Pricing for NDE lockmoithing - how do you do it?

[LockSafe]

So, after a break from locksmithing of some years, I've recently begun looking for work again in my local town. I've checked out my competitors and there seems to be a huge variance in how they charge and what they charge. Some say "from £30" others say "£60 regardless of lock" for example (I'm based in the UK). Any ideas on how to price effectively from other practising locksmiths out there? Thanks.

Phil.

[lockey1963]

phil

its got little to do with nde locksmithing or any other locksmith service at the end of the day , its a pure business equation.
you must first look at your cost per job , add up all of your costs , ie ,

fuel
vehicle and running costs
tools and equipment costs and depreciation
insurances
advertising
admin
etc etc etc

when you know what your average weekly running cost is , divide this by the number of jobs you get per week , this gives you your average cost per job, then how much you need to make to live , divide this by the number of weekly jobs you get , add this figure to your cost per job figure and you have the absolute minimum you should charge in order to survive, you can then base your charges around this.

those charging £30 will not be in business long if full time at this, and quickly go under , though many part time beer money lockies not relying on the income exist and sadly they will keep going at £30 or less to gain entry , and have slowly killed this area of work.

it is important not to overcharge , but it is crucial to do your sums and not under charge, everyones own costs and circumstances differ so much from area to area that it is impossible to put an average charge for all.

the industry norm is actually similar to it was around 5 years ago of day rates between £45 and £60 .

[LockSafe]

phil

its got little to do with nde locksmithing or any other locksmith service at the end of the day , its a pure business equation.
you must first look at your cost per job , add up all of your costs , ie ,

fuel
vehicle and running costs
tools and equipment costs and depreciation
insurances
advertising
admin
etc etc etc

when you know what your average weekly running cost is , divide this by the number of jobs you get per week , this gives you your average cost per job, then how much you need to make to live , divide this by the number of weekly jobs you get , add this figure to your cost per job figure and you have the absolute minimum you should charge in order to survive, you can then base your charges around this.

those charging £30 will not be in business long if full time at this, and quickly go under , though many part time beer money lockies not relying on the income exist and sadly they will keep going at £30 or less to gain entry , and have slowly killed this area of work.

it is important not to overcharge , but it is crucial to do your sums and not under charge, everyones own costs and circumstances differ so much from area to area that it is impossible to put an average charge for all.

the industry norm is actually similar to it was around 5 years ago of day rates between £45 and £60 .

Thanks for that. I can see the sense behind what you have suggested, the problem for me being as I am I just starting up again it is difficult to know how many jobs a week I'll be getting. Just wanted to check - £45 - £60 day rates? That seems awfully low to what I was used to when I was in the locksmithing business before, is that right?

Phil.

[globallockytoo]

I agree with lockey's assessment, however it is true that you cannot determine how many jobs you will be doing a day.

The way I work it out is similar.

Take all your raw costs (annual), divide by 12 to determine your monthly cost. Further divide by 20 to determine your daily cost (if you intend on working only 5 days a week).
Further divide by 8 to determine your hourly cost.

Next, determine exactly how much you want to earn in the next year, perform the same calculations above and add the final result to the hourly cost. You have now determined exactly what you need to charge per hour to achieve your desired income for 12 months.

If you supply parts, often your markup will not be included in the above. That is all extra (cream).

[nostromo]

Using 1963's calculation you can also balance how many jobs it is POSSIBLE to do - how long per average job and how long is average travel time between jobs in your desired service area. The key being how much you want to earn a year after making your 'nut'.

You probably want to factor in the setup costs and inventory are and grow it slowly if you can instead of doing it all up front. IE- just a manual key machine to start and small blank inventory, etc for now, then expand from there.

What would be ideal is if you could combine two sources of income and slowly switch to the locksmith one. I know a few folks where their families help out- mom does the books and watches the storefront. Older kids help with inventory, etc.

Speaking of which, if you need am automatic key machine, let me know. I fell into too good of a deal to pass up and have one or two that would not cost too much. Prefer to keep it in the PM realm for now, if that's ok.

Best wishes for your new startup.

[lockey1963]

phil

it must have been quite some time since you did this mate , in my area we have over 40 new start ups every year trying for a slice of the call out pie , this coupled with hundreds of internet nationals advertising for this work and many new franchise and national emergency firms with big advertising budgets doing the same.
call out work is very thin on the ground for most.

talking to many new set ups with a modest 3k in advertising , many do not even achieve 2 jobs a week , this is a reality and the true uk industry now, normal advertising mediums such as phone books , 118 services etc are swamped and overun with advertisers and nationals to the point of being almost useless.

