Are you planning to start an LED light business? LED products are in high demand in both the domestics and international markets. Therefore, you can start either an LED light manufacturing business or a retail business.
LED or Light Emitting Diode is basically a semiconductor. When current passes through the semiconductor, it emits light. Additionally, LED has a luminance efficiency of 110 lumens/watt. Eventually, it consumes less energy and provides brighter light than CFL, tube light or traditional bulbs.
Further, LED lights are available in a wide range of colors from soft white, ultra white, red, green, yellow to blue etc., of 2700K to 6500K. In fact, they can last for 50,000-80,000 hours.
These features make LEDs so popular that starting a business can be highly profitable even with low capital. Here’s a complete guide on how to start a LED light business.
How to Start LED Light Business?
Undoubtedly, there is a good potential for the LED light business regarding small, medium or large. It’s because LED bulbs produce higher brightness with as low electricity as 0.6 watts. In addition, the maintenance cost is also lower than the conventional bulbs.
Consequently, people can save energy up to 50% with LEDs due to their low consumption and high output. Not to mention, LED bulbs are more durable and cheaper than the others. It’s no surprise why LED markets are growing rapidly.
Let’s give you a step-by-step idea about how to start a manufacturing business of LED lights.
1. Make a Business Plan
Any business requires proper planning to understand the essential aspects. Start with market research and try to know which type of LED lights are on-demand. Then, identify your competition and their promotional service.
Additionally, you need to know your target audience and their requirements to make a business strategy and action plan. There are various LED light applications in the market, such as an emergency vehicle light or traffic light. In Europe, most emergency motor vehicles (police cars, ambulance, fire and State Emergency Service) use blue LED lights as a warning sign.
2. Select Location
Location plays an important role in business growth. If it’s a manufacturing setup, choose a location in the industrial area as the LED manufacturing unit needs a specific space in the manufacturing process.
The area should include a packaging unit, storage room and office to conduct the process. It’s advisable to select a place of at least 500 sq ft. Also, the area is accessible by transportation for easy raw materials collections and distribution of final products.
3. Business Registration
The next step is to get the license and registration from the government authorities to start a LED light business. Here are the following registrations and licenses you may require depending on the LED light manufacturing or processing.
- Registration of business: The business can be either proprietorship or partnership. If you want to start the business individually, register the business under proprietorship. Similarly, you need to register as a Limited Liability Partnership (LLC) or Pvt. Ltd. Company with Registrar of Companies (ROC) for partnership business.
- Bureau Of Energy Efficiency Certification: The LED company is under the energy generation industry category. Hence, you need to apply for the Bureau Of Energy Efficiency Certification.
- GST Registration: Get a GST number as it is compulsory for every business owner.
- Trade License: Obtain the trade license from local authorities.
- MEME/SSI Registration: Further, you have to register for the Udyog Aadhar and MSME registration for the benefits and facilities from the government.
- Pollution Certificate: As the LED business deals with many hazardous elements, you need a NOC from the Pollution Control Board.
- IEC Code: Apply for the IEC code to export LEDs.
- Trade Mark: Secure your business brand with a trademark.
4. Raw Materials
Without raw materials, it’s not possible to conduct a business. For a LED light business too, you require the following listed raw materials (for up to 10W LED-based lighting system):
- LED chips.
- Connecting wires.
- Metallic cap holder.
- Heat sink devices.
- Plastic body.
- Reflector plastic glass.
- Packaging materials.
- Miscellaneous parts.
- Rectifier circuit with filter.
- Soldering flux.
5. Machinery Requirements
Another key point is that the LED light manufacturing process is a bit complex. Henceforth, you need some basic knowledge, especially about the machinery to operate the production unit.
There are various types of equipment needed depending on the specific LED type you’re going to manufacture. Here are the major machines required to start LED light business:
- High-speed LED mounting machine.
- Candlelight assembly machine.
- LED PCB assembly machine.
- LED tube light assembly machine.
- LED chip SMD mounting machine.
- LED lights assembly machine.
Besides the heavy machinery, you need some minor equipment:
- Digital multimeter.
- LCR meter.
- Lux meter.
- Continuity tester.
- Small drilling machine.
- Sealing machine.
- Packaging machine.
- Soldering machine.
6. Manufacturing Technology
Furthermore, you need the assembling innovative technology for the individual LEDs. Thankfully, you can get that help from government associations to an extent for a certain fee amount. It’s always better to procure the manufacturing technology from a reliable source.
7. Start Promoting and Selling
Finally, after manufacturing, do you know where to sell the LED lights? You can either target the local markets or the online market for this purpose.
For online selling, you can register the business on B2C websites like Amazon, Flipkart, Bigbasket etc. or B2B websites like Alibaba, Tradeindia, Indiamart and Exportersindia. You can also launch your own business website to sell directly and export to other countries.
LED lights are the advanced technology offering new prospects in indoor and outdoor lighting. The business has incremented a lot since 2008. It’s expected to grow by 24.3% during 2012-2026.
Moreover, the rising awareness, energy-saving and cost-effectiveness have made LED popular. Therefore, many small business owners are getting interested in manufacturing LED bulbs. It may be a good opportunity for you also to step feet in the global LED market.