Maybe you’ve just finished watching the latest episode of Elementary and realized that you could turn your lock picking skills into locksmithing skills and start your own business. Or perhaps you’re a veteran locksmith that is looking to grow your mobile locksmithing business into a brick and mortar store.
However you got here, you’re about to step down a path that could be one of the most rewarding journeys of your life. But the first step in that journey is ensuring you create a sustainable business that allows you to continue doing something you enjoy – locksmithing. So grab a pencil and some paper, or your laptop or tablet, because we’re going to create a locksmith business plan.
What is a Business Plan?
Before we get into what a business plan is, let’s first clarify what it isn’t.
Above all else, a business plan is not some super long complicated document. Many first time locksmiths likely skip this step because most places make business plans seem like rocket science. We’re going to show you how to keep it short and simple.
To put it plainly, a business plan is created to take you through each step of building your business. It’s your recipe, or checklist to make sure you’ve got everything in order to move forward. But if you want it can be used for so much more, like accountability, or goal tracking. The idea is to get everything in your mind down on a piece of paper (or several sheets) and then organize it.
With that said, let’s take a look at exactly how you should organize this plan according to the U.S. Small Business Administration.
1. Executive Summary
If you recall as far back as grade school your teacher probably told you every report had to have a clear introduction and conclusion. Well the executive summary is essentially both of those things. It is the first part of a business plan, but it is also a summary of everything in your plan.
In order to complete this section you need to answer the following three (3) questions:
- What qualifies you to run a successful locksmith business?
- What need does your locksmith business address?
- What are the costs and profit expectations?
- What are your overall goals with this business?
It’s okay if you can’t answer all of these questions right now. Once you complete your business plan you may want to come back to the executive summary and edit some items. For now, try to keep this portion to a page (or less).
2. Company Description
Next on the list is your company description. At first you may think, “Well, I’m a locksmith, so my company description is locksmithing.”
Dig a little deeper.
Specifically what type of company do you want to be? Are you a mobile locksmith? Is your focus or automotive locksmthing or electrical locksmithing? What are you doing to differentiate yourself from other locksmiths. Essentially, this is your brand.
In order to answer these questions you will likely need to determine who your preferred customers are, and think about their needs.
If you will be looking for a partner or investor, this is your opportunity to really show them what your business is going to be about.
3. Market Analysis
Market analysis can be summarized in one simple question, will you be successful?
This is your opportunity to analyze trends in the locksmithing industry to figure out what kind of results you can expect.
According to a recent report by IBIS World the locksmithing industry is a $2 Billion market that is not dominated by any one single company. The industry seems to move with the housing market, suggesting when the housing market is up the locksmithing market is up.
But trends alone won’t define your success. If you’ll be working in one specific city or county then you need to be able to define the needs of that region and explain how you plan to reach your customers.
4. Organization and Management
The Organization and Management section is simply that, organization and management.
The simplest thing to do here is make a list of all the employees and owners (or managers) in your company and place a title and description by each one. The descriptions should include a few sentences on their background, experience, and expertise. These descriptions may also include any locksmith apprenticeships completed, or formal training. You may want to include a bit more information for the upper tier of your business.
If it’s just you, or just you and a partner, then this section just got a whole lot simpler!
5. Services and Products
We touched on services and products briefly in section two (2) above, but now it’s time to get detailed. Don’t just write down all the services that are typical or that you think you should offer. If you’ve got new ideas or new view points on traditional services then now is the time to get all that down.
Maybe your new take on an existing service may just change the entire market. Just make sure you keep in mind what your customers want and need.
6. Marketing and Sales
We just identified your services and products. Now it’s time to figure out 1) how much they’re going to cost and 2) how you’re getting to let your customers know about them.
In the marketing section this could be things like local ads in newspapers or magazines, a short clip on the radio, a website, maybe even social media.
In the sales section make sure you put a lot of thought into the actual quantity of sales you’ll need to turn a profit. For instance, it may be a great marketing technique to have the cheapest services in town, but if you can’t meet a certain quota to make money then it’s all for naught.
7. Funding Request
The big question is do you need funding? If so, what type of funding are you looking for?
Make sure you are clear on how much funding you need and what you are willing to give up in return for that funding (i.e. interest rates, equity, etc.).
8. Financial Projections
For every business this is likely one of, if not the, most important section of the plan. The bottom line is simple. You have to make a profit.
You may not have all the answers to exactly how you’ll make X amount of dollars each month, but you need to have a clear plan on how you’re going to get to that number. Some of the numbers in this section may be guesses, but they should be based on the data that you used above in your marketing analysis, marketing, and sales.
You’ll likely want to make 1 year, 5 year, 10 year, and 20 year projections. And as we just stated, all projections should be backed up with sufficient data.
This section is not absolutely necessary, but is typically helpful for keeping accumulating your important business documents in one place.
If you’ve got some images of your locksmith van, business licenses, training accreditation, or anything else important, this is the place to add it.
Don’t Be Intimidated
Okay, that was a lot of information. But remember our original goal? Keep it simple.
The easiest thing to do is grab nine (9) sheets of paper and just start jotting down some thoughts for each of the sections we discussed above. If you get stuck, just move on to the next section. In many cases you may run into questions you’ve never even thought to ask. And that’s a good thing!
This may be a time intensive task, but it is a task that will set you down the path for a successful business. So, take a deep breath and get to work.