A self-storage business is profitable and performs well during economic booms and busts. It generates high free cash flow, requires low capital expenses, and can operate with little oversight. Self-storage facilities are distinguished by low overhead, low construction costs, month-to-month leases, and loyal clients. If you want to invest in a self-storage business, you have two options: passive or active.
If you want to be a passive investor, the best way to do so is to buy stock in publicly traded self-storage companies. However, if you want to be an active investor, you can either purchase an existing facility or construct a new one. There is no denying that the self-storage market is more competitive than ever. If you are interested in starting this type of business, here are four steps you need to follow.
Write down your business plan
If you decide to open a self-storage business, you must first create a list in which you express your vision for the business, why you want to open it, and what you intend to offer your clients. Once you've decided on the main points, you'll need to create a self storage business plan in which you can include all of the benefits and drawbacks of your strategy. You will also need to update the business plan once a year to keep track of your company's growth.
You must clearly define your business idea and present your goals for the first six months of operation to attract investors. Having investors is a wise decision because their funding may enable you to achieve more than you had originally planned. Think about the name of your business, its location, and the service fees you intend to charge. You must demonstrate that you are business-ready and that your idea is profitable.
Image source: Storage Mart
Invest in technology
Using cloud access control tools such as self-storage management software is a step forward for expansion in this industry. Payment options, custom dashboards, interactive property maps, and other extra services are available through mobile apps for tenants and employees. A cloud-based business platform provides a centralized dashboard for commercial management, where customer sign-ups can be simplified, as well as built-in accounting and financial functions if required.
Having compatible self-storage software that can be accessed on devices such as tablets and smartphones on both Android and iOS is essential for the modern customer. Customers and employees will benefit from the ease with which they can work or manage their accounts from virtually any location. This way, they will have access to storage facilities and will be able to process rental payments online, provide electronic signatures, and avoid in-store processes.
Find a location
This is the single most important factor in a self-storage business's success. You should look for a property on a road with a large area for parking cars and a huge daily traffic volume of vehicles. Spread the word across your community, including your real estate agent, banker, town planner, and other self-storage operators.
Each property is unique, and each town has different zoning regulations that influence how much storage can be accommodated on a given property. A single-story building typically requires 4 to 5 acres, while a multi-story building requires at least 2 acres. Preliminary layouts are frequently provided free of charge by building manufacturers.
Image source: Extra Space Storage
Promote your business
It's time to open your doors once you've secured your space, units, and all of the necessary paperwork. You must promote your business. Make sure that you have an active web presence. This is the most effective way to connect with potential customers and spread the word about your company. You should create and launch a website for your self-storage company. It doesn't have to be fancy or complicated, but it should include all of the information that a potential customer might be interested in knowing.
Prices, hours, and contact information would be included. Having an active social media presence is also a great way to connect with potential customers. Social media allows you to interact with and respond to your client base. If your budget allows, you can also advertise in other places. Consider using print advertising or radio ads to spread the word about your company. You could even host a promotional event on your first day.
The self-storage industry remains a lucrative source of income for motivated entrepreneurs. Self-storage users value convenience and businesses that use automated tools 24 hours a day, seven days a week. Offer great savings or deals, which can help you attract customers early on. And if you already have satisfied customers, they will naturally spread the word about your business.