If the idea of being your own boss, working independently, and helping out people in need appeals to you, then the locksmith industry might offer an ideal business opportunity. By starting your own locksmith business, you can provide a variety of services that people need. You’ll also enjoy the ability to work on your own, to potentially avoid ever having to hire employees, and to work in a field where every day is sure to bring something new. If you have some mechanical talents and are well-versed in technology, a locksmith career might be a natural fit for your skills.
Locksmiths specialize in security services and solutions. A locksmith business may offer just a few or a comprehensive menu of solutions. Some businesses specialize in commercial security, while others specialize in vehicle lockout services. Other common services include rekeying, cylinder repairs, home security, and emergency services. Because of the nature of locksmiths’ work, many of these businesses are partially or entirely mobile, often working out of vans or trucks.
Locksmiths need to be talented in many ways. Security systems and video cameras are becoming more typical aspects of a locksmith’s work. A locksmith may also work in a consultant capacity, recommending products and solutions for residential, commercial, and industrial use. Some locksmiths establish relationships with apartment owners or condominium owners, where they become the go-to locksmith for all of the services that the facility might need.
According to IBIS World, the locksmith industry experienced 4.3% growth from 2014 to 2019. This growth is driven by the construction and housing market. A strong housing market means there’s increased demand for locksmiths to install locks, gates, safes, and more. IBIS World predicts that demand for locksmiths will decelerate slightly from 2019 through 2024. The growth from 2014 to 2019 was higher than average, but the demand should continue to grow, just more moderately.
As of 2019, the locksmith industry was a $2 billion market. A total of 22,530 businesses employed 35,178 staff. Secrailway 24 Hour Locksmiths, Pop-A-Lock, and Mr. Rekey Locksmith held significant shares of the industry, but there are plenty of smaller, independently-run businesses, too.
The locksmith industry is evolving and being shaped by multiple trends. Locksmith Ledger International reports that advancing technology is one of those trends. While traditional mechanical lock systems will continue to be used, newer hybrid versions that combine mechanical and electronic locks will also be introduced. These hybrid models deliver additional features, but locksmiths will need to learn to work with them.
Similarly, video cameras are increasingly becoming standard parts of security systems, even for home use. Technology advancements also mean that vehicles, residences, and commercial buildings are equipped with new electronic locks. Locksmiths need to be trained in how to work with these newer lock styles.
The Airport Locksmith also highlights how technology is shaping the industry. Bluetooth-powered locks have become highly popular. They offer convenience since users can control them with mobile devices and applications. Wi-Fi locks are also popular and have become a standard element of smart homes. With more families embracing these new styles of locks, locksmiths will increasingly be asked to install and unlock these systems.
Locksmith businesses market to many types of customers. A single business might market to homeowners, the general public who drive cars, commercial property owners, and more.
Skills, experience, and education useful in running a locksmith business
A locksmith business owner doesn’t need a business degree, but certain skills and experiences can increase the chances of that business becoming a success.
Locksmith education. According to ACME Locksmith, some states require locksmiths to become certified. There are many locksmith courses that can serve as an education foundation, but pursuing an apprenticeship also provides valuable in-the-field experience. Plan to spend about a year learning the skills necessary for this profession.
Mechanical knowledge. An understanding of how devices function and skill in fixing and working with them are helpful in the locksmith business.
Problem-solving skills. No two days as a locksmith are ever the same, and locksmiths must be able to think on their feet and solve the problems that they face. The ability to stay calm and clear-headed under pressure is also a benefit.
Customer service skills. Interacting with customers is a large part of running a locksmith business, and those customers are often stressed and upset when they call for help. Locksmiths will benefit from strong customer service skills.
Marketing talents. The nature of the locksmith business means that most customers won’t be frequent returning customers, so the business needs to market to constantly bring in new customers. A locksmith who can do some or all of their marketing can save money while building a strong business.
Amazon has several good books on starting and owning a locksmith business that may be worth checking out:
How to Start a Locks and Locksmithing Business (free on Amazon Kindle Unlimited)
Locksmith Business Book: How to Start, Market, & Get Government Grants
Locksmith Business: A Detailed Business and Marketing Plan (free on Amazon Kindle Unlimited)
Costs to Start a Locksmith Business
Locksmith businesses are relatively affordable to start, especially if you already have access to a vehicle that you can use for the business. Plan to spend a minimum of around $10,000 on locksmith equipment and transportation to get the business up and running.
Some of the more expensive startup costs for a locksmith business include:
- Locksmith tools such as key cutters, key extractor, drills, screwdrivers, hammers, plug spinner, re-keying kits, lock pick sets, and lockout kits.
- Inventory such as deadlocks, key blanks, etc.
- Business vehicle
- Vehicle signage
Steps to Starting a Locksmith Business
Step 1: Write your Business Plan
After coming up with the idea, the next step in starting your business should be to write a business plan. Not only will a bank require you to have a business plan, but multiple studies have shown that a business plan helps increase the odds of starting a successful locksmith business.
