Have you ever thought about starting your own business?
The self-storage market could be perfect if you’re looking for an industry with high demand and significant profit potential. You’ve probably seen storage facilities all over your city and wondered what it takes to get into the self-storage game. This beginner’s guide answers possible questions you may have about the process by walking you through everything you need to know to launch your self-storage business.
Starting a business is never easy, but with some hard work and the tips in this guide, you’ll be well on your way to becoming the next self-storage mogul.
Ready to take the plunge into entrepreneurship? Keep reading to learn how to start a storage business!
Evaluating the Profitability of the Self-Storage Business
You need to evaluate several factors to determine if a self-storage business will be profitable, including the following:
- Pricing strategy
- Startup costs
- Amenities and features
- Staffing requirements
Location, Location, Location
Finding a good location is one of the most significant factors in a self-storage business’s success; the right location can make or break your business. Look for areas with high visibility, easy access, and a large population — industrial parks, business districts, and residential areas are all great options. Make sure there are no competing storage facilities nearby, too.
How much does it cost for a storage unit around your neighborhood?
You’ll want to set competitive rates to attract customers while generating a good profit margin. Study rates of other self-storage businesses in your area to determine a range, then set your prices on the higher end. You can always run promotions and discounts to bring in new tenants and upgrade your pricing later.
Be prepared for substantial upfront costs, such as land purchasing and construction costs for your facility, marketing expenses, and legal fees. Are you buying storage units or constructing them yourself? Make a detailed budget and business plan to determine if the potential return on investment makes sense. Getting business financing or loans may be necessary to cover costs.
Amenities and Features
Today’s customers want more than just a basic storage unit. Consider offering amenities like climate control, wide driveways, loading docks, carts or trolleys, security cameras, and digital locks. These extras may cost more but will also allow you to charge higher rates.
While self-storage businesses are typically low maintenance, you’ll still need staff to handle administrative work, cleaning, maintenance, and customer service. Decide how many employees you need and factor their salaries into your operating costs and financial projections.
A self-storage business can be very profitable with careful evaluation and planning. However, go in with realistic expectations about the investment required and the challenges involved. Self-storage can provide stable cash flow and income for years if done correctly.
The Pros and Cons of Owning Storage Units
Running a self-storage business has many pros and cons you should consider before diving in.
- Owning self-storage units can be very lucrative.
- People always need extra space for their belongings, so demand remains steady.
- Once your units are built, the day-to-day operations are relatively straightforward. You don’t need specialized training or education to manage the business.
- Another benefit is the tax advantages and deductions of commercial property ownership.
- The initial investment in land and constructing storage units can be pretty expensive. It may take years to become profitable or break even.
- Competition is also increasing in many areas, so you have to work to attract and retain long-term customers.
- Managing and maintaining the property requires ongoing time and money. You must handle security, pest control, unit repairs, landscaping, and more. Delinquent customers who don’t pay rent on time can also negatively impact your cash flow.
Certain benefits like steady demand and passive income are appealing; a promising self-storage profit margin also makes the business lucrative.
However, do your research, develop a solid business plan, and ensure you have enough capital to launch and sustain your self-storage company properly. Self-storage can be an advantageous industry if you go in with realistic expectations and expert guidance from us at Unwired Logic.
Creating a Business Plan for Your Self-Storage Facility in 4 Steps
Developing a solid business plan is critical to building a thriving a self-storage business. A good plan will help you outline your vision, mission, and operational details to determine if the business can be viable and help you obtain funding from investors or loans.
Here’s how to craft a business plan for your self-storage business in four steps:
- Define your vision and mission.
- Analyze the market.
- Create an operating plan.
- Develop financial projections.
1. Define your vision and mission.
Consider why you want to start a self-storage business and what you hope to achieve.
Do you want to provide a needed service to your community? Or are you focused on generating a stable source of income? Your vision and mission will guide all the other details in your plan.
2. Analyze the market.
Research other self-storage facilities in your area to determine potential competitors and see what they offer. Look at the sizes of units, features, locations, and pricing to determine how to differentiate yourself. Also, evaluate your city’s overall demand for self-storage to ensure enough customers support another facility.
3. Create an operating plan.
Figure out the nuts and bolts of how your business will run.
Determine things like:
- The size and number of storage units you’ll offer
- Pricing for different unit sizes
- Staffing needs and job descriptions
- Important policies and procedures
- An initial marketing plan to attract customers
- Required licenses, permits, and insurance
- Automating your self-storage business
4. Develop financial projections.
Create projections for your business’s income and expenses over the next 3–5 years. Factors include purchasing or leasing a facility, building storage units, marketing expenses, staffing, taxes, loan payments, and other overhead. Determine how much revenue you need to generate a profit. These forecasts will show if your business idea is financially viable.
A comprehensive business plan may seem daunting, but it’s crucial to launching a successful self-storage company. Do your homework, make realistic projections, and refine the details to build a roadmap for getting your business up and running. With hard work and persistence, you’ll be on your way to establishing and running a profitable self-storage facility.
Building and Designing Your Self-Storage Units
Building and designing your storage units is one of the most critical aspects of following a successful self-storage business model. The units are your product, so you must ensure they meet your customers’ needs.
