storage unit start up business plan

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.

Everything You Need to Know About 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

Self Storage Business Plan Template

Written by Dave Lavinsky

Self Storage Business Plan

You’ve come to the right place to create your Self Storage business plan.

We have helped over 10,000 entrepreneurs and business owners create business plans and many have used them to start or grow their Self Storage companies.

Below is a template to help you create each section of a storage unit business plan.

Executive Summary

Business overview.

Secure Self Storage is a startup self storage company located in Nashville, Tennessee. The company is founded by Bill Williams, an experienced self storage manager who has been working in the self storage industry for over a decade. Bill has recently earned a bachelor’s degree in Business Administration. Now that Bill has obtained the education and experience that will allow him to successfully navigate the process of starting a business, Bill is ready to open his own company, Secure Self Storage. Bill plans on recruiting a team of highly qualified professionals to help manage the day to day responsibilities of running a successful self storage facility – marketing, security, maintenance, accounting, and rent collection.

Secure Self Storage will provide a convenient, safe, and secure self storage solution for anyone in the Nashville area who needs to store their belongings. Secure will ensure that every storage need of the customer is being met. Secure Self Storage will be the ultimate choice in Nashville for self storage solutions while being the best-priced company in the area.

Product Offering

The following are the self storage solutions that Secure Self Storage will provide:

• Small Storage Units (5×5)
• Medium Storage Units (10×10)
• Large Storage Units (10×25)
• Vehicle Storage Units
• Temperature Controlled Units
• Extra Security Units
• Pickup & Delivery Services
• Disposal Services

Customer Focus

Secure Self Storage will target adults 18 years old and over in Nashville who need a storage unit for any reason such as moving, decluttering, doing home renovations, or those who need storage for business, college, or to store an automobile. No matter the customer, Secure Self Storage will deliver the best communication, service, and security.

Management Team

Secure Self Storage will be owned and operated by Bill Williams. Bill has a bachelor’s degree in Business Administration and has been working as a self storage manager for another local storage facility for over a decade. Now that Bill has obtained the education and experience that will allow him to successfully navigate the process of starting a business, Bill is ready to venture out and open his own self storage company. Bill will be the owner and manager of Secure Self Storage.

Bill has recruited his peer, Ken Smith, a financial professional with a Masters degree and fifteen years of experience doing financial work for various construction companies, to be the financial manager. Ken will help manage all of the finances for the company from finding a cost-effective location to set up shop to reporting and budgeting to make sure the facility is profitable.

Success Factors

Secure Self Storage will be able to achieve success by offering the following competitive advantages:

• Self storage units are easily accessible 24 hours a day, temperature controlled, and have the latest security technology to keep customers’ belongings safe and secure.
• On-site security guards are deployed 24 hours a day to ensure belongings, customers, and employees are safe at all times.
• On-site staff to answer questions, help customers, and keep the facility clean.

Financial Highlights

Secure Self Storage is seeking $250,000 in debt financing to launch its self storage business. The funding will be dedicated towards securing the facility space and purchasing equipment and supplies. Funding will also be dedicated towards three months of overhead costs to include payroll of the staff, rent, and marketing costs. The breakout of the funding is below:

• Self storage facility build-out: $50,000
• Equipment, supplies, and materials: $20,000
• Three months of overhead expenses (payroll, rent, utilities): $150,000
• Marketing costs: $15,000
• Working capital: $15,000

The following graph below outlines the pro forma financial projections for Secure Self Storage.

Company Overview

Who is secure self storage.

Secure Self Storage is a newly established high security self storage company in Nashville, Tennessee. Secure Self Storage will be the most convenient, secure, and customer-focused choice for storage unit renters in Nashville. Secure will provide a variety of self storage solutions for anyone looking for a secure storage option. The company’s customer-centric approach will include 24/7 on-site security and customer service staff, the latest security technology, and temperature controlled units.

Secure Self Storage will give customers peace of mind that their belongings are secure. The management team is composed of experienced professionals including business managers, security officers, and maintenance technicians. Secure Self Storage removes all headaches of the self storage unit renter and ensures all issues are taken care off expeditiously while delivering the best customer service.

Secure Self Storage History

Secure Self Storage is owned and operated by Bill Williams, an experienced self storage manager who has a bachelor’s degree in Business Administration from the University of Tennessee. Bill has worked for a local self storage company in Nashville for over a decade. Bill’s tenure with the self storage company combined with his education has given him the skills and knowledge required to venture out on his own and start his own company.

Since incorporation, Secure Self Storage has achieved the following milestones:

• Registered Secure Self Storage, LLC to transact business in the state of Tennessee.
• Has scouted a few location options and reached out to the owners for more information.
• Reached out to numerous contacts to include former customers to let them know about the upcoming facility.
• Began recruiting a staff of accountants, maintenance workers, security, and other facility personnel to work at Secure Self Storage.

Secure Self Storage Services

Industry analysis.

The United States self storage industry generates an estimated $39.5B in annual revenue with over 49,000 storage facilities throughout the country. The total rentable self storage space is approximately 1.9B square feet. An estimated 10.6% of U.S. households are currently renting a self storage unit. The average self storage space used per person is 5.9 square feet. The average monthly cost to rent a self storage unit is $90.

Self storage construction spending has nearly doubled in the past five years. According to the Self Storage Almanac, the market is highly fragmented with 31% of space being owned by six large public companies, 16% being owned by the next top 94 companies, and 53% being owned by small businesses. Self storage industry operators have the potential to achieve highly lucrative businesses if they manage them smartly. The average self storage company’s profit margin is around 11 percent, which is much higher than many other small businesses in other industries that are often closer to 3-5 percent.

Customer Analysis

Demographic profile of target market.

Secure Self Storage will target adults 18 years of age and older requiring self storage services in Nashville, Tennessee. The company will target people in need of storage space for a variety of reasons including moving, renovating, college, business, or to store a vehicle.

The precise demographics for Nashville, Tennessee are:

Customer Segmentation

Secure will primarily target the following customer profiles:

• People who are in the process of moving
• People who need storage space for a vehicle
• People who need storage for business
• People who need storage for college
• People who are renovating their homes

Competitive Analysis

Direct and indirect competitors.

Secure Self Storage will face competition from other companies with similar business profiles. A description of each competitor company is below.  

Nashville Self Storage

Nashville Self Storage is a temperature controlled self storage facility operating in Nashville, Tennessee. The facility has 400 units of varying sizes from 2×5 up to 30×30. Nashville Self Storage uses state of the art security systems with cameras throughout the facility to keep its patrons and their belongings safe and secure. The company currently has one facility with plans to open a second location in the next few months. The owners of Nashville Self Storage have been working in the storage industry for over 20 years and pride themselves on providing exceptional customer service.  

