Do you want to start a parking lot business? If YES, here is a 20-step guide on how to build and run a parking lot with no money and no experience.
Please note that if you intend starting this type of business, it is advisable to first look at the existing laws and zonal regulations in the country or state you reside in to know what is expected of you. The bottom line is that you need to pay a visit to the regulatory bodies in your country to get all the information on what you need to do before you can legally open your own parking lot business.
You can start from a small town in the United States and if you are good at what you do, it won’t be too long before your brand becomes nationally recognized especially if you go into franchising.
Steps to Starting a Parking Lot Business in a Very Busy Area
1. Understand the Industry
The Parking Lots and Garages industry mainly operates via management contracts, lease agreements or property ownership. Companies that are engaged in the storage of vehicles for an extended period of time are not part of the Parking Lots and Garages industry.
If you are a close watcher of the Parking Lots and Garages industry, you will noticed that the industry has followed a similar narrative to that of the US economy. Because of declining employment, the demand for air travel, shopping outings, sporting events and concerts, recovery began in 2011.
Apart from a small blip in 2012, overall increases in parking rates over the five years to 2016 and improvements in employment figures contributed to the industry’s turnaround.
Going forward, employment, domestic trips and vehicle registrations will rise, increasing the need for parking services at airports, entertainment venues and central business districts. However, the industry faces saturation, as more operators compete for slower-growing revenue.
Interesting Statistics About the Industry
Statistics has it that in the United States of America alone, there are about 20,709 registered and licensed large and small Parking Lots and Garages responsible for directly employing about 159,428 people and the industry rakes in a whooping sum of $10 billion annually.
The industry is projected to grow at 4.1 percent annual growth within 2011 and 2016. It is important to state that ABM Industries, SP Plus and Vinci have the lion shares of the available market in the industry.
A recent report released by IBISWorld shows that the Parking Lots and Garages industry is in the mature phase of its life cycle. The report revealed that the industry value added (IVA), which measures the industry’s contribution to the economy, is projected to grow at an annualized rate of 2.3 percent from 2011 to 2022.
In comparison, GDP is expected to grow 2.0 percent per year on average over the 10-year period. The report further stated that while IVA growth will outpace GDP growth slightly over the period, the number of companies in the industry is expected to increase at the low annualized rate of 2.2 percent over this period.
During this time, merger and acquisition activity is expected to remain high, which is a key indicator of a mature industry. All three major players have grown their operations considerably through acquisitions over the five years to 2016.
Lastly, starting a parking lot services business in the United States requires that you get the necessary permit and license to be able to operate in any city of your choice, and you are expected to go into business agreement with owners of business facilities and managers of public facilities.
2. Conduct Market Research and Feasibility Studies
- Demographics and Psychographics
The demographic and psychographic composition of those who patronize parking lot services company cut across all genders; male and female above 18 years with the financial means and who own automobiles hence the demographic composition for parking lot services business is all encompassing. In essence, your target market can’t be restricted to just a group of people, but all those who own automobiles.
3. Decide Which Niche to Concentrate On
It is important to state that there is no known niche area when it comes to parking lot services business.
The Level of Competition in the Industry
The competitions that exist in the parking lot services business goes beyond competitions with parking lot services companies; you will be expected to compete with facilities that also offer parking lot services.
The truth is that, no matter the level of competition in an industry, if you have done your due diligence and you brand and promote your services or business properly, you will always make headway in the industry. Just ensure your valets are well – trained, your services are affordable, your customer care services is top notch and you know how to attract and reach out to your target market.
But over and above, there are several parking lot companies scattered all around the United States. So, if you choose to start your own company in the United States, you will definitely meet stiff competition.
4. Know Your Major Competitors in the Industry
Here are some of the most popular parking lot companies in the United States of America;
- ABM Industries
- SP Plus
- Vinci
- USA Parking System Inc
- 1417 Stout Parking Lot Services
- Vally Park USA Corporation
- Park Go Fly USA
- Auto Storage USA
- Luxe Valet
- Valet-It Parking Services
- W Hotel – Hollywood Parking lot Services
- United Parking lot, Inc.
