business plan for storage facility

How to Create a Self-Storage Business Plan [Plus a Free Template!]

By the end of 2020, roughly 4.35 million hopeful individuals had filed new business applications . 

Perhaps the motivation was the loss of jobs or that people were fed up with the traditional 9-5 gig. Whatever the case, entrepreneurship has been a popular theme lately. 

Many new business owners opted to pursue a real estate investment, specifically a self-storage business. For those of you on this path, let’s discuss creating a self-storage business plan and how a few purposeful decisions can catapult your business to the forefront. 

It starts with a solid self-storage business plan.

Developing a business plan

Before you can start creating your business plan, you need to do some market research first. Start by relying on others’ history and experience. Do lots of market research. Network and learn from other marketing strategies. Attend an industry trade show. Diligently learn the ins and outs of running a small business. 

Start to hone in on the details as you begin to formulate your plan. For example, , are you building or renovating your own potential storage space? You’ll need to consider the zoning in your chosen area, and contemplate the land cost and interest rate from a lender or two. In terms of marketing strategies, will construction costs or developmental costs be worth the initial investment? Thinking through these aspects with some “back of the napkin” math early on will help you as you start to formalize your business plan

Self-storage business plan template

Putting the vision for your self-storage business to paper is important. Not only will it help you develop a roadmap for all the things you need to do to make your business dreams a reality, but it will allow you to easily share your vision with others. This is necessary if you want to bring in funding partners or borrow money for a lender.

Download a business plan template and start drafting your own self-storage business plan. Dive deep into a recent market analysis to determine any possible cash flow outcomes. Understand that your first year as a startup might be your most challenging. Read various feasibility studies, and talk to your peers in the industry. 

Your business plan should look at least two years out into the future. Plan for different scenarios in regards to your return on investment projections. Consider your returns under a best case scenario and a worst case scenario, as well as a conservative median projection.

Components of a self-storage business plan

Aside from the initial planning phase, remember to consider the operational logistics it will take to run this business. Fortunately, self-storage business investments are desirable because of the traditionally low operating expenses. 

Make sure your business plan includes these components:

Executive summary

Business description, market research and strategy, management and personnel, financial reporting documents.

An executive summary is a brief overview of your business. Think of it as the first thing you would tell someone about your business in a conversation. For example, an executive summary for a self-storage business might start something like this:

“The purpose of this business is to develop and operate a 100-unit facility on a parcel of land outside of Colorado Springs, Colorado.”

Or, like this:

“This venture seeks to find and acquire value-add self-storage facilities in secondary markets in the Southeast. The business will modernize and update the facilities with the latest technologies to increase their profitability over the next two years.”

An executive summary should go on to summarize and highlight key elements from your business plan, such as total costs and projected revenue.

How to Start a Self-Storage Business

What kind of business will you be: sole proprietor, LLC, C- or S-corporation?

Here, you can describe the details of how your self-storage business will operate. Beyond your legal status, cover the operational details of your business such as branding, services offered and projected expenses.

Businesses are more tech-enabled than ever before, with easy-to-navigate websites , advanced phone systems, user-friendly apps and online payment services . Of course, these things aren’t always necessary to achieve success; however, having a few tech-powered options will put you ahead of the game. Consider how you will use these technologies sooner, rather than later.

Also consider things like your hiring plans, insurance needs , and maintenance procedures. Include additional revenue sources besides self-storage rents, such as sales of tenant insurance or moving supplies. 

Remember all that market research you did on the self-storage industry? Lay out your most relevant findings and how they support your self-storage business idea in this part of your business plan. Examine the demographics and supply and demand story of your target market. For example, if individuals need RV storage, consider offering that option. Decide how you will make money and attract new renters (i.e., social media , content marketing, etc.).

Like any industry, the self-storage industry has a unique ebb and flow to it. Knowing these trends will help you execute a more successful self-storage project.

This is the who’s who of your self-storage business. Discuss the experience, qualifications and duties of the executive team, as well as additional employees that you have or need to hire to execute your plan.

Is your self-storage business plan financially feasible? Here is where you demonstrate that it is, by laying out details of your financial situation. What are your assets and liabilities? Will you have debt service?

This section should include the projected profit and loss, balance sheet and cash flow for your business for the next two to three years.

Expect the unexpected

Once your business is up and running, you will no doubt encounter challenges and situations that your plan did not anticipate. However, a strong business plan will greatly increase your chances that your business will succeed. If you are looking to do more with your business, Storable offers a host of technology solutions to help your self-storage operation thrive in a competitive environment.

