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

                                    May 20, 2024 - Commercial Bankruptcy Filings Up
                                    • Overall commercial bankruptcy filings, a demand indicator for business-related lock-changing services, grew 39% in April 2024 year over year, according to Epiq AACER. The total number of commercial Chapter 11 bankruptcies filed in April 2024 reached 542, 40% higher than a year ago. Small business filings, captured as Subchapter V elections within Chapter 11, grew 60% in April 2024 compared to April 2023. According to ABI Executive Director Amy Quackenboss, “As interest rates remain at elevated levels and household debts continue to climb, access to the financial fresh start of bankruptcy is key for struggling businesses and consumers. With enhanced eligibility for consumers and small business set to expire at the end of June, we appreciate recent legislative efforts by Congress to maintain greater access to a more efficient process for small businesses and families to restructure their debt loads.”
                                    • The National Federation of Independent Business (NFIB) monthly jobs report shows that unfilled job openings were up in April 2024, with a seasonally adjusted 40% of business owners reporting jobs they could not fill. The reading is up three points from March 2024, which had the lowest reading since January 2021. A seasonally adjusted net 12% of small business owners plan to create new jobs over the next three months, up one point since March. About 19% of owners reported labor quality as the most important problem facing the business. According to NFIB Chief Economist Bill Dunkelberg, “Hiring plans among small businesses once again in April, but open positions remain largely unfilled as owners struggle month after month to find employees. Overall, small businesses are not reporting net gains in employment as wage pressures and inflation keep the labor market tight.”
                                    • Consumer confidence levels fell in April 2024 from March 2024, marking a third consecutive month of weakness, according to data from The Conference Board. The Conference Board’s consumer confidence index was 97 in April 2024 from 103.1 in March 2024. According to Dana Peterson, Chief Economist at The Conference Board, “Confidence retreated further in April, reaching its lowest level since July 2022 as consumers became less positive about the current labor market situation, and more concerned about future business conditions, job availability, and income.” Peterson added that confidence declined among consumers of all age groups and for all income groups except those in the $25,000 to $49,999 range. Plans for vacations, home purchases, and large appliances decreased on a six-month basis.
                                    • 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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