How to start a valet parking business.

Starting a valet parking service... it's a very competitive landscape. You need to be different, and better.

Starting a valet parking service... it's a very competitive landscape. You need to be different, and better.

If you're looking at valet parking as an entrepreneurial opportunity and saying "What's so hard about parking cars?" ...then this is the article for you.

I worked as a valet for 2 years. I'm business-minded. I examined this opportunity. To me, this industry is unattractive.

If you just read through my blog posts, you will begin to get an idea of why I am so down on it.

But if I were going to get into this industry, I'd do it differently.

First, I would seek to have venue clients who understand the importance of having a top quality valet workforce. 

You don't get top quality when you pay $2.13 an hour, which is what valets can be legally paid in 19 states (the federal tipped employee minimum wage in the United States).

To me, valet parking looks like an industry that has been commoditized. There are consultants who specialize in negotiating valet outsourcing contracts. And their clients aim to pit competing valet companies against each other to create the best possible terms for themselves, so the venue may reap the greatest possible profit.

It's the wrong approach.

Because when valets are paid so little, they don't take the job seriously, and they don't stay long. 

This short employee life-cycle invites problems, because when brand new rookies are brought in to replace the experienced workers who left, those rookies are much more likely to make all kinds of mistakes, which includes damaging customer cars, losing keys, and stealing peoples' chewing gum (and other things).

Valet inflicted vehicle damage is your top adversary in this business. Many valet companies attempt to control these costs by stalling and dodging their damage claims. The ill-will created hurts the client; it costs the valet operator lost return customers, and it makes the valet industry appear to have a lot of assholes among its ranks.

If you really want to start-up a valet service, I would advocate offering an elite level of valet service for properties that cater to a high-end crowd in a glutted marketplace. For example... in Philadelphia, where I am from, a new SLS International Hotel is slated to be built. In addition, a very jazzy Four Seasons Hotel is going up right now. It will be at the top of the city's new Comcast Tower. 

Here's another article about it.

In addition, a 755 room dual-branded hotel tower is also in the pipeline.

Plus there is another fancy hotel coming to the old Family Court Building in Logan Square.

The old Four Seasons Hotel will be switched over to another luxury brand and will be renovated.

A new Hudson Hotel is also on the verge of moving forward.

And there are even other hotels that might be built.

It is going to be an increasingly competitive landscape for hotel operators.

So how does one of these hotels distinguish themselves from their new competitors and everybody else? I would suggest one way is have professional career valets, instead of a revolving door of college kids.

Real professionals will care that the job gets done right. But to have elite valets, they need to be treated like elite valets, which begins with compensation.

I think the tipping model is not ideal... because many people do not tip! Instead, I would build the tip into the price of parking. Valets would get paid a good wage, as sanctioned by the client, and a piece of the action with each car movement.

I would recommend that productivity be measured and rewarded as a team... where all the movements are added up, and the valets get a piece of that total based upon the number of hours they each worked. This eliminates bad morale when somebody gets a slow Sunday night shift, and other shifts like it. With this approach, each team member has the same hourly earnings.

These should be good jobs where the workers want to stay. If you get real professionals doing this work, then you reduce the chances for a lot of problems, like vehicle damage, lost keys, and items stolen from the customers' cars.

I would advocate doing things ethically from the very beginning and establishing a culture that emphasizes strict honesty and integrity. 

It appears to me that many valet companies RELY on their valet workers to under-report their tip income, since this keeps payroll costs lower. For example, with every dollar declared in tips, the EMPLOYER is required to pay 7.65% for social security and medicare. Every dollar declared in tips also is directly connected to an employer's workers compensation insurance costs.

So when valet workers declare less in tip income, it creates cost savings for the valet company.

It's simply not good business to play that game.

Strict honesty and integrity begins at the top. That's you!

If you really want to get into this business, then I strongly recommend that you do the actual work of a valet for 6 months — minimum 30 hours per week — at a high volume valet operation.

In fact, you might not be able to get insurance for your future valet company without having experience in this business! (I have heard this.) To go into this type of business being completely green is a strategic error, in my opinion. You will learn a lot in 6 months!

I would especially encourage you to learn the cashiering duties as well and all of the shift paperwork that goes along with that.

After your stint in the trenches, if you still have an appetite to proceed forward, then here are some suggestions:

  • Get yourself an experienced "account manager." Somebody with at least a year of high volume valet experience with proven, verifiable management and leadership ability.

  • It is probably best to set-up your company as a completely separate entity, like a limited liability company, a corporation, or trust, in order to create a shield against your current and future personal wealth.

  • Decide on the valet concept you are going to offer.

  • For logo development, I recommend crowdsourcing. I have used: and have consistently gotten world class results. With this approach, you type-up an idea of what you want in a logo and decide on an award amount. A minimum of $300 is a good starting point. Designers from around the world will submit their design ideas to you. You pick the design you like best. The winner gets the $300, minus LogoMyWay's fee.