Financing Options for Self-Storage Businesses

Resolve your questions about how to get financing for your self storage business. Keep Reading

Is a Self-Storage Business Profitable?

Is owning a self-storage business profitable? Find out how an investment in a self storage facility can turn into a lucrative business for you. Keep Reading

How to Buy a Self-Storage Facility

Thinking about buying a self-storage facility? Here is what you need to know before starting your search. Keep Reading

How to Start a Self Storage Business in (2024): Step-by-Step Guide

Free Self Storage Business Plan Template

Matthew Khalili

10 Min Read

The 44.37 billion dollars self-storage market grows prolifically as the demand for self-storage facilities has grown throughout the country.

With an average occupancy rate of 85-90%, most self-storage businesses in the US enjoy a profit margin of 11-18%. It is indeed a profitable business venture for someone ready to invest and put in some hard work.

Well, if you have made up your mind to venture into the self-storage industry you must be wondering how to start a self-storage business and turn it profitable.

Well, this guide has all your answers. It details all the essential steps that will help you set up a well-planned and legally compliant self-storage business in a hassle-free manner.

So without any further ado, let’s dive right in.

Steps to Start a Self-Storage Business

• Self-Storage Business Planning and Market Research
• Prepare your Self-Storage Business Plan
• Choose the Location for your Storage Facility
• Register Self-Storage Business
• Acquire Essential Licenses and Permits
• Insure the Self-Storage Facilities
• Open a Business Bank Account
• Calculate your Startup and Operational Costs
• Acquire the Fundings
• Build your Brand and Marketing Plan

Let’s uncover this step-by-step guide that will help you set up a legally compliant and financially planned storage business in a proper way.

1. Self-Storage Business Planning and Market Research

As the first step of starting a self-storage facility, evaluate the feasibility of your storage business idea. For this, you must gather a foundational understanding of the market by diving deep into the research.

Analyze your market area by studying its current population and projected population growth. Evaluate the competitive landscape and see if there is room for new self-storage businesses in your chosen locality or region.

Dive further deep, understanding who your ideal customer is. For instance, would you open your self-storage facility for commercial people or residential people?

An answer to this will influence many other decisions like location, size of self-storage units, storage facilities you will be offering, and your startup costs.

Further, decide whether you will operate the self-storage company on your own or hire a third-party company to oversee the management.

Once you have a rough idea of your business concept, take a step further and nail your business planning with a solid plan.

2. Prepare your Self-Storage Business Plan

Proceeding without a business plan is like aiming your shot in the dark hoping it reaches the target. Well, you sure don’t want to take that risk, especially when planning to invest millions in your self-storage business.

A realistic and credible business plan is a worthy document that will drive your business in a specific direction helping you realize your business goals and objectives. Besides, most investors won’t even pay you heed if you don’t have a business plan.

So, better start writing a credible self-storage business plan that resonates with your core objectives, mission values, goals, and business concepts.

Keep in mind that the business plan for getting an existing self-storage facility off the ground will be much different than building a new storage business. However, if we consider the fundamental components of a business plan, you must try to cover the following topics:

• Executive Summary
• Company Overview
• Industry and Market Analysis
• Self-storage products and services
• Management Team
• Self-Storage operations plan
• Marketing and sales plan
• Financial plan

Writing a business plan is taxing. It requires utmost attention to detail and precision and is time-consuming.

Need Assistance Writing a Self-Storage Business Plan?

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3. Choose Location for your Storage Facility

Location plays a crucial role in determining the success of self-storage businesses. It’s better to start sourcing the ideal location for your storage space business ASAP!

The preliminary market research will help you identify the localities that have surging or unmet demands. For instance, the demand for self-storage facilities is high in commercial regions and densely populated residential areas.

Now, answer whether you will buy land for storage facilities or remodel an existing facility. Besides, do you plan to spread across the facilities on the same level or will you create multi-story facilities? And lastly, will you offer indoor access to the facilities or only drive-up to storage units?

Usually, the self-storage facilities are spread across a 10,000-100,000 sq. ft. area housing nearly 500 storage units. Now, evaluate your needs and start looking for easy-to-access locations near your target market.

Take help from real estate investors to help you find the right business location. While finalizing the contract, ensure that all the legal compliances are met.

4. Register Self-Storage Business

It is essential to legally register your business with the state. While registering, you have to choose between different business entities like sole proprietorship, partnership, LLC (limited liability company), and Corporation.

Businesses in the self-storage industry can benefit greatly from registering LLCs and Corporations as their legal entity.

Further, register your self-storage business for state and federal taxes and acquire your Employer Identification Number (EIN) from the IRS portal .

