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  h p c w o r l d  
presented by   HPC, Inc.
Designer and Manufacturer of Locksmithing Equipment Since 1956

Along with picking locks, cutting keys is one of the cornerstones of the locksmith trade. Just as you need proper tools to pick locks, you need proper machines to cut keys. In fact, a key machine is another tool of your trade. When you purchase a machine you are either increasing your efficiency by being able to cut a higher volume of keys and/or cut keys faster; or you are increasing your market by being able to cut a new type of key.

Increasing efficiency is certainly a good investment. Buying a higher level (more advanced) machine, such as semi-automatic or automatic, will save you time, which is saving you money.

Increasing your business is an even better investment. By being able to offer a new type of key you are able to pursue new customers. If you have to turn away a potential customer because you do not have the proper machine for the job, then at best you have lost that sale. At worst, you have lost all of that person's future business. If you were not able to solve their problem (cut their key) the first time, then they will probably not come back to you for their next job. Instead they will go to your competitor, giving your competitor hundreds or even thousands of dollars in business.

Many locksmiths overlook business opportunities. For example:

  • The local bank needs someone to service their safe deposit boxes and cut new flat steel keys
  • Used car dealers need someone to open locked cars and cut new automotive keys
  • Laundromats need someone to service all of the vending machine locks and cut new tubular keys
  • Apartment complexes have a consistent demand to rekey their locks and cut new residential keys
  • Commercial establishments have a great need for door guards, safes and new keys
  • Office Centers are excellent targets for master key systems, which require new keys

DETERMINING YOUR NEEDS
The first questions to ask yourself are: How do I want to grow my business? What services can I offer? What customers do I want to pursue? What types of keys will I need to cut? How many of these keys will I be cutting?

DETERMINING YOUR BUDGET
Determining your budget is more than just counting the money you have set aside for a large purchase. You must also decide what is an acceptable return on your investment (ROI). How long will it take for you to make enough money to recoup your investment, and start earning a profit?

In order to determine your payoff time we need to do a little simple math. First of all determine your cost of cutting a key. This cost should include material, labor and overhead. Material is the cost of the blank (let's say $0.25). Figuring the cost of labor is a little more "labor" intensive. First, add up all of your payroll expenses for an entire year including wages, taxes, workman's comp, vacations, holidays, etc. Divide that number by the number of employees (including yourself), and you end up with the average yearly cost of an employee. Divide that number by 2,080 (the average number of work hours in a year) to establish the average hourly cost of an employee. Divide that number by 60 to end up with the average cost per minute of an employee. Finally determine how many minutes it takes you to cut a key.

Let's say your total yearly employee costs are $100,000 for 4 employees. Your average yearly employee cost is $25,000 divided by 2,080 hours is $12.02 per hour which when divided by 60 results in $0.20 per minute. If we say that it takes two minutes to pull a key off the rack, gauge it and cut it, then our labor cost per key is $0.40.

Overhead cost is the last and most often overlooked cost to be determined. Add up all your costs other than material and labor expenses and divide them down to the minute just like you did with labor. These expenses should include rent, gas, advertising, etc. Let's say that you end up with $0.30 per minute in overhead costs. That means your per key overhead costs are $0.60.

Add all of these costs together to end up with $1.25 per key. Now let's say we sell this cut key for $3.00. Your net profit is $1.75 per key. Take the cost of your new key machine and divide it by the net profit of each key that you will be cutting. Given this scenario you will need to cut 286 keys to pay off a new $500 key machine, 572 keys to payoff a new $1,000 key machine and 1,143 keys to payoff a new $2,000 key machine. Let's say that you cut 500 keys on average each month. That means you could payoff a Speedex® duplicator in a couple of weeks, a heavy-duty Trace-A-Key® duplicator in less than 5 weeks, or a Blitz Code Machine in a little more than 2 months.

Armed with this information it is now time to choose which key machine best fits your needs and budget.

 trac-a-key

If you duplicate about 500 keys per month, an HPC Trace-A-Key® (3344HQT) could pay for itself in as little as 5 weeks.

code max

The HPC CodeMax® (1200MAXAA)will help you automatically originate new keys. And it can pay for itself in as little as 6 months by creating a little more than 400 keys each month.

punch machine

If you think you'll punch at least 150 keys each month an HPC Punch Machine™ (1200PCH) would pay for itself in no time at all.

CUTTING STANDARD KEYS BY CODE
When your business plan calls for cutting keys by code, your options range from a portable card operated machine to a computerized machine.

The Punch Machine™ does not use electricity, and therefore is ideal for carrying with you to a used car auction to generate new keys for their vehicles.

The Blitz™ machine is the Standard of the Industry in terms of code machines. It is perfect for cutting new keys for automotive, residential and commercial customers, including master key systems.

As your code business expands, utilize the power of a computer in your key cutting. The CodeMax® machine is the original computerized code machine. Download key codes from CodeSource® (the code retrieval software) and complete master key systems from MasterKing®.

For the ultimate in computerized code cutting, the Blue SHARK™ machine combines electronic key cutting with a state of the art touch screen to look up codes on the on-board database.

You must keep in mind that different keys result in higher or lower profit. Based on what you pay for blanks, how much you charge for cut keys and what your labor and overhead expenses are your payoff time will vary. Based on figures we have listed above you would need to cut 429 standard keys per month for 6 months to payoff an HPC CodeMax® or punch 152 standard keys each month to payoff an HPC Punch Machine™ in 6 months.

