How to Start a Car Locksmith Business

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.

How to Start a Car Locksmith Business

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.

Calculate Your Costs

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 expenseCost
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

Decide Your Businesses Name

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.”

Find Your Target Customer

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.

Decide What Services To Offer

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.

Register Your Business

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.

Get an EIN

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:

  1. Visit the IRS website to apply online, by fax, or by phone.

  2. Submit a valid tax ID number, like your social security number.

  3. Apply by filling out the form and providing information like your business structure, name, and address.

  4. If submitting online, you must complete the form without 15 minutes of inactivity.

  5. 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.

  6. Save a copy of your EIN application in your business records.

Get a Locksmith License

Most states do not require locksmiths to have a license to provide locksmith services. The following states do have locksmithing requirements.

StateRequirementsLicensing Board
AlabamaCompany or individual licenseAlabama Electronic Security Board of Licensure
CaliforniaIndividual or company licenses, contractor’s license for work over $500California Bureau of Security & Investigative Services
ConnecticutLocksmith licenseConnecticut State Department of Consumer Protection
IllinoisLocksmith licenseIllinois Department of Financial and Professional Regulation
LouisianaLocksmith licenseLousiana Office of the State Fire Marshall
MarylandIndividuals are exempt, but businesses must have a locksmith licenseMaryland Department of Assessments and Taxation
New JerseyLocksmith licenseNew Jersey Division of Consumer Affairs
North CarolinaLocksmith licenseNorth Carolina Licensing Board
OklahomaIndividual or company locksmith licenseOklahoma Department of Labor
OregonLocksmith licenseOregon Construction Contractors Board
TexasClass B security contractor company licenseTexas Department of Public Safety
NevadaLocksmith permitSheriff of your local county
PennsylvaniaHome improvement contractor’s license for work costing $5,000 or morePennsylvania Attorney General
VirginiaLocksmith licenseVirginia Department of Criminal Justice Services

Hire Employees

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.

Compare Cheap Locksmith Insurance Quotes Online

Get all the best quotes from leading providers in a click of a button!

How to Start a Mobile Locksmith Business

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.

Learn What Makes a Mobile Locksmith Valuable

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.

Offer Specialized Services

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.

Undergo Training

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 LevelDescriptionRequired 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 locksmithingPassed 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 topicsPassed ninety percent of all available categories
Certified Professional Safe Technician (CPS)The first level of safe certification17 safe categories
Certified Master Safe Technician (CMST)The final level of safe certificationAll safe categories

Set Up Your Business to Respond to Calls Quickly

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.

Invest in Your Mobile Workshop

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 ToolUsagePrice
Hook pickPicking locks$10-$50
ScrewdriversUnlocking doors$10-$20
Replacement locksUsed to replace damaged or broken auto locks$10-$50
Lockpick gunOpens tumbler-based locks$30-$80
Portable key machineCuts keys for your customers$1,000-$2,000
Pump wedgeHelps create openings to unlock a vehicle$20-$80
Locksmith hammerShock absorbing hammering used for opening saves and applying pressure between a frame.$10-$30
Plug SpinnersHelp you pick locks by changing the direction the lock opens.$20-$80
Key extractorRetrieve broken keys that are stuck in the lock$5-$20
Key decoderHelps you create an identical key even if the original lock is broken$10-$50

Rank and Review Insurance Companies

Help others make better decisions

Show more

Insurance Requirements for Boosting Income

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

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.

Professional Liability Insurance

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.

Commercial Property Insurance

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

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.

Workers’ Compensation Insurance

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.

Business Owner’s Policy

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.

Compare Cheap Locksmith Insurance Quotes Online

Get all the best quotes from leading providers in a click of a button!

Recent Reviews

Recent Posts