How to start a locksmith business

While starting your own business as a self-employed locksmith is hard work, the rewards can make up for it. To help you decide if this is the career path for you, in this guide we explain how to start your own company. From researching the market to purchasing business insurance, we walk through the steps all ambitious locksmiths will need to take.

How to start a locksmith business in the UK

There are a number of factors involved in launching a successful locksmith business. Naturally, a good work ethic is essential, as are basic locksmithing skills and a certain level of experience in the industry. However, there are also a range of often-overlooked management skills that are also required. After all, running a successful business, regardless of the industry, presents a whole range of new challenges. Focusing on the latter set of skills, below we take a look at different processes involved in becoming a self-employed locksmith.

Do your research

Research is an essential part of starting a new business and locksmithing is no exception. As a rule, this initial research can be broken down into two. Firstly there’s internal research. This should include tasks such as finding the costs of the tools and equipment you need to operate as a locksmith. External research, on the other hand, should focus on factors relating to the area in which your business will be operating and the existing competition.

We will look at the tools and equipment locksmith businesses need later. However, before even considering purchasing this equipment, costing it up and ensuring you have the required finances is essential.

Once internal research is complete, it’s time to conduct your external market research. This should focus on two areas - your target customers and the existing competition. For example, you should discover how many homeowners, landlords and businesses there are in your target area to give you an idea of what demand might look like. This will help you decide if you are being under or overly-ambitious and allow you to adjust your plan accordingly. Using this information, financial projections can also be put together. You could even use this data to form internal targets or as part of a formal business plan.

Competitor research can also be useful. By understanding what you are up against, you can make more formulated business decisions. For instance, you may set your pricing structure based on a competitor’s, ensuring you represent better value for money. Or you may choose to offer more niche locksmithing services to fill a gap in the local market.

Purchase the tools and equipment you need

Without the correct tools, it’s impossible to work as a locksmith. This means purchasing the equipment you need before you start trading is essential. Although other tools may be required for certain jobs, there is a basic arsenal of equipment all locksmith businesses should have. These tools include:

• A set of hand lock picks and tension tools (with a variety of rakes, hooks and ball picks)
• A pick gun
• Broken key extractor
• Padlock shims
• Key-cutting machine/key duplicator
• Hand-held scope
• Basic hand tools (hammer, spanner, screwdrivers, allen keys, etc.)
• A power drill (with a comprehensive set of drill bits)
• Broken drill bit extractors
• Safety equipment (safety gloves, eye protection, protective footwear, etc.)

Register your business

After research is complete, finances are secured and tools are acquired, it’s time to register your business. As the owner of your locksmith company, you have a number of options here. You can either opt to operate as a self-employed sole trader or you can form a limited company. With advantages and disadvantages to both business models, it’s important to think carefully before making this decision.

If you choose to incorporate and set up a limited company, all business liabilities are limited. This means your personal assets are protected should your business get into financial trouble. These businesses also enjoy a number of tax breaks that sole traders do not. However, going limited can be time-consuming and does require an incorporation fee.

On the other hand, you can choose to operate as a sole trader. This model is free to set up and does not require as much paperwork as setting up a limited company. However, you are personally liable for the business’s financial responsibilities. This means, if your locksmith business gets into debt, your own personal assets could be put at risk.

Set your rate

Before you start trading, you also need to decide what you want to charge for your work. Factors such as the services you offer, your level of experience and the prices of your competitors should all play a part in forming your pricing list. However, for context, according to the Master Locksmiths Association, the average locksmith in the UK charges £65 per hour. It’s important to note that some do charge a lower rate for any additional hours of work after the first, as most jobs can be completed in an hour. It’s also worth noting some locksmiths will charge a call out charge if the call comes in ‘unsocial’ hours. This usually means calls that come between 6pm and 7am.

Buy insurance

The final thing to consider before you start trading is insurance. However, which insurance policies are a legal requirement for locksmiths? Below we take a look at the main policies a locksmithing business might want to purchase.

Do locksmiths need insurance?

If you own a business in the UK that employs staff, you are legally obligated to have employers’ liability insurance in place. This type of cover offers financial protection in the event someone you employ becomes injured or unwell in the line of work. This is the only form of insurance locksmiths in the UK are legally required to have.

Although liability insurance policies are not compulsory, they are certainly worth considering. After all, an accident can always happen while you’re working and if you are not covered, your business could be held financially responsible. With this in mind, there are a number of policies all locksmiths should strongly consider purchasing.

Firstly there is public liability insurance. These policies are designed to protect your business if a third party individual is injured or their property is damaged while you are working. This can include clients and other members of the public. Public liability insurance would cover all legal costs if, for example, a client injures themselves on a faulty new lock you have installed. You would also be covered if you accidentally damage a client’s hallway when carrying tools into a property, for instance.

Finally, tools and equipment insurance can be purchased. As the name suggests, this policy offers financial protection should any of your equipment be damaged, lost or stolen.

At Markel Direct, we offer comprehensive all-in-one locksmith business insurance packages. These tailored policies can be customised to best suit the needs of your business. This includes the ability to combine a range of the covers discussed above into a single insurance package.