How to Start Your Parking Lot Business: 11 Step Guide

October 6, 2023
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Starting a parking lot business can be a very lucrative venture, especially in dense urban areas where parking is scarce. With proper planning and execution, you can build a successful business that provides value to customers while generating steady income. This guide will walk you through the 11 key steps needed to launch your parking lot business.

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How to Start a Parking Lot Business in 11 Steps

Step 1: Research Your Local Market and Competition

Observing Parking Demands

Parking occupancy was observed by visiting locations at different times on weekdays and weekends. Seeing which areas were consistently full helped identify where demand existed.

Gauging Client Needs

Owners of nearby businesses were spoken to in order to understand the parking needs of their customer bases. Learning peak times and duration of stays helped determine ideal rate structures.

Analyzing Existing Options

A list of current parking operators in the neighborhood was compiled. Details on their typical clients, rates charged and operations models were gathered through calls and visits.

Identifying Opportunities

With collected data, it was clear some locations had consistently high parking without affordable options. This presented a chance to fill needs in the market at a profitable rate point.

Comparing Market Standards

Speaking to competitors informed of standard practices for things like rates, signage and hours of operation. Understanding these factors ensured the new lot would be a smooth transition for clients.

Step 2: Obtain Proper Licenses and Permits

Contact your local government offices like the zoning, transportation and business licensing departments. Find out specific regulations and permit requirements for operating a commercial parking facility in your area. Expect to obtain:

  • A business license to legally operate as a commercial entity.
  • Zoning permit if property needs to be rezoned for commercial use.
  • Building permits for any new structures or major renovations.
  • Fire, health and safety permits depending on lot size and features.
    Get the process started early as permits can take time. Make sure your lot conforms to all codes, with oversight from licensed inspectors.

Step 3: Choose and Purchase/Lease a Prime Location

Neighborhood demand analysis from step one will show ideal areas for your lot. Scout locations considering:

  • High visibility from major roads for easy access and foot traffic.
  • Proximity to public transit, offices and stores with many visitors.
  • Space for minimum number of stalls (usually 10-50) as per permits.
  • No topographical challenges on the land.
  • Ability to secure property at a reasonable bulk rate. Determine lease vs purchase based on finances.
    Evaluate foot traffic, safety and market potential of each site before finalizing. Purchase or sign a long term lease.

Step 4: Design Your Parking Lot Layout

Now that you have selected a location, it’s time to design the layout of your parking lot. The layout will maximize your available space so you can fit as many parked vehicles as possible. Here are some tips:

  • Draw a scaled diagram of your entire property, including any existing structures. This will help you visualize how to arrange parking spaces.

  • Determine the size of parking spaces. Standard spaces are about 9 feet wide by 18 feet long, but you may need larger spaces for trucks or RVs. Account for access roads too.

  • Lay out parking spaces in orderly rows separated by drive aisles at least 24 feet wide to allow for two-way traffic flow. You don’t want cars backing into each other.

  • Consult local planning and zoning regulations to ensure your layout meets requirements for accessibility, drainage, lighting, landscaping etc. Get approval before proceeding.

  • Consider features like angled parking, which maximizes spaces but requires one-way traffic flow. Parallel parking allows two-way traffic but uses more space.

  • Reserve handicapped spaces near the entrance and mark them clearly with signs and blue paint.

  • Leave ample room at the entrance/exit for queuing traffic without blocking drive aisles.

Step 5: Install Necessary Infrastructure

Paving and Markings

  • Hire a paving contractor to install the asphalt pavement based on your design plans.
  • Clearly mark parking space lines and directional arrows using waterproof paint.
  • Add signage clearly indicating parking rates, restrictions, liability disclaimers etc.


  • Install solar-powered or wired parking lot lights along drive aisles and spaces for visibility and security at night.
  • Mount lights on poles throughout the lot according to code requirements.


  • Plant trees and shrubs along the perimeter to beautify the area and provide shade over time.
  • Install mulch beds, irrigation as needed based on your landscaping plan.


  • Grade the lot to allow for proper stormwater drainage away from buildings.
  • Add catch basins, pipes and detention areas if required to prevent flooding.


  • Install security cameras with views of entire parking area.
  • Erect a perimeter fence or barrier as needed for access control.

