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A parking lot or a motor park is a place selected and designed to park cars; it could be a garage, a street, or a parking lot. The space earmarked for parking must be enough to accommodate cars and the parking fee payable is dependent on the location, the time spent on the car park as well as the rules guiding parking lots in the area, and the industry code of practice.

The parking lot or motor park industry typically works through a lease agreement, managerial contracts, or property ownership. The industry in the US generally made a positive U-turn in 2011 when the demand for air travel, sporting activities, the entertainment industry, shopping outings saw some moderate recovery, in line with the US economy.

The reason for the industry slight growth between 2012 and 2016 was as a result of the improvements in employment and as it would rightly be expected, the US vehicle registrations put up a moderate increase. Consequently, the need for parking services at entertainment venues, airports, business districts, and other busy places showed some moderate increase.

Statistical evidence in the US has it that a whopping sum of $10 billion comes from 20,709 registered and licensed parking lots and motor parks and accounting for the employment of about 159, 428 people; with 4.1% estimated annual growth in five years (2011 and 2016).

Another statistical report released by IBIS World revealed that the Parking Lots and Garages industry is at the maturity stage of its life cycle while the industry annualized contribution to the US economy is estimated at 2.3 percent between 2011 and 2021.

With these revelations, there is the renewed optimism of better days ahead in the Parking Lots and Garages industry. Therefore if you are contemplating going into the parking lots business, either because you have experience in the Parking Lot’s business or you own a suitable location to do the business or you are driven by passion, you wouldn’t have had a better chance of success than now.

If you are ready, let’s proceed immediately and follow simple steps that are going to lead you to a full realization of your dream. But before you go into the motor park business properly, you must learn the trade if you are not experienced in the car park business. For example, you must understand the four types of parking lots, namely, parallel parking, perpendicular parking, angle echelon parking, and double parking.

Parallel parking: Parallel parking takes place when you park your car in line with others and the car is parallel to the curb. This means that all cars are designed to face one direction and this type of parking is seen on the streets. Because of a lack of space, parallel parking is used since it provides room for traffic to flow smoothly. To enter the curb properly, it requires expert driving knowledge.

Perpendicular parking: This type of parking is found in garages and requires no special skill to be able to park properly. What is essential is to park your car in perpendicular to the curb.

Angled parking: This type of parking is the same with perpendicular parking except that the car is parked in the same way as the oncoming car to the parking space.

Double parking: Double parking can sometimes be illegal and can also cause confusion since each time it occurs; one car is bound to block another car for the space is limited. However, when it occurs in garages, valets do have access to the cars and can remove them to give room to other park users.

But before you jump into the parking lot business, the following factors should be considered:

• Purpose to be served by the parking lot: If the purpose of the motor park is to serve high-volume traffic such as a shopping mall or business district area, this will help you determine the parking lot floor plan or the building plan.
• Parking lot/building size: If you intend to construct a car park suitable for several restaurants, it must be something smaller compared to a shopping mall.
• Pavement thickness: If you intend to have heavier vehicles such as buses or cargo trucks using your car park, you will going to need a thick layer of bitumen as well as a thick layer of concrete cement. This will support the soil and make it possible to withstand the pressure of these kinds of vehicles.
• Parking Lot/building floor plan: There are car park rules regarding the dimensions to be complied with depending on the city laws and building types of a particular country. In the US, it is no different. There are minimum sizes set for buses and trucks and cars. Do well to find out what obtains in the US or your country.

Therefore, it means that before designing a car park, you should take into consideration the following points:

1. What is the number of parking lots and their sizes? In some places, the minimum parking floor plan is 2,4 meters by 5.00 meters. With this, you should be able to determine the capacity of your car park plan.
2. Car park accessibility: It is important to determine the accessibility of your car park lot such as pedestrians who find themselves in the park, (pedestrian walkways), wheel-chair ramps, the number of parking spaces to be allotted. Consider whether your parking lot will welcome vans as well as whether businesses will require a drive-through.
3. Secure your facility: Security issues must be addressed if you want your parking lot business to prevent constant legal disputes. For example, you should employ parking attendants, security guards, and hidden cameras. If you have an automated system in place, you may only need to employ fewer staff. Others are:
4. Parking guidance system – it automatically detects which parking slot is vacant and therefore which way to go.
5. Parking lot cashier – the hiring of a car park cashier must be done with every amount of care and consideration. The cashier can be assisted by a parking guidance system This piece of equipment can help the cashier manage the income of the park in such an efficient way.
6. The car parking systems: This is a machine that boosts the capacity of a parking lot and it is powered by either hydraulic pumps or electric motors. The car parking system is either automatic or manual but invariably, the automated parking system is more cost-effective and saves time.