- Westpark Express Valet
- 60 East Randolph Street Garage
- Mandalay Bay Parking Garage
- 717 Parking Enterprises
- SPS State Parking Services
- Canopy Airport Parking
- Hilgard Garage Westwood
- Sunset Parking Services LLC
Economic Analysis
If you are looking towards successfully launching a business and maximizing profits, then you need to ensure that you get your economic and cost analysis right and try as much as possible to adopt best practices in the industry you choose to build a business in.
Parking lot services business is no longer a green business, as a matter of fact, you will come across several parking lot companies when you drive through town or search both online and offline directories. So, if you are mapping out your economic and cost analysis, you should carry out thorough market survey and costing of what is required to secure parking lots, business license and also the cost to successfully run the business.
Over and above, if you are considering starting a parking lot services company, then your concern should not be limited to the cost of securing a parking facility, business license, building software apps, but also on branding and on how to build a robust clientele base. The truth is that if you are able to build a robust clientele base, you are sure going to maximize profits in the business.
5. Decide Whether to Buy a Franchise or Start from Scratch
There is no hard and fast rule when it comes to choosing how you intend starting a business. Basically, you should be guided by your overall business vision and mission statement.
If you are looking towards starting a parking lot services company, you would have to start from the very scratch because you can hardly get a franchise of a parking lot services company to buy.
Besides starting a parking lot services company from the scratch is less stressful when compared to other related businesses which usually require detailed groundwork. With parking lot services company, you should just try as much as possible to secure a big and well-secured parking facility then leverage on every marketing tool within your disposal especially the internet to market your company.
Please note that most of the successful parking lot services companies around started from the scratch and they were able to build a solid business brand. It takes dedication, hard work and determination to achieve business success.
6. Know the Possible Threats and Challenges You Will Face
If you decide to start your parking lot services company today, one of the major challenges you are likely going to face is the presence of well – established parking lot companies within your business location. The only way to avoid this challenge is to create your own market.
Some other challenges and threats that you are likely going to face is economic downturn; if the economy is in bad shape, parking lot companies usually struggle to get their customers to pay valets (if you also offer this services) because they would prefer to source for parking themselves. So also, unfavorable government policies can also hamper the growth of your parking lot services company.
7. Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)
Generally, you can either choose a general partnership, limited liability company, or a sole proprietorship for your parking lot service. Ordinarily, sole proprietorship should have been the ideal business structure for a small – scale parking lot business especially if you are just starting out with a moderate startup capital in a small neighborhood.
But if your intention is to grow the business and have chains of organized parking lots and garages all across the United States of America, then choosing sole proprietor is not an option for you. Limited Liability Company, LLC or even general partnership will cut it for you.
8. Choose a Catchy Business Name
When it comes to choosing a name for your business, you should be creative because whatever name you choose for your business will go a long way to create a perception of what the business represents. Typically, it is the norm for people to follow the trend in the industry they intend operating from when naming their business.
9. Discuss with an Agent to Know the Best Insurance Policies for You
In the United States and in most countries of the world, you can’t operate a business without having some of the basic insurance policies that are required by the industry you want to operate from. Thus, it is imperative to create a budget for insurance and perhaps consult an insurance broker to guide you in choosing the best and most appropriate insurance policies for your business.
Here is some of the basic insurance policies that you should consider purchasing if you want to start your own parking lot business in the United States of America;
- General insurance
- Health insurance
- Liability insurance
- Risk Insurance
- Workers compensation
- Building/Property insurance
- Overhead expense disability insurance
- Business owner’s policy group insurance
- Payment protection insurance
10. Protect your Intellectual Property With Trademark, Copyrights, Patents
If you are considering starting your a parking lot service, usually you may not have any need to file for intellectual property protection/trademark.
This is because the nature of the business makes it possible for you to successful run it without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties. But if you just want to protect your company’s logo and other documents or software that are unique to you or even jingles and media production concepts, then you can go ahead to file for intellectual property protection.
If you want to register your trademark, you are expected to begin the process by filing an application with the USPTO. The final approval of your trademark is subjected to the review of attorneys as required by USPTO.
11. Get the Necessary Professional Certification
When it comes to operating a parking lot and garage business, you do not need to have any formal training or special certification. All you need is informal training that will expose you to the in and out of maximizing parking lots and also effectively running the business.
On the other hand, if you come across any form of certification that can aid you to conduct your parking lot business, then by all means try and pursue such certification.