Here are four factors to look into when building and designing your self-storage units:
- Size and type
- Access and security
- Layout and amenities
Size and Type
Offer a range of unit sizes to suit both residential and business customers. Standard sizes are 5×5, 5×10, 10×10, 10×15, and 10×20 feet. You’ll also want to determine if you want to offer climate-controlled, drive-up, and RV/boat storage units. Climate-controlled units, for example, typically charge a premium but attract more long-term tenants.
Access and Security
Your customers want 24-hour unit access, so you’ll need a secure gate system. Consider keypad or card access. Install security cameras to monitor the facility and provide good lighting for customer safety. You may also want to offer unit alarms as an add-on.
Use high-quality and durable materials that will withstand heavy use and weather. Metal roll-up doors, galvanized steel frames, and concrete floors are typical. Make sure the units are weather-resistant and well-insulated. Install sturdy shelving for customers to organize their items.
Layout and Amenities
Design an efficient layout with wide driveways and easy access to all units. Provide amenities like handcarts, dollies, packing supplies, and trash dumpsters. You may also want to include an on-site office, restrooms, and additional parking spaces. Keep everything clean, well-maintained, and looking professional.
Your self-storage units are the foundation of your business. Taking the time to build, design, and outfit them properly will pay off by ensuring happy, long-term customers.
If you need help figuring out the details for your storage units, don’t hesitate to contact the Unwired Logic team. We’re a group of technologists, industry experts and official partners of Storeganise, an established self-storage software solutions provider with years of experience.
5 Tips to Help You Market Your Self-Storage Business for Success
Having a detailed self-storage marketing plan is critical to gaining new customers and ensuring long-term success.
Here are five tips to get started:
Build a website: A professional self-storage website is essential in today’s digital age. It allows potential customers to learn about your business, view photos of your facility and available units, check prices, and rent units online. Storeganise gives you templates so you can build your website in minutes.
Start a blog: Creating an informative blog is a great way to rank higher in search engines and establish authority. You can blog about moving tips, storage solutions, or updates about your facility. Keep your posts friendly and helpful, and be sure to mention related terms like “portable storage,” “climate-controlled storage,” or “RV storage” to improve searchability.
Advertise locally: Publish ads in local newspapers, magazines, and websites. Sponsor nearby events and advertise on community Facebook groups and NextDoor. You may also offer move-in specials and coupons to attract new tenants.
Provide excellent customer service: Offer a hassle-free move-in experience. Greet new tenants warmly and show them available units; explain the rental process and make them feel welcome to ask questions. Provide friendly reminders about payments and lease renewals. Happy customers will leave positive reviews and refer others.
Network: Build mutually beneficial relationships with local moving companies, real estate agents, contractors, and nonprofits. Offer them discounts or commissions for referrals. Attend networking events to make valuable connections and donate storage space or funds to charities and organizations in your area.
With proper marketing and customer service, your self-storage business will thrive. Focus on online and traditional strategies to reach your target customers. And don’t forget that word-of-mouth marketing from happy tenants is the most powerful means of promoting your business.
Frequently Asked Questions
Is owning a storage unit business profitable?
Self-storage is a profitable business if managed effectively; a typical storage business has a profit margin of 41% and is poised to generate $350,000 to $800,000 on average annually.
A self-storage business offers individuals and businesses a secure and convenient solution for storing their belongings. The demand for self-storage facilities is relatively stable and can provide a steady income stream. However, like any business, there are factors to consider, such as location, competition, market demand, and operating costs. Before you start, contact us to guide you on the best way and place to invest in.
Can I invest in self-storage?
Yes, you can invest in self-storage. Investing in self-storage can be lucrative, as the industry has shown steady growth and stability over the years. There are a few ways to invest in self-storage, such as purchasing shares of self-storage real estate investment trusts (REITs), or investing in self-storage properties directly.
However, as with any investment, it’s essential to do your due diligence, assess the market conditions, and consider factors such as location, demand, and potential returns before making an investment decision. Consulting with a financial advisor or real estate professional can guide your investment journey.
Is self-storage recession-proof?
While self-storage can be more recession-resistant than other industries, it’s not entirely recession-proof. During economic downturns, people may relocate, or face financial difficulties, affecting the demand for self-storage units. However, self-storage has historically demonstrated more stability than many other sectors, as people still require storage solutions even during challenging times.
Additionally, well-managed self-storage facilities in areas with consistent demand may be better positioned to weather economic fluctuations. It’s essential to conduct thorough market research and assess the local factors when considering the resilience of self-storage in a specific area.
Do I need planning permission for a container storage business?
The need for planning permission for a container storage business depends on various factors, such as the intended use and location of the containers. In the UK, for example, if you plan to use the containers as permanent structures, you’ll likely need planning permission from your local planning authority.
However, it’s essential to note that container businesses typically require planning approval, so it’s advisable to check with your local planning authority to ensure compliance with regulations.
So there you have it, a quick guide to getting your self-storage business up and running. While it may seem daunting, if you start with a solid business plan, secure financing, find a good location, build or lease storage units, market your services, and provide excellent customer service, you’ll be well on your way to success.
Running your own business is challenging work but also rewarding. You can build something great if you go in with realistic expectations, learn from your mistakes, and don’t get discouraged easily. Starting a self-storage company could be a perfect way to be your own boss and help your community simultaneously.
What are you waiting for? Book a free consultation with us today to get your self-storage business automated.