Would you rather do $5 million in sales with a 20% profit or $10 million in sales with a 10% profit? And what if I said that the $5 million in sales wasn’t all from solar?
The most profitable way to grow and scale your business is most likely not from solar only sales. You see when you evaluate the current pricing structures for solar offerings today, the margins are ultra-thin. And we can talk about the difference between net profits or retained earnings versus gross margins as well.
To go back to the idea for a moment. You might be thinking, you want to do the $10 million and make 10% because you think it is easy. Perhaps you do a few land deals and a few megawatts of solar and you’re done. Low risk. 1, 2, 3. Collect money.
Often this is far from the truth. Utility scale or even some 500kW ground mount requires a tremendous amount of due diligence on your behalf. A lot has to go well. A lot can (and will) go wrong (I have scars to prove it).
But you still are enamored with the $1 million dollars you’re going to make. It’s like a dream. The excitement. The trophy. Behind this so called dream, will be haunting nightmares. And when you finally get through with the development, the risk capital, the debt, the attorneys and accountants, what you actually get to make is often much different.
Back to the $5 million and 20% profit.
What if you offered other services to compliment solar? A blend of home or business services that have higher gross margins. The aggregate that will get you to the 20%. Plus, you can also enjoy some recurring revenue as a result of diversifying your offerings.
The other offerings will be a source of lead generation for you. They will also keep you busy with other opportunities to serve your existing clients for years.
Think back to your customer acquisition costs for a moment. What does it cost you to get business? Solar has the notoriety of having one of the highest customer acquisition costs on the planet. Reported to only grow in the coming years. Why? A lot of the low hanging fruit have been picked.
With that said, what can you offer your existing client base? Or if you’re in another business how can you offer solar or partner with each other?
At the home, there are plumbing, HVAC, security, pool, lawn, roofing, doors, siding, window and gutter cleaning and much more.
A lot of these services can be on service agreements where you go out during the year to your clients’ property. When you’re out there, you have additional opportunities to help them. New things will certainly be born during the year and they’re always looking for creative and innovative ways to improve and enhance their properties.
Whether it be energy efficiency, safety, security, convenience- you can name many ways in which you can improve the life and experience of owning a property.
They’re waiting for you to offer these services. Just don’t assume they know about them. Be a resource for them. They’ll appreciate you and tell their friends.