The fundamentals of starting a locksmith business?

[Jburgett2nd]

In the next four months I will be graduating from my tech school and there is so much to ask about the business side of things. I really feel like my education has been slightly lacking but are there any tips that you seasoned locksmiths can give, like the best method of advertising I've seen alot of you say the yellow pages are a good old fashioned way to get your name out there, do you do any side work? My father suggested that I do locksmith services + roadside assistance, do any of you run a company like that? What are some mistakes you made when first starting out?

[GWiens2001]

If you do a search on this site's locksmithing business area, you will find many threads relating to many aspects of running a business. Topics such as licensing, insurance, advertising, equipment, how to deal with a dangerous and/or embarassing situation. Even ways to use morse code.

Gordon

[billdeserthills]

Depending on Your area, the yellow pages will most likely Not be enough and most especially if You have any scammers targeting Your area. Where I live there are lots of scammers and they all lie about their actual location, saying they are right next to my shop. I am advertising with two online services, one is $1,100 per year and the other one charges $99/month. I also have an ad in the local paper which costs about $500/yr and I have at least one phone book ad $450.
One thing You have on Your side is Go Daddy is charging $1/month to do website hosting along with their $5.95 website builder. Take advantage and begin Your website Now--

One big mistake I made in the beginning was I wanted everything to be on the up & up. Remember the gov't is the last guy out there that will give You a fair shake--Make it a habit to put at least half your earnings into Your pocket & You will find many good reasons as You work over the next 50+ years why I say Do not pay tax on at least half of what You earn. Don't be a chump like I was, innocently paying your quarterly estimated and then finding out at the end of the year that No amount would be enough, as the gov't is a bottomless empty pit and only Everything You have will be just enough to make them happy.

I don't know about utah, here in Arizona we have no licensing

I have found folks do not rely on sales either, they only buy what they absolutely need and if You sell it too cheaply then You have lost. Call the competition and Ask them what they charge. Once You are established it won't matter as much, but to begin You must have similar pricing, or how will You compete??

[Pintickler]

Tire changes, jumpstarts, and fuel deliveries; our company does them all. Those non locksmith jobs don't necessarily pay that great but they do pay, and they expose your company to potential locksmith customers. It doesn't cost that much to tool up for these services either. Do yourself a favor and spend the money on a lithium ion powered impact driver for tire changes.
You will probably want to contact some insurance companies and strike a deal with them. Our company does tons of work for these road clubs. Be professional and polite, and people will tip you often.
.

[Jburgett2nd]

Thanks Bill and Pintickler great advice. Most companies fail early on and I want to be armed with as much knowledge as possible. I had no idea about go daddy that is awesome. I already have most of the tools needed for roadside assistance. Imho every man should own a set of basic tools but I guess I'm old fashioned for my age.

[nick08037]

I wanted to follow up on the comment about sales or discounting. I am not in the trade so I can not speak as such but I have some experience operating a business. I lifted the bit of text below from an internet site. You need to decide if your are selling to a need or a discretionary purchase.

"Discretionary income is money that people have left to spend after they pay all bills and necessary expenses for the month. Marketing products that are discretionary purchases is different than marketing need-based, or everyday-use, items."

I imagine that locksmith service can involve both. Sale pricing goes more to discretionary or impulse purchases. Marketing yourself primarily as a low cost provider is difficult to sustain over the long haul for a small business. When customers are in need of a service now they will be more interested in service and convenience. The lowest cost scam pricing that seems to be common in the trade is just that and unless you are going to engage in the same deceptive practices it is not profitable.

I hope this helps some. Good luck and treat customers fairly but always remember that you are in the game to earn a decent living for you and your family.
-Nick

[cledry]

We wouldn't have the time to do tire changes, jump starts etc. There is far too much business as it is, we can barely keep up. We mostly do commercial work, we have a couple of less experienced guys that do lockouts on cars and houses and residential rekeys, but mostly we stick with commercial work. Less headaches, most don't shop price. We just put on over 700 lever locks we charged labor of $35 a door to install them and another $25 to key them. The locks sell for around $500 each but were supplied by the contractor. It takes a lot of residential to equal one large commercial job. Typically our commercial techs are bringing in at least $1000 - $1500 a day, but the residential guys never bring in more than $600 a day and that is rare. Hence they earn more money. Which boils down to the company earns more money due to concentrating on commercial work.

That said we are established so advertising is less important to us than someone just starting out. A lot of advertising is simply having a fleet of vehicles with logos and information driving around all day. Starting out you could have door hangers printed up and target specific neighbourhoods, perhaps offering a free service call if they spend more than $50 on specific dates. If you are doing multiples in one area you can lose a service call and not take a hit. Do security seminars with neighbourhood watch groups.