EIN is a 9-digit security code unique to your self-storage business and is essential for filing taxes, registering a business bank account, applying for business credit cards, and generating payroll.  Besides, EIN can be generated for free.

5. Acquire Essential Licenses and Permits

To ensure all-around compliance, identify the permits and licenses essential for your self-storage facilities from SBA .

If you are building a self-storage facility from the ground level up, get a Certificate of occupancy (CO) ensuring that your business meets all the zoning, government, and building code requirements.

However, if you are renting an existing self-storage facility, ensure that the owner has an occupancy certificate essential for your compliant business.

Ensure that you have all the essential licenses that comply with Occupational Safety and Health Administration requirements.

While it is still a long way before you start offering your storage unit for rent,  draft the service agreement contracts highlighting the terms and conditions, payment terms, and rental time to minimize the legal dispute.

Failure to get your business legally compliant can attract fines, penalties, and sometimes permanent closure of the business. Ideally, you should avail a legal help to look after the compliances for your business.

6. Insure the Self-Storage Facilities

Just like licenses, you need insurance to ensure that your storage unit business operates safely and lawfully. Federally, business insurance is mandatory for all businesses.

Now, if there is one insurance you definitely need, it is general liability insurance. This offers general protection against injuries, thefts, and property damage- so it’s a good start for your business.

Now, if you are hiring workers to look after your storage unit business, you also need a worker’s compensation fund to cover employees’ injuries and health expenses.

Also, it is wise to get tenant protection insurance to secure the interest of prospective tenants. This can enhance the credibility of your self-storage business amongst your target audience.

Lastly, get umbrella insurance to secure your business interests on all fronts.

7. Open a Business Bank Account

Setting up a separate bank account for your storage unit business helps you protect your personal assets from business liabilities. Not only that, it also eases the bookkeeping and tax filing for your business.

With that EIN procured earlier, you can apply for a separate business bank account. While you apply for a bank account, also apply for a separate business credit card.

A credit card will build credit history for your business making it easier for you to acquire loans in the future.

8. Calculate your Startup and Operational Costs

If the financial section of your business plan is not worked out yet, it is time to calculate your startup cost and operating expenses now.

Evaluate your startup costs by making projections for different expenses. This includes accounting for land purchase, construction, permits, insurance, and much more.

While you calculate your startup costs, also consider the operating expenses for the first 3-6 months. This is a good enough time for you to reach at least break even.

Talking about self-storage operating expenses, here are a few things you should include in your startup cost calculation:

• Mortgage/ Lease payments
• Payroll expenses
• Utility bills
• Professional services bills
• Insurance payments
• Marketing and advertising

Depending on the concept, size, location, and nature of your self-storage business, you can expect to spend anywhere between $1 million-$2.5 million to start your business.

However, it is possible to start a small business with less than a million dollars if you decide to lease or buy existing storage facilities in the lower borough regions of your town.

Once you have a rough estimate of your initial capital needs, you can start making arrangements for the same.

9. Acquire the Funding

As we discussed, it’s quite expensive to start a self-storage business even on a small scale. Personal savings aren’t adequate especially when you need a million dollars for an upfront investment.

Evaluate your monetary position and determine how much funding you require to turn your idea into a successful self-storage business.

In terms of funding options, you can opt for a variety of loans. This includes SBA (small business administration)-guaranteed loans for small businesses, business loans, acquisition loans, construction loans, working capital loans, etc. Evaluate your credit standing and interest rates before choosing this mode of finance.

Additionally, you can raise capital by seeking funding from angel investors and Venture Capitalists. For a certain stake in your business, these investors will provide you with essential funding.

Apart from this, you can also choose the mode of crowdfunding and lending from friends and families to gather essential capital.

10. Build your Brand and Marketing Plan

A strong self-storage business brand is essential to build a successful and profitable business. Ideally, you should start the branding and marketing activities as the facilities start shaping up together.

Define your brand elements to put together a consistent brand image across all the platforms. Get your self-storage business website ready and create your social media accounts to grow your brand’s presence.

You want your target market to find you easily. So get the banners, freeway hoardings, and billboards ready to guide the customers to your self-storage facility.

Define different marketing strategies you will use to attract potential clients to your business. This includes streamlining your GMB (Google My Business) account, email marketing, setting up your phone system, running paid ads, content marketing, and much more.

Allocate your resources to different marketing activities and track the results to see what type of marketing brings you the most benefit.

By now you must have a thorough understanding regarding how to set up your own self-storage business. Let’s take the first step and translate your business idea into a business plan by referring to online business plan samples .

