Parking businesses are perfect opportunities for entrepreneurs interested in managing simple investments and properties. If you’re searching for a profitable business venture, consider starting a parking lot business.
Here is a step-by-step process for starting a successful parking lot business:
Develop a Business Plan
Every successful business begins by developing a business plan. A business plan outlines a business’s future objectives and strategies for attaining goals. Create an effective business plan for your parking business by performing the necessary research.
Identify Your Market
Launch your parking business correctly by identifying your target market. A parking business’s target market refers to customers who use your parking structure to conveniently park near something else. Understand the businesses or locations your customers are parking near to better recognize your target market. Depending on your chosen location, a parking structure may serve general, residential, commercial, healthcare, or hospitality purposes.
Once you identify your target market, learn about the needs, wants, expectations, and objectives of your prospective customers. Information is key to determining prices and creating marketing efforts to effectively reach your target market.
Understand the Costs Involved
Before starting a parking business, understand the costs involved, specifically building and maintenance expenses.
Building costs for a parking business depends on location, size, and type. Expenses involved in the initial build include materials, equipment, and labor. On average, a parking lot costs about $10,000 to build whereas a parking garage costs approximately $9,750,000 to build.
Additionally, ongoing expenses are associated with parking businesses. Ongoing expenses include rent or mortgage payments, wages, utilities, insurance, and supplies which costs about $5,000 per month. Maintenance is another ongoing expense, costing annually about $500 per space to inspect and repair problems.
Choose a Quality Location
Location is essential for every business, especially parking structures. Be patient during your search because finding an ideal property for your business requires ample research and time.
Obviously, choosing a location is dependent on availability, but important considerations are necessary regarding your location choices. Primarily, search for a lot in high traffic areas, potentially near businesses, restaurants, attractions, hotels, or airports. Understand the number of parking spaces you can add to your lot, so you know the profit potential. Also, check local zoning laws and real estate prices to ensure you find a suitable lot.
Choose a quality location because your parking lot’s location contributes to the overall success of your business.
Set Competitive Prices
Set competitive prices for your parking business to guarantee you earn customers.
A primary indicator of your parking business’s average rate is location. For example, a parking structure may charge an hourly rate of $1 in rural areas and $60 in metropolitan locations. Recognize the average rate in your location to determine the initial price.
Afterward, consider numerous business factors, including building costs, ongoing expenses, nearby competitors, and much more. Set a price for your parking structure to cover your expenses, receive a profit, and challenge competitors.
Complete Legal Requirements
Complete your business’s legal requirements to protect your parking business. Legal requirements for starting a parking business involve many factors, including:
- Fulfilling Tax Obligations: Register for state and federal taxes and meticulously record your business’s expenses and income
- Forming a Legal Entity: Understand the different business structures and establish a legal business entity to protect yourself from personal liability and lawsuits
- Obtaining Permits and Licenses: Required permits and licenses vary based on state and local laws
- Purchasing Sufficient Insurance: Different types of insurance are available to defend your business from property damage or personal injury expenses, specifically general liability insurance and workers’ compensation coverage
Guarantee your parking business is completely covered by accomplishing your legal requirements.
Determine Structure, Staffing, and Services
Officially start your parking business by determining the structure, staffing, and services.
How will customers enter your parking lot? Are you installing a gate or trusting customers to pay? Will you use a cashier or automated system for payments?
How will you staff your parking business regarding cashiers, security, and maintenance workers?
Will you manage the business yourself or outsource parking management services?
Parking management services are excellent options for accessing advanced technology, improving customer experiences, and easing your overall stress. For example, Pro Park’s management services provide amazing options for managing your parking business professionally and efficiently.
Determine your parking business’s structure, staffing, and services to operate a successful business.