How to Start a Parking Lot Business in 2024?

Published On: April 4, 2022
Last Updated: February 19, 2024
How to Start a Parking Lot Business in 2024?

Over the years, many people have been opting for vehicles, and finding ideal parking spots is quite a struggle. Hence, many businesses worldwide have started working on this problem and opening parking lot businesses.

Parking lot businesses have always been a profitable investment opportunity, but with the rise of urbanization, their demand has skyrocketed.

According to IBISWorld, the revenue of parking lots & garages in the US will be $8.1 billion in 2024, and it will reach $11.2 billion by 2027.

Starting a parking lot business can be a great way for entrepreneurs to capitalize on this growing demand. It provides a valuable service to individuals that need a safe and secure place to park their vehicles. However, it needs a strong business plan to make it successful.

Further, in today’s digital age, simply offering parking space may not be enough. Customers expect convenience and ease of use, which is where building a parking app comes into play. Business owners need to embrace technology and build an app that simplifies the parking experience for customers.

In this blog, we will explore how to start a parking lot business, the essential steps involved in setting up the business, and the importance of building a parking app to ensure success in the modern market.

So, let’s get started.

Key Elements in Parking Lot Business

Let’s explore the key elements of parking lot business. It includes:

  • Easily accessible location
  • Safety and Security of vehicles
  • Competitive rates
  • Integration of technology
  • Excellent customer service
  • Proper maintenance of the parking lot

All the key elements mentioned above are straightforward & easy-to-understand. However, when it comes to technology integration, seeking expert advice is highly recommended.

Integrating parking management software and mobile apps can simplify the parking experience for customers, improve efficiency, and increase revenue.

We have explained technology integration in detail in the later part of the blog. Don’t hesitate to contact us if you have any queries related to technology integration. We love to guide you in starting a parking lot business.

There are numerous benefits of having mobile apps in this business. Let’s look at it in detail.

Benefits of Mobile App Development in Parking Lot Business

Smartphone users grow every year and they usually look for a solution through apps. There are some of the best parking apps currently available in the market that provide a better experience to users and generate good revenue.

So, let’s look at what benefits you can gain if you develop a mobile app in your parking lot business.

Increased Efficiency

Developing mobile apps can improve parking lot efficiency by allowing customers to reserve and pay for parking spots in advance. It reduces wait times and increases turnover. Moreover, it can automate parking management processes, such as tracking parking space availability, monitoring parking violations, etc.

Improved Customer Experience

Customers get a seamless parking experience from mobile apps as they can easily search for parking spot availability, get updates on directions, reserve and pay for parking, and receive notifications on their devices.

Enhanced Security

Using the app, customers can report incidents & receive notifications on their mobile devices, which enhances security. Also, if it is integrated with security cameras and sensors, it provides users with real-time monitoring and improves overall security.

Cost Savings

The development of parking app helps businesses save costs as it reduces manual processes such as paper tickets and payment processing. Additionally, it reduces labor costs and increases revenue, improving operational efficiency.

Data Analytics

Mobile apps can provide valuable insights into customer behavior and preferences, helping parking lot businesses identify trends, optimize pricing strategies, and improve marketing efforts. Also, it can generate real-time data on the usage of parking lots, allowing businesses to adjust operations accordingly.

Now let’s move forward to understand the step-by-step process of starting a parking lot business.

How To Start A Parking Lot Business: Steps To Consider

Starting a parking lot business requires careful planning and preparation. Here are some steps to consider:

1. Create a Business Plan

Before starting any business, having a clear business plan that defines your objectives, target market, financial projections, and marketing strategy is crucial.

A highly-organized business plan will help you succeed in the parking lot business. In addition, this will help you identify potential challenges and opportunities and set a clear roadmap for your business.

When creating your business plan for a parking lot business, consider factors such as location, parking lot size, pricing strategy, technology integration, staffing requirements, and marketing and promotional activities.

Your business plan should also include a detailed financial plan analysis, including app development costs.

Remember to review and update your business plan occasionally to adapt to changes in the market and your business environment.

2. Form a Legal Entity

Having a legal business entity is crucial for every small to large business. There are various business entities available like sole proprietorship, partnership, corporation, Limited Liability Company (LLC), etc.

Forming a business entity like LLC and corporation prevents you from being personally accountable if your parking lot business is sued for any reason.

3. Find Funding

Firstly, you should collect information about the average selling price for parking spots to provide car parking services.

Reach to a loan officer or a credit union to check whether you have good credit scores to qualify for a commercial loan. Also, you can contact small business administrations that provide low-interest loans to entrepreneurs who want to start their ventures.

4. Find the Location of Your Parking Lot

Get engaged with a real estate professional to assist you in finding the best commercial property on a great deal for a given region of your choice.

Choose places, where street parking is limited, in commercial areas, event spaces that attract a large crowd, near colleges, next to airports, adjacent to hospitals, etc. A parking lot near a harbor will also be in demand as travelers face issues finding a space to park their cars.

5. Register Your Taxes

Before opening your parking lot business, you need to register for many sorts of state and federal taxes. It solely depends on the business structure you choose and accordingly you’ll get various options for how your business is taxed.

For example, commercial parking lot owners have to pay a 12.5% tax on the total parking fee in Seattle, Washington.

6. Define all the Specifics

It would help if you planned adequately whether you want to rent spaces to the customer monthly or yearly or are looking to rent out the parking area at an hourly or daily rate.

