Starting an elevator business is a rewarding venture that combines technical skill with business savvy. The industry is worth billions, driven by a steady demand for installation and maintenance in commercial buildings, residential complexes, and hospitals.
This guide will take you through the practical steps of obtaining necessary licenses, securing funding, hiring staff, and building supplier relationships to help you launch a successful elevator business in the U.S.
Step 1: Plan your business and validate the market
Start by researching your local market. Review public records for construction permits and city development plans. This data reveals upcoming projects that will require new elevator installations, giving you a direct look at potential demand before it becomes common knowledge.
Next, identify your competition. Use databases like the Dodge Construction Network to find established elevator contractors in your area. Note their services, service areas, and any available public reviews. This helps you find a gap in the market you can fill.
Estimate your startup costs
Mapping out your finances is a practical next step. A frequent misstep is underestimating insurance. You will need robust general liability and workers' compensation policies, which can be a considerable part of your initial budget. Plan for these specific costs from day one.
- Licensing and certification: $2,000 - $5,000
- Insurance (first year premium): $10,000 - $25,000
- Tools and equipment: $15,000 - $50,000
- Work vehicle: $30,000 - $60,000
Here are 3 immediate steps to take:
- Analyze local construction permit data for the next six months.
- Create a list of five local competitors and their primary service offerings.
- Draft a preliminary budget that includes estimates for insurance, tools, and a vehicle.
Step 2: Set up your legal structure and get licensed
You might want to consider forming a Limited Liability Company (LLC). This structure protects your personal assets if the business is sued. An LLC also provides pass-through taxation, so profits are taxed once on your personal return, which simplifies accounting early on.
A C Corporation is another option, but it involves corporate taxes plus personal income taxes on dividends. This double taxation can create more complexity than is necessary for a new venture.
Secure the right licenses and permits
Once your business is registered, focus on licensing. Requirements vary by state, but you will typically need a specialty elevator contractor license. For example, California requires a C-11 Elevator Contractor license. Check with your state's contractor licensing board for its specific path.
A frequent oversight is the need for a Qualified Elevator Inspector (QEI) certification. Some states require you or an employee to hold this. The National Association of Elevator Safety Authorities (NAESA) International is one body that provides this certification.
For each project, you will pull permits from the local building department. An installation permit can cost between $500 and $2,000 and often takes 4-8 weeks for approval. All work must adhere to the ASME A17.1 Safety Code for Elevators and Escalators.
Here are 3 immediate steps to take:
- Consult a CPA to decide on and file for an LLC.
- Research your state's specific elevator contractor license requirements.
- Contact your local building department for a schedule of permit fees and timelines.
Step 3: Secure your insurance and manage risk
Your insurance needs are specific. A general policy will not cover the unique risks of elevator work, like equipment failure or installation errors. You need a broker who understands contractors and can build a package that protects you from day one.
Your insurance portfolio should include several policies. Expect annual premiums to be a notable part of your budget, so it helps to get accurate quotes early. Here are the typical policies and estimated costs:
- General Liability: $2M to $5M in coverage. Premiums often range from $7,000 to $15,000 annually.
- Workers’ Compensation: This is state-mandated. Premiums are a percentage of your payroll, usually 5% to 10%.
- Commercial Auto: $1M in liability coverage is standard. Expect to pay $2,500 to $5,000 per vehicle each year.
- Professional Liability (E&O): This covers claims from mistakes in your work. A $1M policy can cost $1,500 to $3,000 annually.
Many new business owners work with a general insurance agent, but you should seek out a specialist. Consider providers like The Hartford, Liberty Mutual, or local brokers who focus on construction trades. They understand the risks and can find better rates.
Here are 3 immediate steps to take:
- Request quotes from three insurance brokers who specialize in construction.
- Ask for a sample Certificate of Insurance (COI) to review coverage limits.
- Confirm your state's minimum requirements for workers' compensation.
Step 4: Set up your location and buy equipment
You will need a physical base for your operations. Look for a space between 1,500 and 2,500 square feet. This size accommodates a small office, secure parts storage, and vehicle parking. A frequent oversight is choosing a location without proper vehicle access for loading heavy equipment.