[Jburgett2nd]

Thanks for the info Jim, my area doesn't have a "local" Locksmith, people get their cars opened by towing companies and have their locks installed by "contractors" I'm in a pretty rural area. The idea of a security seminar with the community is a great idea!

[MatrixBlackRock]

What are some mistakes you made when first starting out?

While I am not a locksmith I have successfully run a few business's in my time and over the years made a few errors, some more painful than the others but all lessons in what not to do again. What follows is what I consider to be the most common mistakes new businessmen trip up on.

Lowballing the estimate, when you are first starting up times are lean and landing every job seems to be critical, the problem is, as a in-experienced startup you are not going to be able to undercut the competition (unless they are robbing people) and stay in business for long, keep you prices fair and make the quality and flexibility of the service you provide be the competing edge. Lowballing is a dangerous practice, more so for a startup, as a small error or omission in your estimate can multiply into a significant loss for you, a loss you will eat or lose the contract and then maybe get sued.

Don't be lowballed, if you give a prospective client a fair and honest estimate and they fire back with "XYZ can do it for X% less, are you willing to beat their price?," stop and think long and hard before going down that road. I have learned two things about lowball clients and that is they always will want it "cheaper" and many are slow to pay.

Many times turning down a lowballer is the best path to tread for a number of reasons, while XYZ is tied up on a less than profitable job, you are able to concentrate on real paying work and if XYZ screws the pooch, you may get a call back requesting you make things correct, which of course will require paying your estimated price plus an additional charge to undo the damage done by XYZ.

Now on the other hand, never be shy about asking suppliers if they can give you a better price on something, especially if it is something you will use a lot of over time and is easy to store, you might be pleasantly surprised to find out a case of something is considerably lower in price then one up, also on large bids, always contact your supplier and find out where their price breaks are on items you will need a lot of, I have learned sometimes you can order more than you need and pay less than what you would have for the quantity you needed, hitting a price break can be a good way to save money, long term.

Again while I no experience with the locksmith world, my experience from the burglar/fire alarm world was become proficient in the commercial side of the business, I have always seen the residential world as a one up customer, sell someone an alarm for their home and that's it, they are not buying another one until they buy a new home, yes you have a little RMR, but collections is problematic in residential. Conversely the commercial market is fluid, successful business will expand and if you treat them right many times you will automatically get that new business non-bid and it's the same if you are working with a property management company, make their manager(s) life easy and they will gladly push their companies money your way.

Do the very best work you can do and strive to improve it with each job you complete and watch the little things, pick up your trash, don't place tools on furniture or counters and generally try to leave the place neater than when you arrived.

If legal in your area consider ancillary services, while a new business may want you to change out the locks, they may also need new batteries and bulbs in the exit signs and emergency lights, are the fire extinguishers out of date, easy simple things that can add a lot to the bottom line on your invoice and what the heck you are already there. Now many states require licensing to do such, so don't miss the opportunity to refer, find local licensed contractors who do such work and who don't do locks and get a pocketful of their business cards and leave a pocketful of yours, referrals work and work both ways.

While I was licensed for fire alarm work, I couldn't touch a fire extinguisher, so I aligned myself with a guy up in Pompano Beach and started pushing some condo business his way, a couple of months later I get a call from a condo board in Lighthouse Point, they where being required by the city, as a part of a remodeling project to upgrade their fire alarm to meet the South Florida Building Code, while my estimate was in the same ballpark as the others they had received, I came with a referral from a company they had already been doing business with, I was awarded the contract.

As for advertising, avoid the treadmills, being listed in a fat book or their on-line version means your name needs to be AAAAAAAAAlocks, because no one using that format to find a locksmith is going to dig down to the "B's."

If you live in a small town, find out who issues business licenses and see if they have a "new applicant" list you can subscribe to, from that list send a postcard sized advertisement of your business offerings, now some of what you get will be stale, but a few (appx 2%) will pan out and that is how you build a base, also while working with the licensing authority find out the cost of full list of all business's in your city or county and as money allows push card out to them as well.

In larger towns you will find a lot of this information available on-line for a nominal fee and in a format that allows an integration into Word.

And while working with the licensing authority find out what you need to do to be legal, generally speaking, the cost of licensing is quite lower then the penalty for getting caught working unlicensed.

Here in Florida doing any contracting involving life safety (fire alarms, sprinklers, access control and more) requires a state license and putting oneself out as a contractor not having one is a felony.

Lastly and quite importantly is contractors liability and property damage insurance, two primary reasons, in the security business your customer expects by the nature of the business to enjoy a certain level of security and when it is violated, which given enough accounts and time will happen, they will (if you are lucky) file an insurance claim, the insurance company will pay the claim and then go after you for the loss.

If you are not so lucky your client will in addition to filing a claim lawyer up and sue you.

Then there is the day when you get the call from one of your guys, informing you that the 36" X 94" X 1/2" tempered glass door he was trying to install a Magalock on just blew up.

Wayne