Ensure all infrastructure meets local building and engineering codes. Address any final touch-ups or modifications before opening your parking lot for business.

Step 6: Set Parking Rates and Payment Options

Determine your daily, hourly and event parking rates. Market research will help you set competitive prices. Here is a sample rate structure you could implement:

Parking TypeRate
Daily Parking (over 8 hours)$10
Hourly Parking (under 8 hours)$2 per hour
Event Parking (concerts, games)$15

You’ll also need options for customers to pay:

Payment Options

  • Accept cash or coins at an on-site payment kiosk
  • Offer hourly/daily parking passes for recurring customers
  • Integrate mobile payment apps
  • Install pay stations that accept cards and digital wallets
  • Provide validation for customers with arrangements

Clearly display your rates and payment information on signs. Consider volume discounts for corporate clients. Track payments with a logbook or online software. Revise your rates occasionally to keep pace with local competition and inflation.

Step 7: Market Your New Parking Lot

Marketing your parking lot is essential to attracting customers. Consider these strategies:

Online marketing

  • Create a website and list your business on Google Maps, Yelp, etc.
  • Run social media ads targeted locally.
  • Offer online booking/reservations.

Pros: Reaches wide audience cost-effectively. Makes your business easy to find online.


  • Contact nearby businesses to offer rates for their employees/customers.
  • Attend local chamber of commerce events.
  • Partner with sports teams/venues for event parking.

Pros: Builds partnerships within the community. Can generate recurring business.

On-site signage

  • Install large signs visible from the street with rates and hours.
  • Post flyers at nearby commercial areas and apartment complexes.
  • Distribute business cards to passersby.

Pros: Caters to impulse parkers. Raises awareness of your location.


  • Offer introductory discounts or loyalty programs.
  • Partner with food trucks to draw lunch crowds.
  • Distribute coupon codes on social media.

Pros: Generates buzz and encourages repeat customers. Increases lot traffic.

With consistent marketing, your new parking lot business can reach its target audience and start filling up regularly. Track the effectiveness of each strategy.

Step 8: Hire and Train Employees


  • Create job descriptions for roles like attendant, cashier, supervisor.
  • Advertise openings on job boards, social media, and onsite signs.
  • Screen applicants and conduct interviews to find reliable candidates.
  • Perform background checks before making an offer.


  • Onboarding Orientation
    • Review company policies, procedures, and expectations.
    • Provide uniforms, keys, radios etc as needed.
  • Cash Handling
    • Train on transactions, cash protocols and security measures.
    • Educate on dealing with issues like fraudulent payment.
  • Customer Service
    • Roleplay customer interactions and complaints.
    • Cover etiquette, problem resolving, enforcing policies.
  • Safety and Emergencies
    • Instruct on first aid, accident prevention and emergency plans.
    • Conduct fire/evacuation drills.
  • Lot Operations
    • Show daily tasks like inspection, cleaning, ticket processing.
    • Review lot map, accessibility standards and valet procedures.

Provide ongoing training, evaluations and support to ensure high-quality service from your parking staff. An engaged team will reflect positively on your business.

Step 9: Purchase Necessary Equipment and Supplies

To start, you will need to purchase equipment to accept payments from customers. This includes a payment terminal that accepts credit cards, debit cards, and mobile payments. You’ll also need a cash drawer for handling cash and coins. A receipt printer is critical for providing customers documentation of their transactions.

Secondly, focus on acquiring supplies for basic operations and maintenance. Stock up on paper rolls for the receipt printers, receipt books for cash payments, and pens. Get uniforms, hats, raingear, and safety vests branded with your company logo for employees. Invest in a first aid kit, flashlights, batteries, and a tool kit for minor repairs.

Finally, consider longer term items for security and management. Install security cameras with the necessary DVR system to monitor activity and license plates. Purchase a laptop or tablet loaded with lot management software for tasks like booking reservations, generating reports, and remote monitoring of camera feeds. Radios or walkie talkies will help staff communicate across the property as well.

Step 10: Insure Your Business

As a new business owner, it is critical to protect your parking lot operations and assets with adequate insurance coverage. Contact providers to get quotes for general liability insurance, which covers bodily injury and property damage claims from patrons.

