Absolutely, you need to make money first!
You can undercut more if you are doing lockouts only. Your overhead is a car of your choosing and maybe $500 in tools, as opposed to full service locksmiths who have a van and probably $5-10 thousand in tools and stock. However, you need to be in an area that will give you plenty of business in lockouts only. I would definitely not recommend starting this way if there are any other lockout only businesses.
I would also find this the least satisfying professionally, lockouts would get real boring after a while.
This day in age, of Wal-mart and all other big box stores people think less about the service(products) than they do price. I have never had anybody tell me I was too cheap for them to use.
For that matter, you are just getting started, you can probably not offer the service of a seasoned veteran.
I am sorry to all other locksmiths here for ever mentioning this sort of business idea, although it is a good idea, it could inhibit our full service businesses. I am pretty sure I violated at least 3 laws in the unwritten book of locksmith guidelines by ever mentioning the idea. I promise I will never mention it here again.
Again, I can not say it enough....you need to be in a heavily populated area to be able to do enough lockouts to survive.
If you are going to offer more locksmith services than just lockouts, only undercut a few bucks.