If you studied electrical engineering or any related course and you are keen to own a business that you can successfully manage, then you should consider starting a solar water heater installation business. In the United States of America and in most countries in Europe, you will notice that a good percentage of homes and offices have solar water heaters, this goes to show that there is indeed a large market for solar water heater installation business.

The increase in new homes resulted in more business opportunities, and state rebates for solar water heater installation have increased in recent years and so the industry will grow because of continued government subsidies for solar upgrades. Solar water heater installation howbeit technical is a business that can be learnt within a few months if you have the right background.

To start this business, you should ensure that you carry out through market research, economic, cost analysis and of course feasibility studies. You have to ascertain why you want to go into this business so that you can tailor your objectives to suit that of your business. If you get things right before launching your solar water heater installation company, it will not take you long before you secure enough clients and start smiling to the bank.

You can start your solar water heater installation company from a small town in the United States and if you are consistent and creative, it won’t be too long before your brand becomes a nationally recognized brand.

20 Steps to Starting a Solar Water Heater Installation Company

1. Understand the Industry

Players in the Solar water heater installation industry install solar water heater systems as part of general residential and commercial contracting services. These operators are contracted either directly by the customer or by solar marketing companies that arrange a buyer for solar thermal systems and contract an industry operator to carry out the work.

If you look carefully at the industry, you will agree that it has very low barriers to entry. Companies with a knowledge of plumbing and general construction can enter the industry with relative ease. While successful operators should have a working knowledge of the systems they are installing as well as building codes and state-specific incentives, this information is widely available and does not require a specialized technical background to understand.

The largest barrier to entry for new participants is lacking a proven track record of installing solar water heater systems. This barrier can be overcome relatively easily by providing installation services at a discount to gain a foothold in the market. Notably, this strategy will pressure profit margins and may preclude entry by companies with limited capital resources.

The Solar Water Heater Installation industry is indeed a large industry and pretty much active in countries such as United States of America, United Kingdom, Germany, France, Italy, Holland, Switzerland, Australia and Canada et al. Statistics has it that in the United States of America alone, there are about 786 registered and licensed solar water heater installation companies scattered all across the United States responsible for employing about 1,783 people and the industry rakes in a whooping sum of $188 million annually.

The industry is projected to grow at 3.1 percent annual growth within 2012 and 2017. It is important to state that there are no establishments in this industry that has a lion market share. A recent report published by IBISWORLD shows that the Solar Water Heater Installation industry had an erratic past. The industry’s saving grace was an assortment of both federal and state solar investment tax credits (ITCs), which subsidized the cost of solar water heater installations.

Over the next five years, revenue is forecast to grow as corporate profit increases and technological advances continue to make solar water heaters more economical than natural gas. Nonetheless, regulatory policies that have been so favorable for the industry remains uncertain in light of an unresolved federal budgetary deficit, limiting overall revenue growth.

Some of the factors that encourage entrepreneurs to start their own solar water heater installation company could be that the business is profitable business and it can be started with minimal capital and of course minimal employees. The solar water heater installation industry is highly regulated in the United States of America and anyone who aspires to start a solar water heater installation company must obtain a license before they can legally operate in the industry.

Lastly, as a solar water heater installation professional, it is very important to use your ideas to meet the rapidly changing needs of the society in the area of aesthetics and trends in the environment where you work.

2. Conduct Market Research and Feasibility Studies

  • Demographics and Psychographics

The demographic and psychographic composition of those who hire the services of solar water heater installation companies cut across all households and players in the real estate and construction industry hence the demographic composition for a solar water heater installation company is all encompassing.

If you are thinking of starting your own solar water heater installation company then you should make target demographics all encompassing. It should include families who are interested in acquiring a decent and well renovated home, corporate organizations who are interested in renovating their properties, home owners who are interested in remodeling their home, and managers of public facilities who would want to install new solar water heaters in the facilities they are managing.

3. Decide What Niche to Concentrate On

It is safe to say that there is no niche area in the solar water heater installation line of business because the business is a subset of the electric appliance installer industry.

