People are locked out of their houses and cars over 16,000 times daily in the US. Car locksmiths help customers get back into their vehicles after they have been locked out for misplacing their keys or other reasons. Are you interested in learning how to start your car locksmith business? You must follow several steps, which include choosing your business name, registering your business, and purchasing car locksmith business insurance. Keep reading to find out more.
You must follow several steps when learning how to start a car locksmith business, like figuring out how much you need to invest and hiring the right people.
Before investing in your car locksmith business, calculate the total starting cost. Your initial startup costs may be between $5,000 and $20,000. However, there will be more expenses you must watch out for. Below are some example costs of different items you must invest in to start your business.
| Car locksmith expense | Cost |
|---|---|
| Building Rent | $1,000-$4,500 |
| Insurance Coverage | $400-$2,000 |
| Employee wages | $40,000 to $62,000 |
| Locksmithing equipment | $5,000-$10,000 |
| Business registration fees | $0-$1,000 |
Your DBA or “doing business as” name is a critical decision. You will want to stick with your name once you have chosen and registered it. This means you want to select a good name the first time around. Some tips for choosing a name include:
Make it memorable: A good name is simple and easy to spell. This helps it stick out in the minds of your customers. A memorable name helps draw in business.
Check to ensure it isn’t taken: You might come up with a good name, but you cannot register a name that is too similar to a competitor in your state. Look up the names of other businesses in state records, and check social media groups in your area to see what other competitors are called.
Match your brand: Your business name should tie into the brand and customers you want to target. If you want to emphasize your quick response time, choose a name like “Quick Auto-locks.” If you're going to brag about your expertise, you might select a name like “The Autolock Experts.”
To run a successful business; you must pick a target customer demographic and appeal to their needs. Some example customer segments include:
Business professionals: Companies and businesses will hire auto locksmiths to repair damage to their vehicle locks and cut keys for their business vehicles.
Local customers: Residents in your local area may find themselves locked out of their car and will look for a name they can trust. If you market your brand as local and establish yourselves, the residents will be more likely to rely on you.
Those in a hurry: Often, the customer will be hurriedly requesting an auto locksmithing job. Without their vehicle, they may be unable to go to work, pick up their kids, or get groceries. For these customers, you want to brand yourself as offering lightning-fast service to ease the customer's worries.
As the owner, you can decide what services to offer your customers. Some common services that people expect from a car locksmith include:
Door lock repair: Sometimes, car doors do not lock properly. This service helps you figure out the cause of the error and repair the vehicle door lock to working order.
Key duplication: Your customers may lose a vehicle key or want an extra for a family member or employee. You can create a new key for them by using specialized key-cutting devices.
Lock replacement: Although lock repair is preferred, sometimes replacement is necessary. This requires purchasing the appropriate lock, removing the old one, and installing the new lock.
Getting into a trunk: Trunks in vehicles often have separate locks. A trunk can get stuck closed, requiring your assistance to help open.
Window lock repair: Vehicle windows have separate locks that can get damaged or loose from normal wear and tear. Often window locks need to be completely replaced by an experienced locksmith.
After you have a solid business idea in mind, you must register it as a legal entity. When you start offering services under a name other than your personal name, most states require you to register your business. Possible business structures to register include:
Sole proprietorship: A sole proprietorship has low starting fees and puts you as the company's sole owner. You avoid being charged corporate taxes by the government but are personally liable for all business debts.
Corporation: A corporation is owned by shareholders who own a stake in the company. Corporations can raise money more easily thanks to their ability to create stocks. A corporation protects its shareholders from liability. Unfortunately, corporations have to follow stricter rules and are taxed twice on all income.
Limited liability company (LLC): An LLC features liability protection like a corporation while avoiding getting taxed on the corporate level. Compared to a sole proprietorship, they are more expensive to form.
An employer identification number or EIN is required to register your business for taxes. Your EIN is also required for hiring employees and opening a business bank account. The steps to acquire an EIN include:
Visit the IRS website to apply online, by fax, or by phone.