ALottaStuff Self Storage

ALottaStuff Self Storage is a Nashville-based self storage facility that provides outstanding service and storage solutions for its customers. ALottaStuff Self Storage takes the risk out of leaving your valuables in an unsecure storage facility by providing 24/7 secure monitoring of all of its units. They have temperature controlled units available in addition to non-temperature controlled units. Customers can depend on ALottaStuff Self Storage to handle their belongings with the best of care. The company provides pickup and delivery services for an extra fee.  

In-Boxes Self Storage

In-Boxes Self Storage is a trusted Nashville self storage company that provides superior service to customers in Nashville and the surrounding areas. They are able to provide a convenient storage solution for a wide range of customers with multiple locations throughout the city. In-Boxes Self Storage offers low prices for do-it-yourself storage facilities. Drive-up units are available for a flat monthly fee and indoor temperature controlled units are available for an additional charge. In-Boxes Self Storage maintains a clean, secure atmosphere with friendly staff available during office hours to assist with customers’ storage needs.

Competitive Advantage

Secure Self Storage will be able to offer the following advantages over their competition:

• On-site staff are available to answer questions, help customers, and keep the facility clean at all times.

Marketing Plan

Brand & value proposition.

Secure Self Storage will offer the unique value proposition to its customers:

• Experienced team of security professionals, customer service associates, and maintenance staff on-site 24/7 to help customers and keep the facilities clean, safe, and secure.
• Unbeatable pricing to its clients – Secure Self Storage offers competitive pricing with promotions and discounts for new and returning customers.

Promotions Strategy

The promotions strategy for Secure Self Storage is as follows:

Word of Mouth/Referrals

Bill Williams has built rapport with an extensive list of customers over the years by providing exceptional service during his tenure as a self storage manager. Many have communicated to Bill that they referred their friends to the storage facility because they were happy with the service he was providing. Once Bill advised them he was leaving to open his own self storage business, many contacts have committed to help spread the word of Secure Self Storage.

Professional Associations

Secure Self Storage will become a member of professional associations such as the Self Storage Association, the Nashville Self Storage Association, and Inside Self Storage. Bill will attend industry expos and events to promote the company.

Print Advertising

Secure Self Storage will have print ads and flyers made for newspapers, magazines, direct mailers, and to post around the city and hand out at industry events.

Website & Content Marketing

Secure Self Storage will create and maintain an easy to navigate, well organized, informative, website that will list all of the available storage options and pricing. The website will also contain an informative blog with storage related posts.

SEO Marketing

The company will use SEO marketing tactics so that any time someone types in the Google or Bing search engine “Nashville self storage” or “self storage near me”, Secure Self Storage will be listed at the top of the search results.

Social Media Marketing

Secure Self Storage will create and maintain an active presence across social media platforms including LinkedIn, Facebook, Instagram, Twitter, TikTok, and YouTube.

The pricing of Secure Self Storage will be competitive so customers feel they receive value when purchasing their services.

Operations Plan

The following will be the operations plan for Secure Self Storage.

Operation Functions:

• Bill Williams will be the Owner and Manager of the company. He will oversee all staff and operations. Bill has spent the past year recruiting the following staff:
• Ken Smith – Financial Manager who will provide all accounting, budgeting, tax payments, and monthly financial reporting.
• Shannon Bowman – Marketing Manager who will provide all sales and marketing initiatives for Secure Self Storage including management of the company website and social media accounts.
• Benjamin Stephens – Maintenance Manager who will oversee all maintenance of the facility.
• Micheal Brown – Head of Security who will provide all security for the facility and oversee a small team of on-site security guards.

Milestones:

Secure Self Storage will have the following milestones complete in the next six months.

8/1/2022 – Finalize contract to lease facility space.

8/15/2022 – Finalize personnel and staff employment contracts for the management team.

9/1/2022 – Begin build out of the facility.

9/15/2022 – Begin networking and marketing campaign.

9/22/2022 – Begin moving into the Secure Self Storage facility.

10/1/2022 – Secure Self Storage opens its facility for business.

Bill has recruited the help of his peer, Ken Smith, a financial professional with a Masters degree and fifteen years of experience doing financial work for various construction companies. Ken will help manage the finances for the company from finding a cost-effective location to set up shop to reporting and budgeting to make sure the facility is profitable.

Financial Plan

Key revenue & costs.

The revenue drivers for Secure Self Storage are the self storage fees that will be charged to the customers for their services. The company will charge a monthly fee for unit rentals. The fee will vary depending on the size of the unit.

The cost drivers will be the overhead costs required in order to staff a self storage facility. The expenses will be the payroll cost, utilities, maintenance costs, and marketing materials.

Funding Requirements and Use of Funds

Secure Self Storage is seeking $250,000 in debt financing to launch its self storage business. The funding will be dedicated towards securing the facility space and purchasing equipment and supplies. Funding will also be dedicated towards three months of overhead costs to include payroll of the staff, rent, and marketing costs for the print ads and association memberships. The breakout of the funding is below:

Key Assumptions

The following outlines the key assumptions required in order to achieve the revenue and cost numbers in the financials and in order to pay off the startup business loan.

• Average number of occupied units per month: 200 out of the total 500 units (40%)
• Average fees per month: $30,000 (average $150.00 per medium sized unit)
• Annual Lease on Facility: $100,000

Financial Projections

Income statement, balance sheet, cash flow statement, self storage business plan faqs, what is a self storage business plan.

A self storage business plan is a plan to start and/or grow your self storage business. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections.

You can easily complete your self storage business plan using our Self Storage Business Plan Template here .

What are the Main Types of Self Storage Businesses?

There are a number of different kinds of self storage business , some examples include: Portable container, Climate controlled storage, and Vehicle storage.

How Do You Get Funding for Your Self Storage Business Plan?

Self storage businesses are often funded through small business loans. Personal savings, credit card financing and angel investors are also popular forms of funding.

What are the Steps To Start a Self Storage Business?

Starting a self storage business can be an exciting endeavor. Having a clear roadmap of the steps to start a business will help you stay focused on your goals and get started faster.

1. Develop A Self Storage Business Plan - The first step in starting a business is to create a storage facility business plan pdf or doc that outlines all aspects of the venture. This should include potential market size and target customers, the services or products you will offer, pricing strategies and a detailed financial forecast.  

2. Choose Your Legal Structure - It's important to select an appropriate legal entity for your self storage business. This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your self storage business is in compliance with local laws.

3. Register Your Self Storage Business - Once you have chosen a legal structure, the next step is to register your self storage business with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws. 

4. Identify Financing Options - It’s likely that you’ll need some capital to start your self storage business, so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms. 