It helps you estimate the price you want to charge the user at the parking lot. Also, make sure the pricing is reasonable and sufficient to pay your expenses.

7. Organize Your Parking Lot Properly

You should consult an architect about your parking lot plans. They have expertise in designing parking lots to ensure all your requirements are met. It is vital to verify that your parking lot possesses the maximum number of spaces per the layout and size.

To check the space, you can also construct a lot properly and paint the line to divide spaces between cars properly. If you plan to rent out the parking space, it is recommended to assign numbers. It will help customers quickly find and use their space.

8. Provide Best Safety and Security

Install security cameras to keep an eye on everything happening in your parking lot. You can also retain a password gate or an attendant at the parking lot to look after anyone who does not have permission to park their car.

Besides this, you can also hire a security guard who will control all the parking lot activities when all the users are enjoying their day.

9. Open a Business Bank Account

When you merge your business and personal account, your assets like your home, car, etc., are at risk in case your business is sued. Using specific business banking and credit accounts for your business transactions helps to protect your personal asset.

Also, business accounts have their own benefits like credit cards on your business’s name, better interest rates, and many more.

10. Obtain Business Insurance

If you have business insurance, you will be able to operate your business safely and lawfully. In addition, this insurance safeguards you financially in case of loss. For example, if there is any damage to a person’s car in your parking lot, it will be covered.

Different insurance policies are present for other businesses. If you are not familiar with them, you can choose to go with General Liability Insurance.

Aside from that, you can get Workers’ Compensation Insurance. This insurance is helpful to cover the losses of any employees that are working in the parking lot.

11. Develop a Parking Mobile App

After deciding all the above things, it is time to take your parking lot business online. You should create a mobile app for your parking lot business to reach a wider audience & generate income.

However, you can also create a marketplace that allows individuals or businesses to rent out their unused parking spaces to others.

This creates a new revenue stream for the parking lot business and provides a convenient parking option for customers who may be looking for affordable or alternative parking options.

So, now let’s discuss what kind of features & functionalities you need to include in your app to meet the growing demand for parking solutions.

Common Features and Functionalities of Parking Lot Apps

Here are some common features and functionalities of the parking lot app you need to include to offer customers a convenient parking experience.

Parking Reservation
It allows customers to reserve a parking spot in advance. They can easily search for parking availability, select the desired time and duration, and reserve a parking spot using the app.

Real-time Parking Availability
It provides customers real-time updates on parking availability, allowing them to select the best available parking spots quickly and easily.

Payment Integration
Payment integration allows customers to pay for parking using the app, eliminating the need for manual payment processes. Customers can securely pay for parking using various payment options, such as credit cards or mobile wallets.

Navigation
The navigation feature allows customers to view parking lot maps and locate nearby amenities. It provides directions to customers’ reserved parking spots, ensuring they arrive at the parking lot quickly and easily.

Security Features
Security features include real-time monitoring, security cameras, and alarms, enhancing the overall security of the parking lot. Customers can also request assistance or report incidents using the app.

Rewards and Loyalty Programs
Rewards and loyalty programs that customers can earn points for every parking transaction, which can be redeemed for discounts or free parking. It leads to an increase in business & encourages customers to use the app and park in the parking lot frequently.

Notifications
The Notification feature provides customers real-time updates on their parking transactions, such as payment confirmation, reservation confirmation, or reminders about expiration time. Customers can also receive personalized offers and promotions through notifications.

With the right mobile app development team, businesses can successfully develop a parking mobile app with these features and create a more comprehensive parking solution.

Conclusion

We hope that this article has provided you with valuable information on how to start a parking lot business.

Moreover, with the growing demand for parking services, developing a mobile app can further enhance your business and improve the overall customer experience.

If you are looking to develop a parking app for your business, our team of experts is here to help; contact us now!

We are a leading web and mobile development company with extensive experience in developing mobile apps. Our team of experts can help you create a customized parking app that meets the specific needs of your parking lot business and enhances the overall customer experience.

Frequently Asked Questions

Yes. Parking lot business is a great investment as in urban areas people face too many parking problems and they are ready to pay any price for safely parking their cars. Also, the hourly-based payment model makes it reasonably more profitable than other businesses.

On average you can generate $50,000 to $80,000 annually per parking lot with 20 parking spaces. However, it depends on the capacity of parking space and location.

For example, Parking rates in rural areas could be as low as $1 per hour but in cities like New York you can charge upto $10 per hour.

There are few tips which help you manage your parking lot business effectively.

  • Appoint parking lot attendants to manage day-to-day chores
  • Install CCTV for regular surveillance
  • Install good lighting for a better vision on night
  • Repaint the parking lines frequently
  • Check on signing boards at every turning point of the parking lot

Yes, you can integrate your existing parking lot management software with the parking mobile app to provide a seamless user experience and improve efficiency.

A parking mobile app can improve your parking lot business by providing a seamless and convenient parking experience for your customers. It can also help you increase efficiency, improve customer experience, enhance security, generate income, and gather valuable data analytics.

Yes, you can customize your parking mobile app to meet the specific needs of your parking lot business. It's important to consult with an experienced app development team to ensure that your app meets the needs of your business and your customers.

Ravi Makhija
Ravi Makhija

Ravi Makhija is an entrepreneur, an IT professional, tech geek, founder & CEO at Guru TechnoLabs - Globally Trusted Web & Mobile App Development Company. He loves writing about new technologies and the latest trends in the IT field.