Start an elevator installation and repair service by following these 10 steps:
- Plan your Elevator Installation and Repair Service
- Form your Elevator Installation and Repair Service into a Legal Entity
- Register your Elevator Installation and Repair Service for Taxes
- Open a Business Bank Account & Credit Card
- Set up Accounting for your Elevator Installation and Repair Service
- Get the Necessary Permits & Licenses for your Elevator Installation and Repair Service
- Get Elevator Installation and Repair Service Insurance
- Define your Elevator Installation and Repair Service Brand
- Create your Elevator Installation and Repair Service Website
- Set up your Business Phone System
You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple guide to starting your elevator installation and repair service. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
STEP 1: Plan your business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
- What are the startup and ongoing costs?
- Who is your target market?
- How much can you charge customers?
- What will you name your business?
Luckily we have done a lot of this research for you.
What are the costs involved in opening an elevator installation and repair service?
This will be a multi-million dollar venture, possibly in the 9-digit range. Your mechanics earn about $80,000/yr while design engineers will expect a $200,000+ salary. A single two-floor elevator can cost several million dollars from design to manufacturing. Tools, trucks, insurance premiums, office space, and a marketing team will all be part of starting this venture.
What are the ongoing expenses for an elevator installation and repair service?
Your payroll will be a significant portion of your business as salaries for your employees run twice the national average. You will need to maintain offices for your engineering and design team. Tools, trucks, and heavy-duty equipment require capital investments with replacement costs factored into your annual budgets. Operational costs will be in the millions.
Who is the target market?
Any general contractor that is building apartment complexes, commercial buildings, or industrial complexes will need an elevator company.
How does an elevator installation and repair service make money?
Your clients pay a fee for annual maintenance and inspection. Emergency calls require an additional payment. The installation of a new elevator requires highly trained technicians that will earn the company a sizable payment for their work.
How much can you charge customers?
Annual maintenance contracts for a single-car elevator in a small building run around $5,000 to $7,000. Emergency responses earn $200/hr. A high-rise building with multiple shafts and cars can generate a $100 million contract for construction and installation of a new elevator system.
How much profit can an elevator installation and repair service make?
It is not unreasonable to expect a million dollar profit to be seen on a single installation project, but keep in mind that completion of a major bank of elevators in a high-rise building can take one to two years from proposal to completion. Regular maintenance visits generally charge 2.5 times the hourly wage for the technician, which provides a healthy 10% profit after business expenses are covered.
How can you make your business more profitable?
Larger construction jobs generate higher payouts while requiring fewer workers for the task. However, when you are starting out completing several smaller jobs in a short amount of time is crucial for building your reputation in town.
What will you name your business?
Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Elevator Installation and Repair Service Name Generator
When registering a business name, we recommend researching your business name by checking:
- Your state's business records
- Federal and state trademark records
- Social media platforms
- Web domain availability.
It's very important to secure your domain name before someone else does.
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your elevator installation and repair service is sued.
Form Your LLC
Read our Guide to Form Your Own LLC
Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services. You can choose to hire a registered agent or act as your own.
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It's really easy and free!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
Small Business Taxes
Depending on which business structure you choose, you might have different options for how your business will be taxed. For example, some LLCs could benefit from being taxed as an S corporation (S corp).
You can learn more about small business taxes in these guides:
There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.
STEP 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Additionally, learning how to build business credit can help you get credit cards and other financing in your business's name (instead of yours), better interest rates, higher lines of credit, and more.
Open a business bank account
- This separates your personal assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Recommended: Read our Best Banks for Small Business review to find the best national bank, credit union, business-loan friendly banks, one with many brick-and-mortar locations, and more.
Open net-30 accounts
When it comes to establishing your business credit, net-30 vendors are considered the way to go. The term "net-30," which is popular among vendors, refers to a business credit arrangement where the company pays the vendor within 30 days of receiving goods or services.
Net-30 credit terms are often used for businesses that need to obtain inventory quickly but do not have the cash on hand.
Besides establishing business relationships with vendors, net-30 credit accounts get reported to the major business credit bureaus (Dun & Bradstreet, Experian Business, and Equifax Business Credit). This is how businesses build business credit so they can qualify for credit cards and other lines of credit.
Recommended: Read our guide on the best net-30 vendors so you can start building business credit now, so you never have to worry about cash flow in the future. Keep in mind that poor cash flow is the #1 reason businesses fail!
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment later on.
STEP 5: Set up business accounting
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
Make LLC accounting easy with our LLC Expenses Cheat Sheet.
STEP 6: Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate an elevator installation and repair business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
For information about local licenses and permits:
- Check with your town, city or county clerk’s office
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.
Elevator installation and repair businesses should require clients to sign a services agreement before starting a new project. This agreement should clarify client expectations and minimize risk of legal disputes by setting out payment terms and conditions, service level expectations, and intellectual property ownership. Here is an example of one such services agreement.
Recommended: Rocket Lawyer makes it easy to create a professional service agreement for your elevator installation business when you sign up for their premium membership. For $39.95 per month, members receive access to hundreds of legal agreements and on call attorneys to get complimentary legal advice.