5. Choose a Location - Whether you plan on operating out of a physical location or not, you should always have an idea of where you’ll be based should it become necessary in the future as well as what kind of space would be suitable for your operations. 

6. Hire Employees - There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events. 

7. Acquire Necessary Self Storage Equipment & Supplies - In order to start your self storage business, you'll need to purchase all of the necessary equipment and supplies to run a successful operation. 

8. Market & Promote Your Business - Once you have all the necessary pieces in place, it’s time to start promoting and marketing your self storage business. This includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective Search Engine Optimization (SEO) strategy. You should also consider traditional marketing techniques such as radio or print advertising.

Learn more about how to start a successful self storage business:

• How to Start a Self Storage Business

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Get this complete sample business plan as a free text document.

Self-Storage Business Plan

Start your own self-storage business plan

Westbury Storage, Inc.

Executive summary executive summary is a brief introduction to your business plan. it describes your business, the problem that it solves, your target market, and financial highlights.">.

This storage business plan describes a proposed self-storage facility to be established in Westbury, New York involving the conversion of an existing building. Total project costs are estimated at $1,054,487 including purchase price, conversion costs, and pre-opening expenses (see section on Start-up Summary). Based on current and projected strong demand for self-storage units, rental revenue is projected to grow rapidly as units fill up from the first year’s target of $320,000 to $684,000 by year three.

After achieving experience and success in their present self-storage facility in Plainview, New York the principals of this proposed project plan to take advantage of the strong demand in the self-storage industry to achieve a major presence in Westbury. The ownership connection with Stote Moving will assist in gaining full occupancy quickly. Goals have been set to rent 50% of the proposed 300 unit spaces within the first six months of Year 1. An additional 25% will be rented in the second half of Year 1, with the remainder to be filled in Year 2.

The mission of the principals is to serve the Long Island community’s local residential and commercial storage and moving needs.

Keys to Success

The keys to success in the self-storage business are:

• To be able to adapt as storage and market needs change.

Company Summary company overview ) is an overview of the most important points about your company—your history, management team, location, mission statement and legal structure.">

Westbury Storage is a start-up project to be located in Westbury. The owners are experienced in the moving and storage field, owning a well-established moving company (Stote Movers) and a successful self-storage facility in nearby Plainview (Plainview Storage). The building to be purchased for this project is a large brick building originally constructed as a bleachers around 1910. This building as well as surrounding buildings, were connected with the now dying leather industry which flourished a few decades ago. A large building of similar size located next door and connected by a walk bridge has already been converted successfully and is operating well. The Westbury Storage building contains three floors of heavy-duty wood and steel beam construction ideally suited to the planned purpose of self-storage units. The building is heated by oil. One of the two elevator shafts will be the home for a new over-sized passenger elevator suitable for transporting storage contents from the ground level to the units on the second and third floors. A large separate parking lot area comes with the building but will not be needed for this project. This lot could be sold or could be the site of additional future storage units to be set up using one of several one-story steel storage systems.

It is estimated that, with purchase of the building taking place in June of this year, the conversion into storage units could be completed and ready for occupancy by the end of the year. Demand for the units is strong, as evidenced by the market survey of existing self-storage facilities. Bank financing for 70% of the project costs is expected with the remainder supplied by shareholder equity.

Company Ownership

The company will be incorporated as an S Corporation, and will be owned by three individuals: Roger Black, Sebastian Stote and Daley Thompson. Each will own 1/3 of the stock. Roger Black and Sebastian Stote are 50-50 owners of Plainview Storage which is a 110 unit self-storage facility converted in 1993 from a former piano factory. All units are fully rented. Sebastian Stote is owner of Stote Movers, which is a family business providing residential and commercial moving since 1917. In addition to being the source of many of the rentals at Plainview Storage, Stote Movers has 52 filled 45-foot trailers located in Roslyn-by-the-Sea. These trailers contain customers’ stored goods pending delivery at a new location.

Company Locations and Facilities

Westbury Storage will be located in Westbury, in a central location about 1/2 mile from the monument in the center of Westbury. The owners’ present self-storage facilities are located at in Plainview with further storage capacity in 52 trailers in Roslyn.

Start-up Summary

Advertising and promotion will rely heavily ads in the Yellow Pages, as well as initial local newspaper ads at the time of opening. We are assuming three directories for Yellow Pages ads with 1/8th page ads costing $165/month each. The ads in the local papers ( Springfield News and community newspapers) are estimated to cost $300 monthly for the first year only. They will be reduced in the second year to half this amount and eliminated in the third year.

Property taxes ($11,946) are projected at the actual rate of the last tax year. Significant increases are not expected.

Building maintenance is normally a very substantial item on a building of this size built in 1910. However, the roof has been completely redone fairly recently and the basic structure of the building is very robust. The start-up costs reflect adequate amounts to ready the building for opening in good order. Also, it should be noted that expenditures for building maintenance would need to be larger if the building were being used for offices rather than storage. We assume an annual amount for maintenance equal to 5% of the purchase price which works out to $27,500.

• The total for utilities is estimated to be $900 monthly.

Insurance: Property and Liability Insurance amounted to $15,000 annually for the present tenant. We’ll assume the same annual cost.

Telephone: Most of the telephone bill will be the charges for the Yellow Pages ads. These costs are already included in advertising and promotion. We assume the telephone bill to amount to $150/month.

Bookkeeping/auditors/legal: Bookkeeping and billing will be handled by the same system used at Plainview Storage and charged at a rate of $300 per month. Auditor charges will run about $4,000 annually.

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Competitive Comparison

All self-storage facilities that could be found in Westbury or the area bordering Westbury were surveyed with the following results:

Prices average at $1.20 per sq. ft. per month. Mean price is closer to $1.40.

Market Analysis Summary how to do a market analysis for your business plan.">

In a similar split experienced by management’s existing storage facilities, Westbury Storage is expecting to rent 70% of its available units to non-commercial renters and the remaining 30% to the commercial sector of the market. A total of 300 self-storage units of various sizes will be created and offered for rent by Westbury Storage in a central location in downtown Westbury. The present supply of these units is insufficient to meet the demand as evidenced by a survey of all self-storage facilities within easy reach of Westbury residents. The price realized by these existing units is more than double the national average.

Market Segmentation

Self-storage units are needed by residential customers for storage of personal items as well as by commercial customers for storage of stock. It is envisaged that 70% of the planned self-storage units will be taken up by the residential segment of the market and the remaining 30% will be directed toward the commercial segment. This split is expected based on the existing customers of management’s present self-storage facilities in Plainview. The commercial segment are small businesses, many of which are run out of people’s homes such as an interior designer who needs space to store hundreds of expensive sample fabric books, or a retail shop with inadequate on premises storage.

