March 16 2020, By Admin
HOW TO START A PARKING LOT BUSINESS
Parking lots are located in places where street parking is limited and there is plenty of automobile traffic. Parking may be offered in exterior open lots or in interior secured garages.
Parking lots are found in commercial areas, next to airports, near hospitals, adjacent to schools, and near event spaces that attract a large crowd.
There are two facets in the parking lot business. One is the owning and operating the parking lots and the other opportunity is managing the parking lots on behalf of other owners.
Learn how to start your own Parking Lot Business and whether it is the right fit for you.
What are the costs involved in opening a parking lot business?
Initial startup costs include the rental or purchase of the lot/garage, purchase or lease of equipment, such as transaction machines, lift gates, and security cameras. Garages are more expensive, and costs are much higher for multilevel garages equipped with elevators.
In smaller cities, it is possible to start with a single small outdoor lot for less than $10,000 in startup capital if you lease the land. An indoor garage can cost many hundreds of thousands of dollars and upwards to millions depending on its size and location.
What are the ongoing expenses for a parking lot business?
Parking lots are relatively low-maintenance businesses. The majority of work that goes into maintaining a parking lot involves repainting lines, replacing signage, and paying for lighting (and possibly heat) if it is a garage.
Who is the target market?
Parking lots are used by customers because of the convenience of parking near something else. The customers are those that drive by the parking
How does a parking lot business make money?
Most parking lots make money by filling up the empty spaces with cars that pay an hourly rate or flat rate for the parking. Parking lots are especially profitable during peak traffic in larger cities. For example, many lots take advantage of the number of drivers in town during sports games and those attending other big events.
For a parking lot company that offers parking lot management services, they are paid a monthly fee that is based on the revenues produced by the parking
lots they manage for other owners.
- What are the startup and ongoing costs?
- Who is your target market?
- How long it will take you to break even?
- What will you name your business?
The price you can charge depends on the demand for parking and the nearby competitive prices. In common areas, 20 per hour is very common. In major metropolitan areas that are very congested, with extraordinarily high real estate prices, such as Mumbai, it is possible to charge up to 50 for sixty minutes.
How much profit can a parking lot business make?
One small lot with 20 spaces that earns, on average, 20 per space per day will have 2000 per day in gross revenues and earn 73,000 in gross revenues per month. If the lot is outdoors and 4,000 square feet at 0.50 per square foot per month rent, the annual rent will be 24,000. Wages paid at minimum wage level for parking
lot attendants will be about $20,800 per year, leaving 28,200 in gross profits before taxes from a single, small parking lot.
Large parking lots can have many hundreds of parking
spaces, which is a multiplication of these basic profit estimates.
How can you make your business more profitable?
lot business becomes more profitable through economies of scale. Owning more parking
lots that use the same back office and support services is the key to growth and increasing profits. In addition to management of parking
services, the business can expand to offer other support services to commercial building owners such as energy monitoring, facilities engineering, HVAC, janitorial, maintenance, and landscaping.
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What will you name your business?
Choosing the right name is very important. Read our detailed guide on how to name your business. We recommend checking if the business name you choose is
available as a web domain and securing it early so no one else can take it.