The locksmith industry is run by professionals (not handymen) who provide services such as installations, rebuilding, repairs, and adjustment of security systems to a client list that include individuals, car owners, businesses, and governments.
The locksmith industry has a low level of market share concentration, since there are no players in the industry with a market share value higher than 5%. Consequently, this means you too can make your mark in the industry.
Therefore, if you've recently started or acquired a locksmith business, the following guide provides you with some key pointers on how to effectively grow and succeed as a locksmith.
How to Improve and Reinvent Your Locksmith Business
The locksmith industry hinges on the human need to feel secure in homes or businesses, therefore your business has to exude trust and dependability. You can't afford to be perceived as unscrupulous, which means you have to be honest, consistent, and punctual. This way you can keep your existing clients and even make new ones through referrals.
Offering round the clock and emergency services is a good way to increase the value proposition of your locksmith business. Also, clients who are in pressing situations such as being locked out of their cars or homes will gladly pay more for your services.
Additionally, developing new skills and keeping up with new technological trends in the industry helps you stay ahead of the curve. This is especially important if you specialize in commercial security.
You might need to incorporate services such as designing and installing keyless security systems, complex master key systems, cloud-based, digital security systems, and access control systems as part of the menu you offer.
Another way to expand your business and increase revenue is to sell products that are closely knitted with the locksmith industry and that would be of benefit to your clients. You could make use of your office space as a showroom to display products such as personal safes, key accessories, padlocks, locking mailboxes, spray lubricant, and more.
Inventory Management of a Locksmith Business
Inventory might be easy at the start of your business but it becomes more complicated as your business grows. You need a good inventory management system to keep track of your equipment, orders and manage your stock (if you sell locksmith products).
A locksmith business is both in-store and on-site, which requires you to keep track of the items/tools you have in stock, in your truck, and on you at all times.
A clean and organized workspace makes it easier to keep track of your inventory. Labeling and shelving your tools is an excellent way to make them easily accessible for use or reference purposes. You could also invest in wearable storage such as cargo pants, tool belts, or tool bags.
Inventory is important and it saves money but it's also difficult and time-consuming. This is why it's advisable to invest in locksmith inventory software such as smart service and workiz. Inventory software like these will help you with things such as
- Real-time tracking: this allows you to oversee canceled orders, returns, and movement between storage containers in real-time.
- Location management: helps you track what tools or parts have been removed or added to your service trucks, main office, or warehouse.
- Integration: this allows the free flow of data by integrating with your email, calendar apps, accounting system, and other operational tools.
Locksmith Industry Market Analysis
An overview of the locksmith industry shows that the demand for the industry's services is hugely dependent on the performance of the construction and housing markets.
Hence as a locksmith, your target market should include real estate contractors, owners, and developers. You could also solicit jobs from government sectors such as the public works departments. Knowing and targeting what parts of the market are in demand for your services could help grow your business exponentially.
Additionally, a good competitive analysis of your competitors could also benefit your locksmith business. You would learn how to identify and avoid pitfalls in the industry, what makes their business successful and how to exploit their weaknesses in your favor.
You can find out the number of businesses that are in direct competition with you with a simple online directory search or by checking out the local yellow pages. Locksmith businesses are also in indirect competition with security monitoring companies which render comparable security services to businesses and homeowners.
Growth Potential for a Locksmith Business
The locksmith industry is highly unsaturated which means there's room for growth. According to IBIS, the US locksmith industry increased at an annualized rate of 3.5% from the year 2016 to 2021. This shows that the industry is lucrative and if armed with the right knowledge, you too can run a successful locksmith business.
Interesting Facts about the Locksmith Industry
- In the US, only 14 states out of 50 States require that locksmiths are properly licensed.
- The average yearly salary of a locksmith in the US is between the range of $24,270 and $65,870.
Marketing Ideas for a Locksmith Business
An effective marketing strategy is how you get people to know about your locksmith business and the plethora of services you offer. Here are some marketing tips that would benefit your locksmith business:
- The majority of your prospective clients will be in and around your local area. Hence, it will do you good to list your business in yellow pages ads. You should also advertise in relevant business magazines, radio stations, tv stations, and newspapers.
- Create an official website that has been 'search engine optimized' for a locksmith business. This is so that your business will turn up when people go online in search of a locksmith.
- Social media platforms like Facebook, LinkedIn, Instagram, and Twitter offer an opportunity for you to reach a larger audience. Through them, you can also maintain a good relationship with your existing clients and let them know if there are any changes in the services you're offering.
- Maintain an ongoing relationship with real estate developers and general contractors within the targeted market.
How to Get Funding for Your Locksmith Business
Getting funding for your locksmith business means you can buy new equipment, employ more hands and finally implement some of the strategies we've discussed so far in order to boost your bottom line.
Though their requirements are somewhat strict, you can always apply for SBA loans. SBA loans are somewhat guaranteed by the small business administration and are tailored specifically for small businesses. They come with prime-based interest rates and extremely ideal terms.
Your locksmiths business could also benefit from equipment financing loans. This option is a great asset for locksmiths since most of the services they render require the use of specialized tools. This loan is for equipment purchasing purposes only and most lenders would require a quote before releasing funds.
Exit Strategy For a Locksmith Business
Having an exit strategy while you're trying to grow your locksmith business could seem counterintuitive. On the contrary, it might be the critical ingredient that drives your business to success.
If your endgame is to sell your business or transfer ownership to your employee/family, then you need to create a business that's worth buying or a business that wouldn't become a liability upon relinquishing authority.
So before you begin drawing out your exit plan, you need to pinpoint what your motivation is: are you staying to make more money or are you terrified of leaving? Also if you're leaving, identify why: are you leaving because of an unfavorable business atmosphere, or are you making a pragmatic decision?
Providing candid and genuine answers to such inquisitions will determine the exit strategy you come up with.