance to get an employee to stay with us longer, so our overall turnover is significantly less.?

Other landscape contractors may not be ready to make the change just yet. ?We have considered getting into the business, but we just haven?t had the interest from our clients yet,? said Ben Case, president of Down to Earth Designs, Inc., in Raleigh, North Carolina. ?We?ve proposed the idea to some existing customers who we have done some permanent lighting for, but we haven?t gone into the temporary holiday lighting business yet. They have the interest, but the expense has turned some people off. If they had the budget, many have said they would do it, but since it?s temporary, there hasn?t been a great interest here so far.?
Kevin Lipscomb, owner of Outdoor Decor, Inc., a Christmas light franchiser, says he has solved the problem of the high cost to the customer. ?By renting the lights to the homeowner, they don?t have the initial cost of buying the lights. So the sale is not hard to make. With the job for the average home costing from $300 to $400, our biggest problem is finding time to install all the lights!?

?Holiday lighting makes a terrific add-on business for landscape maintenance companies, particularly when they are in a seasonal marketplace such as Denver,? said Jody Bost, assistant manager of CoCal Landscaping in Denver, Colorado. ?It?s also fun to do, and great to see your work lit up at night. We start our holiday lighting in late October. It?s one of the best things we?ve done, because we are a seasonal business so it helps us during our slower months.?

With home automation, holiday lighting can be taken one step further. Lights can now be timed, tuned, animated and tailored to an individual client?s requests.

?This is a relatively new business. Almost all businesses and many homeowners would like to decorate their property with lights for the holidays,? says Mark Strickland, vice president of Holiday Presence, Orem, Utah. ?What they don?t want to do is put them up or take them down. Most business people don?t want to climb ladders to string lights in a decorative form. They don?t have the time or the expertise.?

That?s where you come in. The service you offer is exactly what they don?t want to do. Put up decorative lights before the holidays, and take them down after the holidays. You buy the lights, you own the lights, and you use them year after year.

For the landscape contractor, who is doing this work on his own, it?s important to learn the ins and outs of the business first, since all training is mainly on the job. A highly-trained contractor is much more desirable than a first-time novice. Although contractors are not able to enjoy a mid-winter break any more, they are now able to realize significant profit margins as a result.

So how, you ask, do I get into this side of the business? Where do I learn how to put up the lights? There are a number of options. Some companies will offer you a franchise; one company will sign you up as a distributor. Another place to get your lights is your wholesale supply store (irrigation supply stores are beginning to stock these lights).

All light suppliers agree that training in installation and design are important and can save you lots of time. Companies that offer franchises provide on-going training, not only in the installation but in sales as well.

One such company, Christmas D?r, has been franchising since 1996. ?We started the holiday lighting business in 1988 to keep our staff on during the winter months,? said Blake Smith, president of Christmas D?r in Texas.

?October was the beginning of our slow months, and by November we were faced with the decision of layoffs. We realized the immediate success of the Christmas market, and started Christmas D?r in 1996. The obvious benefits were being able to keep quality employees on full-time. Holiday decorating is generally a 100-day season, from start to finish. If you know you?ve got work lined up in October, you can take pruning and other non-time sensitive jobs and schedule them for January and later months. Snow removal can also be done with Christmas as an add-on.?

Holiday Presence markets commercial Christmas lighting to wholesale distributors. ?We distribute to irrigation supply stores, and put on seminars for people to attend independently,? said Strick-land. ?It gives the contractor the opportunity to buy locally without having to pay for freight. Our product is warehoused at an irrigation supply store; the contractor goes in and buys it off the shelf.? Holiday Presence has training manuals and videos available to help jump-start your business.

Automatic Irrigation, with four stores in Indiana, began stocking holiday lights last year. ?As a wholesale distributor, Mark Strickland called us and discussed the business,? said Wayne Wheeler, operations manager for Automatic Irrigation. ?We had about six to 12 guys with multiple jobs. We provide training for the contractors through seminars.

This year, we expect to double that figure.?


Brite Ideas, Omaha, Nebraska, on the other hand, manufactures holiday lighting products. ?We don?t charge royalties, just a one-time setup fee, because we manufacture the lights and have people sign on as distributors,? said Reed Nyffeler, national sales director for Brite Ideas. ?We have about 140 clients that include landscape contractors and pest control operators. We?re one call away from getting a product, which means we can deliver more quickly. We are also able to do custom products, too.?

While some of the best people to sell holiday decorations to are existing landscape contractors, they must also be careful to ensure the quality of their workmanship. If a client has to call a contractor back because he or she is displeased with the service, the company will suffer long-term results.
?The most expensive mistake a landscape contractor can make is to buy cheap lights,? Smith emphasizes. ?Customers don?t want problems associated with installation. Callbacks can kill a company. When making product decisions, it?s important to choose high-quality materials that are readily available. One of the biggest lighting challenges is product availability. Some Christmas manufacturers keep several products in limited offerings, so they may be difficult to get. Be sure to check this out first.?

With reliable suppliers and a broad customer base, employers are realizing that they can keep their staff on year-round, and perhaps even turn their current downtime into a profitable sideline that benefits from the multi-million dollar holiday decorating market. That should put a twinkle in your eye.

August 2002

 
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