You operate a locksmithing business out of your van and home, and you have a good thing going: You do what you love, and your time is your own.
But business is getting a little too good — you’re running out of hours in the day to make money to pay bills and take care of your family.
So, you’re thinking about taking the plunge and opening a lockshop.
It’s daunting. In addition to finding where to place the shop itself, you have to think about stocking the shop with parts and equipment. Then, there are the additional expenses that you don’t have to worry about when you work out of your home or truck. These don’t stop with a mortgage or rent, depending on whether you bought or leased the property. There are employee wages, utility bills and all types of insurance.
It also can be a way to increase your revenues.
Steve M. Norch is the owner of Bierly-Litman Lock & Door in Canton, Ohio. Five years ago, he moved the business started by his father and cousin into what he calls a “true commercial building” and says he has no regrets.
“There are only so many hours in the day,” he says. As a mobile-only locksmith, “You can do only so many calls in a day. The only way to make more money is work longer hours.” Or you could charge more and potentially lose business to a lower cost competitor.
That isn’t the case when you have a store. “People are coming to you; you don’t even have to be there,” Norch adds. “I can make money even if I’m not there.”
Of course, it isn’t as easy as merely hanging a shingle outside a storefront. Make no mistake: Opening a lockshop is a big commitment, not only of money but time.
“I wouldn’t recommend it for everyone,” says Larry Schwalb, who owns a three-location locksmithing business in and around Philadelphia called Houdini Lock & Safe. “The opportunity to work half-days or four days a week is gone. You’re working six, seven days a week.”
Schwalb has been in the business for 35 years, during which time he opened two of the business’s three locations.
“If the customer comes and the doors are closed and a sign says, ‘gone fishing,’ or the phone rings and you can’t go, you’re saying ‘no’ to the customer,” he adds. “When you say ‘no,’ they go somewhere else.”
So, what do you do? Locksmith Ledger spoke with several current and former locksmiths — those who opened a shop and who haven’t—and they shared advice on what you should consider and what you can expect if you decide to turn the key on your own retail business.
Opening the Door
The first issue is standard to opening any small business: You must have enough money to handle opening and operating expenses until the lockshop generates enough income to pay for itself.
Unfortunately, none of the experts we spoke with could determine a particular amount that you should set aside. One said enough to pay six months’ rent (if you don’t buy); another said no more than two; and a third estimated that you should figure roughly $3,000 per month in expenses.
A lot depends on where your store would be located. Obviously, expenses such as rent, property taxes, insurance and utilities can vary widely from state to state and city to city — even neighborhood to neighborhood.
There’s an old saw in real estate: location, location, location. You want your store to be visible, so customers can find it easily. However, property values almost certainly will be higher the more traffic passes by your store.
Another consideration is the amount of competition. Particularly in smaller markets where there would be competing established lockshops, there might not be enough potential customers to go around.
Given all of the variables, Schwalb suggests following his route — buying into an established business. If you were to start from scratch, you’d have to scout the location and do research on property values, taxes and the amount of traffic the location generates. You also will have to prepare for some lean times early on.
“The traffic that you get when you first start, you get trickles,” he advises. “You get spill-off from Home Depot. You might get a few people come in, and you don’t want to be stuck inside looking out for business when you could be making service calls. That’s why it makes more sense to buy a business. You already have enough volume. You don’t have to go through the misery of advertising to promote and build it.”
What’s Inside
All of the experts we spoke with say your store shouldn’t merely be a place to store your tools or, worse, scavenged parts. It should be bright, clean, orderly and in good repair. And it should be stocked with plenty of new merchandise ready to sell.
Zack Gilmore is the president of Hollon Safe. Before that, he owned Charlotte County Safe & Lock in Port Charlotte, Florida, for four years, having bought into the business.
He says locksmiths who own stores must have a retail mindset in addition to being service-oriented.
“Inventory has to turn, like at Walmart or any store,” he advises. “You want to know, how often is that 2 square feet of space turning? Buy something that you’re going to sell, and make that 2-by-2 space pay for itself.”
Gilmore further advises not to cede any business to the big boxes, such as Walmart, The Home Depot and others. True, the big boxes might carry safes, for example, but that’s no reason for you not to.
“If you can’t have as much room for safes as Home Depot and Walmart, what are you doing? This is your business,” he says, noting that locksmiths have the expertise about the products that they carry and can better inform—and sell them to—the customer.
It stands to reason that someone who owns a business that sells retail products to locksmiths would note the importance of a lockshop having such inventory, but Norch and Schwalb agree with Gilmore.
“I think [product inventory] honestly is the biggest thing to having success when you have a shop,” Norch says.