DUPLICATING STANDARD KEYS
If you need a duplicator your choices range from a small manual machine to a fully automatic heavy-duty machine, with several other options in between.

If your plan calls for cutting a small amount of keys, then the Mini Speedex® is well suited for your needs. It is compact yet extremely accurate.

When you start offering master key systems, you will benefit from using the Automate™ to cut the duplicate keys. The automatic operation allows you to stamp a key while the next key is being cut.

If you are ready to duplicate safe deposit box and mailbox keys, then you need the Premier Speedex®. It is available with an optional slotter cutter to effortlessly cut flat steel keys.

As the volume of keys you are cutting increases, you will appreciate the speed of a semi-automatic machine. The Power Speedex® has a spring-loaded carriage to hold the keys against the tracer and cutter. The Trace-A-Key® has a spring-loaded carriage and is also equipped with a heavy-duty motor and top-quality cutter, making it the fastest, most accurate duplicator available.

Based on figures we have listed above you would only need to duplicate 112 standard keys per month for 6 months to payoff an HPC Automate™ or only 35 standard keys each month to payoff an HPC Mini Speedex® in 6 months.

 automate

Although the HPC Automate™ (6666HQT)can automatically duplicate thousands of keys for you, duplicating as few as 112 per month is all you have to do to have it pay for itself.
tubular key adapter

Even if you only get a few calls, why not start cutting tubular keys when the HPC Tubular Key Adapter (TKA-CMB) can pay for itself in less than three months?

CUTTING TUBULAR KEYS
Tubular keys require a specialty key machine or one of HPC's Tubular Key Adapters. HPC offers your choice of the Tubular Duplicode™ for code cutting or duplicating tubular keys or the Tubular Duplicut™ as a sturdy stand-alone duplicator. The HPC Pocket Cut-Up™ is a portable tubular code machine ideal for someone just getting into tubular key cutting. If you cannot justify a dedicated machine for cutting tubular keys, then try one of HPC's Tubular Key Adapters for the Blitz™, Switch Blitz™ or Blue Shark™.

Let's determine the payoff on the Tubular Key Adapter for the Blitz™. The cost of the blanks are about $0.50 each. These keys take a little longer to cut, so increase labor and overhead to three minutes ($0.50 material, $0.60 labor and $0.90 overhead), making the total cost $2.00 to cut a tubular key. If you sell tubular keys for $5.50, then your net profit is $3.50 per key. If you average 25 tubular keys per month, then you could payoff an HPC Tubular Key Adapter in less than three months.

CUTTING FLAT STEEL KEYS
Like cutting tubular keys, when you look to cut flat steel keys you have to make a decision between buying a dedicated machine or just the cutters for one of your existing machines. Aside from originating standard keys, the HPC Blitz™ is an ideal machine for originating flat steel keys. If you already own a Blitz™ then all you may need to purchase is a few additional code cards and the appropriate slotter cutters. If you are looking to duplicate flat steel keys, then the HPC Premier Speedex® is an excellent choice. With its 4-way jaws and heavy-duty motor it is ideal for cutting a wide variety of keys including flat steel.

Should you purchase a dedicated machine for flat steel and safe deposit box keys? Let's say the cost of these blanks is about $2.00. And we'll say that it takes about three minutes to cut these keys ($2.00 material, $0.60 labor and $0.90 overhead), making the total cost $3.50 to cut flat steel keys. If you sell these keys for $8.00, then your net profit is $4.50 per key. If you average 25 flat steel keys per month, then you could payoff an HPC Premier Speedex® equipped with a Slotter Cutter Kit (No. CW-16KIT) in under five months. If you do not want a dedicated machine and all you need are the correct cutters for your existing machine, then you can expect to payoff that investment almost immediately.

 premier speedex

The HPC Premier Speedex® (9160MC) will pay for itself by duplicating as few as 25 flat steel keys per month.
mini groove

CUTTING HIGH-SECURITY AUTOMOTIVE KEYS
Tibbe Keys are used on some Ford and Jaguar cars. They are extremely profitable keys to sell, and can be easily cut using an HPC Tibbe Key Adapter for your Blitz™, Switch Blitz™ or Blue SHARK™.

High Security Automotive Track Keys call for a specialty machine. The most affordable way to enter this high profit market is with the purchase of an HPC Mini Groove™.
Are you ready to start duplicating High Security Automotive Track Keys? The cost of these blanks is about $3.50 each. And we'll say that it takes about five minutes to duplicate one of these keys. So if the material cost is $3.50, labor is $1.00 and overhead is $1.50 the total cost is $6.00 to duplicate a track key. If you sell these keys for $35.00 your net profit is $29.00 per key. When you start cutting these keys we'll say you average only 6 keys per month. At this rate you could payoff an HPC Mini Groove in less than 6 months.

Duplicating high-security track keys is very profitable. The HPC Mini Groove™ (8000MGDC) can pay for itself by duplicating as few as 6 keys per month.

The numbers used throughout this article are based on information received from surveying locksmiths just like you. Use these numbers and calculations as guidelines. Determine your own costs and sales projections in order to determine a more accurate payoff period for your next HPC Key Machine. Your new key machine is an investment in your business. Do the calculations and see how quickly your investment will start generating profits.