A parking lot business gives you a way to make money from people anxious to park their cars in areas where little street or other parking is available. Equipment, insurance and personnel should be included in your startup costs. Determine your pricing in comparison to other parking lot structures.
Starting a parking lot company in a busy area with limited parking is an opportunity worth exploring. The cost of opening a parking lot business depends on the price of the property you buy and how much work is required to turn it into a pay parking lot. Leasing property is another option if the owner is willing to let you turn the land into a parking lot.
Find a Suitable Lot
Look for empty lots you can pave and strip to turn into a parking lot, or find a lot that's all ready for customers to park their cars. Search for a lot in high traffic areas, such as near tourist attractions, restaurants, malls, sports arenas, conference centers, hotels, airports and cruise ship lines. Once you find a suitable lot, make sure it has commercial zoning, or find out what your city or county requires to rezone it.
Before you buy an undeveloped lot, figure out how many parking spaces you can fit on the property. Public use parking spaces usually measure 9 to 10 feet in width by 18 to 19 feet in length, with spaces reserved for larger handicap vehicles. You also need to stripe the lot, paint the curbs and paint arrows to indicate where drivers enter and exit. The cost of doing this work for a lot with 100 spaces can average around $800. Materials and labor will vary from state to state.
A ticketing system with a time stamp so you know how much to charge customers is necessary. You also need a way to collect payments, such as through an automated system that accepts cash and credit cards. Another option is to hire someone to take payments when people depart the lot. Signage that explains rates and rules along with directions for entering and exiting the lot is also required.
Be Fully Insured
You need full general liability insurance coverage, including premises liability, to cover a customer's injury or damage to their vehicle. Complete operations insurance is also recommended to cover litigation and settlement costs if you are sued by someone using the parking lot.
Pay Your Taxes
Check into state and city laws about any taxes you must charge for parking. For instance, in Seattle, Washington, commercial parking lot owners must pay a tax of 12.5% on the total parking fee. The city allows you to include the tax as part of the parking fee as long as you clearly state this on the signs in your lot.
Depending on the size of your parking lot, you may want to hire attendants to handle questions, make payments and provide a measure of security. Employees should also maintain the parking lot and keep it free of debris, empty garbage cans and make sure automated payment systems work properly. Buy uniforms for your staff so customers recognize employees in case they have questions or concerns.
You can rent spaces in your lot on an annual or monthly basis to one or several tenants who want their employees or customers to park there. You can also charge an hourly or daily rate. Review competing parking lots to help create your pricing structure. You can charge a higher rate for special events, especially on weekends or during evenings, when your regular customers are less likely to use the lot.
Marketing and Advertising
Let businesses within a few blocks of your parking lot know it is available for their customers and staff. Sell validation stamps to businesses so they can offer complimentary parking to their customers. Talk to real estate developers near your lot to let them know you have space for people who buy into their projects. Become a member of the National Parking Association to access resources such as informative articles, how-to guides and training.