12. Get the Necessary Legal Documents You Need to Operate
It is a fact that you cannot successfully run any business in the United States without the proper documentation. If you do, it won’t be too long before the long hands of the law catches up with you. These are some of the basic legal documents that you are expected to have in place if you want to legally run your own business in the United States of America;
- DBA
- EIN
- Business and liability insurance
- Federal Tax Payer’s ID
- State Permit
- Certificate of Incorporation
- Business License
- Business Plan
- Employment Agreement (offer letters)
- Operating Agreement for LLCs
- Insurance Policy
- Online Terms of Use (if you have a website)
- Online Privacy Policy Document (basically for online payment portal)
- Company Bylaws
- Memorandum of Understanding (MoU)
13. Raise the Needed Startup Capital
Starting a parking lot services company can be cost effective especially if you choose to start on a small scale. The amount needed to acquire the required business licenses, purchasing customized software apps, tags and paying your workers are part of what will consume a large chunk of your startup capital, but if you choose to start the business on a large scale by acquiring and constructing your own parking lot, partnering with loads of public and private facilities in your city, you would need to go source for fund to finance the business.
When it comes to financing a business, one of the first things you should consider is to write a good business plan. If you have a good and workable business plan document in place, you may not have to labor yourself before convincing your bank, investors and your friends to invest in your business.
Here are some of the options you can explore when sourcing for startup capital for your parking lot services company;
- Raising money from personal savings and sale of personal stocks and properties
- Raising money from investors and business partners
- Sell shares to interested investors
- Applying for loan from your bank
- Source for soft loans from your family members and your friends.
14. Choose a Suitable Location for your Business
Parking lot services businesses require that you position the business within busy public and private facilities without parking lots hence it must be located in good location; a location that is prone to both human and vehicular traffic and a location that is at the epicenter of a business district if indeed you want to attend to loads of clients.
The fact that you can operate your parking lot services company from any part of the world does not mean that location has little influence on the success of a parking lot services company.
If you have taken your time to study parking lots and garages, you will realize that parking lots services are willing to partner with public and private facilities in a busy business district; a place where business activities and social/entertainment activities are at its peak.
It cannot be overemphasized that the location you chose to open your parking lot company is key to the success of the business, hence entrepreneurs are willing to partner with public and private facilities in a visible location; a location where the demography consists of people and businesses who own automobiles and with the require purchasing power and lifestyle.
So, if you are looking for a location for your parking lots services company, ensure that it is located in a commercial center in your city, a place that is visible and easily accessible.
15. Hire Employees for your Technical and Manpower Needs
If you are considering starting a parking lot services company, then you should look towards hiring ICT experts to help you develop your own unique software application to help you coordinate and secure cars parked in your parking lots,.
You also need a secured internet platform and online payment system (that will help you facilitate easy payment of parking fee based on time spent). So also, you will definitely need computers/laptops, internet facility, telephone, fax machine and office furniture (chairs, tables, and shelves) amongst others and all these can be gotten as fairly used.
As regards leasing or outright purchase of an office facility, the choice is dependent on your financial standing, but the truth is that to be on the safe side, it is advisable to start off with a short – term rent/lease while test running the business in the location. If things work out as planned, then you go on a long – term lease or outright purchase of the property.
When it comes to hiring employees for a standard parking lot services company, you should make plans to hire a competent Chief Executive Officer (you can occupy this role), Admin and Human Resources Manager, Sales and Marketing Officer, Accounting Clerk, Valets and Customer Service Executives. You may need a minimum of full time 10 staff to start a parking lot services company.
The Service Delivery Process of the Business
When it comes to service process of parking lot services business, it is indeed straight forward. Basically, a driver drives in, get a tag before parking his/her car. Once the driver is about leaving, he makes payment based on the number of hours spent.
But if the parking lot also offers valet services, then once a car comes in, they capture the time of entry, agree with the owner of the car, and then take over the steering and park the car for the client. When the owner of the car is about pulling out, the valet drives the car to the gate get the time out from the cashier at the gate and the owner of the car make payment, get his/her receipts and drive off.
It is important to state that a parking lot services company may decide to improvise or adopt any business process and structure that will guarantee them efficiency and flexibility; the above stated business process is not cast on stone
16. Write a Marketing Plan Packed With ideas & Strategies
The fact that the entry barrier for starting even a small – scale parking lot services company is high does not mean that more players won’t want to come into the industry if they have space. So, you must come up with unique
So, when you are drafting your marketing plans, make sure that you create a compelling company profile. Aside from your qualifications and experience in managing parking lots and garages, it is important to clearly state what you have been able to achieve in time past.
