Are you looking to establish a self-storage business? When it comes to beginning a company in real life, capital intensive and anyone that will not take up much of your time, owning a storage unit is the best idea. 

People use storage units to store their possessions. To keep their stuff safe, they may be looking for any type of storage area, varying from boxes, cabinets, containers, rooms, and even an empty ground lot. Since 1958, the storage unit company has grown to be a booming enterprise that has made many investors wealthy. As a result, if you conduct a thorough study on the industry and ensure that you are geographically well situated, you may expect to generate substantial profits.

You must undertake a full assessment of this business before becoming involved in it, just like you would with any other firm, to ensure that you do not wind up wasting your time or money in a venture that is not a good match for you. Another reason it is necessary to conduct a survey is to identify whether or not the company will prosper in the place or area in which it is well established.

A thorough understanding of the industry, as well as the nature and extent of competition you are likely to encounter, will allow you to determine how much to invest in the business and how much you will profit from it as a result of your survey. As soon as you have completed a thorough study of your company, it is critical that you document your results since the information and facts you have gathered will be utilised to create your business strategy.

How much money will it need to start a successful self-storage business?

Before you start searching for potential locations for a self-storage facility — whether you’re considering purchasing an existing facility or creating a new one — you’ll need to do some math.

To get started in the self-storage industry, you’ll need a solid idea of how much it will cost to get started. Location, acquisition prices, land expenses, and facility building costs are all important considerations, and the numbers will vary substantially depending on these aspects.

Not only must you consider the costs of purchasing or developing a facility, but you must also consider where the money will come from:

• What kind of liquid assets do you have that would allow you to purchase or construct a self-storage facility on your own? 
• Are you able to afford to put such belongings in a self-storage facility for the time being?
• Do you require an acquisition or construction loan to complete your project?
• Do you need to find self-storage investors to assist you in financing an acquisition or development project? 

After you’ve figured out the answers to those questions, you’ll need to work out how much it will cost to run the facility once you’ve acquired it for yourself. 

• Are you and your family planning on running the business on your own? 
• What kind of person will you have to recruit to run it? 
• Is it preferable to outsource the business administration to a third-party management firm? 
• Is it necessary to install facility management software, such as SiteLink, on your computer? 
• How much of your time are you willing to invest in managing a self-storage facility?

Keep in mind that a self-storage facility is more than just a building. It’s a commercial venture.

When starting in the storage industry, you’ll almost certainly need to set aside millions of dollars to purchase or construct an office building and pay different running expenditures, including salaries and taxes. 

The commercial real estate business CBRE published a survey in early 2018 that found real estate taxes accounting for 28 per cent of all self-storage running expenses, with on-site and off-site management fees accounting for another 38 percent of operating costs.

6 Simple Steps to Starting a Storage Unit Business in 2022

1. Location of Your Storage Unit Business

Determining the most appropriate location for your storage unit company is critical to its success. The finest storage facilities are profitable because they are located less than convenient. On the other hand, they are easily accessible and conveniently located near major roads or interstates.

Traditionally, many storage unit providers have a shop in disused warehouses that have been transformed. However, if you have the necessary funds, you might construct your storage unit facility from the ground up once you have purchased or leased the site. But first and foremost, be sure that you are browsing for storage facilities in business zones that have been licenced for such use.

2. Perform a market analysis and a feasibility study

A storage unit company’s demographic and psychographic composition is strongly reliant on the location of the units, the population of individuals living in the surrounding region, and the amount of income earned by the households that require a storage unit for their personal or constant out. 

It is reasonable to assume that more people in the suburbs, which are mostly higher-income individuals, are more likely to rent or lease storage units when compared with those living in urban or rural sections of the country. This does not preclude enterprises of any size from seeking a safe site and department to keep their extra company papers from pursuing their goals.

3. Know Your Major Industry Rivals

The storage unit sector is very robust, and as a result, some organisations have distinguished themselves from the competition, whether as independents or as more significant enterprises. Various characteristics distinguish these businesses from the competition, including, but not limited to, their length of time in the sector, their marketing and PR techniques, the number of units they have, the placement of their units, and their safety and security measures.

As a result, it’s important for you to know your competitors, study their techniques and marketing strategies and build for yourself a complete business plan to stay unique.

4. Choose between buying a franchise or starting from scratch

Whether you start your business from the ground up or purchase a franchise is mainly dependent on your aims and ambitions for the company. You should also thoroughly research your alternatives because there are advantages and disadvantages to any decision you make on behalf of your company.

Independents dominate the storage unit industry and major corporations, and the franchise system has not evolved to the extent that it has in other sectors. Due to this, entrepreneurs wishing to start a business cannot take advantage of the franchising opportunity.

Suppose you desire to establish this business from the ground up. In that case, you need to make sure that you thoroughly research the industry to comprehend the company before becoming involved in it. To start a business from the ground up, you would need to make judgments about marketing and advertising and establish how much you should charge your customers.

5. Storage Unit Service Contracts

A tenancy contract or service agreement is required by law for all clients who use a storage unit rental facility’s storage services. There should be specifics on all of the terms and circumstances of leasing, as well as the use of storage space at your facility in this agreement.

You will need to draft this contract before you begin operations at your new company. In addition, it also contains the conditions of payment, the rental duration, the waiver of liability at the end of the day and any other expectations you have of your clients. These agreements are frequently the difference between success and failure for a storage unit company.

6. Building Your Business Structure

At the moment, the storage unit sector is highly competitive. As a result, you must establish your company in the most efficient manner possible. Sole proprietorships, partnerships, or other incorporated businesses are viable options for starting a storage unit business.

If you have any questions about this or any other aspect of launching your storage unit company, you must get legal and financial advice. This is because attorneys and accountants are typically aware of the ideal company structures for a particular situation based on the type of business and its circumstances. 

Additionally, it will spare you the time and effort of attempting to figure it out on your own and, in the process, making potentially fatal mistakes along the road.

Bottom Line

Purchasing or constructing a self-storage facility will almost probably require time, energy, and funds. Although the risks are high, the rewards may be significant in a constantly expanding market. Its success is clearly evident.

The need for self-storage continues to grow due to several phenomena, including the overall shrinking of baby boomer families, the general preference among millennials for renting flats rather than purchasing homes, and the continued mobility of American workers. It has been proved that the self-storage industry is a recession-resistant industry.

Shortly put, self-storage provides an abundance of reasons why purchasing an existing facility or developing a new facility might open the door to significant financial benefits.

Author Byline: 

Nishanth is a Startup Specialist working at NeoITO – a reliable Software Development Company based in the USA. He is an avid reader, writer, and works closely with entrepreneurs to stay updated on the latest.