Also, ease your business planning process by using cutting-edge tools from the Upemtrics business planning app . We have financial forecasting and AI writing assistant tools to strengthen your business planning along with free resources and extensive guides to help small business startups.

So let’s turn your vision for self storage business into a reality.

The Quickest Way to turn a Business Idea into a Business Plan

Fill-in-the-blanks, AI-assistance, and automatic financials make it easy.

Frequently Asked Questions

How much money do you need to start a self-storage business.

The cost of starting a self-storage business right from ground level up costs anywhere between $1M-$2.5M . However, it is comparatively much cheaper to buy existing storage facilities and upscale them to meet the concepts and nature of your self-storage business idea.

Are storage businesses profitable?

Absolutely yes. The average profit margins of a self-storage unit business in the US is anywhere between 11-18% Sometimes, storage units with streamlined operations and consistent occupancy rates can manage to earn margins up to 40% as well.

Is starting a storage business a good idea?

Indeed, starting a storage business would add a prominent source of income to your financial standing. In fact, most of the storage business owners hire a third party for facility management. This way they can earn a significant passive income while working on their other business ventures. Moreover, since storage facilities are always in demand, you can stay assured of reaping high benefits by running a highly functional storage unit business.

How many storage units are there at a self-storage facility?

Considering a 10*10 square foot size for one storage unit, you can fit nearly 130-215 units in one acre of land. Generally, self-storage facilities are spread over 10,000-100,000 sq. ft. of land making room for nearly 500-600 storage units in total.

What is the average sq. ft rent in self-storage facilities?

According to Statista, the average asking rent per square foot for storage facilities in the US is $1.3. Considering a 10*10 average size per unit, per month rental of a storage unit is anywhere around $130 .

About the Author

Matthew Khalili is an experienced business planning expert and the founder of The Plan Writers. With over a decade of experience in the field, he has helped numerous entrepreneurs in creating investor-ready pitch decks and business plans. Matt has enabled 5000+ startups to raise over $1 billion through his business plan, market research, and financial modeling services. Read more

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Starting a Self Storage Business in 2024: Ultimate Guide

In this extensive guide, we delineate how to start a self storage business.

The self storage industry is a rapidly growing market that provides vital services for individuals and businesses who need to store their belongings. There are various self storage units available and several ways to start your own self storage business.

To start a self storage business, one must first understand the basics and then learn how to run a self storage business. This entails finding out what the market needs and identifying potential customers.

As complex as these may seem, we’ve compiled all you need to know and how to go about the entire process in this extensive guide. We’ll walk you through the process of starting your self storage business. We’ll cover the basics of a self storage facility, how to find a location, what you need to get started, and how to open a storage unit business, including setting up reliable self storage software .

Download the ultimate Self Storage e-book

Everything you need to know about setting up your self-storage facility.

Important Trends of the Self Storage Business You Must Know

Before outlining the process of starting a self storage business, let’s examine what the self storage niche entails and associated trends.

What Is a Self Storage Business?

A self storage business is a venture that provides consumers with their own space to store goods. The enterprise has exploded in popularity over the past few decades, hitting a global market value of $51.32 billion in 2021 .

A Chron report indicates that over 80% of self storage facilities are privately owned and operated. This means people use private self storage facilities for storing their belongings more often than government-owned enterprises — the latter make up only 30% of self storage clients.

Customers who require storage space for travel or a temporary move tend to take advantage of the ease and adaptability offered by self storage services. Similarly, businesses typically deem renting a storage container as a more cost-effective means to accommodate their goods than moving to larger quarters.

With self storage, there’s no binding long-term commitment, and this in itself is a significant selling point that attracts patronage. Notably, the average person rents storage space for 11 months, and the average business rents for 24 months. This flexibility makes it a good fit for a wide variety of customers’ demands.

Why Should You Invest in Self Storage?

A self storage business is usually successful because it provides an essential service that many people need. The more people who need this service, the better for your business.

If you decide to start a self storage business, know that you won’t be alone. The need for storage space has increased in recent years, leading to the proliferation of storage facilities in unexpected places like shopping malls and downtown areas.

A fairly recent Multi-Housing News post opined that the self storage industry is more resilient to economic downturns than most sectors of the real estate market. Self storage units continue to be a valuable solution for the storage needs of modern society as more and more people relocate and need somewhere to keep their valuables.

Want to learn more about self storage investment , check out the below figure from Self Storage Association Asia .

There are speculations that the self storage market presents fewer complexities than residential housing since the human element is less pronounced in the former. A facility manager may have to deal with tenants, for instance, if they can’t keep up with payments, but otherwise, their paths rarely intersect. However, it’s not a passive investment and has more in common with retail than real estate.  For more data-driven insights on why investing in self-storage is a wise decision, check out our self storage industry statistics .

