How to Start a Christmas Light Business (and Earn $8K/Month)

1. Analyze the market

Before you start a Christmas light business, research the market in your area. This will help you identify the types of customers who might need your holiday lighting services.

In your market analysis, consider the following:

• Target audience: Are you focusing on residential homes, commercial properties, or both? Understanding your customer base will help you tailor your services and pricing.
• Local demand: How many potential customers are in your service area? Look at key demographics like income level and property type (e.g., single-family homes, retail stores, office buildings). This will help you assess their likelihood of paying for professional holiday light installations.
• Customer pain points: What problems will your business solve for them? For example, many people don’t have the time or equipment to install holiday lights safely. Highlight how your service can eliminate those hassles.
• Pricing expectations: What are potential customers willing to pay? This is a good time to figure out whether they value budget-friendly options, convenience, or customization so you can decide whether to offer good, better, best pricing options.
• Customer priorities: What are your ideal customers looking for? Whether it’s design expertise or efficiency, knowing what they care about can help you stand out. Fast installations and maintenance options (such as repairing broken lights) could also be a selling point.
• Industry regulations: Are there any local codes or restrictions on outdoor lighting displays? Some areas may have guidelines about light placement, brightness, or even energy efficiency.

Then, understand your competition. Get a leg up on other Christmas light installers in your area by learning about everything they offer. A thorough competitor analysis might include:

• Services offered: Do they focus on residential or commercial clients? Are they offering additional services like takedowns and storage?
• Pricing comparison: How does their pricing structure compare to what you’re considering? Are they charging per hour, flat rate, or offering packages?

Reputation: How long have they been in business? What’s their local reputation like? Is there anything they’re lacking that you could capitalize on?

2. Plan your business

The holiday season is extremely profitable, and installing Christmas lights is no exception. You’ll need to create a business plan that includes:

• Services list showing which holiday lighting services you’ll provide. For example, commercial or residential Christmas light installation.
• Pricing strategy with rates for each of your residential or commercial services
• Market analysis showing where you’ll work, what customer demographics are there, and how much demand there is
• Competitive analysis of other local holiday lighting businesses
• Marketing plan for reaching your ideal clients and winning new lighting contracts
• Employee planning with any new roles you’ll need and a hiring timeline
• Financial projections and cash flow strategy for the first year of business, including income, expenses, and salary

Even if you don’t need a business plan for a loan, it’s still a good idea to make one. Get a more complete guide to writing a business plan from the Small Business Administration.

READ MORE: Christmas light installation: 10 business tips for a profitable season

3. Learn how to install holiday lights

Training isn’t legally required to become a holiday light installer, but it’ll help you start your Christmas light business on the right foot. In addition to improving your installation process, it also creates a safer work environment.

Start by installing lights on your own home, then ask family and friends if you can spruce up their homes for the holidays.

Then get a basic understanding of lighting systems. If you know an electrician, ask them about circuits, timing, wattage, and other factors that go into building an amazing light display.

You should also consider joining the Christmas Light Installer Professional Association (CLIPA). You’ll get in-class and practical training that covers best practices for installation, health and safety, and more.

As a bonus, CLIPA membership also gives you more purchasing power with access to member pricing on lights and decorations.

READ MORE: Professional development resources for home service entrepreneurs

4. Form a legal entity and register your business

If you’re starting a new business from scratch, make sure you have the right legal documentation in place before you start installing lights. Here’s what you’ll need:

• Name: Pick a professional name to describe your business. Make sure it’s memorable, unique in your area, and not already registered or trademarked.
• Registration: Register your business name at your local registry, trademark your business name, and register your domain name. Already have a registered business and will offer holiday lighting under your current name? Skip ahead to updating your business license.
• Business structure: In the United States, you can register your business as a sole proprietor, partnership, or limited liability company (LLC). LLC is common for small service businesses because it reduces your personal liability if you’re ever sued.
• EIN: If you’ll have partners or employees, apply for an employer identification number from the Internal Revenue Service so you can file taxes properly.

Registration requirements can vary depending on where you live. Check with the business registration division of your local, regional, or federal government to see what’s needed.

READ MORE: Should I incorporate my small business?

5. Open a business bank account

Set up a business bank account to keep your personal finances separate from your business income and expenses. This will be a big help during tax season.

Consider getting a business credit card to improve cash flow during startup. Pick a card with a low interest rate and a rewards program for dollars spent and pay off the card every month.

Get an accountant to help manage your finances. You can always do it yourself with accounting software like QuickBooks or Xero. But outsourcing allows you to focus on light installations instead of stressing over finances.

Pro Tip: Set up a reserve fund containing enough cash for 90 days’ expenses. It’ll help your business in case you have cash flow issues or your clients don’t pay their invoices.

READ MORE: 30 small business tax deductions to save money when filing

6. Get a business license

Depending on where you plan to operate your business, you may need to get a business license. You might also need an electrical contractor’s license or another type of permit.

Without the right licensing and permits, you could face hefty fines or be forced to shut down.