Submit a valid tax ID number, like your social security number.
Apply by filling out the form and providing information like your business structure, name, and address.
If submitting online, you must complete the form without 15 minutes of inactivity.
An online submission will net you instant access to your EIN. Otherwise, you will have to wait a few weeks to get a confirmation in the mail.
Save a copy of your EIN application in your business records.
Most states do not require locksmiths to have a license to provide locksmith services. The following states do have locksmithing requirements.
| State | Requirements | Licensing Board |
|---|---|---|
| Alabama | Company or individual license | Alabama Electronic Security Board of Licensure |
| California | Individual or company licenses, contractor’s license for work over $500 | California Bureau of Security & Investigative Services |
| Connecticut | Locksmith license | Connecticut State Department of Consumer Protection |
| Illinois | Locksmith license | Illinois Department of Financial and Professional Regulation |
| Louisiana | Locksmith license | Lousiana Office of the State Fire Marshall |
| Maryland | Individuals are exempt, but businesses must have a locksmith license | Maryland Department of Assessments and Taxation |
| New Jersey | Locksmith license | New Jersey Division of Consumer Affairs |
| North Carolina | Locksmith license | North Carolina Licensing Board |
| Oklahoma | Individual or company locksmith license | Oklahoma Department of Labor |
| Oregon | Locksmith license | Oregon Construction Contractors Board |
| Texas | Class B security contractor company license | Texas Department of Public Safety |
| Nevada | Locksmith permit | Sheriff of your local county |
| Pennsylvania | Home improvement contractor’s license for work costing $5,000 or more | Pennsylvania Attorney General |
| Virginia | Locksmith license | Virginia Department of Criminal Justice Services |
As your business expands, you should hire employees that can accommodate the growing needs of your business. Some employees to hire include:
Locksmiths: Your locksmith employees must be adept at handling door locks, trunk locks, or anything else the client may require.
Business assistants: These employees help with daily tasks like scheduling clients, answering phone calls, contacting suppliers, and ordering equipment.
Bookkeepers:Your bookkeepers manage the financial side of your business. They produce reports to help you make business investment decisions and manage payroll for your other employees.
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If you want to minimize overhead costs and don’t mind traveling, you should learn how to start a mobile locksmith business. Mobile locksmiths often offer better rates than standard auto locksmiths because they primarily operate out of a mobile workshop rather than an office building.
A mobile locksmith prioritizes getting to the customer wherever they may be. As a mobile locksmith, you will invest in a mobile workshop containing various tools you can use when traveling to a customer's home and vehicle. Mobile locksmiths prioritize offering 24/7 emergency services where they travel to a customer quickly, even if they get stranded in a remote area. While a local locksmith is content to provide services within their area, a mobile locksmith will travel longer distances to reach clients.
As a mobile locksmith, you will save money because you don’t necessarily need a permanent workshop to conduct business. Many mobile locksmiths operate with a van or vehicle containing the necessary tools. This allows mobile locksmiths to offer faster turn-around times on their services and help customers that a locally based locksmith might not be able to.
As a mobile locksmith; you can offer services which include:
Emergency services: Mobile locksmiths operate outside standard business hours to offer customers 24-hour care.
Forensic locksmith: A forensic locksmith will travel to customers to analyze locks to determine if they have been tampered with. They will also testify in court as expert witnesses for their expertise on the scientific concepts of locks and keys.
Installing safes: A mobile locksmith can transport lock systems like lockers and safes to customers and install them there.
To add value to your services, you should undergo official training to become a locksmith. A certified locksmith will have instant legitimacy in the eyes of their customers. While many states do not require a locksmith license, you can still get a locksmith certification from entities like the Associated Locksmiths of America (ALOA).