How to Start a Self Storage Business: A Step-by-Step Guide

1. Find a Suitable Location.

For a company to be successful, it must first be able to meet a need in the market.

Customers may be hard to come by if you set up shop in an area where the demand is already satisfied. On the other hand, if you pick a spot with commercial potential but few existing businesses, you increase your odds of attracting and retaining customers. Hence, it’s vital to identify your options before settling on a spot.

It’s no secret that densely populated regions have a greater need for self storage options. Cities with a variety of housing options benefit greatly from them as well. Similarly, people downsizing or staying in an apartment temporarily often choose to keep their items in storage until they can move into a larger dwelling.

In summary, ensure a sizable customer base in the area before settling on a permanent site for your company. Also, see if any nearby storage facilities aren’t in use and may benefit from some redesign or upgrade. Considering the growing demand for versatile and cost-effective storage solutions, starting a shipping container storage facility could offer a unique opportunity within the self-storage market, combining flexibility with efficiency.

2. Develop a Business Plan That Outlines a Detailed Strategy for Success.

Including critical information about your self storage business in your business plan is crucial. Your business plan needs to outline everything from your target market and how you want to reach them to how you intend to run your company financially and operationally in the first few years.

When starting a business, every company needs a business plan. A credible business plan is crucial to attracting investors or acquiring funding from outside sources, with most financial institutions requiring one before loan approval. A well-thought-out business plan can serve as a powerful catalyst for your company’s development by helping you reach your goals and circumvent potential roadblocks.

You can develop a business plan independently, as many examples are available online . Other options include hiring a professional business plan writer or enlisting the services of a nonprofit organisation like SCORE , which provides free business counselling.

Remember that the business plan for an already operating self storage facility will differ significantly from a brand-new site’s.

Although business plans should be written with the specific needs of the company in mind, a self storage facility business plan would typically include the following elements:

• Mission statement
• Vision statement
• Ownership structure
• Sources of capital
• Revenue streams
• Market research analysis
• Competitive analysis

3. Obtain the Funding Required to Launch Your Business.

Self storage facilities have lower startup and development costs than many other businesses. There are, however, expenses to look into/consider.

Locate a suitable storage facility that can be used as is or modified into units with minimal effort. Regardless of the path you choose, it’s a good idea to talk to an organisation that provides storage engineering and design services. They’ll be able to advise you on how to best organise your company.

For added safety, double-check that your property is adequately secured and fenced. Locks must be installed on all units and feature a secure key-locking system.

Don’t forget to add the price of having full-time workers on site whenever the business is open. Cleaning materials, upkeep charges, and advertising must also be factored in.

After figuring out how much money you’ll need in the first month of business, you’ll have a better sense of the total amount you’ll require in the first year. As a rule of thumb, you should have enough money to cover at least a year’s operating costs before kickstarting your self storage business.

Are you thinking of how to start a self storage business with no money?

A small business loan could be an option if you lack the necessary funds to launch your self storage business. Alternatively, you could seek appropriate investors to join forces in the early stages of your company’s development.

4. Acquire All Necessary Licences and Permits.

Never launch a business, of any kind, without first securing the appropriate licences and permissions. Such endeavours can lead to severe financial penalties or possible closure of the enterprise altogether.

Carefully investigate the prerequisites for opening a self storage company in your chosen area, such as licences, permits, and registrations. You can discover such information about your town of choice by contacting them directly or looking at their website.

A certificate of occupancy, service contracts, small business permits, and other legal paperwork will be required before you can open for business. In a recently published article, we discussed whether you need planning permission for a storage container business , so you should consider having a read.

5. Make a Marketing Game Plan.

Consistently incorporating a strategic self storage marketing plan into your business strategy is essential for reaching your goals.

At the very least, you should have a website and business cards. Digital marketing services and printed marketing materials, however, can help your firm reach its maximum potential through advertising and promotion.

6. Get a Business Insurance Policy.

Insuring a self storage company requires special considerations. The primary service (the rental of self storage units) can’t be separated from the facility itself.

Insuring your commercial structure is a no-brainer because if a customer is injured while visiting your establishment, general liability insurance might help cover the costs. Storage facility insurance provides additional, specialised protection for the assets of self storage business owners beyond the basic coverages mentioned above.

You may modify your self-service storage insurance in various ways to meet your requirements. One method is to offer clients the option of purchasing additional property liability insurance. This may seem extremely kind, but it’s good business sense; we’ll explain how.

