The parking industry is highly competitive, and growing a parking business requires operational excellence. Finding ways to reduce costs while maintaining a high quality service is an important driver in parking operations. In this blog post, we explore the costs involved in a running a parking business.
The typical costs for a parking operator can vary widely based on the size, location, and type of parking facility they manage. However, the main categories of costs generally include:
1. Operational Costs
- Staffing: Salaries and wages for attendants, security personnel, and administrative staff.
- Maintenance: Routine maintenance of the parking lot or garage, including cleaning, landscaping, and repairs.
- Utilities: Costs for lighting, heating, ventilation, and air conditioning (HVAC) in enclosed parking facilities.
- Insurance: Liability insurance to cover potential accidents, property damage, and other risks.
- Security: Costs associated with surveillance systems, security guards, and other safety measures.
2. Technology and Equipment
- Parking Management Systems: Software and hardware for managing entry/exit, payments, and space allocation.
- Payment Systems: Installation and maintenance of payment kiosks, ticket machines, or mobile payment systems.
- Access Control Systems: Barriers, gates, and automated access control equipment.
- Hint: Use the ParkMan platform to dramatically reduce your technology costs!
3. Property-Related Costs
- Rent or Lease: If the operator leases the property, this includes rent or lease payments.
- Taxes: Property taxes if the operator owns the property.
- Depreciation: Depreciation of owned property and equipment.
4. Regulatory and Compliance Costs
- Permits and Licenses: Fees for obtaining necessary permits and licenses to operate.
- Compliance Costs: Expenses related to ensuring compliance with local, state, and federal regulations.
5. Marketing and Customer Service
- Marketing: Costs associated with advertising and marketing to attract customers.
- Customer Service: Expenses for customer service operations, including handling complaints and feedback.
- Hint: Use the ParkMan platform to automate your marketing and customer service.
6. Miscellaneous Costs
- Supplies: Office and operational supplies.
- Legal Fees: Costs for legal services related to contracts, disputes, or other legal matters.
Summary
Here's a rough breakdown of these costs:
- Staffing: 30-40% of total costs
- Maintenance and Utilities: 20-30%
- Technology and Equipment: 15-25%
- Property-Related Costs: 10-20%
- Regulatory and Compliance Costs: 5-10%
- Marketing and Customer Service: 5-10%
- Miscellaneous: 5-10%
These percentages can vary based on specific circumstances such as the scale of the operation, the location, and the type of parking services provided (e.g., surface lot vs. multi-story garage). Operators need to carefully manage these costs to maintain profitability while providing high-quality service to customers.
How ParkMan can help
ParkMan wants to help our clients bring down the technology costs and marketing costs to a minimum. Explore our services and talk to our sales - we want to be the most parking operator-friendly software company on the market.