The ALOA has certified over 4,000 locksmiths in the US, with an additional 2,900 still being certified. They offer over 200 training classes for you to learn the necessary skills. First, you will take a practice test with the ALOA before applying for certification. You must score 70% or better on the mandatory test sections to pass the first certification level. Below is a description of the different certification levels.
| Certification Level | Description | Required Categories Passed |
|---|---|---|
| Certified Registered Locksmith (CRL) | The first level of locksmithing that demonstrates you have a good working knowledge of locksmithing. | Ten mandatory categories |
| Certified Professional Locksmith (CPL) | The second level of certification is earned by applicants with advanced knowledge of locksmithing | Passed CRL categories plus 12 elective categories |
| Certified Master Locksmith (CML) | The final level of locksmith certification. Certifies that you have advanced knowledge of most locksmithing topics | Passed ninety percent of all available categories |
| Certified Professional Safe Technician (CPS) | The first level of safe certification | 17 safe categories |
| Certified Master Safe Technician (CMST) | The final level of safe certification | All safe categories |
Several factors must be in place to offer emergency services to your customers outside of regular business hours.
Hire trained locksmiths: You never know when a customer will call you, and you cannot rely on just yourself to answer calls. You should hire other trained locksmiths and put them on a schedule to respond to 24/7 calls.
Establish a hotline: A hotline ensures that customer calls can be redirected to your locksmith technicians, even if there isn’t one available to answer the phone immediately. A hotline raises the credibility of your business and helps screen calls and send notifications to your employees.
Use a toll-free number: A toll-free number helps customers reach your business easier by making it free for them to call. You can also make your toll-free number more accessible by customizing it for your business. For example, you could make your number 1-800-carlock so your customers can remember it easier.
Since you will most likely be working out of a vehicle and not an office building, you should carry tools that will fit in your vehicle easily. See below for some tools you need to carry and their costs.
| Locksmith Tool | Usage | Price |
|---|---|---|
| Hook pick | Picking locks | $10-$50 |
| Screwdrivers | Unlocking doors | $10-$20 |
| Replacement locks | Used to replace damaged or broken auto locks | $10-$50 |
| Lockpick gun | Opens tumbler-based locks | $30-$80 |
| Portable key machine | Cuts keys for your customers | $1,000-$2,000 |
| Pump wedge | Helps create openings to unlock a vehicle | $20-$80 |
| Locksmith hammer | Shock absorbing hammering used for opening saves and applying pressure between a frame. | $10-$30 |
| Plug Spinners | Help you pick locks by changing the direction the lock opens. | $20-$80 |
| Key extractor | Retrieve broken keys that are stuck in the lock | $5-$20 |
| Key decoder | Helps you create an identical key even if the original lock is broken | $10-$50 |
Before you go, look at the insurance requirements your car locksmith business needs to protect your income from lawsuits and property damage.
General liability insurance protects your business against third-party lawsuits. It helps when your customers or members of the public make bodily injury, property damage, or personal injury claims against you. For general liability insurance, we recommend Thimble. They offer short-term general liability insurance, which you can set the duration of down to the hour. Thimble has an A+ from the Better Business Bureau and is first-time buyer friendly. Over 75% of their customers are first-time buyers.
Your professional liability insurance protects you from mistakes or omissions during business operations. It protects from causes like negligence or failing to fulfill a contract. Choose Hiscox for your professional liability insurance. They offer refunds for unsatisfied customers within 14 days of purchase and discounts when you bundle policies. Hiscox has an A rating from AM Best and a platinum trusted service award from Feefo.
A commercial property insurance policy protects your business against physical damage. It protects your building and equipment from events like theft, vandalism, fire, wind, lightning, and explosions. An excellent place to get your commercial property policy is CoverWallet. They are an online insurance platform with over ten highly-rated partners to choose your policy from. You can manage multiple policies from different insurers with their convenient app. CoverWallet has an A+ from the Better Business Bureau.