The market research shows that the annual market potential for the commercial self-storage service in the Westbury area is about 10,000 customers. As stated above, these are mostly small businesses. The residential segment potential is substantially higher at 150,000 customers per year and is based on the Self Storage Association’s assumption that 40% to 55% of population has used self-storage facilities.  This estimate includes individuals who need storage facilities due to moving arrangements or to store excess household property. Both of the market segments are expected to grow at a 5% annual rate. The table and chart below outline the market potential for the both customer segments.

Target Market Segment Strategy

Since the demand for local self-storage services substantially exceeds the local supply, Westbury Storage will simultaneously market its services to the two major customer segments–residential customers and small business customers. The company will not pursue large business segment due to the limited service scope it can provide to such customers at the existing facilities.

The market analysis shows that local self-storage rates are substantially higher than the national averages. Westbury Storage will position itself to the both customer segments as a conveniently located and affordable quality self-storage facility. Both customer segments will be effectively reached via the local Yellow Pages ads and through the referrals of Stote Movers owned by one of the Westbury Storage’s co-owners.

Market Needs

Customer needs in the self-storage industry have certain similarity across different market segments. The underlying need is for a reliable, safe, dry and accessible self-storage facility. Due to the overwhelming demand, customers are less price sensitive and consider convenient location as the major buying decision criterion.

Residential customers use self-storage facilities to temporarily store their property while moving to a new location. This need originates in the mobility of the American population and the affordability of rental accommodations. Such customers usually rent 25 to 100 square feet depending on the size of their household and they rent on a weekly or monthly basis. The other cluster of residential customers rents self-storage facilities for longer periods to keep their oversize property like boats or other equipment that either does not fit in their garages or is not used on a constant basis.

Small business customer segment requires self-storage facilities to temporarily store their stock or merchandise. These customers may use the storage facilities more often than residential customers and they benefit from convenient loading areas, extended operating hours and better equiped storage units of bigger size.

Service Business Analysis

According to an article in the November 15th issue of Inside Self-storage the national industry average rental income generated by self-storage units is $6.00 per square foot per year, or $.50/sq. ft. per month. In the market to be served by Westbury Storage the average storage rate (see section on Competitive Comparison) is more than double this amount. Washington Storage in Westbury is a typical example. They charge $50/month for an 8X6 ft unit which works out to $12.50 per sq. ft. per year. A 9X9 unit on the second floor also rents for this same amount only because there is no elevator. All of their units are fully rented! All units within the area were surveyed. The average rate is $1.20/sq. ft. per month ($14.40 per year) and the mean was closer to $1.40/sq. ft. per month ($16.80 per year). The story concerning availability was uniform. Either the facility was full or only had one or two available units to chose from. E-Z Mini Storage in S. Centreport said, “There’s some turn-over at the end of every month. Leave your name and we will call you when one becomes vacant.” Extra Space Storage in Springfield said, “We need one week advanced notice.” North Shore Self-Storage said, “We have nothing available on the ground floor.” U-Haul reported, “We have one small unit available, otherwise we are all full.”

The self-storage industry really only started in the late 1960’s when a few far-sighted people recognized the growing need for residential and commercial storage. The industry has doubled in size each decade. Returns on investment have been very impressive–often twice that of other forms of real estate investment. The reasons for this have been the mobile society, the tendency to live in rental apartments, and the general increase in the accumulation of property, especially leisure articles such as skis, wind-surfers, exercise equipment, etc.

It could be argued that the higher than national average rates enjoyed by local self-storage facilities may not continue indefinitely, but there is no indication of any downward pressure at this time. It should also be pointed out that during an economic down-turn the self-storage industry does not suffer to the extent that other industries suffer.

Should the supply of self-storage units begin to outstrip demand, Westbury Storage should be well positioned to deal with the competition due to its ability to offer heated units (nearly all competing units are unheated) and its ability to supply electric outlets to individual units (for hobby/workshop purposes).

Business Participants

Although there are a few nation-wide players in the self-storage market, the industry is still fairly dispersed in which many small companies take part. (See the section on Competitive Analysis for a complete listing.)

Competition and Buying Patterns

Convenience is probably the single most import factor in the decision of where to rent a self-storage unit. For example, Hicksville and Huntington have no self-storage facilities. Residents choose to rent one in a nearby town probably based on proximity to the route taken by the renter to and from work. If no units are available nearby, then renters will travel further afield. Units on the ground floor are favored, especially if no elevator is available.

Main Competitors

See the section on Competitive Comparison for names of competitors. In the present market situation, competition plays a very weak role.

Strategy and Implementation Summary

The sales and marketing strategy is fairly simple by virtue of the fact that self-storage facilities are in short supply. Westbury Storage will simply have to inform the public of its existence by advertising in local newspapers, and by placing Yellow Pages ads.

Competitive Edge

Although the current local demand exceeds the supply and Westbury Storage will have no problems fully utilizing its capacity, the market situation may change in the future. The company will fully utilize its management’s seasoned experience in the storage business in order to establish a strong foothold in the local community. This will be reached by providing excellent service and offering extra service features like the heated and well-lit rental units, which will supplement the great location of the storage facility.

Sales Strategy

Most inquiries will come through the Yellow Pages ads. Proper telephone manners and professional handling of on-site inquiries are essential. Even though there is an excess of demand over supply, an unfriendly manager or clumsiness over the telephone will cause needless lost sales.

As is the case with the owners’ present self-storage facility in Plainview, many sales are directed through Stote Movers, who are in constant contact with people on the move and, therefore are most likely to require temporary storage.

Sales Forecast

Due to the fact that demand has been outstripping supply in this market, Westbury Storage may well be able to rent out all of its new units within the first year of operation. Prices paid for self-storage units reflect this strong market demand. The ground floor units will rent at $1.40 per sq. ft. per month and the upper floors, served by an over-sized elevator will rent for $1.20/sq. ft. per month. It is assumed that half of the units will rent in the first six months of operation. The second half of 1999 will see a further 25% of the total space rented, leaving the final 25% to be reached in the year 2000. Within these time spans, the growth, for projection purposes, will be assumed to be straight line, i.e. the first 50% of the total space will be reached in equal monthly increments during the first six months, and so forth.

The building measures 240 ft. X 80 ft. A section at one end (40′ X 80′ =3,200 sq. ft. per floor) will be reserved for future offices. This leaves total space dedicated to self-storage units of 48,000 sq. ft. (16,000 per floor). Some space is lost when the partitioning is done. Floor plan “D” suggests a way to partition an area 200 ft. X 40 ft. Doubled, this is exactly the space available in the Westbury building after deducting the office area. This 16,000 sq. ft. (200′ X 40′ X 2′) would be reduced somewhat to allow walkway/passages on the sides. So instead of 16,000 sq. ft. of rental space per floor, we would end up with about 15,000 sq. ft. Total self-storage net rentable space would be 45,000 sq. ft. The 15,000 sq. ft. on the ground floor would rent for $21,000 monthly and each of the other floors would rent for $18,000 each on a monthly basis.