This will help boost your chances in the marketplace. Here are some of the platforms you can utilize to market your parking lots services business;
- Introduce your parking lot services company by sending introductory letters alongside your brochure to owners of private facilities and managers of public facilities and other key stake holders throughout the city where your parking lot services company is located so as to partner with them to manage their car park.
- Advertise on the internet on blogs and forums, and also on social media like Twitter, Facebook, LinkedIn to get your message across.
- Create a basic website for your business so as to give your business an online presence
- Directly market your services to cars driving through your parking lot facility.
- Join local parking lot services company associations for industry trends and tips
- Provide discount days for your customers
- Advertise our business in community – based newspapers, local TV and radio stations
- List your business on yellow pages ads (local directories)
- Encourage the use of word of mouth marketing (referrals)
17. Work Out a Reasonable Pricing for your Services & Products
One key factor that will help you offer your parking lot services at a price that is highly attractive is to ensure that you source your working capital from sources that won’t put pressure on you or give you high interest rate.
Another strategy that will help you offer parking lot services at the right price is to ensure that you cut operational cost to the barest minimum, and channel your efforts towards marketing and promoting your brand name. Aside from the fact that this strategy will help you save cost, it will also help you get the right pricing for your products and services.
So also, if you are able to secure business partnership as it relates to getting referrals, then you will be able to get the right pricing and of course maximize profits from your business.
18. Develop Iron-clad Competitive Strategies to Help You Win
The availability of secured and spacious parking lots, availability of professional and honest valets in your company, your business process and of course your pricing model are part of what you need to stay competitive in the industry.
Another possible competitive strategy for winning your competitors in this particular industry is to build a robust clientele base. Over and above, ensure that your organization is well positioned, key members of your team are highly qualified and your services and products can favorably compete with the some of the best in the industry.
19. Brainstorm Possible Ways to Retain Clients & Customers
When it comes to business, no matter the industry that you choose to pitch your tent in, one of the easiest ways to increase customer retention and perhaps attract new customers is to produce results and satisfy your customers always.
If your customers are satisfied with your products and service delivery, they can hardly source for alternative service providers.
If your services and customer service fluctuate, you are likely going to struggle to get your customers retaining your services. Ensure that you offer your customers incentives if you want to retain them and of course continue to generate repeated sales from them and also attract new customers.
Part of what you need to do to achieve this is to track progress, results or outputs with the aim of improving on them quickly as the case demands. When it comes to managing your customers and building a loyal clientele base, you should purchase a customized CRM software.
With a customized CRM system, you can easily stay in touch with your clients (you can carry out quick surveys, you can introduce new products and prices to them without any hitch, you can felicitate with them on their birthdays and other anniversaries, you can keep track of their progress, you can send bulk sms and customized e – mails and above all, you can easily receive complaints and feedback from them).
20. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity
If you are in business and you are not conscious about boosting your brand awareness and communicating your corporate identity, then you should be ready to take on whatever the society portrays your business to be. One of the secrets of larger corporations is that they are willing to spend good money to boost their brand awareness and to continue to communicate their corporate identity the way they want people to perceive them.
No matter the industry you belong to, the truth is that the market is dynamic and it requires consistent brand awareness and boosting cum promotion to continue to appeal to your target market. Here are the platforms you can leverage on to boost your brand and create a corporate identity for your parking lot services company;
- Place adverts on both print (newspapers and auto magazines) and electronic media platforms
- Sponsor relevant community – based events/programs
- Leverage on the internet and social media platforms like; Instagram, Facebook, Twitter, YouTube, Google + et al to promote your parking lot services company
- Install your Bill Boards in strategic locations all around the location where you have your parking lots
- Distribute your fliers and handbills in target areas
- List your parking lot services company in local directories/yellow pages
- Advertise your parking lot services company in your official website and employ strategies that will help you pull traffic to the site.
- Position your Flexi Banners at strategic positions in the location where your parking lot services company is located.
- Ensure that all your staff members wear your branded shirts and all your vehicles and vans are well branded with your company logo et al.