Check with your local Chamber of Commerce or business development department before scheduling any jobs. This ensures you have the right local, state, and federal permits and licenses.

Already running a successful business, and you have a license for it? You’ll need to update or reapply for your current license to include your new services. There will likely be a renewal fee associated with this change.

7. Get business insurance

A career as a lighting contractor comes with risks, from falls and electrical shocks to property damage and equipment theft. Small business insurance helps cover you in these situations.

Get a business owner’s policy that includes:

• General liability insurance for property damage and personal injury
• Commercial property insurance for equipment and office damage
• Business income insurance to keep operating after an incident or disaster

These are just the basics. You can also get:

• Commercial auto insurance to cover your vehicles in case of accidents or damage while traveling to job sites or transporting equipment
• Workers’ compensation insurance to protect your employees by covering medical expenses and lost wages if they get injured while on the job
• Crime insurance to help cover losses from theft or fraud that could impact your business
• And any other type of coverage that’s important to you for additional protection, such as coverage for specialized equipment or client disputes

8. Get holiday lighting equipment

Even if they offer their own, contractors provide lights, not the client. Learn from Dave Moerman of Revive Services, who learned the hard way, “Don’t ever, ever, ever install client-owned Christmas lights. It turns into a gong show. It creates operational complexity for your company.”

You’ll need to build up an inventory. Equipment will be the bulk of your startup costs—at least $865 (USD), but likely much more.

Find a reliable online or brick-and-mortar wholesaler to buy commercial-grade lights from. It’ll help you save money long-term while giving your clients the best product possible.

Here’s what you’ll need to get started:

• LED lights (roughly 150 ft / 500 bulbs per house)
• Holiday decorations
• Outdoor extension cords
• Light clips
• Wooden ladder
• Wire cutters
• Zip ties
• Electrical tape
• Fall protection kit
• Safety gloves

Pro Tip: The closer you get to the holidays, the harder it will be to find lighting and decorations—and the more you’ll spend. Get yours during the summer, or after the holidays when vendors are clearing out stock at lower prices.

9. Price your services

As an installer, you have two service options—leasing or selling lights.

Leasing

Leasing lights gives you a hard asset that you purchase once and then can use for different clients—making it a great source of repeat income. It also gives your clients greater flexibility to change the lighting color or design year after year. 

With this option, you’ll also be responsible for repairing, storing, and maintaining. When pricing your leasing services, consider:

• Light rental fee: Charge clients a rental fee based on the cost of the lights. A good rule of thumb is to recoup the initial purchase price over a few seasons.
• Labor costs: Include the cost of installation and removal.
• Maintenance and storage fees: Charge an additional fee to cover the ongoing expenses of storing and maintaining the lights.
• Profit margin: Add a percentage for your desired profit margin to ensure you’re making a reasonable return.

Selling

Selling lights is a more hands-off approach. Once you’ve installed the lights, your client is responsible for maintaining or replacing damaged strands.

However, they might get frustrated about repair or replacement fees. The client also can’t change their lighting color without buying a whole new set of lights.

When pricing your services for selling lights, consider:

• Cost of lights: Pass the entire cost of the lights onto the customer. Since they’re buying the lights outright, your pricing should reflect the retail price of the lights.
• Labor costs: Calculate this by estimating the time it takes to complete the installation and multiplying it by your hourly rate.
• Markup: To profit from the lights, add a markup. This could be 20%-50%, depending on the market.
• Additional fees: You can also charge a fee for additional services, like offering repairs or replacements if the lights are damaged during the season.

Pro Tip: If you’re new to installing Christmas lights, time yourself installing them on a one-story house. Do the same thing for a two-story house. And for trees or bushes. Use a labor cost calculator to total your hourly salary, direct costs, and desired profit amount to determine the hourly rate you’ll charge customers.

10. Get your first customers

To get customers, you’ll need to make it easy for people to find and choose you for their holiday light needs. With the right strategies, you can grow your business and create a steady stream of work.

Here’s how to get started:

Brand your Christmas light business

When people think about your business, they should start to feel that holiday cheer. Your business branding will help with that.

Create a unique logo by working with a designer or using an online logo builder like Looka. From there, you can apply the logo to your website, social media, truck, uniform, business cards, and more.

Here’s an example of what your Christmas light installation business branding could look like:

11. Grow your holiday light business

Transitioning from your seasonal business? Installing Christmas lights is a great way to reduce turnover and provide longer employment for your employees.

But if you’re starting from scratch or looking to take on more business than you can handle alone, you’ll need to hire your first employee.

Write an engaging job description for your Christmas light installers. Advertise on Indeed or Facebook Jobs and hire the best applicants for the role.

READ MORE: Hiring and recruiting tips to attract employees that stick around

Once you have a larger installation crew, you can expand into new communities and explore winter landscaping services. Or you can offer even bigger outdoor lighting and Christmas decoration options.

You can also expand into year-round services like window cleaning, lawn care, or landscaping if you aren’t already providing them.