From an outsider’s perspective, self-storage companies look simple to run and live off the profits. However, there are many moving parts to these companies. In reality, starting a storage unit company is similar to beginning any business type. Explore these tips on starting a self-storage business right now.
1. Consider Consumer Need
According to Storable, most self-storage customers tend to be middle-class people ranging in age from their 20s to 50s. Because of this specific demographic, starting your own storage unit company must originate with market research.
Before selecting a location for the company, consider the regional need for storage. For example, dense communities full of condominiums are often short on storage. These residents may require storage units. Other factors can be included as well, such as population growth and proximity to busy streets or highways. Every detail contributes to either a strong bottom line or a weak business deal.
2. Debate Between New Construction and Existing Structures
The most important aspect of a storage unit company is the physical building. Essentially, you have two types of investments to choose from, including new construction or an existing structure. First, new construction gives you the most flexibility regarding size, design and location. This freedom, however, comes at a higher cost than an existing structure. Here, you must pay for the labor to build a structure instead of just the building itself.
Second, existing structures offer turnkey service but with exceptions. Some buildings may be in dire need of repair, for instance. Lastly, existing structures may be located in desirable locations, which leads to an expensive sticker price.
3. Organize Those Finances
Generally, it may take around $1 million or more to start a storage unit company. You might have an inheritance to use, or multiple people are pooling their money to give this dream a try.
Preferably, create a spreadsheet of your finances. Explore startup expenses, everyday costs and possible profits. For many people, the financial end is the most challenging part of becoming a small business owner.
ADP suggests financing a company with several different options, such as crowdfunding, venture capitalists, small business loans or personal savings. Each funding choice has its advantages and disadvantages. In the end, your personal choices regarding funding will ultimately help or hinder the company’s growth.
4. Create a Business Plan
Every company needs a business plan. Ideally, create a mission statement, itemize your goals and summarize your financial parameters. In addition, outline the allowable and prohibited activities at your facility. For example, some unit renters want to run a small business out of their spaces, reports Small Business Trends. If you would like to avoid this scenario, create a section in the business plan about it. In the end, you control the actions on your property.
With your business growing at a steady pace, it can become an asset that’s passed down through the generations. Start your storage unit company with a mixture of financial investment and research. Thorough planning can make that business dream come true.