Certificate of Occupancy
An elevator installation business is generally run out of a building. Businesses operating out of a physical location typically require a Certificate of Occupancy (CO). A CO confirms that all building codes, zoning laws and government regulations have been met.
- If you plan to lease a location:
- It is generally the landlord’s responsibility to obtain a CO.
- Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to an elevator installation business.
- After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommended to include language in your lease agreement stating that lease payments will not commence until a valid CO is issued.
- If you plan to purchase or build a location:
- You will be responsible for obtaining a valid CO from a local government authority.
- Review all building codes and zoning requirements for your business’ location to ensure your elevator installation business will be in compliance and able to obtain a CO.
Labor Safety Requirements
It is important that your business complies with federal and state labor safety requirements. The following link provides an overview of employer responsibility regarding labor safety.
STEP 7: Get business insurance
Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.
There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.
Learn more about General Liability Insurance.
Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners, we'll give you helpful tips and advice for creating the best unique logo for your business.
If you already have a logo, you can also add it to a QR code with our Free QR Code Generator. Choose from 13 QR code types to create a code for your business cards and publications, or to help spread awareness for your new website.
How to promote & market an elevator installation and repair service
Your company will attend trade shows for the construction industry. You will need to become an active participant of your local chamber of commerce, support trade unions, and even work with politicians to establish profitable relationships in the business community. Personal visits to construction sites and headquarters help to keep your name at the top of the list. Make sure to charge a fair, not low, fee for your services.
How to keep customers coming back
You will have to actively build your customer base. For the first five years, you will be submitting proposals for as many projects as possible. While few contracts will come through, your brand will be placed in front of the people cutting the checks. Once you have installed an elevator, it is fairly difficult to lose that customer as there are few elevator companies to compete against.
Still unsure about what kind of business you want to start? Check out the latest Small Business Trends to help inspire you.
STEP 9: Create your business website
After defining your brand and creating your logo the next step is to create a website for your business.
While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.
Here are the main reasons why you shouldn’t delay building your website:
- All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
- Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
- Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.
Using our website building guides, the process will be simple and painless and shouldn’t take you any longer than 2-3 hours to complete.
STEP 10: Set up your business phone system
Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.
There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use. Check out our review of the Best Business Phone Systems 2022 to find the best phone service for your small business.
Recommended Business Phone Service: Nextiva
Nextiva is our top choice for small business phone numbers because of all the features it offers for small businesses and it's fair pricing.
Start An Elevator Installation and Repair Service In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
Is this Business Right For You?
The owner and operator of an elevator service business will have professional connections among the building trades, unions, city leaders, and state safety inspectional services. You will be highly motivated to continue to expand your area of influence while keeping all your current clients satisfied with your services.
Want to know if you are cut out to be an entrepreneur?
Take our Entrepreneurship Quiz to find out!
What happens during a typical day at an elevator installation and repair service?
Your business will be the soup-to-nuts solution for everything related to an elevator from design to daily maintenance. On a daily basis your company will:
- Work with general contractors creating the design for a new elevator
- Install new elevators in active construction sites
- Complete regular maintenance that ensures safe operation of elevators
- Schedule repair appointments
- Provide 24 hr. emergency response for mechanical failures
- Coordinate annual safety inspections with state inspectors
- Remain informed on changes regarding rules and regulations
What are some skills and experiences that will help you build a successful elevator installation and repair service?
The skills needed to actually repair elevators will not be the same ones needed to run this business. You should have excellent knowledge of every aspect of the design, installation, function, and maintenance of elevators, but not necessarily the physical experience. Otherwise, you will need:
- Excellent business management skills
- Expansive contacts in the construction industry, including trade unions
- Ability to create proposals for a project on time
- Time and people management skills
- Knowledge of building codes, safety rules, and regulations
- Solid knowledge of OSHA standards
- Networking skills to generate new clients in a rapidly expanding industry.
What is the growth potential for an elevator installation and repair service?
The beauty of an elevator business is that with each new elevator installed, you organically create a return client for the next 50 years. As time goes by, you can expect the need for additional repair technicians to increase. Expanding into neighboring markets becomes a real possibility.
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Take the Next Step
Find a business mentor
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
Learn from other business owners
Want to learn more about starting a business from entrepreneurs themselves? Visit Startup Savant’s startup founder series to gain entrepreneurial insights, lessons, and advice from founders themselves.
Resources to Help Women in Business
There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:
If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.
What are some insider tips for jump starting an elevator installation and repair service?
As a bonus, the elevator industry is growing at a steady 10% per year, providing thousands of opportunities to build an expansive customer base. Should you locate a city that is on the edge of a building boom, that is your door for success. Since elevator companies are few and far between, once you install an elevator, that building manager will likely return to you for maintenance and repairs for the next 50 years. You will need to actively curate new installation jobs over the first 10 years to firmly establish yourself in the community.
How and when to build a team
The elevator installation trade is one that still relies on apprenticeships to train its workers. It requires four years to move from apprentice to journeyman. While you will hire your project management team at the outset to start generating designs and proposals for construction sites, you will need to work with existing elevator repair companies to train your mechanics and technicians. Once you have several masters on your payroll, you will be able to start your own apprenticeship program.