How I Started A $600K/Month Company Selling Low Cost Solar Energy
Hello! Who are you and what business did you start?
My name is David Gomez and I’m the founder and CEO of Clean Energy Solutions, based out of Los Angeles, California. We’re a solar energy provider that provides homeowners and businesses with low-cost solar power.
From 2014 to 2019 we have grown over 6700%. Our unique solar program allows clients to save money using solar energy, but without having to actually purchase a solar system. We provide the client with a solar system at no upfront cost, and the client only pays for the energy that the system produces, but at a lower price than their utility would charge them.
Our monthly revenue is around $600,000 with big plans to keep growing. A lot of our growth in the new year will be focused on our energy-efficient affordable housing division.
What's your backstory and how did you come up with the idea?
As far back as I can remember I’ve always wanted to have my own business. I didn’t go to college (besides a few junior college classes). Instead, I started working in sales, first selling car insurance for a few years, and then making the jump into mortgage loans. After a few years of gaining experience, I opened up my own mortgage company and rode the wave of the mid-2000’s real estate boom. It was an incredibly lucrative time and it seemed like it would go on forever. However, by the end of the decade, the good times were over and the recession hit. Although I hung in there and we did extremely well for several years in a down economy, I still ended up having to shut down my company. During this time I experienced some of the most challenging times of my life and career.
After rolling with the punches, I started looking for the next business opportunity to get involved with. A friend of mine had been telling me for several years about solar power and how renewable energy was the future. After doing some research, I realized what a great opportunity it was.
- There’s an unlimited amount of solar energy.
- Solar is clean energy compared to fossil fuels that damage the environment.
- Solar energy is a cheaper source of energy than fossil fuels, in the majority of markets.
- Power purchase agreement (PPA) allows a homeowner to get a solar system without having to actually purchase the system. There is not a purchase loan or lien required on a client’s home.
A great business opportunity that is also good for the environment. I was sold on solar energy and the idea for Clean Energy Solutions was born.
Take us through the process of designing, prototyping, and manufacturing your first product.
At the time I still had some money saved up from my mortgage days but decided to do everything on a shoestring budget. I rented a desk in my friend’s office and rolled up my sleeves and got to work.
The first thing I had to do was to learn the basics of how the solar industry works. There weren’t any books at the time because the industry was just too new, so I just cold-called random people I found on the internet and started putting the pieces together.
Here’s what I learned:
Proposal - A solar company designs a solar system based on the electricity usage that a homeowner or business has used in the past 12 months. It’s then presented to the client.
Permit design plans - Once the client has signed an agreement to purchase a solar system (or a program to buy the electricity the system produces), then design and permit plans are created by an engineer.
Permits - These plans are then submitted to the local city or county to get building permits issued.
installation - The next step is for the system to be installed by a team of installers and electricians.
Utility approval - the last step is to submit for approval to the local utility company to get attached to the electrical grid. This allows the client to sell their excess electricity back to the utility company.
One of my cold calls put me in touch with a local solar equipment distributor, Affordable Solar.
Know your financial and marketing numbers inside out. It’s the difference between having a business and having a hobby.
Their account representative was a really nice guy who helped me a lot. He set me up to be able to purchase solar equipment from them, and by referred me to a good installation subcontractor and a permit runner (who submits permits). This gave me the basic contacts that I needed but I was far from ready to do any serious business.
Launched in 2014, I spent the first couple of months trying to figure out how to market solar to homeowners and how to get access to the type of financing that we would need in order to finance solar systems for homeowners. A residential solar system can cost anywhere from 15-30K, so without being able to offer good financing or programs, you have zero chance of being successful.
My days in the mortgage industry gave me lots of marketing and sales experience and I quickly came up with a clever direct mail solar marketing campaign, that revolves around selling lower-cost energy, as opposed to selling solar.
We started testing out the marketing campaign and we quickly started setting appointments with potential clients. The only problem was that I didn’t actually have any financing programs to offer to potential clients. In other words, our marketing was great but without financing programs, we couldn’t do any sales. I cold-called every finance company that I knew, but all turned me down for being a new company.
In search of a finance partner, I drove to Las Vegas in the summer of 2014, for the industry’s annual solar convention, Solar Power International. While there I managed to get 5 minutes with the CFO of my equipment distributor. Since I had nothing to lose, I started pitching him my solar marketing campaign about focusing on selling lower-cost energy.
Right in the middle of a crowded convention, I started reciting our sales script word for word, from start to finish. When I was done, he looked at me and said, “You get it but you need a PPA or lease finance partner, and I’m going to introduce you to them today”. An hour later I was introduced to a VP from one of the major industry finance companies, and I went through my whole sales marketing pitch, again word by word. He was also impressed and offered for them to become our finance partner right on the spot. Ironically enough, this company had turned me down just a week earlier when I cold-called them.
Describe the process of launching the business.
After testing out our marketing campaign and locking up a finance partner, we were ready to launch,
In the beginning, we didn’t have a team of solar sales reps, it was just me setting appointments and then sending out one of my former loan officers to pitch the program. We set appointments, answered the phones, sold systems, and processed paperwork with just two people.
