Locksmithing involves picking, designing, installing, and maintaining locks — both mechanical and electronic. Your business would sell to, and service, clients who need these kinds of services. Clients may include other businesses, state and local governments, elementary and secondary schools, hospitals, and security companies. Most locksmithing businesses provide services either in-store or on-site.
There is more to starting a business than just registering it with the state. We have put together this simple guide to starting your locksmith business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
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Starting a locksmithing business doesn’t cost a fortune. If you start working out of your home, it may cost a few hundred dollars for basic equipment like:
A full-time operation with a wide range of services might have initial startup costs of between $5, 000 and $10, 000, with much of this money going toward more advanced tools like:
Ongoing expenses for a locksmith business depend on the size of the business. Maintenance of service vehicles may run a few hundred to a few thousand dollars a year. Maintenance on tools is typically minimal, but may cost several hundred per year depending on the equipment used and your company’s maintenance needs.
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Locksmiths serve a wide variety of customers. However, the most profitable customers are typically corporations and governments in need of ongoing service and maintenance. With that said, a 24/7 emergency service can be profitable for some locksmithing businesses since premium prices can be charged for what is essentially “after hours” work.
Locksmith businesses make money by designing and installing lock systems. They also make money by designing keys and performing various services related to locksmithing. This might include letting someone into their car or home if they’ve locked themselves out accidentally. It could also include making duplicate keys or fixing locks or security systems.
Most locksmiths charge a mobile fee of $35 and $150 if they have to go to the customer for service. For nights or weekends, you can charge between $150 and $250. For basic service, like changing a lock, locksmiths charge anywhere between $40 and $100, plus $5 to $25 per cylinder. If you’re installing new locks, you can charge up to $100 as a minimum fee, plus $20 to $30 per lock.
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Copying a key should cost customers between $1.50 and $4 for standard keys. Specialized keys can be sold for up to $20 and “chipped” keys for vehicles may fetch prices between $50 and $175.
Locksmithing businesses tend to have a high markup on services. Because it’s a low-overhead business, most of what you charge is profit. A one-person locksmithing business can clean between $40, 000 and $60, 000 per year. However, if you employ other locksmiths, there’s no reason you can’t make a million dollars or more.
One of the best ways to build profits in the locksmithing business is to offer exceptional service and ask for referral business. However, beyond that, locksmiths who specialize tend to make more than generalists. For example, automobile lockout services tend to charge more than a general locksmith. Locksmith companies who specialize in corporate security also make more than generalists. Keep this in mind when considering whether a locksmithing business is right for you.
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Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Locksmith Business Name Generator
If you operate a sole proprietorship, you might want to operate under a business name other than your own name. Visit our DBA guide to learn more.
Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your locksmith business is sued.
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You can form an LLC yourself and pay only the minimal state LLC costs or hire one of the Best LLC Services for a small, additional fee.
Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services. You can choose to hire a registered agent or act as your own.
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
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Learn how to get an EIN in our What is an EIN guide or find your existing EIN using our EIN lookup guide.
Depending on which business structure you choose, you might have different options for how your business will be taxed. For example, some LLCs could benefit from being taxed as an S corporation (S corp).
There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.
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When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Additionally, learning how to build business credit can help you get credit cards and other financing in your business's name (instead of yours), better interest rates, higher lines of credit, and more.
Net 30 accounts are used to establish and build business credit as well as increase business cash flow. With a net 30 account, businesses buy goods and repay the full balance within a 30-day term.
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NetMany net 30 credit vendors report to the major business credit bureaus (Dun & Bradstreet, Experian Business, and Equifax Business Credit). This is how businesses build business credit so they can qualify for credit cards and other lines of credit.
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
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Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.
There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.
Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.
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Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners, we'll give you helpful tips and advice for creating the best unique logo for your business.
If you already have a logo, you can also add it to a QR code with our Free QR Code Generator. Choose from 13 QR code types to create a code for your business cards and publications, or to help spread awareness for your new website.
How To Become A Locksmith
Marketing for locksmithing is not as difficult as it sounds. Most businesses that market to residential customers do so through Google. A local Google search has become, by far, the most reliable way for people to find local locksmiths. This is because Google curates local businesses in its local search.
In addition, locksmith businesses often advertise by putting a sign on their van or truck. They also invest in good signage in front of their office.
Locksmith businesses that stand out from the crowd tend to do best. Unless you’re the only locksmith in the area, you need to figure out what you can do that others cannot. For example, a locksmithing business might advertise a 99% success rate on opening locks without damaging the lock or door. Alternatively, the business might guarantee availability between certain hours or guarantee to have a technician out to a job site within a certain amount of time.
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Still unsure about what kind of business you want to start? Check out the latest Small Business Trends to help inspire you.
While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.
Using our website building guides, the process will be simple and painless and shouldn’t take you any longer
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