How to start up a car alarm fitting business

Mechanic improving car alarm capabilities under a bonnet of a car

Mechanic improving car alarm capabilities under a bonnet of a car Although new vehicles come fitted with effective security systems, many owners upgrade them. Owners of valuable classic vehicles are also key customers. Read our guide to starting up and running your own alarm fitting business.

Buy an existing business

You might decide to buy an existing car alarm fitting business rather than start your own venture from scratch. Buying a going concern can mean that:

  • the premises, business equipment and workshop equipment are already in place
  • vehicles used for mobile installations and repairs have already been purchased and fitted out
  • there are established customers
  • the business can generate income immediately
  • suppliers of security equipment have been identified and relationships established with them
  • the business has a track record, which can help if you are looking for finance
  • staff are already in place
  • the business website and social media profiles have already been set up

However, look critically at any business that you are interested in to make sure that the price you negotiate with the seller is a fair one. Try to establish why the business is for sale - for example, is the owner keen to retire or is there another personal reason for selling up.

Your market research into the sector as a whole and the locality in particular will help you to establish whether or not the owner is selling because he or she can no longer generate enough income from the business. This may not necessarily deter you - many business people are confident that they can turn a failing business around. The important thing is to have established the current position so that the price you pay for the business is not too high.

Other matters to consider include:

  • the state of the premises, fittings, vehicles and so on. Will you have to spend money refurbishing or replacing assets
  • the condition and value of any tools, equipment and stock you are buying. Check this over carefully before agreeing a price
  • is the existing owner prepared to give you some training after you take over
  • existing staff rights
  • how to retain key personnel once you've taken over
  • does the business owe money that you will be responsible for
  • if you are paying for goodwill, to what extent does this depend on the skills and personality of the seller

Ask your accountant to look critically at the business accounts for the past three years and discuss with him or her the selling price in the light of what the accounts reveal. Make sure you budget for other professional fees such as legal fees and valuation and survey costs.

Market research

Estimating demand

You will need to find out whether there is enough local demand for your proposed car alarm fitting business. Don't forget that businesses concentrating on car electrics or car audio might also offer alarm fitting as a secondary service and any that do will be your competitors as well as other specialist car alarm fitters. Consider the level of local competition that you will face - online directories like Yell.com can help you to quickly estimate this, although bear in mind that not every business advertises in this way. You can also use the 'Find a member' tool on the Mobile Electronics and Security Federation (MESF) website. Remember that car alarm fitting is available from various sources, so your local competitors could include:

  • other independent alarm fitting businesses, including those that are exclusively mobile
  • franchised motor dealers and used car dealers that offer alarm fitting services
  • auto-centres (superstores with services bays attached), such as Halfords
  • car electrical system specialists
  • shops dealing primarily in car audio equipment
  • garages offering general vehicle repairs and servicing

It may be that you will only be competing directly against some of these outlets because you will be targeting a particular sector of the market or offering extra services which are hard to find elsewhere.

Have a good look at existing car alarm fitting businesses in your area to establish:

  • what prices they charge
  • what range of services are offered (for example fitting a range of alarms and immobilisers, fitting tracking devices, upgrading existing systems, fault diagnosis and repairs)
  • how knowledgeable and helpful their staff are
  • whether they operate a mobile service or have fixed premises
  • whether they offer to collect and deliver customers' vehicles
  • whether the premises and fittings are modern and smart
  • if they undertake work on lorries, coaches, caravans and so on
  • if they offer any additional services such as sat nav or in-car entertainment installation

Check out future developments

Some car alarm fitting businesses offer an exclusively mobile service from an appropriately equipped vehicle, but others operate from retail or workshop premises. If you choose to offer a premises-based service, the location of your business is important and ideally there will be ample and easy parking nearby and also lots of passing trade. Try to check that there aren't any plans to build new road systems, which would mean that traffic would bypass your premises, or proposals to impose parking restrictions.

Find out what people want

As you are likely to face strong competition it is important to find out what people want and whether there are any particular services you can offer which will attract customers. If you plan to carry out a local survey, don't forget that you may well have some trade customers such as driving instructors, taxi firms, car hire businesses, haulage and courier firms and used car dealers. New car dealers may also require alarm fitting or repair services for vehicles taken in part exchange. If you are prepared to carry out work on larger vehicles, haulage companies and coach firms might be interested in your services too.

Research current trends, plus legal and tax issues

Customer profile

Depending on the focus of your business, you may have a mix of private and trade customers.

Private motorists

A wide range of private motorists might use your services. As a general rule, motorists in affluent neighbourhoods are more likely to drive new or nearly new cars that are already fitted with manufacturers' immobilisers and alarms. Drivers of less expensive models may feel that the manufacturer's system is sufficient but owners of more upmarket models may be willing to spend additional money upgrading their car's security. Drivers of all types of car may wish to add accessories, so you may decide to offer as wide a range as possible. Private motorists might also require security systems for motorhomes, caravans or trailers. This is a potentially lucrative market as very many motorhomes and caravans are not fitted with much in the way of security devices and - in the case of motorhomes - often have several doors that need protecting.

