How to Start a Storage Business
Self-Storage as a viable business for the novice.
Few business offer the opportunity to participate without being an expert. You may have spent your career in another unrelated business category, but see self-storage as a good investment with a good return. All you need is a single-source manufacturer like BETCO that has the knowledge and experience to help guide you through the process.
There is no magic formula and there are no short cuts in getting started. If you follow our advice and do your homework, you will be successful in developing your facility.
First, you need professional advice from those who understand self-storage. It doesn’t matter what size facility you plan. It can be a single building, but you need professional assistance – a team that will guide you through the process. There are a number of people you should contact including attorneys, real estate agents, building suppliers, contractors, architects, engineers, just to name a few, but if you want to start with the one source that will have the most overall knowledge of how to get you started, it should be a top quality building manufanufacturer, such as BETCO. Why? Because we are a single-source manufacturer. This means you can get everything you need from a single source. This precludes you having to contact a variety of suppliers. The fewer people you need to deal with the better. Think about it. The more products and services you can get from one source, the fewer headaches you’ll have – and if you have questions or concerns, the “buck stops” with a single company – BETCO.
Certain economies can also be realized by dealing with a single source. There are no duplications of costs. If you can get your building design, engineering, manufacturing of components, shipping, and building construction from a single company, think of the time and expense you’re saving.
Next, you must make a decision on site selection, or if you already own a piece of property, whether it is in a good location for self-storage. If you find a site that seems suitable, you may want to put an “option to buy” on it , in case it ends up being a suitable location. It’s smart to tie-up the property while you’re going through the other stages of the process.
Now come the tough questions that need to be answered about site selection. You must determine if it is the right size and configuration to accommodate a storage building or buildings, if it has good visibility on a major thoroughfare with a high traffic count, and is it easily accessible. After all, self-storage is a retail business and must be conveniently located and highly visible for potential customers in your market.
This calls for a market analysis, which will provide you with the necessary information to decide whether you should proceed further with your site selection or whether you should stop and consider another location.
For example, you will learn that self-storage is a local business, limited to a very specific area surrounding your facility site.
A market analysis will reveal what type of people live and work in your market – demographic information – like their age and income, how many are renters and how many are homeowners, who is married and who is single, what percentage of rooftops are residential or business. If your site is located in a college town or near a military base, it will tell you what percentage of students and military personnel are in your market. In fact, the demographic profile of a market will determine much about how you run your business and how you should market it to your customers. Further, it will identify where your competition is, and give you an indication of what kind of demand for your services exists in your market. So, a market analysis is vital if you are to be successful.
As you move through the decision process, you will discover that a feasibility study makes a lot of sense. This kind of study is more like a business plan, covering very specific information concerning development costs, financial analyses, such as projected costs and anticipated returns, more detailed information on traffic flow, competition, demographic reports, zoning, permitting, unit mix, and final recommendations of whether to “go” or “no go” on the project.
By the way, a market analysis and feasibility study are important pieces of information you should have when you apply for your financing.
To generate this kind of information, you should contact someone who does self-storage feasibility studies or get in touch with BETCO. We will be glad to suggest names of these kinds of consultants, as well as additional insights into the business.
The feasibility study will ultimately reveal whether you should proceed with your plans. If the answer is yes, you need to make a final commitment to the site you have chosen. If you have optioned the property you will need to finalize items such as soils testing, zoning, permitting, and title.
This brings up the issue of financing. Where do you find it? Generally speaking, if you know a local lender or a community bank, you should start there. But be aware that there are national lenders who specialize in self-storage development loans. Again, your BETCO sales consultant may be able to help.