Estimated reading time: 5 mins
If you are considering starting a business, you might be drawn to the self-storage industry. Residential and commercial storage solutions are increasingly popular and continue to be in demand. Before you make any decisions that you might later think could have been done differently, here are the basics for starting this type of business on the right foot.
Do Your Homework
The key to starting any business well is doing your research beforehand. Specifically, look at where would be a prime location for a self-storage facility.
The ideal location meets certain criteria. It is:
- A place that has a high demand
- Has correct zoning
- Costs are not outrageous
- Close to highly populated areas
After narrowing down potential locations based on how well they meet the items listed above, your next step is to determine whether it is zoned for you to build on the land.
Evaluate Startup Costs
Before going further, it’s imperative that you look at the financials. If you cannot get the required startup costs, then it is time to shelve this business idea until you have more money to invest in it.
Otherwise, you risk you not being able to get the startup off the ground. Then you would lose any money you already put into it.
Initial costs will be building a new facility if you decide to go that route. As well, there are the costs of creating and hosting a website to advertise the business and promotional materials to announce the launch. These expenses are ones that you will want to include in your business plan.
Starting the Building
Next up is the process of building. The layout and design are vital to the success of your new business venture. If it is not easy for customers to use the facility, they are likely to go elsewhere.
For your design, choose from the two main types:
- Rental units within a building spread across several floors
- Drive-up units spread across a large property
If you are building on an empty lot, then those are considerations. Alternatively, you might decide to convert an existing building into your new business idea.
A third option is to buy an existing storage business that is for sale. No matter which route you take, try to provide storage units of different sizes so that you can market the building to a broad audience.
The layout must be functional, yes, but also it needs to be attractive and clean for people to want to use it. They are placing their possessions here, and they need to trust that your business is secure. A dirty, disorganized storage lot won’t help matters.
Create a Business Plan
Every successful business needs a plan. This plan is what drives the organization forward. It involves setting goals and thinking ahead to potential issues in the future.
A business plan for a self-storage facility will include:
- Mission statement
- Business structure
- Growth strategy
- Employee roles and duties
- Strengths and weaknesses
- Marketing strategies
- Major competitor spotlights
- Cash flow analysis
- Profit projections
Making sure that your revenue gets to where you envision it within a certain time frame requires smart marketing techniques, including creating a website. It is important to use local seo as part of a comprehensive online marketing strategy, for example. Self-storage customers frequently look online first to help them find a storage unit.
Further develop your online presence by creating social media profiles and positioning yourself as an expert on there. Find out your customers’ pain points and start to fill their storage needs. Also, start an email newsletter to reach out to your target audience.
Start to build a positive reputation. It takes time and effort, but it is well worth it when people start to rent your units.
Developing a business plan is crucial, so take your time doing so. It will be the blueprint for startup and operations.
While the business plan includes your plans for growth, it also provides a business strategy that you will work from over the coming years.
As your organization develops, you will continually modify the plan to fit with the current economy and your company’s place within it.
If you do not have the investment, then you can get financial support. For example, you might get funding from a bank or family members. For the funds to get approved by a financial institution, you will likely have to provide detailed information about:
- How much you need for funding
- Why you need it
- Exactly how much money will go each expense
- Future financial plans, including how to pay off the debt
You will need to have a strong credit score to be approved for a loan. This may require time if you have not already begun to build your credit.
Alternatively, you might decide to bring on investors who can provide cash in return for a certain percentage of ownership. You can assign them responsibilities within the operation, or they could be silent partners.
Looking ahead, you might not make a profit for several months or even a few years on this business. Many factors will determine when your business turns a profit, including how many units are rented, the price of rentals, the size of your expenses, and any costly obstacles that come along the way.
Follow Legal Regulations
Always make sure that you abide by laws regarding business registration, related laws, and tax regulations. You will likely have to research business licenses to find out the details, as well as reading up on how to increase the likelihood of approval.
Once the operation starts, you might think about expanding as a way to bring in more revenue. There are regulations to follow, so always make sure you act in accordance with local laws. You might also grow your team to improve efficiency. Again, ensure you register new employees as required.
Concluding Words on Starting a Self-Storage Facility
Buying or building a storage facility can be a rewarding experience if you have put in the work before you even open the doors. The industry continues to grow, and you could have a long-term business opportunity on your hands.