How To Start a Self-Storage Business

You may not pay a lot of attention to the self-storage industry, but it’s one of America’s most dependable and consistent investment opportunities for entrepreneurs. 

With houses shrinking in size and businesses moving about more and more these days, there’s been a steady increase in demand for useful, high-security storage space. In fact, the US boasts over 2.1 billion square feet of self-storage space across the whole country, and it keeps on growing year after year. So, if you are looking for your next business idea, this may well be it. 

For those with an entrepreneurial mindset, this growth is a whole lot more than a fleeting trend. It is the backbone for a well-planned self-storage operation that can bring in steady and reliable revenue. Unlike many other businesses, you don’t need to invest in a large team to run once you’re set up.

Yet, turning a good idea with a lot of real demand into a profitable storage facility is not without challenges. It requires a careful strategy: 

You want to know exactly what your local customers need
You need to sort out financing
You need to find the best location
You also need to invest in some level of equipment that’s specific to storage facilities

Unsure how to get started? Here is a guide to walk you step by step through the process so you can build your self-storage venture for success.

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Your Business Plan

Every business, no matter what it is, needs a plan to get started. If you don’t design a clear business plan, you don’t have a clear direction. 

What should your business plan include?

Ideally, you want to start your plan with research data, suggesting the projected demand in your target area and the current market. This should also highlight local competitors when relevant. Bear in mind that this is your starting point. The plan needs to define the key steps and activities for setting up your business, and potentially even explain how to achieve long-term goals for expansion.

But, as you are about to start a business, you want to consider permits, insurance, and all resource requirements. It’s best to start early with those, as it can take time to obtain everything you need to get started. 

Your business plan should also feature a realistic cash flow target, which you can derive from calculating costs, such as maintenance, cleaning, security, marketing, and utilities. Then you can use your research into the market to create a forecast of your first year and beyond.

At this point, you need ot be aware that it may take a few years for the business to become profitable. So, your accounting needs to account for slow early occupancy periods and high marketing costs as you launch, without mentioning construction, land rental or purchase, and any equipment purchase. In other words, you will need to explore flexible financing solutions, such as small business loan options, to help balance the launch expenses and maintain enough liquidity to run your operations. 

A Word on Location

How important is your location?

Locations can make or break a business, and while this may seem less crucial for self-storage ventures, it still holds true.

The ideal site should be easy to access by car for your main audience. While it can’t be in the city center, you want to be close to the highway and preferably on the side of town where your target resides, whether it is businesses or individuals, or both. 

Another consideration when it comes to your location is the general size potential. Ultimately, self-storage businesses need plenty of space for their customers, so you need to be in a position to offer enough storage containers — even if you expand gradually.

Lastly, if you are planning to run a 24/7 business, you need to be accessible while being far enough from residential areas so that nighttime customers do not disturb the people who live nearby.

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Thoughts on Building Design

It is highly unlikely you’ll be able to take over a building that is perfect for your objectives. In other words, once you’ve secured the location and your funding, your next step is likely to be designing your perfect prefab self-storage building. Your facility’s design will play a huge role in the long-term durability and expansion potential of your venture. 

So, where do you get started? When it comes to self-storage, there are many options, but ideally you should focus on something that is:

Quick and easy to install, like prefab structures
Durable and resistant to temperature, humidity, and pressure, like pre-engineered metal 
Resistant to fire and pests
Easy to maintain
Suitable for customization and expansion

Your building will also need additional features for the parts that are fully customer-facing, including toilets, easy payment stations if you are taking walk-ins, and a manned reception area. In short, your self-storage building needs both metal containers and more traditional welcome spaces.

Planning Your Digital Presence

In today‘s market, it’s impossible to run a successful business without having an online presence. Most customers will look for the services they need online before making their decision. This is where they check the location, reviews, and compare prices before booking. So this is your sign to consider your website as your main selling platform. 

The priority is to design a professional-looking and easy-to-navigate site that allows potential customers to see in real-time unit availability, unit size, and prices. They also need to be able to book the unit of their choice for the duration of their choice and pay online. This means integration with a transaction solution that is secure.

You also need to prepare for people who are less familiar with space measurements. They can find it hard to figure out precisely the size of the container they need, so it will be helpful to have photos and even virtual tours where you can show how much fits in each unit size. 

In conclusion, there is a lot to plan just to be able to launch a self-storage business. Nevertheless, this type of venture is highly in demand and can be profitable if you focus on the things that give you a competitive edge, such as your security system, digitally controlled access for customers, and even the unit features.

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