7 Steps To Open Your Solar Business

Solar business has been booming. It might not be the cheapest option out there but it is definitely worth the investment. In overtime, one can save up a decent amount on their electricity bills, using solar energy. Considering it is a beneficial investment, the solar industry has been doing well making it a lucrative business opportunity. 

Here is a step by step guide to opening a solar panel business:

Step 1 – Create a Business Plan

Multiple processes go behind starting a business, so just registering is not it. 

Assemble a plan, with downright specifics to start your business. It must reflect a clear concise information on the relevant things to consider including – 

  • Cost of business – Investing in a solar panel business is expensive. We are looking at about $500,000 that will cover initial marketing, a crew, and the installation done in a year. A franchise will cost you a minimum of $100,000 to $350,000 to gain access to their assigned region. 
  • Ongoing Expenses – Make a checklist of the expenses that come with owning a business. Certain responsibilities include stocking requirements from the distributor, payroll, marketing and initial payment to the energy company. Office space, delivery vans and ongoing training to maintain licenses fall amongst the unavoidable expenses. Prepare yourself to invest in business insurance coverage. 
  • Target Your Buyers – Solar energy is an evolving technique used by most homeowners looking to save money. Oftentimes it is also adapted by homeowner associations for an entire neighborhood. Small and large businesses have started using solar powers for energy programs. 
  • Tools For Promotion – Active marketing is key to a successful business. Promote solar panels on home shows. On-air and print ads will add more recognition to your business. Set sail to your ship by joining the local chamber of commerce and make your existence known. Establishing a web presence will help your business to reach out to a wider range of customers.

Step 2 – Establish a Legal Entity

It is advisable to opt for a business structure that prevents you from liability. Limited liability companies or LLC can be life saviors for small companies. Tax advantage, less paperwork, flexibility in terms of management, and ownership are other benefits of business structures.

Step 3 – Get your Permits and Licenses

Permits and licenses are non-negotiable, without one your business might even shut down before it starts. Failure in not obtaining can very-well result in hefty fines. Below are the following licenses requirement you need to consider: 

  • State & Local Business Licensing Go through regulations in local areas as certain areas may prohibit the installation of solar panels. Check-in with listed local associations for solar panel business licenses. 
  • Service Agreement – Create a service agreement for wholesale solar panels or solar panel installation business. It summarises the parameters of installation, the price, and client services. It is a warranty of sorts ensuring the panels will provide energy efficiency post-installation.
  • COA – A Certificate of Occupancy will be needed to guarantee that your business has met building & zoning codes and government regulations. 

Step 4 – Register for Small Business Tax

Starting your business will require you to register for various taxes including state and federal tax. Familiarise yourself with the advantages and disadvantages that come with taxing. This will help you avoid potential threats and benefit from other tax breaks. 

Step 5 – Apply for Business Bank Account & Credit Card

Do not make the mistake of mixing your personal and business accounts. If you do, then an event of your business being sued can lead you to risk your home, car, and other valuables. 

Having separate business banking accounts helps protect your asset and separates your company’s assets. Opening a business bank account will also make accounting and tax filing easier. Get a credit card for business expenses and build a good credit history. The company’s credit can be beneficial for investing and raising money in the future. 

Step 6 – Hire an Accountant

Set up business accounting to make a record of income and expense. Hire an accountant who will keep accuracy, simplify your annual tax filing, and will indicate the performance of your business based on numbers. 

Step 7 – Do Not Skip Insurance

Insurance is recommended to protect your business from costs associated with property damages and liability claims. The following claims can be financially devastating for many business owners. Workers compensation insurance and business owners policy (BOP) can be a legal requirement in your state.

The following can be used as a blueprint for your legally compliant solar panel business.