Cars made before 1998 were not all fitted with immobilisers and so drivers of these vehicles are potential customers. A small proportion of these cars are still worth a lot of money and owners are often willing to pay for a security system, especially if the car has to be parked on the street at night (for example in an urban area). They may also be keen to fit accessories.

As cars get older and their values fall, motorists are less willing to spend money on them. Drivers of older vehicles, for example, are most likely to rely on mechanical steering locks or similar devices to secure their car. Some younger drivers, however, will be keen to add accessories to their car whatever its age. In particular, many spend large amounts of money on in-car entertainment systems, so fitting these can be a good source of trade. You might also be able to persuade them to invest in an alarm to protect their new sound system. Younger drivers also often benefit from lower insurance premiums if they have security devices fitted to their vehicles, which could be suggested as another incentive.

Local businesses

Local businesses that might use your services include:

  • taxi and minicab firms
  • car hire companies, including specialist firms that hire supercars and other very expensive vehicles
  • franchised motor dealers and used car dealers
  • driving schools
  • haulage companies
  • coach operators
  • any firm or organisation that runs a fleet of vehicles (company cars, delivery vans and so on)

Special offers and discounts

You will probably offer a discount as a matter of course to any regular trade customers that you have. How much discount will depend on your pricing policy and the level of local competition. You could offer further discounts for fitting security systems to fleets of vehicles or to regular customers (taxi firms or used car dealers, for example).

Services offered

The greater the range of services you are able to offer, the broader your potential customer base. So as well as fitting alarms and immobilisers, you may decide to offer a wider range of security equipment. This might include items such as vehicle tracking systems, paging systems that communicate the security status of a vehicle to the owner, remote door locking, mechanical security devices and window etching.

You may also choose to expand your services further by offering to supply and fit other accessories, such as:

  • in-car entertainment (this is a large market in itself) and is likely to grow as more car owners adopt 4G internet connected in-car devices
  • installation of in-vehicle CCTV, for example for taxis
  • 'hands-free' mobile phone kits
  • parking sensors
  • satellite navigation systems
  • speed camera detector devices
  • telematic systems for fleet management and tracking
  • air conditioning
  • towing equipment
  • auto-electrics repairs and servicing

Mobile fitting service

Some customers will appreciate the convenience of having their car worked on at their home or place of work. If you are able to offer a mobile fitting service, this can broaden the appeal of your business and may bring in extra work. You will of course need a suitably equipped car or van. Alternatively you could offer to collect customers' cars and bring them back to your workshop.

As you gain experience you might decide to offer fault diagnosis and repairs to vehicle security systems. In this case, a mobile service will be essential as any faults are likely to mean that a car cannot be driven.

The right image

It is important that your business projects the right image. If you have premises, try to make sure that they look smart and indicate to passing trade the high standard of service available. Staff should look smart too - perhaps you could have overalls printed with the name of the business. If you operate a mobile service, make sure that the vehicle you use is smart and well maintained. If you have it professionally sign written it will act as a mobile advertisement for your business.

Promoting your business

Whatever range of services you decide to offer, you must make sure that potential customers know about you and the services you offer.

There are a number of things you could do to promote your business:

  • use external signs to inform and attract passing trade
  • advertise in your local newspaper and any local directories
  • have leaflets printed, perhaps including basic security tips
  • arrange to put fliers on the counter of petrol stations and accessory shops
  • contact local business to let them know about your services
  • contact any local motor clubs to offer members a discount
  • launch your own website, showing all the features that will attract customers to your business

Pricing policy

When considering your pricing policy, remember that you must be able to cover your costs, overheads and drawings (the amount you take from the business). But you'll also need to bear in mind that fitting car alarms and accessories is a competitive marketplace and you may have to price in line with other local firms unless you are targeting a niche market that they do not cater for.

Fitting charges

Most car alarm fitters set a fixed price for installing a basic alarm, immobiliser or in-car entertainment system. A higher charge may be made for fitting more sophisticated systems (for example those with ultrasonic movement sensors). Such a system might take four or five hours to fit and a customer might typically be charged £150 or more (excluding the cost of the alarm system).

Some car owners may be tempted to fit a security system themselves in order to save money. It's a good idea to let customers know that insurance companies may offer drivers a reduced premium if a Thatcham approved alarm is fitted, but this will only apply if it is installed by an approved installer.

Parts

The price of a security system will vary depending on its specification. The charge made to the customer is usually the cost price of the system increased by a certain amount (for example 10% or 20%). However, the amount that you charge a customer for a system will be fixed to a certain extent by the going rate elsewhere - customers will not pay over the odds for a system that they can get easily from one of your competitors.

Other charges

If a car is to be collected from and returned to a customer's home or workplace, then a separate charge is often made for this. The exact amount you decide to charge may depend on the going rate, so check to see what your competitors charge. You might also supply and fit other accessories or carry out fault diagnosis and repairs to security systems. The time taken and hence the charge made will vary from job to job.

Consider how often you will review your prices and whether you will offer discounts (for example reduced rates to trade customers) or special offers and so on.

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