Nearly two-thirds of US adults want their own business one day. Of course, that dream comes with challenges.
For example, introverts might shy away from running a business because of all the customers. The good news is that not all businesses require constant interaction with customers. In fact, some businesses come with minimal customer contact.
A self storage business, for example, typically requires very little direct contact with customers. If that sounds like the business for you, you might wonder how you start one.
Keep reading for the main steps in starting a self storage business.
You’ll need a solid market analysis before anything else. A market analysis includes some key factors, such as competition density and service demand. So, you might research how many other self-storage businesses exist within a given radius. You can even call those businesses and ask if they have open units in popular sizes.
If there is a lot of competition or lots of available units, your area is already at saturation for self storage. If there’s minimal availability or limited competition, you’re in good shape.
Next up is property research. You need enough land that you can build your self storage facility. You also need land that has the right kind of zoning.
Look for lots that are selling for fair market value. Cheap land almost always comes with significant problems that will crop up later.
A preferable alternative is for you to find an existing self storage business for sale. Lenders often offer better financing terms when you acquire a self storage facility.
Business and Marketing Plan
Once you do your market analysis and property research, you need a business plan. These plans come in several forms, but your self storage business plan should include some essential features, including:
- Company description
- Market analysis
- Company Structure
- Financial projections
- Funding requirements
You’ll need this plan for the next step.
Financing for self storage businesses typically come in one of two forms. If you plan on running the business long-term, you’ll likely get a fixed-rate mortgage for a 10-year term.
If you plan on buying, improving, and then selling an existing business, you’ll likely opt for a shorter-term bridge loan. Three and five-year loans are common in this scenario.
Even self storage ventures require some management. You can offload some of these duties by hiring a site manager to handle day-to-day activities. You must also take on normal management duties, such as advertising and marketing, payroll, accounting, and paying taxes.
Getting Started with a Self Storage Business
A self storage business requires the same level of initial effort as any other business. It’s rarely a turnkey operation.
Do your due diligence on market and property research. Keep your options open in terms of acquiring an existing facility. Get your business plan in order.
Looking for some extra help along the way? Self Storage Investing offers educational courses for budding self storage entrepreneurs. For questions or more information, contact us today.