Confirm the local zoning allows for a contractor's yard, often classified as light industrial. When you negotiate a lease, you might ask for a shorter initial term, like two years, with an option to renew. This gives you flexibility as the business grows.
Stock your workshop
With a location secured, you can acquire your equipment. Your initial investment here directly impacts job site efficiency and safety. Some new owners try to save money with lower-quality gear, which can lead to safety issues and costly replacements down the line.
- Chain Hoists and Rigging: $1,000 - $3,000
- Rail Alignment Tools: $800 - $2,000
- Digital Multimeter and Testers: $500 - $1,500
- Fall Protection Harnesses and Lanyards: $300 - $700 per set
Establish accounts with industry suppliers like Wurtec or GAL Manufacturing. They often require your business license and insurance certificate to open a trade account. Some may have minimum order quantities, so start by ordering what you need for your first confirmed project.
Here are 3 immediate steps to take:
- Research local light industrial zoning for spaces between 1,500-2,500 square feet.
- Request a catalog and pricing from two elevator equipment suppliers like Wurtec.
- Contact a commercial real estate agent to tour available properties.
Step 5: Set up your payment processing
For large installations, it is standard to require a 50% deposit upfront with the balance due upon project completion. Maintenance agreements typically use recurring monthly or quarterly payments. Define these terms clearly in your contracts.
A frequent challenge is collecting payment for smaller service calls. Chasing invoices for a few hundred dollars wastes time. You need a way to get paid on the spot, which brings us to your payment solution.
Choose your payment solution
For an elevator business that needs to accept payments on-site, JIM offers a streamlined solution. With JIM, you can accept debit, credit, and digital wallets directly through your smartphone. Just tap and you are done.
At just 1.99% per transaction with no hidden costs or extra hardware, it is particularly useful for collecting payment after a service call. Many other payment solutions have average commission rates between 2.5% and 3.5%, often with added hardware fees.
- Get Started: Download the JIM app for iOS.
- Make a Sale: Type the sales amount, hit sell, and ask your customer to tap their card or device on your phone.
- Access Funds: Your money is available right on your JIM card as soon as the sale is done - no waiting for bank transfers.
Here are 3 immediate steps to take:
- Draft your standard payment terms for both installation projects and maintenance contracts.
- Compare solutions for recurring billing to automate your maintenance agreement payments.
- Download the JIM app to see how it handles on-site payments for service calls.
Step 6: Secure funding and manage your finances
Most lenders favor businesses with a solid plan and some collateral. You might want to consider an SBA 7(a) loan, which can provide $50,000 to $350,000. Lenders typically look for a credit score above 680 and a detailed business plan. Interest rates often sit between 7% and 10%.
Another path is equipment financing. This type of loan is secured by the tools and vehicles you purchase. Because the equipment itself serves as collateral, these loans can be easier to qualify for than general business loans. Approval is often faster as well.
Calculate your working capital
A frequent oversight is to focus only on startup assets and forget about operating cash. You will need enough working capital to cover your first six months. This buffer pays for salaries, fuel, and unexpected costs before your revenue stream is consistent.
- Payroll (2 technicians): $30,000 - $45,000
- Insurance Premiums: $6,000 - $12,000
- Fuel and Vehicle Maintenance: $3,000 - $5,000
- Marketing and Office Supplies: $2,000 - $4,000
Here are 3 immediate steps to take:
- Contact your local SBA office to discuss 7(a) loan pre-qualification.
- Draft a six-month operating budget to determine your exact working capital needs.
- Request quotes from two lenders who specialize in equipment financing.
Step 7: hire your team and manage operations
Build your technical team
Your first hire is your lead elevator technician. This person handles complex installations and mentors future hires. Look for someone with at least five years of field experience and a Certified Elevator Technician (CET) certification. A qualified lead technician typically earns between $75,000 and $100,000 annually.
Many new owners try to save money by hiring less experienced staff. This often backfires, leading to safety issues and project delays. A seasoned professional costs more upfront but ensures work quality and helps build your reputation from day one.
Streamline your daily operations
Once you have a technician, you need to manage workflow. You might start with a spreadsheet, but that approach does not scale. Consider field service management software like ServiceTitan or Jobber to organize schedules, dispatch technicians, and track job progress efficiently.
