35 Pros & Cons Of Starting A Led Lights Business (2024)

Crowded Space

Competition is high when it comes to your LED lights business, so it's important that you spend a good amount of time analyzing the market and understanding where the demand lies.

Finding The Right Supplier

Most businesses in this space go the supplier/manufacturer route, which isn't a bad thing! However, finding the right supplier can take a lot of time, energy and trial/error. If done properly, this process can save you months (if not years) of time and energy. More on this below in the "finding a supplier" section.

Security Issues

With any Saas business, data loss and security issues may arise throughout your process of building your product. It's critical that you understand exactly what you're responsible for and how to avoid potential issues down the road.

Lack of benefits

With a LED lights business, you are typically self-employed and responsible for finding your own insurance, which can be quite costly and time-consuming.

Isolation

Often times, as a LED lights business, you typically work alone and do not have much face-to-face interaction with other team members.

Taxes

As a LED lights business, you typically pay self-employment taxes which can be quite high. It's important to understand what you will be paying in taxes each year so you can determine if the work you're taking on is worth it.

No safety net

Typically, as a LED lights business, you do not receive a consistent pay-check and instead earn money based on your transactions each month. During the slow periods, you typically take away less since the job is based on commission. It's important to budget accordingly for the slow times.

High overhead expenses

With starting a LED lights business, there are overhead expenses that come with selling a physical product. You will want to make sure you strategically budget for these overhead costs. We discuss this more in the startup costs section below.

Further reading:
Factors to Consider When Choosing Silicone LED Lenses
What color LED street lights are best?
Saving Energy at School
The Importance of Lighting
What is a discount coupon code?
What are the lighting requirements for hotels?
Outdoor Lighting Buying Guide

You may need to charge sales tax

If you are selling your products in various states, you may be required to charge sales tax. Although this may not impact your financials specifically, it can be a headache to create a process and procedure for this. To learn more about sales tax, check out this article

Work can be repetitive

You may find creating the same product over and over repetitive and tiresome. One way of avoiding this is to diversify product lines and revenue streams - this will keep things interesting!

Difficult to build trust with your customer

With starting a LED lights business, there can be minimal face-to-face interaction, which means it can be a lot more difficult to establish trust with your customers. You'll need to go the extra mile with your customer to grab their attention and business.

Minimal physical activity

A big part of starting a LED lights business is sitting at a desk for the majority of the day starting at your computer. Some may enjoy this, but others may struggle with sitting for the majority of your day without much physical activity.

Learning Curve

When you start your own business, you no longer have upper management to provide you with a playbook for your roles and responsibilities. You should know the ins and outs of every aspect of your business, as every decision will come down to you.

Consider your commercial building, and the costs associated with its routine upkeep. In an older facility with a traditional lighting system, replacing spent bulbs is likely to account for a large proportion of your routine expenditure. Yet due to their longer lifespan, LED lamps make it possible to dramatically reduce this outlay.
 

An impressive lifespan

If you are unconvinced, these statistics may surprise you. A traditional incandescent bulb lasts around 1,000 hours, while a metal halide bulb typically functions for up to 20,000 hours. Compare this to a quality LED bulb, which has an impressive lifespan of around 50,000 hours.

This means for every one occasion that you replace an LED lamp, you could replace up to 50 incandescent bulbs. LED lighting will also illuminate your space for considerably longer than high-pressure sodium, fluorescent and halogen alternatives too.
 

A low-maintenance solution

The result? When you install an LED lighting system, you’ll spend less money on replacement lamps and labour costs. But the financial benefits far exceed this. LED luminaires are also more reliable and require less maintenance than many traditional light sources, which means you pay for fewer electrical repairs.

If you’re unsure, just ask Sistema Poland. The logistics services provider recently installed Schréder’s industrial lighting products in its 65,000m² warehouse, with outstanding results.
 

The new lighting has gone beyond our expectations, says the maintenance and facilities manager. The quality of the light output is very good and clear for all to see. The staff really appreciate it. In addition, we are very happy with the savings on power consumption and virtually no maintenance costs.