Commercial auto insurance is necessary when using vehicles for work-related purposes. It offers vehicle accident liability protection and will help you repair vehicle damage. Personal auto insurance does not offer adequate protection or policy limits for business vehicles. Tivly is our choice for commercial auto insurance. They offer necessary policy options from over 200 insurance partners. You can get policies like gap insurance and personal injury protection. Tivly is hands-on and will help you find the right policy. They are easily available thanks to their 4-second phone answer rate.
A workers’ compensation policy protects your employees from illnesses and injuries. It helps pay for medical costs and lost income due to the injury. For workers’ compensation insurance, you should choose The Hartford. This company has over 200 years of experience writing insurance policies. Their workers’ compensation insurance offers access to over 65,000 pharmacies. Your employees get expert claim care with their “nurse back to health program.” Their experienced nurse case managers will ensure your employees get coordinated and appropriate treatments. The Hartford has served over one million small business customers.
A business owner’s policy is comprehensive insurance because it combines general liability and commercial property coverage. Often you pay a lower premium for a business owner’s policy than when buying the policies separately. NEXT is our pick for your business owner’s policy. NEXT’s insurance rates are some of the most affordable. Thanks to their transparent pricing structure, you won’t have to worry about hidden fees. NEXT offers free and quick online quotes with no buying commitment. The company has an A- rating from AM Best and a B+ from the Better Business Bureau.
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This place is an absolute joke of a company and should be ashamed of the way they conduct business. I was hurt on the job at the end of July and it took them just shy of 7 weeks to issue out a paycheck to me. Yes the amount was back dated but still. Not many have the luxury of not receiving a paycheck for almost 2 months. To top it all off, the original adjuster marked me down for the wrong state which caused a problem from the get go, I've had 3 different adjusters now since each one can't seem to figure out the simplicity of my claim. All my paperwork which includes, my job, house, and drs visits all are from the same state and city but yet some how I have been filed under a completely different state 1500 miles away. They do not answer your phone calls or emails no matter how many you leave. I've had to escalate my frustrations to the supervisors of each of these individuals in order to even get some kind of response. I've had more communication and information given to me about my claim from the customer service representatives then the actual adjusters.......... please tell me how that works?! A serious overhaul needs to happen here in order to serve your clients the way they deserve to be taken care of. 10/10 do not recommend this company to a single soul on earth
I have never had the displeasure of working with a more incompetent and disrespectful person in my life. I’m an injured worker and the adjuster that was assigned to my case was named Carrie Furgeson. In the past 6 weeks that I’ve been injured and out of work I have only been able to get ahold of her twice, not for lack of trying. I have left countless voicemails, countless emails, and she ignores them all. When I am finally able to get ahold of her I’m greeted with terrible customer service. She is rude, she talks over me and I’m hardly able to get a word in edgewise. She spelled my name wrong on my documents even after I spelled it for her properly countless times, this caused a whole new issue with my bank. I have bill collectors from the hospital calling me demanding payment and Carrie Furgeson won’t do a single thing to help, or to get them paid. All of my documentation is in Colorado, my job is in Colorado, my address is in Colorado, all my Dr offices and appointments have been in Colorado and Carrie still managed to hold my claim because she wasn’t sure what state she needed to file it under. It’s been 6 weeks since my Injury and my company still hasn’t received the wage paperwork to fill out so they can get me my correct wages. When she’s not ignoring me she’s answering my questions with “I don’t know” well I don’t know how she got this job, because apparently she doesn’t know anything about it. She is a disgusting morose individual inside and out and I genuinely wish her the worst in all of her future endeavors. I highly recommend you don’t use this company. Please if you are a business owner and your looking into this company please don’t use them. I’m sure they have the cheapest payment and that’s why companies use them in the first place, but you will be doing your employees a grave disservice by forcing them to venture into this absolute dumpster fire of a company. I would rate 0/5 if possible but 1 was the lowest I was allowed.
Their general liability insurance purchase process is simply the best online experience I've ever had in my life!
As long as they cover your line of business, you're literally covered! best rates, best coverage, best online experience, best professionals, can't be happier that I chose them!
It really can't get any better than this... wow
Not all those who wander are lost.
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