How to start a parking lot business

1. Find out whether parking lot business is for you
2. Plan your business
3. Decide on your market segment
4. Find out who are your competitors
5. Be aware of your weaknesses and possible threats you are likely to face
6. Use an appropriate location
7. Choose an appropriate form of business
8. Cover your business with the best insurance policy
9. Source for the required initial funding
10. Different categories of car park lots
11. Conclusion: 

Find out whether parking lot business is for you

There is a need to conduct a market survey to determine who the target market is. From all indications, those who use parking lots are all-embracing and cuts across all sexes above 18 years old. It is right to conclude that the target audience consists of anyone over the age of 18 who owns a car and is not limited to a particular group of people.

Besides, you must take stock of yourself to find out if the business is right for you in terms of previous parking lot experience, resource availability, and more importantly whether you have the passion and entrepreneurship acumen. If you can boast of any two of the above, go ahead and mount on your camel, reaching your destination can be assumed to be a foregone conclusion.

Plan your business

No matter how small is your business going to be, you should make out time to plan for it. Many people sometimes fail to plan and the consequences are always grave because such businesses fail after a while.

For this reason, create a plan for your parking lot and take into account such issues as your target market, the start-up costs, legal issues, licensing and permits, when to break-even, and how to know that things are not working out and the exit strategy. Find out for yourself the answers to the following questions;

• What will be the estimated initial cost and how can it be raised?
• Is the traffic in the area sufficient to justify setting up a parking lot?
• The zoning laws and other legal issues, what are they?
• What is the area used to the parking lot, valet services, or secured parking?
• Out of these parking services, which ones are available already?
• Who are the major or minor players in the area and how well they are faring?
• Do most car owners make use of the car park services?
• Determine from the outset how long you are going to be in the business without making headway.

After careful examination of the above, you will be able to determine the way forward, whether you will take the risks associated with starting the business.

Read Also: 8 Reasons You Need a Business Plan for Your Small Business

Decide on your market segment

The market segment represents the demographic elements such as age, gender, race, and religion or it could also represent psychographic or behavioral segmentation. But since there is no known segmentation in the parking lot business; there is only one market segment that is people who are over 18 years old and own cars. To woo these set of people within your business locality, you have to package your services in such a way that it is value for money, your valets are equal to the tasks, your customer care service is up and doing, and your brand and promote your services to the right audience.

You must also work towards retaining your customers by upgrading your services and using the latest technology. Software that supports efficiently serving your customers is available and it is up to you to leverage on it.

Since the market segment has been defined in this business as a single segment of people above 18 years and own a car, you don’t need to seek out for every adult but those that park their cars in other parking lots.

Find out who are your competitors

Find out who you are competing within the industry and study their tactics before you launch an attack. Such tactics include their pricing strategies, promotion strategy, and the technologies adopted that stimulated their growth. Some of the known names in the parking lot business include the following:

Auto Storage USA.

Luxe Valet

Auto Storage USA

United Parking  lot, Inc.

Mandalay Bay Parking Garage

717 Parking Enterprises

Canopy Airport Parking

Hilgard Garage Westwood

Sunset Parking Services LLC

The list is not exhaustive, but you will be competing with these big players and you are likely to attack them successfully if you know their ins and outs. Besides, they might be too big for you to attack and win the battle, therefore prepare for a guerrilla attack instead rather than attacking them head-on. Guerrilla attacks consist of waging small intermittent attacks on the opponent’s different territories. The aim is to harass and demoralize the opponent and eventually secure a permanent foothold, e.g. Using selected price cuts intense promotional blitzes, and sometimes legal action to attack your competitors.

Don’t forget that you are not only competing with direct competitors; you will also be competing with facility owners such as hotels and conference hall owners.

Be aware of your weaknesses and possible threats you are likely to face

Knowing your weaknesses is essential if you are going to successfully tackle it. Threats are external and therefore not easily reduced or eliminated. One such threat comes from competitors who are well established in your very neighborhood. In this situation, you can’t help it but create your niche, which possibly should be an unexplored market. The only unexplored market that can be identified is those that are yet to start using the parking lot. It is going to be difficult to identify them and woo them over.

It is possible to face other challenges such as COVID 19 pandemic, with its economic consequences, bad economies such as the rise in unemployment, and other unfavorable economic policies of the government. The aftermath of all these is that the numbers of parking lot users are likely to drop.

Use an appropriate location.

The location you choose for your parking lot business is crucial for the success of your car park undertaking hence the need for collaboration with facility owners in a densely populated area where those owning cars and needs parking lots to reside.