  • Get a pro to design your promotional materials and website. Create a professional "we know what we're doing" aura.

  • Be choosey, careful and patient in which accounts you go for. And don't make the mistake of conceding too much while chaining yourself to a long-term contract. Be very careful with the terms you agree to.

  • You're going to need a large amount in cash reserves. Expect insurance to be costly. And you will probably need to have a $5,000 to $25,000 deductible to keep your insurance costs reasonable. This means you will need to have a good amount of cash set aside for self-insurance purposes.

    Alliant is one of the more prominent providers of insurance to valet companies.

  • If you are going for a hotel account, know that this will be a 24 hour a day operation, 365 days per year. If the overnight worker calls out, it could be you working those shifts! You can expect this to be a nearly all-consuming endeavor. Be prepared for commitment.

  • If you like the idea of "on demand" valet parking, it's early. Frankly, when on-demand valet parking only costs $15 in SAN FRANCISCO, all day, AND you get a carton of water too (Zirx), I'm completely mystified with the question of how money is made. It seems to me they must be simply trying to get people hooked on the service before an eventual price rise, or there is heavy reliance on selling additional services.

    Instead of pouring resources into developing your own Uber-like valet parking app, I would explore licensing somebody else's app for a faster entry into the business (there are multiple on-demand valet services out there).

  • You're going to need to have a really good training program. And hiring just anybody to be your front-line workers isn't going to cut it. Each new hire will be crucial. You need to choose well.

  • Be aware of what the Obama healthcare mandates for employers might mean to your future expansion plans. Once you go past 50 full-time equivalent employees, you probably will be impacted by this law. And it could result in some really big expenses. It might be best just to stay small with just one or two very worthwhile accounts.

  • If you think you are going to make your valets independent contractors, that's a very risky idea. I would say "forget about it." But if you think you really want to go this route, then I would strongly urge you to invest in an hour of a lawyer's time to get a legal opinion about it.

  • Be different. Set yourself apart from the crowd.

  • Read everything I have on this site. It will benefit you.

Is purchasing a franchise the way to go? That's not something I would do. Just become a valet yourself. Do the actual work. It's a much less expensive way to learn the business (and there is a lot to learn).

ADDITIONAL RESOURCES: offers valet key cabinets, valet tickets and other supplies. They also have a podcast that can provide you with additional industry insights. offers a pay-per-car software solution that is worth taking a look at.

A different valet parking business model.

A different valet parking business model.

In this new post, I explain an alternative approach to starting a valet parking business and setting it up from the beginning to be a substantial enterprise.

Book Co-Authorship Opportunity...

Do you have valet account manager experience?

Are you interested in profiting from your knowledge and experience?

People are looking for start-up information about launching valet parking services. I know this because this post is my most popular post on this site.

I believe it is just a small niche market, but it exists.

I am looking for somebody with valet manager experience to provide their viewpoints in starting and operating a valet parking business.

You will write it up. We will collaborate during the editing stage. Then we will both make it available for purchase here. It will be a revenue share arrangement.

It's not a get rich quick thing. Consider it just a mini-income opportunity.

  1. You need to have well-rounded knowledge about the various ways valet parking services contracts can be negotiated.

  2. If you have samples of contracts that can be used, this would be helpful to our buyers.

  3. We need information on typical insurance policies used by valet parking services, the typical costs with these policies, and who to get them from.

  4. We need samples of typical accounting paperwork used in a valet operation, along with what software programs are advantageous to use.

  5. We need industry resources like uniform providers, valet ticket printers, signage providers, valet kiosks and umbrellas, etc.

  6. Tell us how to best land new accounts, how to get in with restaurants, hotels. hospitals, country clubs, airports, shopping malls. What is a sales presentation like?

  7. We need to know a lot of minute detail about recruiting and maintaining a workforce, with emphasis on how U.S. labor laws apply to a valet parking business.

  8. What are the do's and don'ts of entering this business.

  9. How do you handle claims management?

  10. What written procedures and policies should a valet parking company have?

  11. What is the ultimate valet parking empire building strategy?

In short, we need useful and valuable information that will justify the price charged for the manual. It can't be superficial information. Rather, it's got to go deep. And if you don't know the answers, then you've got to research the hell out of it.

No drivel. No hype. No guessing. You have to be the real deal. It's got to be the good stuff.

After the book, perhaps we'll move on to doing some video training material.

Most buyers will be in the United States, but some will be international.

The project will have a lifespan of maybe 5 years. So we complete the book, and I expect it will provide a mini-income to both of us over a course of years. And it holds the possibility of creating additional training products to sell to these buyers.

This isn't going to be a $20 book. The market is limited, so it's going to be not-the-average book price. ($100, $200, I don't know yet?) 

If you want to give it a shot, get in touch with me (Ed):