It can be difficult to make such an investment and see products take a while to move—particularly when customers sometimes come in merely to look at and learn about products only to order them for less online. But it’s all about the opportunity—that you’ll have what the customer wants when they come into the store in search of a particular product.
“Even if you charge a little more, you have it,” Norch points out. “The customers don’t care how much it is; they want it now. You can charge whatever you want, and they still think you’re the best person in the world, because you have it.”
Of course, having a reputation for satisfying customers also leads to future business.
That doesn’t mean you should buy anything and everything that comes down the pike. Gilmore says you have to take note of what sells—and at what time of the year. (Safes, for example, sell well in Florida during the winter but only during the summer in Colorado.) He also advises stocking up when distributors have a sale of, say, exit devices, so the discount will add to your bottom line when you make the sale later.
Helping Hands
In addition to retail products, you’ll have to have employees who can help you to run the store, or as Schwalb notes, “you don’t want to be stuck inside looking out for business when you could be making service calls.”
A different mindset is called for here, too, because the type of work that’s involved after you open a store isn’t just more locksmithing tasks, such as cutting keys or even selling exit devices. It’s also hiring other employees, handling advertising, keeping more-detailed financial records, operating computers. And, yes, it’s training future locksmiths.
Being able to hire experienced workers is the ideal situation, but experts say the more typical scenario is hiring inexperienced people and training them yourself.
As with just about everything, there are pros and cons to having an apprentice program. The cons are the amount of time that you’ll spend on the training and that apprentices won’t be able to bring in much in the way of income early on. The pros are that you’re training employees to do things exactly how you want them to do it, and you’re giving them a better feel for the business, so they can take on more responsibilities and improve your bottom line.
Norch says a new hire spends the first 90 days of employment in his shop before he lets them go out on service calls. That serves a dual purpose. First, it gives them a good on-the-job education.
“There’s volume in the shop,” he says. “You might get 50 [tasks] a day there, whereas you might have eight or 10 service calls in a day—that’s the max. You can get 20 [jobs] in the shop before lunch time. It’s great for the experience.”
Second, it provides the company with scheduling flexibility in case of illness or an employment shift. “By having road guys who have spent time in the shop, I’m protected, because a road guy can cover the shop if need be,” Norch says.
It should go without saying, but no matter whom you hire, that employee should be trained to provide the best customer service. Even something as small as acknowledging a customer who enters your store while you’re on the phone can make a difference.
It’s part of that “commitment” when you open a shop, Gilmore says, adding that when a customer leaves your store because you didn’t carry the item they wanted or you didn’t provide the best service, you don’t know whose business you might have lost.
“That person might have been the janitorial super for the entire school district,” he says. Now, “he’ll call someone else. If you do good work, he might ask, ‘hey, do you do commercial work? I need someone. I’ll move over to you.’”
And That’s Not All
Finding a store, stocking it and hiring employees are primary considerations, but for locksmiths thinking about opening a lockshop, they don’t end there.
Insurance and bookkeeping are necessary components to any locksmithing business, but they go deeper for those who have shops. For example, there’s errors and omissions insurance, which covers you in the case of employee negligence. Norch says a good insurance agent should be able to help you out with any new insurance needs.
Then there’s the government—federal, state and local—with laws and regulations that you have to follow, including workers’ compensation for employees. Not to mention taxes.
You must keep immaculate accounting books after you open a shop, because, Schwalb says, you should expect to be audited at some point. “It’s not a matter of ‘if’ but ‘when’ for a small business,” he says.
Opening a store also enhances your visibility within your community. That can be good, because customers can see that your business has legitimacy and permanence. Consequently, they might be willing to make a more expensive purchase, because they believe that your business will be there to help them if something were to go wrong later. But it can come with a price.
“If you think that dealing with the phony reviews and bad ethics of Yelp and Google now [as a mobile locksmith] are difficult, wait,” Schwalb warns. “When you have a storefront, you’re a sitting target. You’ll get a slap on the head.”
He suggests being proactive, having more involvement with the community, such as sponsoring a Little League team or making charitable donations.
Mark Selent is a certified locksmith who owns Lock Alchemy in Cleveland. He knows all the pros and cons of opening a lockshop and has decided against doing so, although he admits that an appointment-only storefront has advantages.
“A by-appointment-only store would allow us to physically store inventory, act as a meeting point for employees, offer some marketing advantages and signal to customers that we are here to stay,” he says.
Even that, however, requires a higher level of commitment than before. It’s one you should plan for carefully before you decide to open a store—if you make that decision—and it’s one you should continue to plan for afterward.
“It will be lifetime commitment when you go to a storefront,” Schwalb says. “It’s a horrible thing to open and then have to close [a store]. It should be in that community forever. That’s how you should think—that you’ll never close, like a hospital.”
