“The first year or two was kind of a learning curve for us — it just took us a little while to figure out how to make money at it,” says Aaron Wiltshire, president of Oklahoma Landscape in Tulsa. In addition to switching to a leased-light model, Oklahoma Landscape made a few other changes to ensure profitability.
Customers now must sign up for a two-year lease agreement to begin, which provides Oklahoma Landscape with the assurance that its investment in purchasing the lighting materials makes sense. “The first year, we take a little bit of a hit because we have to actually purchase lights for them. But most people stay on the lease system; we don’t have a lot of people dropping off.”
And if and when customers do move out of the area or stop the lease agreement for whatever reason, Oklahoma Landscape owns and stores the lights at its warehouse, so it is able to repurpose them for new customers in future years. “So when we’re selling new projects, a lot of times we’re not having to buy new lights, but rather are repurposing lights from customers who have come off the lease program,” says Wiltshire.
To further protect itself financially and ensure that this is a profitable service, Oklahoma Landscape has established a minimum lease agreement ($1,200 per installation). “That seems to work for us; at one point we had a lot of $200 and $400 and $600 projects, and it was just hard for us to make a profit making so many stops in a day,” explains Wiltshire. “And on every install, you have to come back and take down, so you’re going back to these little jobs to do take-downs. A lot of companies get into this business and think they’ve made their money after the installation, but you actually have to go back and take everything down, too.” Customers are also required to pay upfront because collecting payments for holiday lighting services proved to be a challenge sometimes, says Wiltshire. “We were struggling to get the rest of the payments in; we were into March and April and even May waiting for payments,” he explains. “We just decided one year that it’s too big of a hassle, and it’s too much of a fast and furious time of year to worry about getting paid, or getting paid late.”
Holiday lighting is still a growing part of Oklahoma Landscape’s business. “It’s still a very popular service … people are looking for a hassle-free experience,” says Wiltshire.
Alan Marchant, co-owner of A & K Landscaping in Eugene, Oregon, says that holiday lighting can be a very difficult service to price. “There are just so many factors to consider: The pitch of the roof, the material of the roof, the way they have to be hung, accessibility, height, where the power is going to come from, etc.” And you can’t miss one of these factors if you want to price the project in a way that’s profitable, he stresses.
It’s also important that employees are trained in the most efficient way to install and remove the lights. “If you don’t put the lights up the right way, you can really get killed by the labor costs,” says Marchant. “If it takes you too long to put them up or take them down, then you can never make money at it.”
With A & K Landscaping, some customers provide their own lighting, while others purchase them from the landscape company. “I prefer to sell them the materials so I know what I’m going to be working with, which gives me a better idea of what the labor costs are going to be. And they get a higher quality product than if they were to buy just off the shelf because we’re not buying junk from a big box store,” says Marchant, who adds that he personally tries out different lighting materials before ever recommending them to customers.
The customer then owns and stores the lighting materials and has them on hand for installation (hopefully by A & K) the following year. Marchant says that some installation companies like to store the materials for the customer, which helps to ensure repeat business the following year. But Marchant prefers not to do that. The property owner may move, for example. And if they want to use a different vendor, he wants them to have that ability. “We’ve had people do that — they go find someone else to put them up, but then they return to us because it wasn’t the same quality of installation,” he explains. “The products we use are better, and the installation is better. The price may be a little more, but there’s a reason for that.”
Marchant says he would like to continue growing his company’s holiday lighting business; he’s just not sure how much additional demand there would be for the service in that area. “Based on the size of our community and those that are paying for it currently, I’m not sure there’s much more need out there.”