Please note that some solar water heater installation companies may decide to add any of the under listed as part of their business offerings;

  • Active solar water heater system installation
  • Passive solar water heater system installation
  • Closed-loop solar water heater system installation
  • Installing solar thermal panels
The Level of Competition in the Industry

The competition that exists in this line of business goes beyond competition amongst solar water heater installation companies in your location; you are expected to compete with other businesses like plumbing services, electrical appliance installation companies and general contractors who also install solar water heater. So, it will be right to say the competition in the solar water heater installation business is tough.

But no matter the level of competition in an industry, if you brand and promote your business properly, you will always make headway in the industry. Just ensure your workforce can carry out neat and thorough installation, you can deliver excellent customer care services and you know how to attract and reach out to your target market.

4. Know the Major Competitors in the Industry

Irrespective of the industry you choose to start a business in, there are always brands that perform better or are better regarded by customers and the general public than others. Some of these brands have been in the industry for a long time, while others are best known for how they conduct their businesses and the results they have achieved over the years.

These are some of the leading solar water heater installation companies in the United States of America and in the globe;

  • Solar Wolf Energy
  • Solar Water Heating | Hawaiian Electric
  • Custom Solar and Leisure
  • Aztec Solar | Sacramento Solar Company
  • Maine Solar Installers – Clean Energy Authority
  • Solar Water Heating | Solar Energy Services, Inc.
  • Solar Water Heating | Energy Saving Trust
  • Solar Water Heater – Lovotti Air
  • AG Heating & Air Conditioning
  • Solar Water Heater – Florida Solar Energy Center
Economic Analysis

If you want to launch a business and maximize profits, then you need to ensure that you get your economic and cost analysis right and try as much as possible to adopt best practices in your chosen industry.

Solar water heater installation might be a relatively green business, but you will still come across several solar water heating installation companies and other players in related industry that also carry out solar water heating installation. When mapping out your economic and cost analysis, you should research the cost of renting a space where you will open your installation company, the tools and equipment you would need and also the cost to successfully run the business.

Over and above, if you are considering starting a solar water heating installation company, then your concern should not be limited to the cost of renting an office space et al. but also on branding and on how to build a robust clientele base. The truth is that if you are able to build a robust clientele base, you are sure going to maximize profits in the business.

5. Decide Whether to Buy a Franchise or Start from Scratch

When intending to start your solar water heating installation company, you have no option but to start from the scratch because you can hardly find a solar water heating installation franchise to buy.

Besides, starting from the scratch is less stressful when compared to other related businesses in the installation industry. You should note that most of the successful solar water heating installation companies around started from the scratch and they were able to build a solid business brand. It takes dedication, hard work and determination to achieve business success.

6. Know the Possible Threats and Challenges You Will Face

If you decide to start your own solar water heating installation company today, one of the major challenges you are likely going to face is the presence of well – established solar water heating installation companies and other players such as plumbing services companies, and general electrical installation companies that also carry out solar water heating installation.

Some other challenges and threats that you are likely going to face are economic downturn and unfavorable government policies. There is nothing you can do as regards these threats and challenges other than to stay positive that things will work well for you.

7. Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)

When starting a solar water heating installation company, the legal entity you choose will determine how big the business can grow. You have the option of choosing a general partnership, limited liability company, or even a sole proprietorship for your solar water heating installation business. Basically, sole proprietorship should have been the ideal business structure for a small – scale solar water heating installation company especially if you are just starting out with a moderate startup capital in a small neighborhood and carrying out selected installation services.

But if your intention is to grow the business and have offices and clients in key cities in the United States of America via franchising, then choosing sole proprietor is not an option for you. Limited Liability Company or even general partnership will cut it for you.

Setting up an LLC protects you from personal liability. If anything goes wrong in the business, it is only the money that you invested into company that will be at risk. It is not so for sole proprietorships and general partnerships. Limited liability companies are simpler and more flexible to operate and you don’t need a board of directors, shareholder meetings and other managerial formalities.

These are some of the factors you should consider before choosing a legal entity for your solar water heating installation company; limitation of personal liability, ease of transferability, admission of new owners and investors’ expectation and of course taxes. If you take your time to study the various legal entities available, you will agree that limited liability company; an LLC is the most suitable. You can start this type of business as limited liability company and in future convert it to a ‘C’ corporation or an ‘S’ corporation especially when you have the plans of going public.