Sales for the first month would be $4,750 (50% of total $57,000 divided by 6). The second month would have $9,500 in sales, etc.

Many self-storage companies charge administration fees to first-time customers. Deposits are also not uncommon. In addition to these sources of income, the sale of certain related items such as cardboard boxes, tape, packing materials, storage containers, plastic mattress covers, etc. can be substantial. However, for projection purposes, it is assumed that income from these sources will wash out any credit losses.

Strategic Alliances

An important strategic alliance is the common ownership connection to Stote Movers. By virtue of its contact with people changing addresses, Stote Movers is in a position to direct a lot of storage business to Westbury Storage.

The following table shows the milestones that Westbury Storage has established.

Management Summary management summary will include information about who's on your team and why they're the right people for the job, as well as your future hiring plans.">

The management of Westbury Storage will rest with Roger Black and Sebastian Stote, both of whom are successful in the moving and self-storage industries.

Personnel Plan

Operating hours are planned to be 7 a.m. to 7 p.m. Monday through Friday and 9 a.m. to 5 p.m. on Saturdays. Westbury Storage will be closed on Sundays.

The manager will work a normal 40 hour week at an annual salary of $35,000. A maintenance man will be employed at a salary of $24,000. A night watchman will be employed at a salary of $24,000.

Financial Plan investor-ready personnel plan .">

A commercial loan needs to be negotiated to finance approximately 70% of the total project costs. A 15-year mortgage will be applied for with an 8.5% interest rate. First drawdown upon agreement of the seller and buyer concerning the terms of sale of the building. Last drawdown around the end of the year when all conversion to self-storage units should be completed. First repayment of principle is planned in April of 1999 with monthly installments of interest and principle to continue until the loan is fully repaid in 2013.

Important Assumptions

Key financial indicators.

The following chart shows the benchmarks for Westbury.

Break-even Analysis

The following table and chart show our Break-even Analysis.

Projected Profit and Loss

Property taxes ($11,946) are projected at the actual rate of the tax year 7/1/96-6/30/97. Significant increases are not expected.

Projected Cash Flow

The following chart and table represent the cash flow for Westbury Storage.

Projected Balance Sheet

The following table presents the balance sheet for Westbury Storage.

Business Ratios

Business ratios for Westbury for the years of this plan are shown below. Industry profile ratios based on the Standard Industrial Classification (SIC) code 4225, General Warehousing and Storage, are shown for comparison.

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How to Start a Self Storage Business

A self-storage business makes it easy for people to store their personal belongings without the hassle and clutter of keeping things at home. These businesses also cater to other businesses who need storage space for equipment like office supplies, furniture, and more.

The lack of space in homes and offices, and the desire to be able to store and forget about items, are the driving forces behind self-storage businesses.

Learn how to start your own Self Storage Business and whether it is the right fit for you.

Ready to form your LLC? Check out the Top LLC Formation Services .

Start a self storage business by following these 10 steps:

• Plan your Self Storage Business
• Form your Self Storage Business into a Legal Entity
• Register your Self Storage Business for Taxes
• Open a Business Bank Account & Credit Card
• Set up Accounting for your Self Storage Business
• Get the Necessary Permits & Licenses for your Self Storage Business
• Get Self Storage Business Insurance
• Define your Self Storage Business Brand
• Create your Self Storage Business Website
• Set up your Business Phone System

We have put together this simple guide to starting your self storage business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.

Exploring your options? Check out other small business ideas .

STEP 1: Plan your business

A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:

What will you name your business?

• What are the startup and ongoing costs?
• Who is your target market?

How much can you charge customers?

Luckily we have done a lot of this research for you.

Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Self Storage Business Name Generator

If you operate a sole proprietorship , you might want to operate under a business name other than your own name. Visit our DBA guide to learn more.

When registering a business name , we recommend researching your business name by checking:

• Your state's business records
• Federal and state trademark records
• Social media platforms
• Web domain availability .

It's very important to secure your domain name before someone else does.

Want some help naming your self storage business?

Business name generator, what are the costs involved in opening a self storage business.

MakoSteel says to allocate 25% to 30% of the total development project budget to buy the land. If land costs $1.25 per square foot and there is the ability to build out the coverage to 40% of the job site, then the land cost for the building would be about $3.13 for each rentable square foot.

A single story facility costs $25 to $45 per square foot to build. A multi-story building is $42 to $70 per square foot for construction. For a businessperson wanting to start up a new self-storage facility, they would have to have the financial clout (or investor support) to be able to finance the land purchase and the construction costs. Typical projects require financing of $2 to $3 million with 10 to 20% down payment.

Inside Self Storage gives an example of a development budget:

Statement of Development Cost Annual

What are the ongoing expenses for a self storage business?

The monthly expenses include loan debt service, staff expenses, maintenance, marketing expenses, utilities, security expenses, and insurance.

Inside Self Storage gives an example of the financials for a business able to rent 50,000 square feet for $9 per square foot per year. This is about half the current national average because the example is based on the year 2000. Even so, a modest operation such as this one is still nicely profitable.

Financial Model

Who is the target market?

The best customers are the ones that have a longer-term need for storage, such as a military member who is on active duty outside of the United States, and who are able to pay for the monthly rental by using some method of automatic payment, such as a monthly credit card payment or an electronic fund transfer (EFT) from a bank account.

The most popular storage size is a 10’ by 10’ by 10’ space with the best customers renting one for up to two years or more.

How does a self storage business make money?

The income streams include monthly rental collections, auction proceeds from past due accounts, fees, and sales of related products such as moving supplies and locks.

These businesses make extra money from administrative fees, lost key fees, lock removal services, late fees, and other fees, in addition to the normal rental fee structure. Some charge a premium rate for the rental of storage spaces in a climate-controlled building. Others offer insurance, for an additional monthly premium, to insure the contents of the items placed in a storage space.

Easy Storage reports the average monthly rate per square foot (PSF) of non-climate controlled storage units in America is $1.26 PSF and for climate-controlled space the average monthly rate is $1.60 PSF. The overall average is $1.42 PSF. The most popular size is a 10’ by 10’ unit. This means the average rental income for each of these units would be $126.00 to $160.00 per month, depending on whether the building was climate-controlled.

During 2015, there was a national average of 90%+ occupancy for all storage units. Some that are located in more popular areas have waiting lists and therefore may charge rates that are higher than these national averages.

