Locksmiths

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 4,000 locksmiths in the US sell, install, open, modify, and service mechanical or electronic locking devices, safes, and security vaults. Major revenue categories include non-residential services, residential services, key duplication, and merchandise resale. Firms may install and service electronic alarm and surveillance systems or provide roadside assistance for locked vehicles.

Staying Current With Technology

Electronic locking technology is changing the security industry and forcing locksmiths to adapt accordingly.

Recession-Resistant, But Not Recession-Proof

While the locksmith industry is considered recession-resistant, an individual firm’s specialty can be sensitive to economic factors.

Industry size & Structure

The average locksmith operates out of a single location, employs four workers, and generates about $575,000 annually.

    • The locksmith industry consists of about 4,000 companies that employ about 16,500 workers and generate about $2 billion annually.
    • The industry is highly fragmented; the top 50 companies account for 23% of industry revenue.
    • The industry primarily consists of small, independent operators that serve a local market. Franchises include Pop-A-Lock and Mr. Rekey.
                                    Industry Forecast
                                    Locksmiths Industry Growth
                                    Source: Vertical IQ and Inforum

                                    Recent Developments

                                    Mar 18, 2024 - Employment Flat, Wages Increase
                                    • According to the Bureau of Labor Statistics (BLS), employment by security system services, which includes locksmiths, was mostly unchanged from December 2022 to December 2023 and rose 5.4% from 2019. Wages at security system services have increased significantly as companies compete in a tight labor market. Average hourly wages increased 11.7% in December 2023 from the previous year and 35.7% from 2019, per the BLS. Additionally, consumer spending levels increased in the last half of 2023, a 3.1% rise in the third quarter and a 2.8% increase in the fourth quarter, according to Reuters.
                                    • Consumer confidence levels fell in February 2024 after increasing for three consecutive months, according to data from The Conference Board. The Conference Board’s consumer confidence index fell to 106.7 in February 2024 from 110.9 in January 2024. According to Dana Peterson, Chief Economist at The Conference Board, “The decline in consumer confidence in February interrupted a three-month rise, reflecting persistent uncertainty about the US economy. The drop in confidence was broad-based, affecting all income groups except households earning less than $15,000 and those earning more than $125,000.” Peterson added that the decline in consumer confidence was largest in householders over 55 and those under 35. Plans to purchase homes, autos, and large appliances decreased slightly on a six-month basis.
                                    • Inflation was reported as the top business problem for small business owners, selected by 23% of owners in a survey by the National Federation of Independent Business (NFIB). The NFIB’s Small Business Optimism Index fell in February 2024 to 89.4, marking the 26th consecutive month below the 50-year average of 98. According to NFIB Chief Economist Bill Dunkelberg, “While inflation pressures have eased since peaking in 2021, small business owners are still managing the elevated costs of higher prices and interest rates. The labor market has also eased slightly as small business owners are having an easier time attracting and retaining employees.” Small business owners are still encountering high job opening levels, with a seasonally adjusted 37% of owners reporting job openings they could not fill in the current period. Nearly 55% of owners reported making capital outlays in the past six months, with 35% spending on new equipment, 23% acquiring vehicles, and 15% improving or expanding facilities.
                                    • Locksmiths will have to monitor minimum wage changes, as 22 states increased their minimum wages in January 2024, according to USA Today. About half of the increases are automatic adjustments linked to inflation. States that raised their minimum wages in January 2024 include Hawaii ($14), Maryland ($15), Nebraska ($12), and Washington ($16.28). Several states are set to boost their minimum wage levels later this year, including Florida (up to $13 in September) and Nevada (up to $12 in July). According to the Economic Policy Institute, nearly 40 US cities and counties will increase their minimum wage rates above state levels at the start of the new year. The federal minimum wage is $7.25 an hour, and more than 20 states, primarily located in the South and the Midwest, use the federal minimum as their wage floor.
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