For financial planning, a good benchmark is to aim for $175,000 to $225,000 in annual revenue per field technician. This target helps you project income and determine when to hire your next employee. It keeps your growth tied to real-world performance metrics.
Here are 3 immediate steps to take:
- Post a job opening for a lead technician with CET certification on industry job boards.
- Schedule demos with two field service management software providers.
- Set a revenue-per-technician goal to guide your first year's financial plan.
Step 8: Market your business and get customers
Establish your digital footprint
Your first move should be to create a professional website. It acts as your digital business card. Make sure it clearly lists your services, contact details, and your contractor license number. This simple step builds immediate credibility with potential clients.
Next, set up a Google Business Profile. This action helps you appear in local search results when property managers look for elevator services. Ask your first few clients for reviews to build social proof quickly. Positive feedback is a powerful magnet for new business.
Build B2B relationships
Most of your high-value work will come from other businesses. You should focus on connections with general contractors, architects, and property management firms. These partnerships can provide a consistent flow of installation and maintenance contracts for years to come.
Many new owners just wait for the phone to ring. A better approach is to join your local chapter of the Building Owners and Managers Association (BOMA). Your presence at these events puts you directly in front of decision-makers who manage large property portfolios.
Direct outreach also works for maintenance contracts. Create a list of local commercial buildings over 10 years old. Their service agreements might be up for renewal, which presents an opportunity for you to submit a bid.
Here are 4 immediate steps to take:
- Build a one-page website that lists your services and license number.
- Create a Google Business Profile with your service area and hours.
- Research your local BOMA chapter to find the date of its next event.
- Make a list of 10 local commercial buildings built more than a decade ago.
Step 9: Price your services and create proposals
Your pricing strategy directly impacts your profitability. Most elevator businesses use three models. Use fixed-price bids for installations, recurring contracts for maintenance, and time-and-materials pricing for service calls. This approach gives you flexibility for different job types.
Develop your pricing models
For new installations, aim for a gross profit margin of 15-25%. When you calculate your bid, a frequent oversight is forgetting to add a percentage for overhead. Your bid must cover labor, materials, permits, and your business's operational costs to be profitable.
Maintenance contracts provide steady income. A basic monthly contract for a low-rise building might run from $200 to $500. For repairs, charge an hourly labor rate between $150 and $250, plus a 30-50% markup on parts. This ensures both your time and inventory are covered.
Your proposals should be clear and professional. Always include a detailed scope of work, the total cost, and a payment schedule. A standard schedule for installations is 50% upfront, 40% upon major equipment delivery, and 10% upon completion and final inspection.
Here are 3 immediate steps to take:
- Create a rate sheet with your hourly labor rate and standard parts markup.
- Develop a proposal template that includes a clear scope of work and payment terms.
- Call two local competitors to get a quote for a standard service call to benchmark your rates.
Step 10: Implement quality control and scale your operations
Your reputation depends on quality. Adherence to the ASME A17.1 code is the baseline, not the goal. You might also consider pursuing ISO 9001 certification down the line to formalize your quality management system and stand out to larger clients.
Measure your performance
Track specific metrics from your first service call. A high first-time fix rate, aiming for over 90%, shows your team is efficient. Also, monitor your callback rate, which is the percentage of jobs that require a return visit. A rate below 5% is a strong indicator of quality work.
Plan your growth
Use your revenue-per-technician goal to guide expansion. Once you secure an additional $175,000 in annual contract value, it is time to hire another technician. Many owners wait too long to hire administrative help. Consider an office manager once you have three technicians in the field.
Here are 3 immediate steps to take:
- Draft a quality control checklist for service calls based on ASME A17.1.
- Set up a simple spreadsheet to track your callback rate and first-time fix rate.
- Define the revenue benchmark that will trigger hiring your next technician.
You now have the blueprint for your elevator business. Your success will hinge on the relationships you build with property managers and contractors. Focus on quality work and clear communication, and you will establish a strong reputation from day one.
As you complete service calls, make sure getting paid is just as efficient. JIM turns your phone into a card reader for a flat 1.99% fee, with no extra hardware needed. Download JIM to be ready for your first customer.