The cost of this insurance may be much lower than the expense of defending against negligence claims for failing to safeguard customers’ property when you had the opportunity to do so. You gain an advantage over the competition by insuring your clients’ property while safeguarding your assets by including this provision in your policy. A lot of storage facilities don’t provide this extra perk.

Your customers’ belongings should be insured, especially if they’re being removed or discarded, which is a unique extra. It’s a bummer to sell or otherwise get rid of the belongings of customers who haven’t paid for them.

This insurance might help cover costs if a client successfully sues for the return of their property after it has been removed. It helps keep costs down and offers some security.

You should also talk to your agent about getting cyber, data, and commercial umbrella insurance . If you run a self storage business that relies on online bookings and payments, cyber and data insurance can help you get back on your feet after a hacking incident by covering the costs of defending your business and replacing lost revenue. As for commercial umbrella insurance, it can assist you in covering any losses beyond your general liability policy’s limits.

Customers visiting self storage facilities are at a higher risk of slipping and falling due to the increased activity of carrying items into and out of a unit. Without a comprehensive insurance plan, you may have to spend more on healthcare and legal fees.

However, commercial umbrella insurance provides excess liability coverage for a reasonable price, ensuring that your organisation can survive a substantial loss. It’s like an insurance policy for your company that ensures it doesn’t shut down when things become rough.

Size, location, number of employees, and other criteria should all be considered when deciding on the best self storage company insurance policy. You may tailor your insurance policy to your specific needs by having an open discussion with a local, independent agency.

7. Define Your Brand.

More than just a name, logo, and slogan, branding encompasses everything that represents a company . It implies all the things people think of when they hear your company’s name.

For example, the widespread recognition of real estate investment trusts (REITs) gives them an edge over regional competitors in the self storage industry. According to G5’s report on why you need a self storage brand , the importance of branding for a self storage operator seeking to compete with REITs and raise their company’s profile is growing. You can carve yourself a niche in the regional market if you prove that your product or service is the best option for your demographic.

Through consistent branding, you attract renters who’ll remain loyal to your business over time. Developing a memorable self storage brand evokes feelings, motivates your messaging, and spreads the word about your services to potential customers in your area.

As you build your business, the following questions should be at the back of your mind:

What makes your space unique from others?

Who’re you trying to reach?

What’s your primary message?

If you can give thoughtful answers to these questions, you’ll be well on your way to building a brand that stands out from the crowd and attracts your target audience.

Build a name that people will recognise and trust to attract more prospective tenants and longer lease terms. Expanding your brand’s reach inside the self storage sector can create a more memorable message and establish yourself as the go-to provider for your target demographic.

Here are some helpful tips when branding your self storage business:

Find Out What Sets You Apart from the Competition First.

Explain what sets your business apart, what problems it addresses for customers, and how you can help them. If a consumer is considering a purchase, why should they opt for your company and not a competitor’s? What specific benefits do you offer to renters that they won’t find in another company?

Develop Your Personas.

Branding also involves researching and cultivating a specific demographic of consumers. Demographics, such as geography, and psychographics, such as preferences, motivations, and behaviours, are factored into creating a complete persona. Using these fictitious archetypes, you’re better positioned to relate to and market to your target demographic.

Examine Your Competitors Through SWOT Analysis.

SWOT is an acronym for “strengths, weaknesses, opportunities, and threats,” which is a common method for analysing a situation. You can use this potent tool to stand up to the competition.

Utilise the SWOT analysis to assess the positives and negatives of your competitors. Figure out how to counteract their advantages and take advantage of their flaws. By conducting a SWOT analysis, your organisation can avoid pitfalls and seize the possibilities presented by your rivals.

Create a Distinct Visual Identity for Your Brand.

Your promotional materials—from your website to your ads to your billboards—should look professional and draw in potential customers. Make sure that the primary selling points of your brand are prominently outlined on your website, above the fold, before your visitors have to scroll.

Picking a colour scheme and design that directly addresses your target audience strengthens your brand’s reputation amongst its competitors while increasing your chances of converting visitors into buyers.

8. Create Your Self Storage Business Website, and Invest in Reliable Self Storage Software.

A self storage firm should have a user-friendly website to attract as many consumers as possible. Like with just about anything else, buyers today often begin and conclude their search for self storage facilities online. With that in mind, it’s highly unlikely they’ll come across you if you don’t have a website.

Discussed below are some benefits of having a self storage business website:

Allows You to Take Control of Your Brand.

Unlike with a Facebook or other social media page, you may exert more control over your brand with a personalised website. Your marketing website should be unique by employing your brand’s colours, emblems, and other identifying features. When the website belongs to you, you decide what users can expect.