Please note that if you upgrade your solar water heating installation company to a ‘C’ corporation or ‘S’ corporation, it will give you the opportunity to grow the business so as to compete with major players in the industry; you will be able to generate capital from venture capital firms, you will enjoy separate tax structure, and you can easily transfer ownership of the company.

8. Choose a Catchy Business Name from the ideas Below

When it comes to choosing a name for your business, you should be creative because whatever name you choose for your business will create a perception of what the business represents.

If you are considering starting your own solar water heating installation company, here are some catchy names that you can choose from;

  • Green Life® Solar Water Heater Installation Company
  • Rowland Pence® Solar Water Heater Installation, LLC
  • Clean Energy© Solar Water Heater Installation, Inc.
  • Zenith® Solar Water Heater Installation, Inc.
  • Tim Carson and Sons™ Electrical Installation Company, Inc.
  • Larry Watkins & Co ™ HAVC Installation Company, Inc.
  • George West© Solar Water Heater Installation Company, Inc.
  • Ray Jones® Solar Water Heater Installation Company, LLC
  • Rena Davies© Solar Water Heater Installation Company, Inc.
  • Sally Ferguson & Sons© Solar Water Heater Installation Company, Inc.

9. Discuss With an Agent to Know the Best Insurance Policies for You

In the United States and in most countries of the world, you can’t operate a business without having insurance covers that are required by the industry you want to operate from. So, it is important to create a budget for insurance and perhaps consult an insurance broker to guide you in choosing the best and most appropriate insurance policies for your solar water heating installation company.

Here are some of the insurance covers that you should consider purchasing if you want to start your own solar water heating installation company in the United States of America;

  • General insurance
  • Health/Medical insurance
  • Liability insurance
  • Workers compensation
  • Property/Building Insurance
  • Overhead expense disability insurance
  • Business owner’s policy group insurance
  • Payment protection insurance

10. Protect your Intellectual Property With Trademark, Copyrights, Patents

When starting a solar water heating installation company, you may not have any need to file for intellectual property protection/trademark because it is possible to run the business without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties.

But if you just want to protect your company’s logo and other documents or software that are unique to you or even jingles and media production concepts, then you can go ahead to file for intellectual property protection. If you want to register your trademark, you are expected to begin the process by filing an application with the USPTO.

11. Get the Necessary Professional Certification

Aside from the results you produce as it relates to solar water heating installation, professional certification is one of the main reasons why most solar water heating installation companies stand out. If you want to make an impact in the industry, then you should acquire all the needed certifications in your area of specialization. Certification validates your competency and shows that you are highly skilled, committed to your career, and up-to-date in the market.

These are some of the certifications you can work towards achieving if you want to run your own a solar water heating installation company;

  • The Galileo Master Certificate (GMC)
  • Solar Heating Installer Certification | NABCEP

Please note that you can successfully run your solar water heating installation company without necessarily acquiring professional certifications as long as you have adequate experience cum background in the industry.

12. Get the Necessary Legal Documents You Need to Operate

It is a fact that you cannot successfully run any business in the United States without the proper documentations. If you do, it won’t be too long before the long hand of the law catches up with you.

These are some of the basic legal documents that you are expected to have in place if you want to legally run your own solar water heating installation company in the United States of America;

  • Certificate of Incorporation
  • Business License
  • Tax Payer’s ID / Tax Identification Number
  • Business Plan
  • Contract Document
  • Employee Handbook
  • Employment Agreement (offer letters)
  • Operating Agreement for LLCs
  • Insurance Policy
  • Online Terms of Use
  • Online Privacy Policy Document (basically for online payment portal)
  • Company Bylaws
  • Memorandum of Understanding (MoU)
  • Building License
  • Franchise or Trademark License (optional)

13. Raise the Needed Startup Capital

Starting a solar water heating installation company is not capital intensive if you choose to start on a small scale. Securing a standard office space in a business district, purchasing tools and equipment and raising working capital are part of what will consume a large chunk of your capital. If you choose to start the business on a large scale, you would need to source for fund to finance the business because it is expensive to start a standard solar water heating installation company with over a dozen employees under your payroll.

When it comes to financing a business, one of the first things you should consider is to write a good business plan. If you have a good and workable business plan document in place, you may not have to labor yourself before convincing your bank, investors and your friends to invest in your business.

