With the increasing number of personal vehicles roaming the streets, starting up a parking lot business might seem like a profitable business venture. However, as with every business venture, there are key considerations you need to take into account in order to ensure a successful and affluent future.
People are in growing need of a place to park, however finding the right way to monetize such a demand requires prudent planning and a sound start-up strategy. From staffing and security, to pavement quality and toll options, here is a complete guide on how to start your parking lot business.
Site Consideration and Selection
When scouting for the perfect location for your new business, there are several key factors you’ll need to consider. Firstly, you want to assess the volume of daily traffic around the parking lot area. Look for places near downtown shopping centers. Make sure the site is convenient for people to use, paying special attention to its proximity to relevant buildings in the area.
Next, you want to check if the local governing bodies allow for parking lot construction, and be sure to inquire about the land prices as well. Lastly, consider the type of lot you want to run: a parking garage, or a parking lot. Although a parking garage offers much more space and can be monetized more efficiently, the costs involved in construction and management are substantially higher.
Monetizing Your Parking Lot Business
One of the most important aspects of running a parking lot is figuring out how to best monetize your new business venture. There are three ways you can go about this problem. The first is trusting customers to pay for parking based on how long they park. This method should be avoided at all costs.
The second solution would be to have a gate staffed by a cashier who collects parking fees. This is a reasonable solution although it can have its downsides associated with the risk of human error and organization. The last, and most effective and efficient solution is an automated payment system.
An electronic gate with an automated payment system will not only allow your regular customers to feel safer parking their car in your lot, but it will virtually guarantee every parking session is paid. You want to make sure people cannot take advantage of your parking lot without paying, and an automated system might be the most cost-effective long-term solution.
Paving the Lot
Another crucial element of running a parking business is the quality of your lot’s pavement. The pavement needs to be in constant top condition, if you want to stand a chance of attracting and retaining customers long-term in the overly competitive market.
In addition to regular cleaning and maintenance, you’ll first need to prepare the area for coating and sealing. Make sure the surface is clean, devoid of any dirt or debris, potholes or other irregularities. You then want to apply durable concrete sealers to the surface in order to provide the pavement the protection it needs to withstand high amounts of vehicle traffic on a daily basis.
As far as paving costs go, you can expect to pay anywhere from $1.25 to $1.50 per square foot, for a 50,000-square foot lot. Remember, the bigger the parking lot, the likelier you are to pay less for every square foot. Always hire certified professionals to handle a project of this magnitude.
Security and Staffing
Finally, you’ll need to consider the number of employees and departments your parking business is going to have. While your up-front cashier and your accountant will be the two essential people behind your success, you will need more staff members if you plan on making it big.
You will need a maintenance staff to keep the lot clean 24/7, and you can even consider a valet service if your lot experiences high volumes of traffic every day. People appreciate not having to search for an empty space themselves, so while something like a valet department is a sound investment, remember that operating costs will also rise exponentially.
The number of vehicles on the streets is increasing with each passing year. This is the right time to invest in a parking lot business; however, the process of monetizing your investment will require some prudent planning. Be sure to follow these steps and you will have a much easier time getting your parking lot business off the ground and on the road to success.