£45 to £60 is about average with every area having the part timers and the desperate offering far less, prices have dropped big time , even warrants have dropped up to £40 per day in past few years to what they were 8 years ago, sadly there is almost a locksmith in every street in uk.

There is abosolutely no business left in lock outs , warrants are getting to the point of not worth doing , basic and bread butter jobs and lock changes are dwindling for all, so you will not make a living in these areas, the living is in the jobs the new set ups cannot do yet so prices have held up and less people bidding for this work, contract work is a must these days.

forget the nde openings services, as there is no living in this anymore, do some serious research before pumping money into this side of the industry , as very little is left.

[LockSafe]

Ehm, some very interesting points, thank-you gentlemen. I'm very lucky in a lot of respects, being from the second generation of my town's longest established locksmithing family, the Morlands. I've worked in different aspects of the lock and safe industry for twenty odd years which means I have a broad knowledge of many different aspects. NDE is only one part of my business plan. My brother, Brian, is a well known and respected lock historian nationally. My father started Key and Lock Supplies, a high street locksmith shop, back in 1964, I worked there for 12 years before moving on to Loksafe Services, a national supplier a safe equipment, a short spell at Citysafe Wholesale and then a rep for Intelligent Locking Systems, manufacturers of time delay locks and devices for safes etc. The plan is to bring all of this knowledge together in my new Business, Bournemouth Lock & Safe, eventually with retail premises. But I have been out of the industry for quite a while, so I'm feeling my way a bit. I'm just thinking on an advertising campain with Yell, they can give me forth fixed place on Yell.com, a decent ad in Yellow Pages and 118 247 listing for £1100 + VAT for the year. My goal is to aim more for commercial work, although domestic clients would obviously be serviced. it is a new start in the industry, daunting in some ways but mostly exciting. I'd like to make aquantances with people also in the industry, one reason for being here. Still giving lots of hard thought on how to launch it all but I am the sort of guy that thinks things through to the enth degree. Just hope it works!

[Rickthepick]

Id say the locksmith industry in the UK has peaked and is now at 'critical' level.

Its just a matter of who can survive longest before packing it in. Those that survive will eventually pull back in the customers.

In the last few months iv noticed a few things...

internet advertsing has soared, Its the new battlefield. you really have to spend some wonga now to get top spot for your main gogole search.

Yellow pages are overflowing with locksmiths and really not worth the £1000+ for a decent ad.

The nationwide companies like reactfast, able etc are themselves struggling especially as more and more rival companies are popping up. Again only time will tell who survives.

Its a really bad trade to get into at this point in time and personally id save your money until times are better (if it ever happens)

Iv had a poor two weeks and iv heard rumours of established blokes going nearly a month without a single job. That must be crippling. but thats the way it goes

[oORusHOo]

Is it because there has been a flood of new locksmiths, or is it because people aren't putting money aside for locks during the recession?

I'm moving to London soon to continue being a student ( for ever it will seem.. ) and I was thinking of offering a lockout service to the students there. The beer run guys who have destroyed the industry (i'm rethinking it now btw).

[Rickthepick]

heres a good article
http://www.keyzine.co.uk/OnlineNews/May ... aining.pdf

[oORusHOo]

Ah, so i guess it's an over-saturation of crappy locksmiths and rouge traders :/
I would quite like to be a good locksmith - the excitement of never really knowing how the day will end up, or what jobs the phone may bring.

But at the same time, I would only be contributing to the problem of too many locksmiths, not enough locks. I think i'll stick to lock-enthusiast and perhaps, one day, locksport :]

[LockSafe]

heres a good article
http://www.keyzine.co.uk/OnlineNews/May ... aining.pdf

Scary, but oh so true it seems, thanks for bringing this to my attention Rick. Thing is with me I'm a very persistant and hard working individual that finds it hard to fall at the first hurdle. As I've mentioned elsewhere I am very lucky in that my family name is well known in the industry, even more so locally. I'm a determined little fella and will give it my all, long hours, persistance etc. At least I've done it all before so I know how it is done - that was some years ago though and I know things have changed. Wish me luck, I've got a feeling I might need it!

Phil.

[Rickthepick]

theres no harm in trying and if you are fortunate enough to live in a less saturated area there is still hope :-p