Here are some of the options you can explore when sourcing for startup capital for your solar water heating installation company;

  • Raising money from personal savings and sale of personal stocks and properties
  • Raising money from investors and business partners
  • Sell of shares to interested investors
  • Applying for loan from your bank
  • Pitching your business idea and applying for business grants and seed funding from donor organizations and angel investors
  • Source for soft loans from your family members and your friends.

14. Choose a Suitable Location for your Business

It cannot be overemphasized that the location you choose to start your business is key to the success of the business, hence entrepreneurs are willing to rent or lease a facility in a visible location; a location where there are high real estate and construction activities and household with the require purchasing power, and lifestyle. If you make the mistake of renting or leasing an office facility for your solar water heating installation company in a not too visible or hidden location because it is cheap, then you must be prepared to spend more in promoting the business.

A business facility in good location does not come cheap hence you should be able to allocate enough fund for leasing/renting in your budget. If you are new to the dynamics of choosing a location for your business, then you should feel free to talk to a business consultant or a realtor who can help you out.

Most importantly, before choosing a location for your solar water heating installation company, ensure that you first conduct a thorough feasibility studies and market survey. The possibility of you coming across similar business that just closed shop in the location you want to open yours can’t be ruled out. This is why it is very important to gather as much facts as possible before setting up your own solar water heating installation company.

These are some of the key factors that you should consider before choosing a location for your solar water heating installation company;

  • The demography of the location
  • The demand for the solar water heating installation services in the location
  • The purchasing power of the residence of the location
  • Accessibility of the location
  • The number of solar water heating installation companies and other players in related industry that also carry out solar water heating installation in the location
  • The local laws and regulations in the community
  • Traffic, parking and security

15. Hire Employees for your Technical and Manpower Needs

There is no special technology or equipment needed by a solar water heating installation company but you will definitely need a complete tool box, computer, telephone and fax machine. All these can be gotten as fairly used.

As regard leasing or outright purchase of an office facility, the choice is dependent on your financial standing, but the truth is that to be on the safe side, it is advisable to start off with a short – term rent/lease while test running the business in the location. If things work out as planned, then you go on a long – term lease or outright purchase of the property but if not, then move on and source for other ideal location / facility for such business.

When it comes to hiring employees for a standard solar water heating installation company, you should make plans to hire a competent Chief Executive Officer (you can occupy this role), Admin and Human Resources Manager, Project Manager, Solar Water Heating Installers, Sales and Marketing Officer, Accountant, and Customer Service Executive/Front Desk Officer. On the average, you will need a minimum of 5 to 10 key staff members to run a standard solar water heating installation company.

The Services Delivery Process of the Business

The way solar water heating installation companies work varies from one company to another, but ideally, such company is expected to first and foremost build a robust company’s profile before biding for solar water heating installation contracts from clients and corporate organizations; it will give them an edge amongst their competitors.

The process starts with biding or submitting a proposal for a solar water heating installation contract, once the contract is won, then it is expected for all the contract documents to be signed and advance payment made as required.

Once the payment has been sorted out, the next step is for the solar water heating installation company to deploy workers and equipment as required to execute the job.

It is the practice for solar water heating installation companies to first access the risk involved and the nature of job they are to do before billing the organization that requested for their services.

16. Write a Marketing Plan Packed With ideas & Strategies

Running a business requires that you should be proactive when it comes to marketing your goods or services. If you choose to launch your solar water heating installation company, then you must employ strategies that will help you attract customers or else you will likely struggle with the business because there are well – known brands that determine the market direction in the industry.

Your marketing strategy will center on attention to details, reliability, swiftness, safety, pricing, thoroughness, and above all excellent customer service. You should ensure that whenever your customers hire your services, they should be rest assured that they will get excellent service. The truth is that, if you are able to put the above stated in place, you won’t struggle to retain your old customers and at the same time win over new customers.

