How to Start a Parking Lot Business in California


Every company needs space for customers’ vehicles, and in California, a parking lot business can be extremely profitable for an aspiring entrepreneur. Curious about what it takes to create one successfully? Check out our step-by-step guide below to help you get started!

Step One: You Have to Plan Ahead

It takes more than sectioning off parking spots with paint to create a parking lot in California. Before choosing a property for this purpose, you first need to create a well-thought-out business plan.

Running this type of operation involves many elements to make it successful. There is much to consider, from the number of available spaces to initial costs and liabilities before opening your lot. For example, how do you plan to attract customers? Will you provide covered parking, like a garage? Or, do you only offer outdoor parking? You also have to find out if this type of business can operate within certain parts of the city or not and what permits are necessary.

Another crucial part of your planning should include your finances to secure additional capital in the future. You should also consider any development objectives and management expectations to ensure your business runs efficiently.

Step Two: Assess Start-up Costs

When first starting up your parking lot business, you can expect to invest quite a bit of money. But don’t do this blindly. List out the many different expenses you will need to pay for upfront, including:

  • Rental costs if leasing property: Many commercial properties will require a significant deposit from their tenants;
  • Down payment and closing costs if purchasing the lot: While more costly at first, buying the property you plan to use as a parking lot can save significant expenses on rental fees later;
  • Equipment to run your business: Common business equipment should include access gates, payment kiosks, installing a security shack, lot cameras, etc.;
  • Payroll for employees: Even if you run a fully automated parking service that doesn’t require an attendant to accept payment, you will still need a few employees to clean and maintain your lot;
  • Costs related to construction and repair of your premises: If you choose to buy your property, there may be different repairs or maintenance necessary – one of the most common being pavement. Plan on hiring a commercial paving company in El Dorado County, CA, to resurface the lot and ensure it’s up to code. This will keep your employees safe and protect you from potential lawsuits;
  • Permits and licensing operation costs: California requires parking lot owners to have specific business permits and licenses to do business in the state. What you will need depends on your location. Speak to your local government about these requirements and how to get them.

Keep in mind this list covers the startup costs of a parking lot business and doesn’t cover ongoing expenses, such as utilities and insurance, to name a few.

Step Three: Find the Perfect Site

As mentioned before, serious consideration is necessary when picking a spot to open a parking lot business. When choosing a property, keep the following in mind:

  • How convenient is the location for your customer base?;
  • Is the cost to rent or buy the land reasonable or within your budget?;
  • What zoning laws apply if you want to build?;
  • Does the area you’re considering need more parking?;
  • Will you have enough business to be profitable?

You should also look at more than just empty lots. Believe it or not, some commercial property with abandoned buildings may offer a better location. While you would still have demolition costs, in the long run, you could profit more.

Step Four: Find a Reputable Paving Service

Pavement takes a lot of punishment, so as a parking lot business owner, you need to be ready for potholes, oil and fluid spills, uneven asphalt settling, and more. There are many professional paving services throughout El Dorado County, CA, so establishing a relationship from the beginning is essential. You don’t want to be waiting weeks for availability to fix a hazard on your lot.

Make sure any company you choose understands all federal, state, and local requirements for pavement standards so that you’re always in compliance.

Step Five: Determine Access to Your New Parking Lot

How efficiently customers can get in and out of your parking lot is crucial to your success. The same is true for your employees. Typically, there are three ways for a lot’s entrance and exit to work.


With this method, customers will drive into your lot, pick a spot, and pay a machine or dropbox for their stay. This approach relies on an honesty system where people will pay their fees as expected without an attendant present.


Gated is as stated: there is a perimeter spanning the parking lot. Gated lots need an attendant present at the lot entrance or exit to accept payment.


If you want to avoid having an attendant but automate the collection of parking lot fees, an electronic gate is ideal. Customers can get a ticket when entering the lot that records the time. When leaving, they can submit it to the gate kiosk and pay a final total to exit.

You will also need to paint directional arrows on the pavement, or install signs on the walls of your garage, to create a traffic pattern. It’s important to take this step to help minimize long lines at the exit.


As you can see, there are many moving components to running a successful parking lot in California. Fortunately, many of these issues are easily planned, so you can quickly start your operations and create a lucrative business.


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