Self-storage facilities allow customers to store items month by month.
Self storage facilities provide customers with the means to store nonperishable, nontoxic and nonhazardous materials in a secure space on a month-by-month basis. Self service has been the fastest growing real estate industry for the past 35 years, according to the Self Storage Association. Finding out everything you can about the industry and what is required to start a business is essential before embarking on this path.
Instructions
1. Learn everything you can about the industry. Investment and operational costs can be high. For example, average operational costs can be 25-40 percent of your total income on average, according to the Self Storage Association's "Introduction to Self Storage" hand book. Land and building costs need to be carefully considered in the overall investment costs. The current "rule of thumb" for land costs is that land will cost on average 25 to 30 percent of the total development cost, the association states. For example, a facility of a good size, say 60,000 to 80,000 square feet, will cost $45 to $65 per square foot, excluding land costs.
The Self Storage Association is a good place to begin your research. It has industry information that you can easily access and download.
2. Decide on your location. Look for a high growth area near or in the middle of a heavily populated urban area. Finding a location close to a major artery that runs through a neighborhood is a good place to start. Such areas might be densely populated with families who are more likely to need smaller storage units. Selling large numbers of smaller units represents more profit per dollar invested, according to the association.
3. Find out as much information about your competitors' facilities as possible. How many are there? Is the market saturated? Is there potential for growth? Your decision will be based on several factors, including appropriate zoning, ease of access and land availability.
4. Conduct a detailed market survey. Obtain a feasibility study from one of the major industry vendors. The feasibility study should include detailed demographic information, such as current population, population mix and potential growth. Plot locations of competitors on a map and get detailed information about their business activities, such as unit mix, rental rates and occupancy levels. You can obtain this information from the local planning department. It will be used in your business plan and to find out average rental prices in the area. You also can use this information to determine whether or not the market is saturated. Sunbelt areas tend to have a higher market saturation point than other areas.
5. Learn and understand the space requirements of the types of people identified in your market survey. For example, a family looking to store furniture and personal documents will have different space requirements than a company that wants to store industrial machinery. Adjust your business plan according to the needs of the prevailing majority in your market survey.
6. Collate all of your gathered information into a well-presented and detailed business plan. Contact your bank, business angels, venture capitalists and grant schemes to see if you are eligible for funding.
7. Purchase your land. Hire designers and construction workers to begin development and construction if you are building your facility. If you are purchasing an existing building and converting it, hire the relevant staff to renovate the building appropriately.
8. Get the necessary state licenses. Choose a suitable name and register your business with the appropriate authorities. Ensure that you have appropriate signs for your business, they are an important aspect of appealing to your customers. Market your business.
9. Install 24-hour video surveillance both inside and outside the facility with motion detection and security alarm systems. Ensure that customers have 24-hour access codes. Consider selling padlocks, wrapping materials and boxes on site. Ensure that there are trolleys and dollies at loading bays to enable customers to unload their goods and take them to their storage rooms safely without having to return to the car or van too many times. If done well, this business can be highly profitable.
Tags: your business, business plan, Ensure that, market survey, Self Storage