Targeting Orange County, the direct mail campaign and sales script worked so well that we were immediately setting 3-5 sales appointments per day, and we had to bring in a couple of seasoned veteran solar sales reps to handle the volume. With closing ratios averaging between 24-40%, our production started to grow very quickly.
Since we started on a shoestring budget, we waited until we actually had production, before starting to hire staff. As we grew, we quickly had to scramble and hire more appointment setters, permit runners, operations personnel, and installation crews. We haven’t taken any venture capital or investment money, everything has been self-funded.
Since launch, what has worked to attract and retain customers?
After about a year of doing direct mail marketing, we realized that there was a ceiling for the amount of business we could do using this type of marketing. Appointment sales restricted the area that we could market to because it required our sales reps to drive to appointments. A rep can only cover a few hours by car at the most in one day.
The solution was to start doing the whole sales process by phone from start to finish. This would give us an almost unlimited reach since we no longer had to meet the client in person. In the solar industry, the sales process has traditionally been done in the client’s house, so this was a huge game-changer.
It took time to develop, but in 2017 we opened up our own call center and today more than half of our production comes from deals closed by phone. Much like our direct mail campaigns, sales scripts play a huge part in how any solar program is presented to a potential client. These scripts are always evolving as we roll out new campaigns.
Running a call center means staying on top of a lot of requirements, like the ”Do Not Disturb list”, which prohibits you from calling certain phone numbers. Doing the sales processes by phone has also allowed us to incorporate social media into our marketing campaigns.
Although we were late to using social media for marketing, today we get about half of our call center production from social media. In the coming year, we’re looking to drastically increase this marketing channel.
How are you doing today and what does the future look like?
Since launching in 2014 we have grown very quickly. By the end of our 2nd full year in business, our sales revenue had grown over 1900%. In our 4th year, we made the Inc 500 list of the fastest-growing private companies in the US with over 4300% growth. We also made the Inc 5000 list for the 2nd year in a row.
Today we’re doing around $7 million in revenue and looking to substantially grow in the next year. Since all growth is self-funded we constantly track our numbers. Knowing your numbers is crucial.
Get a job in whatever industry that you are looking to start a business in. Learn as much as you can before starting your own company. You will gain invaluable hands-on experience.
Our cost per acquisition averages less than $300 per deal, which is very low for the solar industry. This is an advantage that is going to help us expand in 2020, as we look to keep growing our solar business, as well as our energy-efficient affordable housing division.
We’re an extremely process-driven company and our back end operations work much like a well-oiled assembly line. Currently, we have some of the fastest installations in the industry and this is all due to our incredible operations team.
Last but not least, we are looking to launch our own fintech company in 2020. It will be a finance company that will focus on financing for renewable energy and energy-efficient home improvements.
Through starting the business, have you learned anything particularly helpful or advantageous?
The number one thing I’ve learned while starting and running multiple businesses is that you have to be ready to adapt. Sometimes your marketing just stops working, or the economy changes. Better to be lean and mean, and ready to pivot, when and if things change.
Early on, our direct mail campaign was killing it. However, soon our production started to slow down because we didn’t have the ability to do appointments beyond a certain driving radius. The eventual solution was to develop solar phone sales and to open our own call center. We adapted by making a pivot and were able to move forward.
What platform/tools do you use for your business?’
- Communication: Slack for fast and easy communication, and to keep everyone in the loop at all times.
- Email: Microsoft Outlook
- CRM: JobNimbus
- Google Sheets: for various tracking between multiple team managers
- Facebook dashboard to track leads and cost
What have been the most influential books, podcasts, or other resources?
I’m an avid reader, and I’m constantly reading books to be inspired and learn. Some of my favorite books are:
Great CEO’s are Lazy: breaks down how to focus on a company’s top constraints. Powerful.
The Power of Habit: your daily behavior creates your results This book helps you create successful habits.
Any book by Ben Mezrich. Bitcoin Billionaires is his latest. Always entertaining and inspiring.
I love any podcasts that tell stories of entrepreneurs, their successes, failures, etc. Here is my favorite:
Short story long with Chris “Drama” Pfaff: Each week entrepreneurs and other successful people tell their story of how they built their business or career. Very inspiring and Drama is a business owner himself.
Group Chat: Three friends that are entrepreneurs give their takes on business, news, entertainment, etc. An entertaining but very informative show. Highly recommended.
Trevor Moawad - any podcast interview with Trevor Moawad, who is one of the top mental coaches in the world of sports. His neutral thinking approach is simple, yet so incredibly productive.
Advice for other entrepreneurs who want to get started or are just starting out?
Get a job in whatever industry that you are looking to start a business in. For example, if you want to start a clothing line, go to work for a smaller clothing company (even if you have to intern for free!). Learn as much as you can before starting your own company. You will gain invaluable hands-on experience and save yourself a lot of rookie headaches, time, and money!.
Know your financial and marketing numbers inside out. It’s the difference between having a business and having a hobby.
Are you looking to hire for certain positions right now?
We’re always looking to work with good marketing or business development people. Anyone that is interested should contact me by email or call our office for more information at 800-994-1134.
Where can we go to learn more?
Clean Energy Solutions has provided an update on their business!
About 1 year ago, we followed up with Clean Energy Solutions to see how they've been doing since we published this article.
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