An average moving truck rental customer, pays around $200 to $500 for the rental truck and equipment needed to make the move, if the move is a local one. They may pay up to three or four times this amount if the move is long distance, depending on the distance driven.

How much profit can a self storage business make?

The Parham Group says that an average storage facility will be 60,000 to 80,000 of rentable square feet and break-even once occupancy reaches about 40 to 60%. A successful facility will operate with 83% to 93% occupancy and produce net income of about 26% of rental income after paying for expenses and loan debt service.

At the average rent of $1.42 PSF per month ($17.04 per year), this example would produce $1,022,400 to $1,363,200 in annual rental income and $265,824 to $354,432 in before tax cash flow per year.

How can you make your business more profitable?

Adding moving truck rental services, moving equipment, and supplies to the business will increase income by about 5% according to the Parham Group.

Many self-storage facilities extend their business operations to include managing a fleet of rental trucks, vans, and moving trailers, such as those offered by national franchises like U-Haul or Budget . These businesses can operate side-by-side or as one combined enterprise. Besides offering moving vehicles, the moving equipment offered for rent includes furniture dollies, furniture pads, and hand trucks. The rental office may also sell moving materials such as packing tape, packing supplies, and moving boxes.

Want a more guided approach? Access TRUiC's free Small Business Startup Guide - a step-by-step course for turning your business idea into reality. Get started today!

STEP 2: Form a legal entity

The most common business structure types are the sole proprietorship , partnership , limited liability company (LLC) , and corporation .

Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your self storage business is sued.

Form Your LLC

Read our Guide to Form Your Own LLC

Have a Professional Service Form your LLC for You

Two such reliable services:

You can form an LLC yourself and pay only the minimal state LLC costs or hire one of the Best LLC Services for a small, additional fee.

Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services . You can choose to hire a registered agent or act as your own.

STEP 3: Register for taxes

You will need to register for a variety of state and federal taxes before you can open for business.

In order to register for taxes you will need to apply for an EIN. It's really easy and free!

You can acquire your EIN through the IRS website . If you would like to learn more about EINs, read our article, What is an EIN?

There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.

STEP 4: Open a business bank account & credit card

Using dedicated business banking and credit accounts is essential for personal asset protection.

When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil .

Open a business bank account

Besides being a requirement when applying for business loans, opening a business bank account:

• Separates your personal assets from your company's assets, which is necessary for personal asset protection.
• Makes accounting and tax filing easier.

Recommended: Read our Best Banks for Small Business review to find the best national bank or credit union.

Get a business credit card

Getting a business credit card helps you:

• Separate personal and business expenses by putting your business' expenses all in one place.
• Build your company's credit history , which can be useful to raise money later on.

Recommended: Apply for an easy approval business credit card from BILL and build your business credit quickly.

STEP 5: Set up business accounting

Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.

Make LLC accounting easy with our LLC Expenses Cheat Sheet.

STEP 6: Obtain necessary permits and licenses

Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.

State & Local Business Licensing Requirements

Certain state permits and licenses may be needed to operate a self-storage business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.

Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses .

Services Contract (e.g. MSA)

Self-storage businesses should require clients to sign a services agreement before leasing a space to a new customer. This agreement should clarify client expectations and minimize risk of legal disputes by setting out payment terms and conditions, service level expectations, and length of the rental. Here is an example of one such services agreement.

Liability Waiver

Labor safety requirements.

It is important to comply with all Occupational Safety and Health Administration requirements.

Certificate of Occupancy

A self-storage business is generally run out of a warehouse. Businesses operating out of a physical location typically require a Certificate of Occupancy (CO) . A CO confirms that all building codes, zoning laws and government regulations have been met.

If you plan to lease a location:

• It is generally the landlord’s responsibility to obtain a CO.
• Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to a self-storage business.
• After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommended to include language in your lease agreement stating that lease payments will not commence until a valid CO is issued.

If you plan to purchase or build a location:

• You will be responsible for obtaining a valid CO from a local government authority.
• Review all building codes and zoning requirements for your business’ location to ensure your self-storage business will be in compliance and able to obtain a CO.

STEP 7: Get business insurance

Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.

There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance . This is the most common coverage that small businesses need, so it’s a great place to start for your business.

Another notable insurance policy that many businesses need is Workers’ Compensation Insurance . If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.

FInd out what types of insurance your Self Storage Business needs and how much it will cost you by reading our guide Business Insurance for Self Storage Business.

STEP 8: Define your brand

Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.

If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners , we'll give you helpful tips and advice for creating the best unique logo for your business.

Recommended : Get a logo using Truic's free logo Generator no email or sign up required, or use a Premium Logo Maker .

If you already have a logo, you can also add it to a QR code with our Free QR Code Generator . Choose from 13 QR code types to create a code for your business cards and publications, or to help spread awareness for your new website.

How to promote & market a self storage business

The location of a self-storage facility is a critical factor. It is best if it is located near a highly populated area that has many renters. Large billboards are effective advertising on the nearby freeways. Bus stop ads are also effective. Having the facility painted with signage to be a prominent advertisement can be very helpful. Easy access to major freeways is very desirable.

National companies that offer franchise opportunities have cooperative media advertising campaigns that coordinate efforts on the Internet with websites using standardized branding and style. They make use of radio promotion, physical ads, and television ads to create more brand awareness and advertise the locations in the local area.

How to keep customers coming back

In order to compete with larger national companies, smaller self-storage companies may consider offering more competitive rates and cater to a previously underserved area. Hand delivery of discount flyers to apartment buildings and neighborhoods that contain potential renters helps attract customers. Active digital marketing is important using the best search engine optimization techniques available.

STEP 9: Create your business website

After defining your brand and creating your logo the next step is to create a website for your business .

While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.

Here are the main reasons why you shouldn’t delay building your website:

• All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
• Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
• Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.

Recommended : Get started today using our recommended website builder or check out our review of the Best Website Builders .

Other popular website builders are: WordPress , WIX , Weebly , Squarespace , and Shopify .

STEP 10: Set up your business phone system

Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.

There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use. Check out our review of the Best Business Phone Systems 2023 to find the best phone service for your small business.

Recommended Business Phone Service: Phone.com

Phone.com is our top choice for small business phone numbers because of all the features it offers for small businesses and it's fair pricing.

Is this Business Right For You?

People who succeed in this business enjoy working with people and are excellent when it comes to tenant relations. It helps to have simple maintenance skills to fix some of the things that may need repairs. You should be able to use a ladder to change light bulbs and be able to keep the place painted nicely.

Want to know if you are cut out to be an entrepreneur?

Take our Entrepreneurship Quiz to find out!

Entrepreneurship Quiz

What happens during a typical day at a self storage business?

