South Kelleton Keys and Locksmith

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Locksmith Business Plan

Market Analysis Summary

The locksmith industry sells to consumers and to businesses, with goals of securing residential and commercial real estate and other property. This market ranges from individuals securing a gym locker, to renters adding additional security to their rented space, to landlords, homeowners, and business owners securing entire buildings. 

4.1 Market Segmentation

The market for locksmith products and services in South Kelleton has been broken down into the segments shown in the Market Analysis. They are growing at a slow rate, as South Kelleton is built up and not undergoing much new development.

Building management companies work for landlords, providing management services for buildings ranging from single-family homes to large apartment building complexes. The managers are tasked with reducing the risks of their landlords, providing good service for their tenants in order to attract and retain the best tenants, and keeping costs of service down. They look for ongoing relationships with local vendors with whom they can receive relationship rates for the high volume of business they provide. Locks must be changed frequently for new apartments, for front doors, for mailboxes, and for other rooms in buildings, both when tenants leave and when locks malfunction or are damaged. Robberies or robbery attempts may increase security concerns in given buildings or areas and lead to a spree of lock upgrades.

Homeowners seek basic security for their home, but think of locksmiths as involved in a single transaction. They will look for the reputation and experience of a company, but will not spend a great deal of time comparing locksmiths. They will pick the first of the two or three they contact, and they will find those based on their visibility either in the community or on the internet/Yellow Pages.

Apartment renters generally add a deadbolt to their apartments for greater security, but look for the lowest prices to do so. They think of this work with a locksmith as a single transaction and will not spend too much time comparing prices.

Businesses with real estate may have great amounts of property to protect (all of their inventory and assets) and look for security systems and gates as well as locks. Business owners will seek good prices, but not with a loss of quality and security. They will generally need consultation services as well. Some have large holdings and may work to create ongoing relationships, much like building managers.

Other landlords include absent owners of homes and buildings who do not use a management company. They may not work as professionally as building management companies, and may look for and choose locksmiths through simple searches.

Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
Potential Customers Growth CAGR
Building Management Companies 1% 100 101 102 103 104 0.99%
Homeowners 1% 8,000 8,080 8,161 8,243 8,325 1.00%
Apartment Renters 1% 7,000 7,070 7,141 7,212 7,284 1.00%
Businesses with Real Estate 1% 1,000 1,010 1,020 1,030 1,040 0.99%
Other Landlords 1% 1,000 1,010 1,020 1,030 1,040 0.99%
Total 1.00% 17,100 17,271 17,444 17,618 17,793 1.00%

4.2 Target Market Segment Strategy

To seek the most profitable market segments in South Kelleton overall, SKelleton Keys will focus on building management companies, homeowners, and businesses with real estate. Each spend a greater dollar per transaction on locks and generally will have multiple locks or installations sold with every deal.

Furthermore, apartment renters may be referred to SKelleton Keys by their building management companies, creating future revenues from this segment if building managers are sought out first.

4.3 Service Business Analysis

The ALOA (Associated Locksmiths of America), an organization which provides accreditation for locksmiths, provides the following information:

A professionally trained locksmith/security professional may do some or all of the following: install locks, deadbolts and other mechanical or electronic locking devices to safeguard homes, businesses, vehicles and other property. Locksmiths also may modify or repair such devices, rekey locks, make duplicate keys or cards, generate or program new keys/cards for locks whose keys/cards have been lost and respond to emergency calls to unlock vehicles, homes and businesses that have been locked accidentally, or whose locks have malfunctioned.

Some locksmiths install and service electronic alarm and surveillance systems. Many locksmiths specify, design, provide, install and service a wide range of electronic access control systems and closed circuit television (CCTV) systems. Because of the integration of electronic security systems with computers and networks, some locksmiths maintain security hardware and software for computer systems.

When new or replacement locks are required, a locksmith assists the customer in determining the correct types of locks needed based on the security risk/exposure, life safety application and frequency of use. The locksmith installs locks and security devices using manufacturer’s templates and/or industry specifications, by cutting or drilling the proper opening in the selected location with small hand and power tools.

A locksmith may sell, service and install safes for home and business use. Banks have many locking devices and related hardware that require regular service by locksmiths such as; vault doors, time locks, safe deposit boxes and teller equipment.

A locksmith repairs a lock by disassembling and examining it to locate worn or malfunctioning parts, then cleans and adjusts the internal mechanisms and replaces these parts with new ones supplied by the lock's manufacturer. On occasion, it may be necessary to custom make some repair parts using lathes, drills, grinders, and other power and hand tools. When the repairs have been completed, the locksmith will reassemble the lock and check its operation.

A locksmith makes duplicate keys using a key-duplicating machine. With the customer's (pattern) key and key blank clamped in their respective vises, the locksmith moves the pattern key across the guide. A rotary cutter cuts the same pattern into the key blank. The locksmith carefully examines the new key to ensure its accuracy.

A locksmith may respond to emergency calls for customers who have accidentally become locked out of a home, business or vehicle. The locksmith begins by examining the lock(s) to determine the best method to circumvent the lock. These methods may include use of lock picks, bypass tools or other special instruments. Fitting a key by code or other skilled means is also a method of opening a lock. Experience, skill and knowledge dictate the method a professional selects to open a lock. There are times when the quality of the lock, concern for safety of occupants and other factors such as a malfunction of the lock may force the locksmith to use destructive techniques to gain entry. Before performing an emergency opening or certain other sensitive tasks, the locksmith may require positive ID procedures.

For security reasons or because keys are stolen or misplaced, many businesses, hotels/motels and apartment complex owners contract with locksmiths to provide new master key systems, reset combinations and rekey their door locks on a regular basis. Some cities and states require locksmiths to be licensed and bonded. The licensing process may include submitting fingerprints, undergoing a state or national background check, passing an examination, and paying a fee to the licensing agency. A self-employed locksmith must also keep business records and maintain a proper inventory of locks, parts, keys and tools.

In our state alone over 290 locksmith businesses are registered with the ALOA and South Kelleton includes 20.

4.3.1 Competition and Buying Patterns

Neighborhood locksmiths with shops depend on a steady stream of street traffic. As some are provided within hardware stores, many of these shops are not aggressive in their competition for business and are susceptible to aggressive marketing by other locksmith businesses. Because the locksmith industry sells to both consumers and businesses, a combination of "pull" marketing through advertising and "push" selling through directed sales efforts are used.

Customers will choose locksmith shops based on their location, the range of security options available, the helpfulness of sales staff, and, finally, price. Some prefer hardware stores with locksmiths which can handle more of their needs in one stop, while others look for specialists because of the greater level of service and expertise they generally provide.