Parking businesses are profitable ventures for interested entrepreneurs. Guarantee your perfect business idea prospers by understanding important steps and considerations for operating a parking structure.
Here are five tips for running a successful paid parking business:
1. Identify Your Target Market.
Guarantee your parking business succeeds by identifying your target market. A target market refers to a particular group of customers at which a product or service is aimed.
Generally, a target market for parking businesses are the customers who pass by and use your parking structure to conveniently park near something else. Accurately define your target market by understanding the nearby businesses your prospective customers visit, specifically general, residential, commercial, healthcare, or hospitality locations.
Once you establish your business’s intended audience, learn about your customers needs, wants, expectations, and objectives. The valuable information you gain will assist you in determining prices, providing services, and developing marketing strategies to effectively reach your customers.
Understand your target market to create a parking business your customers appreciate.
2. Determine Competitive Prices.
Operate a profitable parking business by determining competitive prices. Numerous factors impact a parking business’s prices, including:
Building Costs: Initial costs depend on the location size and type of parking structure, e.g. an average outdoor parking lot costs around $10,000, but an average above ground parking garage costs around $9,750,000
Operating Expenses: Ongoing expenses include rent or mortgage payments, wages, utilities, insurance, and supplies, costing approximately $5,000 every month
Profit Potential: Profits are dependent on size and location of your parking business, ranging from $15,000 to $2,000,000 per year
Location: Location changes a parking business’s hourly rate from $1 in rural areas to $60 in metropolitan locations
Local Competition: Other parking businesses near your location offering similar services and prices
Choose a price for your parking business based on the estimated daily revenue to earn a profit and challenge local competition. We recommend taking a data-driven approach and introducing dynamic parking. Modern smart parking systems based on computer vision and machine learning can help you collect valuable data. As a result, you will be able to identify exact hours when you can yield thanks to high demand or spot opportunities to maximize your parking occupancy with discounted rates during a low demand period. This system requires only a camera with a parking monitoring system to monitor and control your inventory in real-time.
3. Complete Legal Requirements.
Complete legal requirements to guarantee your parking business is covered, specifically establishing a business entity, acquiring proper permits and licenses, and purchasing insurance.
A legal business entity, such as a limited liability company (LLC) or corporation, protects your personal liability for business debts or lawsuits. Form an LLC by researching the requirements yourself or finding a professional service to assist you.
Permits and licenses for your parking business depend on state and location, so research your area’s obligations to avoid substantial fines. Typically, a certificate of occupancy (CO) is necessary to confirm your business abides by building codes, zoning laws, and government regulations. Obtain a CO by fulfilling the requirements and contacting a local government authority.
Insurance is essential for securing your parking business’s finances. Evaluate your business’s risks to understand the types of insurance you need. At a minimum, purchase general liability and workers’ compensation coverage to defend your business from being liable for property damage or personal injury.
Protect your parking business by completing the legal requirements.
4. Offer Exceptional Service.
Enhance customer experiences by offering exceptional services. Quality service is key to earning and retaining customers.
Outsourcing your parking management is an excellent method for improving services. A parking management service offers unique services, advanced technology, and remarkable guest interactions to elevate your parking business and ease the overall stress of daily operations.
Recruit parking management for your garages to guarantee your business succeeds.
5. Promote Your Business.
Promote your parking business to increase overall awareness. Effective promotions and marketing is necessary for earning clients and profits.
A variety of methods are available for promoting your business, including developing a logo, creating a website, participating on social media, offering discounts to new customers, starting a rewards program for returning customers, sending marketing materials to local businesses, purchasing promotional signs, and much more.
Market your parking business by discovering unique ideas to reach your specific target market.
Guarantee your paid parking business succeeds by following these five essential tips.