Many of the storage spaces are owned and operated by a team. Marketing of available spaces is ongoing. Interested new tenants are shown the facilities. Applications need to be taken and processed with background and credit checks. Security deposits, key deposits, and the collection of rental payments, all need to be handled properly. Monthly accounting records need to be up-to-date and accurate.

The facility needs to be kept clean and constantly supervised to prevent vandalism and theft. Rent for any storage space that is past due needs to be collected, and if there is a serious problem with the rental payments, the proper legal processes need to be taken to manage the problem. This may include turning the account over to collections, filing court papers, giving eviction notices, and/or selling the items left abandoned in storage spaces after the correct amount of time has passed according to the local laws and the rental contract agreement.

Statistics Brain says that the contents of about 155,000 storage spaces are auctioned each year, for the average price of $425, because of past due rental payments.

What are some skills and experiences that will help you build a successful self storage business?

As this type of business bears many similarities to the real estate business, previous experience in the real estate field may be a helpful skill when starting this type of business. Renting and maintaining storage spaces is similar to renting apartments.

What is the growth potential for a self storage business?

This industry sector has everything from locally run single storage facilities, to huge major national operations with thousands of locations. There are over 54,000 storage locations in America with over $30 billion in annual revenues. The SpareFoot Storage Beat reported on the largest public storage companies, their market valuation, and revenues for 2015. They are:

• Public Storage: Market Valuation $2.38 billion
• Extra Space Storage: Market Valuation $782.27 million
• CubeSmart: Market Valuation $444.5 million
• Sovran Self Storage (Uncle Bob’s): Market Valuation $366.6 million
• U-Haul: Market Valuation $211.1 million (self-storage revenue only)

TRUiC's YouTube Channel

For fun informative videos about starting a business visit the TRUiC YouTube Channel or subscribe to view later.

Take the Next Step

Find a business mentor.

One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.

Having a support network in place to turn to during tough times is a major factor of success for new business owners.

Learn from other business owners

Want to learn more about starting a business from entrepreneurs themselves? Visit Startup Savant’s startup founder series to gain entrepreneurial insights, lessons, and advice from founders themselves.

Resources to Help Women in Business

There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:

If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.

What are some insider tips for jump starting a self storage business?

If you plan to open a new facility, be prepared to finance a negative cash flow for about 18 month to two years before the facility has an occupancy rate that is high enough to create long-term sustainable profitability. The key in the early years is to focus efforts on getting the facility rented and work hard to reach higher occupancy rates.

Once a self-storage business has stabilized with plenty of renters, it has a tendency to create a long-term profitable revenue stream and become much easier to manage after the first two years.

How and when to build a team

There needs to be enough staff to cover the hours of operations for the administrative office. This depends on the size of the facility. Smaller facilities, usually have just two people running the administrative office. If there is a larger volume of new customer flow, then additional staff may be necessary during certain times to respond to the customer needs. You want to make sure the customers do not have to stand in line for extended periods.

Most storage facilities are highly automated and require very few staff. Statistics Brain notes that during 2015, there were 58,000 storage facilities in the United States, with an average of 566 units each. They employed around 172,000 people in total. This means there was only an average of three people per location across America.

A storage facility may also offer extended hours of operation for tenants who wish to move things in and out of their storage space. Some facilities allow 24-hour access by issuing security codes for the drive-in gates. During the extended hours, the administrative office may be closed so that the only requirement for staff is to cover facility security, which can be done remotely by video surveillance.

Useful Links

Industry opportunities.

• Self Storage Association
• Franchise opportunity with U-Haul, a popular storage/moving company

Real World Examples

• Public Storage - the number one self-storage company in America
• UHaul - a large self-storage company
• Business profile with president of Affordable Storage

Further Reading

• How-to guide detailing the process of starting a self-storage business
• Resource detailing the costs associated with opening a self-storage facility
• Resource for further information about opening a self-storage facility
• Book: Creating Wealth Through Self-Storage

Have a Question? Leave a Comment!

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Self Storage Business Plan

Have you ever found yourself surrounded by a lot of stuff and wondered where to place those extra furniture or boxes of memories?

But you’re not alone; there are so many individuals who can’t get enough of all their belongings. And that’s where self-storage comes into the picture!

The self-storage facility stores people’s stuff by charging some rental fees. It offers a secure haven for your cherished items, from lockers to outdoor spaces.

Surprisingly, if you are planning to start a new self-storage or warehouse business, you will need a solid business plan for a successful business.

So, we have created this sample business plan for you to get a better idea about how a business plan should look and what details you have to include in your self-storage unit business plan.

But before diving right into a detailed business plan, let’s consider a few things you need to understand.

Things to Consider Before Writing a Self-Storage Business Plan

As per statistics, the global self-storage market is projected to reach an astonishing value of $71.37 billion by 2027, with a CAGR of 5.65% from 2021 to 2027.

The primary reason for this rapid market growth is due to the increasing need for commercial and residential storage.

The self-storage companies provide secure spaces and various storage unit types such as containers, compartments, lockers, and outdoor spaces. So that, customers can safely store and retrieve their belongings anytime.

In fact, the self-storage industry has been the fastest-growing sector in commercial real estate since it started in the 1960s.

And the cool part is that self-storage unit operators don’t need a ton of staff, utilities, or maintenance. So, it makes sure that your self-storage facilities earn substantial profits.

Now that you know a little about the industry, it’s time to discover what to include in your self-storage business plan.

What to Include in Your Self Storage Business Plan?

• Executive Summary 
• Company Overview
• Industry Analysis
• Customer Analysis
• Competitive Analysis
• Marketing Plan
• Operations Plan
• Management Team
• Financial Plan

1. Executive Summary 

An executive summary is a brief overview of your entire business plan. Although it is the first section of the plan, entrepreneurs write it at the last when the whole plan is ready.

This section highlights the most important points, from business concept and mission-vision statements to financial outlook. 

You may start this section with a compelling introduction to your self-storage business, including the business name, owners, location, and type of business you are running.

Give a brief overview of your market opportunity, service offerings, management team, and marketing strategies. Highlight financial projections if you’re seeking funding.

Most of the readers will go through the executive summary before making a judgment. So, make sure to keep it clear, concise, and engaging to grab readers’ attention.

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2. Company Overview

The company overview section is a detailed description of your business, including the business idea, name, location, future goals, history, and other business-related facts.

This section helps you provide an in-depth understanding of your business, introducing and positioning your business as an ideal solution for your target audience. So, write it in a clear and concise yet impactful way.

First, you may discuss the basic details of your storage facility and what type of storage business you are operating. It could be a warehouse, portable containers, vehicle storage, lockers, climate-controlled storage, etc.

