How Do I Start An LED Lighting Company (LED Light Business Opportunities)

You can either start a LED light retail business or a LED light manufacturing business. Regardless of which business you want to start, you must have a business plan. If you are interested in the retail business then you have to identify the market/customer of your product. For the LED manufacturing business you will need raw materials and an assembling unit. Finally, you will need the right mindset to run a LED lighting company.

Key Takeaways

• LED stands for Light Emitting Diode and it is the latest advancement of technology in the field of outdoor and indoor lighting
• LED lights are more cost-effective and they have more operational life compared to other light types
• The LED light industry is expected to grow at 25 percent annually till 2023
• You will need various types of equipment to start your own LED light company that includes LED PCB assembly machine, LED lights assembly machine, LED chip SMD mounting machine, etc.

How To Start A LED Lighting Company

Compile A Business Plan

A competitive business plan will help you get to market faster. Moreover, a business plan will help you gain clarity, focus, and confidence. It will make sure your business becomes successful. There are many ways you can compile a business plan. It’s not necessary to make a huge business plan. You can start planning a part of the business at a time. You can start with writing down the business goals first, then you can write down the strategies and action steps and your business plan become real. Below are some questions that you can ask yourself – 

1. What am I building?

2. Who will I serve?

3. What is the promise I am making to my customers?

4. What are my objectives, strategies, and action plans?

Identify The Target Audience

Before you start a business it is very important to research the market and identify your targeted audiences. Don’t spend a penny on your business before knowing the behavior of your customers and you have to find out if people will actually buy your products or services. You also have to validate your markets like who will buy your products or services other than your family or friends. There are a few questions that will help you identify the audience – 

1. What is the size of your target market?

2. Who are your customers?

3. Is your product or service relevant to their everyday life? 

4. Why do the customers need your product?

Required Equipment

If you have a competitive business plan and you have also identified your customer then the next step is to buy the required equipment to set up your LED assembling unit. LED assembling is a complex procedure and you will require various types of equipment depending on the different LED types. Some major equipment is – 

1. LED PCB assembly machine

2. LED lights assembly machine

3. High-speed LED mounting machine

4. LED chip SMD mounting machine

5. Candlelight assembly machine for LED

6. LED tube light assembly machine

7. Soldering machine

8. Sealing machine

9. Small drilling machine

10. Packaging machine

11. LCR meter

12. Digital multimeter

13. Continuity tester

14. Lux meter

15. Oscilloscope    

Raw Materials

If you are interested in LED light manufacturing then you will need raw materials. Below is a list of RAW materials that you will need to assemble LED-based lighting systems of up to 10W – 

1. LED chips

2. Rectifier circuit with filter

3. Heat-sink devices

4. Metallic cap holder

5. Plastic body

6. Reflector plastic glass

7. Connecting wire

8. Soldering flux

9. Miscellaneous items

10. Packaging material   

Business Registration

LED light manufacturing business requires some license and registration from government authorities. You have to obtain the following registrations and licenses from government authorities:

Registration Of The Business: Depending on the size of your business you can start a Proprietorship or Partnership business. If you are the only owner of the company then you should register your business as a proprietorship. If it’s a partnership business then you have to register as a limited liability partnership (LLP) or Pvt. Ltd. Company with Registrar of Companies (ROC).

Bureau Of Energy Efficiency Certification: The LED manufacturing company is in the energy generation industries category so you have to apply for Bureau of Energy Efficiency Certification.

GST Registration: You have to apply for GST Registration as it is now mandatory for every business owner.

Trade License: You have to obtain a trade license from local authorities.

Pollution Certificate: There are hazardous elements involved in the LED manufacturing business that cause pollution so you have to obtain NOC from the Pollution Control Board to operate the business legally.

Trade Mark: You should trademark your business brand and secure it from being copied by others.

IEC Code: If you want to export LED light then you have to apply for IEC code.       

Area For The Assembling Unit

In every manufacturing business location play a very important role. You have to select a location according to your business type. Many experts suggest that you should start a LED light manufacturing business in the industrial area because an LED manufacturing unit requires specific space for the manufacturing process. You also have to check if the location is accessible by transportation because you have to collect raw materials from the suppliers as well as distribute the LED lights. Moreover, you will need a storage room, packaging unit, and office operation for this type of business. Usually, it requires a minimum of 500 sq. ft. area to establish the assembling unit.

Business Insurance                               

For a LED lighting company, insurance is very important. Along with licenses and permits, insurance is required to operate your business safely and lawfully. Business insurance protects your company’s financial wellbeing in case there is an accident or in the event of a covered loss. There are various types of insurance policies available for different types of businesses. If you are not sure which insurance to take then you can begin with General Liability Insurance. This is a very common coverage for small businesses. You will also need Workers’ Compensation Insurance if your business has employees. Many states in the USA require the business owner to carry Workers’ Compensation Coverage.

Spread The Word

You have the courage to say who you are and what you do with conviction and without apology. You can use the online platform and social media platforms like Twitter, Facebook, YouTube, and LinkedIn to promote your business and create brand awareness. Apart from social media, you should also focus on other methods like word-of-mouth marketing, website, and internet marketing tools, public relations, blog posts, columns and articles, speeches, email, newsletters, and many more.

LED Light Business Opportunities

Since 2008, the efficiency of LED lights has increased a lot and the price has decreased rapidly. People are now more interested to use LED lights in their houses as well as in offices. So there are huge opportunities available for the LED manufacturing business. Let’s check them out!

1. The global LED market is hugely influenced by the growing focus on climate change therefore the demand for LED lighting is increasing every day.

2. Many countries around the world including USA, India, China has implemented effective energy efficiency programs and the government has initiated the use of LED lights in home and offices.

3. It is expected that the LED Lighting market will grow 24.3% during the forecast period (2021-2026); so now is the best time to invest in this sector.

4. The rising awareness about the cost-effectiveness and eco-friendliness of LED lights among the customers suggests the demand of this industry.

5. The demands for LED lights in residential as well as commercial sectors are rising rapidly so producing high-quality LED lights will boost your business.

6. LED lights can be used for home lighting, street lighting, historical places lighting, electronic displays, traffic signals, commercial space lighting, factory lighting, and many more.

7. LED lights cut lighting costs by 50% or more so the uses of LEDs in commercial sectors are increasing to reduce the energy cost.

8. The use of LEDs can reduce annual Greenhouse Gas emissions by 180 million metric tons so it will encourage people to use LED lights instead of conventional lights.

9. The demand for LED light is increasing and the production cost is reducing so the marginal profit is increasing for the LED manufacturing business.

10. An aggressive decline in the prices of LED lights has been driving the market growth over the last few years and the trend will continue for another 10/12 years.

11. LED lights are highly efficient and they have a longer life span which is why they will boost the use of LEDs in the coming years.

References:
1. https://medium.com/@SamHawkins02/starting-your-own-led-lighting-company-3f99dc7a52c4
2. https://www.steptowardbusiness.com/led-light-manufacturing-small-scale/

Last Updated on October 18, 2022 by Magalie D.