Step 2: Form a Business Entity
A business entity refers to how a business is legally organized to operate. There are four primary business entities to choose from, which include the sole proprietorship, partnership, corporation, and Limited Liability Company (LLC). Each type of entity has its own pros and cons, such as liability exposure, costs, and administrative requirements.
Related: Comparison of Business Entities
Step 3: Name the Business
Finding the perfect name for a business can be challenging. Not only does the name have to resonate with your customers, but it also has to be available to use.
Step 4: Select your Location
It’s possible to start a smaller business right out of your home or garage, saving on rent costs. As that business expands, then it may be time to rent a commercial space. Rental costs will depend on the size of the space, location, and amenities. Some businesses operate entirely out of their vehicles for years; the right option depends on the business’ model.
Related: Choosing a business location
Step 5: Apply for Business Licenses and Permits
A locksmith business owner will need to obtain certain business licenses and permits. These permits and licenses can vary based on the state and town where the business is located.
In addition to standard business licenses and permits, many states require locksmiths to obtain a locksmith license. According to BizFluent, 15 states require licensing, including; California, Connecticut, New Jersey, North Carolina, and Oregon. The process of getting a license usually involves a criminal background check, and some states require locksmiths to pass written exams. Many states require an FBI criminal history background check and won’t allow people with felonies or misdemeanors to hold a license.
In addition to licensing, some states also require bonding insurance and certification.
Also, there are some general local, state and, federal business registrations a locksmith company may need, including a sales tax permit, Employer Identification Number, and Occupancy Permit, among others.
Step 6: Find Financing
Coming up with a good business idea and having the skills to run it are one thing, but getting the funding to start a locksmith business is another. While the cost to start is low, the borrower(s) will need to have good credit and personally invest 15-25% towards the total start-up costs.
Step 7: Open a Business Bank Account
Keeping your business and personal finances in separate business bank and credit card accounts makes it easier to track the income and expenses of the business.
Step 8: Get your Marketing Plan in Place
Locksmith businesses need to continuously market to bring in new customers. Some common marketing techniques include social media marketing, online advertising with Google local listings, Yelp, Angie’s List, print advertising, and radio advertising. A locksmith might also network with apartment building owners, realtors, and condominium owners to encourage them to refer the business to their customers. Marketing costs will depend on the volume and type of activity performed.
Step 9: Get Business Insurance
A locksmith business needs several types of insurance for full coverage:
- General liability insurance offers protection against expenses that could occur if a customer is ever injured while on the business’ property or as a result of the business’ work.
- Commercial property insurance can cover expenses and losses that the business might face if its equipment is ever damaged or destroyed by an event like a fire.
- Commercial auto insurance protects the business against expenses that might occur if a business vehicle were ever involved in an accident.
- Worker’s compensation insurance covers expenses like medical bills and legal fees that a business might face if an employee were ever hurt while working.
Factors like the business’s location, the number of employees on staff, and the value of its equipment and vehicle will all affect insurance policy costs. To get the best idea of what to budget for insurance, request quotes from multiple companies. When evaluating the quotes, compare not only the premiums but also the plan exclusions, coverage limitations, and deductibles compare.
Step 10: Hire Employees
Many locksmiths work independently and manage their businesses on their own. If a business does well, and you’re turning away work, you might consider hiring another locksmith or taking on an apprentice. Average salaries vary by state. For instance, according to ZipRecruiter, locksmiths in New York earn an average of $20.60 per hour, while locksmiths in Connecticut earn an average of $18.90 per hour.
If a business does hire an employee, the budget needs to include not only salary costs but also other related expenses. Workman’s comp insurance, unemployment insurance, and paid time off are all common employee-related expenses.
Related: Hiring your first employee
Step 11: Set up an Accounting System
Setting up an accounting system for your locksmith business is critical to the long-term success of your business.
Staying on top of taxes not only keeps the business out of trouble with the government, but the numbers can be used to track and monitor trends and cash flow in the business and maximize profits.
How much can you potentially make owning a locksmith business?
A locksmith’s income will depend on many factors, including the business’s location, services offered, profit margins, and how long the business has been in operation. According to Locksmith Plus, locksmith salaries average between $40,000 and $60,000 per year. Average hourly rates range between $21 and $28, but rates average $25 per hour.
Things to consider before starting a locksmith business
When starting a business, it can be easy to become overwhelmed with all of the potential services you could offer. Rather than simultaneously offering rekeying, vehicle services, emergency services, and home security system setups, focus on one or two of these areas to start. By honing your skills and developing a strong reputation for your quality work, you can build up your business and then later expand into these other areas if you should choose.
Running a locksmith business means working long hours. Providing emergency services means that you will get calls late at night and on the weekends, and this can create a lifestyle change that you’ll need to be prepared for. Some locksmiths find this transition is a difficult one, and the first year in business can be challenging.
Because technology has become integral in both home and vehicle security, the locks and technology used will continue to evolve. Be sure that you regularly invest your time in learning these new systems so that you’re able to stay competitive and deliver customers the solutions they need.