The future of solar in Utah depends on learning from past mistakes; not just in terms of engineering and design, but in terms of solar companies themselves. Whether you are starting a new business or helping an existing one, money management is key, as it will have an external influence on customers’ experience of your brand.
In a perfect world, everyone (Utah solar companies included) would spend within their means. And businesses would all pay off debts before acquiring more. This, however, is not always the case. We hope that Utah solar businesses are able to glean valuable lessons from what follows.
And that future customers will be aware of what to look for in a solar company from recent industry disasters. As a debt-free solar company highly respected by the Better Business Bureau, we feel it is our obligation to help both solar companies in the Beehive State and citizens belonging to the same area understand what makes a great solar company.
Companies Need to Market Within Their Budget
If you’re a potential solar customer, and see a solar company spending a lot of money on advertising without them having been around very long, it may be a sign they are willing to become another debt-leveraged solar company. While this business model was popular within the industry 2 to 3 years ago, it’s led some Utah solar companies to their demise.
Budgeting is something that every business needs to take into account if they want to stay afloat. In 2013, Forbes wrote an article detailing three simple steps to creating and maintaining a marketing budget.
Know What You Have to Spend
Knowing your budget and sticking to it is essential to any successful solar business. Although this can be difficult considering all the legislative changes impacting solar in Utah (from net metering to federal tax credits and rebates), once you have decided what your reliable revenue is and the minimum monthly take home, you can use that as a base. After subtracting monthly expenses you can determine from there what you have to work with. What you decide to spend this money on depends on your business goals and the stability of the business landscape itself.
Determine Where Your Funds Will Be Best Placed
Once you determine funds for marketing, you need to decide what marketing strategies would be best. Where to put your efforts depends on your target audience. It also is determined by the expense of the marketing tactics themselves. If you don’t have money to do large marketing campaigns, investing money you don’t have in them may not be the best option, especially since the Utah solar market is over-saturated with residential solar competition.
Regularly Assess the Effectiveness of Your Marketing Strategies
Regularly checking in on your marketing efforts is necessary for company growth. If your marketing tactics aren’t bringing in more revenue, they need to be reassessed. Holding true to Einstein’s adage “insanity is doing the same thing over and over and expecting different results,” You can’t expect your company to thrive if you are spending more money than you are earning. At least not over the long term. Taking a Utah solar company from venture capital to private equity is the desirable outcome. However, given the unwarranted decrease in solar investments in result of the 201 Trade Case Tariff, companies who attempt to leverage investor capital will likely prove unsuccessful.
Executive Spending: What Expenses are Considered Overly Decadent/Extravagant?
In the business world companies look at the burn rate of their employees. This is the expense that goes into keeping your staff. On average this comes out to about $16,666 per month for small to mid-sized businesses with benefits and revenue growth.
Reasons Behind Scaling Up Hiring
All of us want more people to have jobs. If you are hiring for the wrong reasons, however, then you can set yourself up for disaster. Stockpiling talent can improve your company if their skills are being utilized and there is legitimate demand for these employees’ skills. If you don’t need these employees, talent and money are surely being wasted.
If you are spending more than 5% of your budget on things outside of payroll tax, benefits, and rent, take a second look. You may be overspending in some areas and have to cut back until your business has grown.
Long-term Sustainability: It’s About Much More than Growth Beyond Six Months
Don’t stop once you have found your niche in the solar market. Utah solar companies that see long-term growth develop their product and help it to extend into several niches. If you don’t stretch, then you will never grow. Breaking even may require some sacrifices. You will have to decide what these are, but they need to happen if you want to stay out of debt. You can’t continue to spend more than you are making and end up on top. Many professionals in the business world have come to the conclusion that money needs to be managed. Large companies have whole departments dedicated just to this aspect of their business. You won’t get far in life if you don’t know where your money is coming from and going to.
Honesty Is Always the Best Policy
When it comes down to it, you need to be honest. You can’t lie and expect it to not come back to haunt you. In the business world, honesty, although not always the easy route is the best policy. A company that is known for being honest may not get that big deal right now, but they will have loyal customers. Happy customers that have been dealt with fairly will mean far more to your company’s future growth. Go Solar Group works hard to reach these standards laid out in this post. We are a company that not only deals fairly with our customers but also have been in business since 2009. We are financially stable and able to continue moving into new markets. We suggest you take a close look at the Utah solar companies you’re considering, and evaluate them against these criteria for successful Utah businesses.