Purchase garage keepers legal liability insurance to protect against theft or damage to customer vehicles while parked. Also invest in workers’ compensation insurance for employee injury claims and business personal property coverage for buildings and equipment.

Review your policies annually with your agent to ensure continued protection as your business grows. Maintaining proper insurance is essential for risk management and peace of mind.

Step 11: Track Metrics and Evaluate Performance

  • Set up a system to collect monthly data on:
    • Number of daily/hourly parking transactions
    • Peak parking periods
    • Occupancy rates
    • Revenue vs. expenses
  • Note any recurring issues from customer feedback forms
  • Measure staff performance through customer service surveys
  • Analyze online reviews and adjust based on feedback
  • Compare metrics to goals and regional competitors
  • Identify areas for improvement like marketing campaigns, rates, or processes
  • Formally review performance after the first 6 months and annually to refine operations, budget accordingly and ensure continued business success

How much it cost to start a parking business?

Cost CategoryMinimum CostMaximum CostAverage Cost
Initial Startup Costs$62$47,597$27,637
Parking Lot Costs$9,000$18,000$13,000
Land Acquisition$50,000$500,000+Varies by location
Construction per sq ft$1.25 – $1.50 per sq ft (large lots)$3 – $6 per sq ft (small lots)Varies by size

Some key points:

  • Total startup costs can range widely depending on the scale of operations and land/construction costs.

  • Initial costs include licensing, insurance, equipment while parking lot construction is a major expense.

  • Land purchase is typically the biggest single cost and budget $50K minimum for a small area. Construction scales with parking lot size.

  • About $13K on average to establish a basic cash-only, small-scale pay parking area excluding significant land value. Larger automated lots are more expensive to develop.

How can I make my parking lot business more efficient?

  • Implement an online reservation and payment system. This allows customers to book and pay in advance from their phones.

  • Invest in automated pay stations. Electronic kiosks are faster than cash payments and can accept various payment methods.

  • Utilize license plate recognition technology. Cameras can automatically charge monthly parkers and enforce parking rules.

  • Train employees efficiently. Cross-train attendants on multiple roles to handle absences better and optimize staff schedules.

  • Incorporate LED lighting and sensors. Motion-activated, energy-efficient lights save on electricity compared to always-on traditional lights.

  • Establish monthly parking packages. Recurring customer agreements through payroll deduction or flat monthly fees provide stable revenue.

  • Consider expanding vertically. Build additional floors if possible to increase capacity in a small area and earn more per square foot.

  • Provide bike parking and electric vehicle charging. Extra amenities attract new customer segments and demonstrate corporate responsibility.

What are common mistakes in parking lot businesses?

  • Not pricing parking rates correctly – Rates that are too high can deter customers, but rates that are too low fail to maximize revenue. It’s important to research competitors and understand customer demographics.

  • Neglecting maintenance and repair – Parking lots require regular upkeep like cleaning, re-striping, pothole filling, and equipment maintenance. Falling behind on these tasks can negatively impact the customer experience.

  • Lacking signage or wayfinding – Customers need clear direction when entering and exiting the lot as well as guidance to available parking spaces. Confusing signage will frustrate customers.

  • Inefficient enforcement of parking rules – Policies around overstay parking and unauthorized vehicles need to be enforced consistently. Lax enforcement trains customers that rules don’t matter.

  • Not addressing security concerns – Customers will avoid parking lots perceived to be unsafe or high-crime. Proper lighting, security cameras, and emergency equipment can help alleviate safety worries.

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Final Thoughts

Starting a parking business takes planning and effort but can be highly profitable with the right strategy. Do your research thoroughly, develop a strong business plan, and you’ll be on your way to owning a successful parking business.

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    Aditi Krishnan

    Aditi Krishnan is a custom software development expert with over 5 years of experience in designing and building applications. She is currently a Lead Developer at Zipprr, a fast-growing software development company based in Cleveland, USA. Aditi specializes in Java, Python, and web technologies like ReactJS. Some of her past projects include developing internal tools for a logistics unicorn and building custom CRMs for Austrian SMEs. Outside of work, she enjoys traveling, cooking experimental dishes and is currently learning coding in Rust.