So ensure that your parking lot service is located in a commercial center in your area, a visible place that is easily accessible and secure.

You can begin by doing informal research and making contacts with shop owners and other people in the community to find out what their parking experiences are, whether good or bad. Then be ready to do it yourself and become a customer looking for a parking lot; drive around the area seeking a car park and trying to park, using various parking lots. You must not forget that other facilities may or may not be available for commercial purposes but are there for users of such facilities such as shopping malls, hotels, hospitals, government buildings, conference centers, etc. If these facilities are so many in your area, there might be no great need for more car parks, otherwise, a business opportunity is being created for you if they are very few.

Choose an appropriate form of business

There are four forms of business you can select from, namely: sole proprietorship, partnership, and corporation. The sole proprietorship is appropriate if the business revolves around you alone and you are unlikely to face legal action in the future. But since this is not possible because a parking lot business deals with customers on daily basis, protecting your assets is essential.

Limited liability company (LLC); This is an appropriate form of business to choose because it safeguards you against legal action against disgruntled employees or customers or others who disagree with you on the method adopted in the parking of cars. It protects your assets from being subject to litigation for actions committed by the business.

In the case of a partnership, unless you are two or above, you can’t form this type of business.

A corporation is suitable for a bigger organization since the legal requirements including publicity is overwhelming, setting it up would be a colossal waste of resources.

Cover your business with the best insurance policy

In all countries of the world including the US, you can’t legally operate your business without obtaining an appropriate insurance cover. Insurance is necessary to protect your business and employees against business hazards that could occur in the course of business such as accidents, natural disasters, or burglary.

In the US, the following are some of the basic insurance policies you need to obtain before you go into business.

General insurance – this covers the general liability of the business as a whole in cases of loss of assets, fire, or burglary.

Health insurance – this covers the employees against loss of income arising from bad health.

Workers’ compensation – workers are usually compensated at the end of service and this type of insurance cover workers against non-payment of such compensation.

Building/Property insurance – this insurance is intended to cover the company’s property against fire disaster.

Intellectual property protection – registration of trade-mark, copyright or patent right is required to protect your intellectual property. Other insurance covers that may be necessary for your business include:

Read Also: Types of Home Business Insurance

• Risk insurance
• Overhead expenses disability insurance
• Business owner’s policy group insurance
• Payment protection insurance
• Liability insurance
• Risk Insurance
• Overhead expense disability insurance
• Business owner’s policy group insurance
• Payment protection insurance

Source for the required initial funding

You may decide to start-up your parking lot business small, in which case the capital outlay is going to be low but if on the other hand, you decide to make it big, you must cough out the commensurate capital. The initial capital must be sufficient to acquire some basic tools for the business such as business permits and licenses, buying custom made software apps and tags, and enough cash to support running the business including paying workers’ salaries.

If you decide to make it big, then you may need to put up your parking lot/motor park, buy-in into a franchise, collaborate with loads of private and public facilities in your area. Sourcing of funds cannot be ruled out since you may not be able to provide the amount of money for the initial capital alone. So fashion out an attractive business plan that will attract financiers and other investors. The following are the available options you can try out when seeking initial capital for your parking lot business.

• Funds from your savings including selling of personal assets.
• Soft loans from friends and family members
• Funds from the disposal of your stocks and shares, particularly if you have a large chunk of them.
• Funds from potential investors and financiers.
• Find out if government assistance to small scale business covers your type of business.

Different categories of car park lots

In owning a car park lot, you have different categories of the car park to choose from ranging from car parks for rent, where they are available for rent such as apartments is available to paying customers. Some facilities are available for overnight parking, while some customers choose to park on the street pavements. But the high-point of the parking lot is the automated, high-tech parking lots that have adopted a mechanical, automated, parking system.

Therefore, if you are a newbie wanting to start something new or you desire to upgrade your existing car park, you have different categories of parking lots to choose from.

Read Also: How to Start Towing Service

Conclusion:

Going into parking lot business can be daunting if you fail to make some necessary preparation such as planning for success, carving your niche and research your potential customers, discovering the current challenges and be ready to put things right, deciding on the scale of operation you want to operate, procuring the necessary tools and equipment and channeling your resources to serve the teeming vehicular owners with the wherewithal and the willingness to use the commercial parking lot.

Your success also requires concerted efforts of all and sundry to make the business succeed; while singling out employees like the cashier and the customer services care personnel. For you to run the business properly, you need hand-on experience and good training in this type of business, together with the other two employees already mentioned. This will give your staff the required experience, and with the right motivation, your staffs are likely to operate at maximum efficiency.

Automotive

Tags: Automotive business ideas, Business ideas