Makes It Possible to Offer Online Rentals.

Do you want to rent your property online but don’t know how?

Creating a promotional website for your storage facility is the least complicated option.

If you let out units through your website, tenants can reserve a unit at their convenience (day or night) and do the necessary paperwork and rental transactions on their own time. Investing in decent self storage software while setting up your website makes these processes even more seamless for your clients.

Eases The Burden of Payments.

You can expand how your consumers can pay you by launching a website. There’ll be fewer rent arrears if tenants can quickly and easily cover their payments.

If you set up the appropriate automatic billing processes , your tenants can use online tools to manage their accounts and pay their rent. The advantages of accepting payments on your website become readily evident when everything occurs mechanically, and you no longer have to spend time making collections calls.

All these and more are what the Storeganise self storage software offers , making it a must-have for most businesses in this niche.

Makes It Easier for Potential Clients to Find You.

A marketing website increases the likelihood that potential clients will find your storage facility through an online search. You may achieve this by implementing search engine optimisation (SEO) strategies, such as using the appropriate keywords, incorporating title tags and meta descriptions, and ensuring that your website loads quickly and without errors.

9. Enjoy the Process of Managing Your Self Storage Facility.

Self storage business ownership may seem mundane at first, but there are many ways to put your unique imprint on the industry.

Developing the company’s identity through advertising may be fun. Some business owners have found success by incorporating comedy into their marketing strategies, and you never know when your comedic juices will start flowing. The public’s perception of self storage facilities has also been improving recently, making it more likely that local media outlets will want to interview you.

As if that weren’t enough, there are also unintended advantages. If you’ve put money into a sizable area that needs people to run it, you might be in the fortunate position of being able to hire relatives or close friends.

Moreover, you’re likely to encounter certain strange items in units, including taxidermied animals, film celebrity memorabilia, and even an electric chair. That means there’s also a wild side to self storage that, although it won’t harm your business, might offer you some fantastic tales to tell.

However, you shouldn’t let that give you sleepless nights because regulations dictate what can and can’t be kept in storage facilities and what must be done if you need to access and dispose of their contents.

10. Get the Help You Need — Both Technically and Personnel-wise.

Due to the high initial cost of securing land for your storage facility, you must know how much money you’ll need to launch your business.

Customers will feel more at ease leaving their belongings in your care if they’re in a safe and secure area. As a result, you shouldn’t put up shop in a dangerous neighbourhood or somewhere too far from your target audience.

After purchasing land, the bulk of your work will comprise constructing the various storage units your clients would rent. Installing security equipment to keep tabs on the premises is a must. In addition to a computer, a landline phone, a cell phone, a vehicle, and security software, these items will be necessary for the smooth operation of your business. If money is tight, you can get by with somewhat used versions of several things.

As for staffing needs, a storage facility needs the following personnel a start:

• A CEO (this could be the company owner)
• An administrative and human resources (HR) manager
• A business development and marketing executive
• A customer service officer
• An accountant
• An information technology consultant
• A security guard

Today, many people in the United States and the United Kingdom, for example, now use storage facilities to keep their surplus household and commercial items out of the way. Thus, getting started in the self storage industry is quite simple since one only needs to identify a good site and purchase the land to construct the storage facilities.

Once the site is secured and the necessary permits obtained, you may begin construction on storage units of varied sizes, as not all customers will need to keep massive quantities of items.

However, before promoting and renting out the storage units to customers, you must have an attorney prepare the terms and conditions of usage and agreement paperwork.

It is also important to note that even once your business is set up, there will be operating expenses, such as electricity, security, labour, wifi and other ongoing costs.

Should You Buy an Existing Self Storage Facility?

It’s a good idea to purchase an already existing self storage facility, as it’ll save you the stress of finding land and building a new facility. You can renovate the facility according to your tastes and needs and even expand it.

The cost of purchasing an existing self storage facility varies widely, just like the wide variety of self storage options available. This explains why a self storage facility in London would cost tens of millions of pounds, while the same type of facility in rural Carlisle would likely cost less than a million pounds.

If you aren’t a trained real estate agent, you should engage a self storage broker to assist you in your search and purchase. An experienced broker has market knowledge and can negotiate a fair price.

You should buy a facility near your home if you plan to work there full-time. However, location is less of an issue if you want to outsource facility management to a third party. You should check that you and your broker have a solid understanding of the neighbourhood’s market conditions.

How Much Does It Cost to Start a Self Storage Business?

It’s no secret that launching a storage unit business can cost a lot. The cost of construction for a normal single-story building range from $25 to $40 per square foot .