Businesses these days are aware of the power of the internet and which is why they will do all they can to maximize the internet to market their services. In other words, a larger percentage of your marketing effort should be directed to internet users, and your website will become your number one marketing tool

These are some of the marketing ideas and strategies that you can adopt for your solar water heating installation company;

  • Introduce your solar water heating installation company by sending introductory letters alongside your brochure to households, estate managers, corporate organizations and other key stake holders throughout the city where your company is located.
  • Advertise on the internet on blogs and forums, and also on social media like Twitter, Facebook, LinkedIn to get your message across
  • Create a basic website for your business so as to give your business an online presence
  • Directly market your services
  • Join local solar water heating installation business associations for industry trends and tips
  • Join local chambers of commerce and industry with the aim of marketing your services
  • Advertise our business in community based newspapers, local TV and radio stations
  • List your business on yellow pages ads (local directories)
  • Encourage the use of word of mouth marketing (referrals)

17. Work Out a Reasonable Pricing for your Services & Products

One key factor that will help you offer your solar water heating installation services at rock bottom prices is to purchase your installation materials directly from wholesalers in the quantities you need.

Another strategy that will help you offer your services at the right price is to ensure that you cut operational cost to the barest minimum and channel your efforts towards marketing and promoting your brand name. Aside from the fact that this strategy will help you save cost, it will also help you get the right pricing for your services.

You can also try as much as possible to work with independent contractors and marketers; it will help you save cost for paying sales and marketing executives.

18. Develop an Iron-clad Competitive Strategies to Help You Win

The availability of competent and reliable solar water heating installers under your payroll, your business process and of course your pricing model are part of what you need to stay competitive in the industry.

Another possible competitive strategy for winning your competitors in this particular industry is to build a robust clientele base and ensure that your solar water heating installation works are top notch. Over and above, ensure that your organization is well positioned, key members of your team are highly reliable and competent and can favorably compete with the some of the best in the industry.

19. Brainstorm Possible Ways to Retain Clients & Customers

When it comes to business, no matter the industry that you choose to pitch your tent in, one of the easiest ways to increase customer retention and perhaps attract new customers is to produce results and satisfy your customers always. If your customers are satisfied with your services, they can hardly source for alternative service providers.

One of the strategies that you need to employ in order to generate repeated sales from your customers and also to retain them is to ensure that your solar water heating installation jobs are always top notch and your customer services does not fluctuate. The truth is that if the services and customer service fluctuates, you are likely going to struggle to get your customers coming back.

Part of what you need to do to achieve this is to track progress, results or outputs with the aim of improving on them quickly as the case demands. When it comes to managing your customers, and building a loyal clientele base, you should purchase a customized CRM software. With a customized CRM system, you can easily stay in touch with your clients (you can carry out quick surveys, you can introduce new products and prices to them without any hitch, you can felicitate with them on their birthdays and other anniversaries, you can keep track of their progress, you can send bulk sms and customized e – mails and above all, you can easily receive compliant and feedback from them).

20. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity

If you are in business and you are not deliberate about boosting you brand awareness and communicating your corporate identity, then you should be ready to take on whatever the society portrays your business to be. One of the secret of larger corporations is that they are spend fortunes to boost their brand and to continue to communicate their corporate identity the way they want people to perceive them.

If your intention of starting a solar water heating installation business is to grow the business beyond the city where you are going to be operating from to become a national and international brand by opening offices all across key cities in the United States, then you must be ready to spend money on promotion and advertisement of your brand.

Here are the platforms you can leverage on to boost your brand and create corporate identity for your solar water heating installation company;

  • Place adverts on both print (newspapers and real estate magazines) and electronic media platforms
  • Sponsor relevant community based events
  • Leverage on the internet and social media platforms like; Instagram, Facebook, Twitter, YouTube, Google + et al to promote your solar water heating installation company
  • Install your billboards in strategic locations all around your city or state
  • Engage in roadshows from time to time in targeted residential communities to create awareness of your company
  • Distribute your fliers and handbills in target areas
  • Contact households, corporate organizations and other key stake holders throughout the city where your solar water heating installation company is located informing them about your solar water heating installation company and the services you offer
  • List your solar water heating installation company in local directories / yellow pages
  • Advertise your company in your official website and employ strategies that will help you pull traffic to the site.
  • Position your Flexi Banners at strategic positions in the location where your solar water heating installation company is located.
  • Ensure that all your staff  wear your branded shirts and all your vehicles are branded with your company logo.
Ajaero Tony Martins