The price per square foot for multi-story structures will be higher than that of single-story ones because of the additional cost of obtaining land. Depending on your location, you can pay between $42 to $70 per square foot for a high-rise apartment.

Building a state-of-the-art facility will require at least 70,000 rentable square feet at $50 to $70 per square foot (not including the land cost). This translates to an investment of almost $3 million to create a cutting-edge establishment.

How do you profit after shelling out that kind of cash?

You should start seeing a profit at about 50–70% occupancy. This becomes even more realistic when you consider that the need for self storage facilities will never go away.

Throughout the year, an ultra-modern, conveniently located self storage facility may easily maintain an occupancy rate of 85–95%. What this means is that your self storage business should generate a respectable profit. Still, you should know when to adjust your marketing plan for when occupancy is high to enable you to reap the most profits.

How Much Profit Can a Self Storage Business Generate?

As was previously said, once occupancy hovers around 50–70%, you can expect to break-even. However, a well-located building can function profitably with about 85–95% occupancy rates, resulting in a net income of around 27% of rental income after deducting all operating expenditures and loan debt payments.

At a yearly rate of $17.04, renting a unit for $1.42 per square foot each month is a good example of how this works out. If your building is 80,000 square feet, you can anticipate a yearly rental income of around $1.4 million and an annual gross cash flow of up to $354,432.

Adding moving truck rental services , moving supply sales, and moving equipment sales could boost your self storage company’s bottom line. Including such services can augment your earnings by up to 5%.

Self storage companies often offer additional services, such as fleet management for vehicles, vans, and moving trailers. The good news is that these companies can function effectively as a unified entity.

As an added service, you can provide moving equipment like furniture pads, hand trucks, and furniture dollies in addition to using your moving vehicles. Selling packing materials, moving boxes, and tape is another option.

Moreover, diversifying into niche storage markets, such as offering specialised facilities for boats, can further enhance your business’s appeal and profitability. Learn more about the specifics of building a boat storage facility to explore this lucrative opportunity.

Final Thoughts

Investing in self storage facilities can be lucrative because the industry is well-established and widely believed to be less labour-intensive than other real estate ventures. Considering the sector’s resilience and that storage space costs far less per square foot than residential property, it may be an especially appealing prospect.

Have you started your self storage business and are looking for ways to strengthen it? Storeganise offers helpful software solutions for self storage businesses, providing them with tools and insights to manage and grow their business. Sign up for a personalised demo to see how we can help!

Frequently Asked Questions

How profitable is a self-storage business.

A self storage company is reasonably profitable and offers an excellent opportunity to amass sizable passive annual revenue. Your greatest shot at success is to provide excellent service to your customers and offer additional services like valet storage.

Is It Wise To Invest in a Self-Storage Facility?

Yes, it is.

Our research suggests that the allure of investing in self storage facilities hasn’t changed much. These firms do well when times are good and, if managed well, can weather the storms of economic downturn with relative ease.

Why Is the Self-Storage Industry Booming?

As a result of the pandemic, more people are looking for ways to declutter their houses by renting out extra space for home offices, relocating to the suburbs, or consolidating their households with relatives. All of these have contributed to a surge in the patronage the self storage industry has recently received.

How Much Can I Charge for Self-Storage Units?

The appropriate fee for your self storage units depends on various factors, including unit size, location, items’ value, the unit’s unique features (e.g., climate control ), and the rent period. In the UK, for example, the Self Storage Association (SSA) UK annual industry report pegs the average price of renting a storage unit at £23.94 per square foot annually.

While you may charge more or less, it’s best to keep your pricing as low as possible while still making a profit. At the same time, knowing when to raise prices and how to do so without angering customers is essential.

How to set up a storage business?

To set up a storage business, conduct market research, secure financing, find a suitable location, obtain permits, build storage units, set pricing, and develop marketing strategies to attract customers.

Is self-storage a viable business?

Yes, self-storage is viable due to growing demand for extra space. It offers steady cash flow, relatively low maintenance, and can be profitable with effective management and location selection.

What is the profit margin on self-storage?

The profit margin for self-storage facilities typically ranges between 30% and 50%, depending on factors like location, occupancy rates, and efficient management of operational costs and maintenance.

What are the risks of investing in self-storage?

Risks include market saturation, economic downturns, high initial capital costs, location-related issues, and potential challenges in maintaining high occupancy rates, which directly impact profitability.

How do I start investing in self-storage?

Start by researching the market, deciding on direct ownership or investing in a REIT, securing funding, selecting a strategic location, building or acquiring a facility, and implementing effective management.