Have a look at Maxwell’s business introduction written using Upmetrics AI Assistant :

Apart from that, your company analysis section should include the following information:

• Vision and mission statements
• Business legal structure(Sole proprietorship, partnership, LLC, or corporation)
• History and background of storage business (if any)
• Owners’ names with qualifications
• Future business goals(Short-term or long-term)
• Milestones you have accomplished(number of self-storage units occupied, number of referrals, contract renewals, etc.)

3. Industry Analysis

The industry analysis section is an overview of the specific industry and market. It supports you in a better understanding of the external business environment.

While it seems unnecessary, it helps you develop strategies that maximize business opportunities and lower potential risks.

By doing thorough research, you may learn a lot about the storage industry and the market that you will serve. And this will show your readers that you are an industry expert.

So, start this section with a quick introduction to the self-storage industry. Describe the self-storage business in terms of size(in dollars) and mention whether the market is falling or growing in the USA.

You may conduct detailed market research to examine previous trends and market growth potential. This helps you identify the top competitors in the industry and their market shares.

Don’t forget to highlight a few factors that affect the industry, including regulatory rules, market trends, and other businesses’ competitive activities .

4. Customer Analysis

The customer analysis section of your self-storage business plan provides the details of the customers you serve or intend to serve.

It helps you identify your target customers, evaluate their needs, and explain how your services cater to them.

You may consider some examples of customer segments, such as business owners, families, individuals who are relocating, and students. Try to break your target market in terms of their psychographic and demographic profiles. 

For a demographic profile, you should include details of the age, gender, location, and income level of the customers. Most self-storage facilities mainly serve customers staying in the same town or city. 

You may explain the target customers’ wants and needs for demographic profiles. If you properly understand these demands, it will help you attract and retain customers.

You may refer to the below example written from Upmetrics’ self-storage business plan:

Target Market of Maxwell – Storage and Warehouse

We are aware of the fact that for any business to thrive so well in profit, it has to first and foremost define its market. The target market for self-storage and warehouse facilities cuts across people from different walks of life.

The fact that people need a secure place to keep their properties for a short period of time makes the self-storage and warehouse rental business a thriving and growing business.

Maxwell – Storage and Warehouse, LLC will work towards providing services, facilities, and an environment that will help us reach out to our target market. These are the categories of people that we intend to market our self–storage and warehouse facility to:

• Working Class Adults / Corporate Executives
• Sports Clubs (soccer team, athletics team, and choreographers et al)
• College Students / Schools
• Community and Corporate organization
• Business People / Entrepreneurs
• Government Officials
• Religious centers (Crusade Teams)
• Merchants, Importers, and manufacturers
• Sports Men and Women
• Construction companies

5. Competitive Analysis

Competitive analysis is essential to recognize key competitors within the industry, including direct and indirect competitors.

Also, this section will help you know your storage business’s unique selling propositions along with market positioning.

You may start by identifying direct and indirect competitors & other alternative self-storage companies in the industry.

Direct competitors can be other self-storage facilities that provide the same self-storage services as yours. While indirect competitors can be other options or storage businesses with their own storage space.

After specifying such competition, you need to focus more on your direct competitors. Such self-storage facilities are the most threatening to your self-storage company.

Describe an overview of their businesses. Describe their strengths & weaknesses and try to find out key things like:

• Who(type of customers) do they serve?
• What type of self-storage services do they provide?
• What are USPs, including their quality service?
• What is their pricing strategy(medium or low)?
• What do they need to improve as per their customers?

After conducting the above analysis, understand the areas of competitive advantage. For instance, consider your superior self-storage services, unique offerings, better prices, and excellent customer service.

You may perform a SWOT analysis like below to get your storage business’s strong points.

6. Marketing Plan

Your business’s marketing plan provides a detailed outlook of sales strategies and promotional techniques you will use to reach your target audience.

It will help you streamline your marketing efforts and create impactful marketing campaigns to acquire new customers and retain existing ones.

Here are some of the sales and marketing strategies for your self-storage company:

Unique Selling Propositions(USPs)

Specify the USPs that sets your self-storage facility apart from other self-storage businesses. Emphasize a few aspects such as quality services, security features, competitive pricing, etc.

Social Media Marketing

For a successful self-storage business, social media engagement can be very helpful. Use popular social media platforms to target specific audiences. Create visually appealing ads and content to drive traffic.

Partnerships

Establish collaborations with local businesses to promote your storage facilities and generate referrals. This can benefit your self-storage company and local partners.

Website and online reservations

Having a website can establish a strong, professional brand and help you reach a wider audience. Showcase all your storage services on the website and consider the online reservation procedure.

Loyalty programs and special offers

Try to retain existing customers with the help of loyalty programs, special offers, and referral incentives. This can encourage your customers to refer new clients.

7. Operations Plan

The operations plan chapter outlines the daily processes and activities centered on achieving the business objectives mentioned in the earlier sections.

A detailed operations plan helps you and your team define responsibilities, daily tasks, and short-term goals you need to accomplish, keeping track of your long-term objectives.

So, briefly discuss operational planning, highlight how it directly impacts the quality of services, and pique the reader’s interest.

Here are a few key elements to add to this section:

Staffing & Training

Describe your staffing plan, prioritize training programs, and foster a collaborative work environment for smooth administrative processes and excellent customer service.

Facility Management

Consider including security systems to provide the highest level of security for storage units. Also, mention regular maintenance checks to keep the condition and cleanliness of the facility.

Technology and Software

Describe the technology and software you use to easily reserve, access, and manage storage units. This will enhance your customer service and contribute to effective business operations.

8. Management Team

As the name suggests, the management team section introduces the owners and key managers, along with their roles & responsibilities, qualifications, work experience, and compensation plan.

A strong management team is essential to weigh authority and helps potential investors to be confident about your storage company’s idea and vision.

You may start this section with an introduction of the storage owner and team members, including the facility manager, admin & HR manager, sales & marketing executive, accountant, customer care executive, or front desk officer.

Highlight their responsibilities, industry experience, educational background, and skills that can benefit your business. For a better understanding, you may refer to the below example:

You might include an organizational structure that depicts the reporting lines and the flow of the decision-making hierarchy. Also, discuss the compensation plan for each individual, part of your management.

If you have any advisory board members, mention them and emphasize their experience in managing self-storage companies or small businesses.

9. Financial Plan

The financial plan is the most important and demanding aspect of business planning.

When it comes to convincing potential investors and banks to invest in your business or lend money, a financial plan is one of the crucial factors.

This section of your plan describes your self-storage facility’s financial information and how it will achieve its financial goals or how much revenue potential it has.

Here are a few essential elements and financial statements you must add or provide while making a financial plan:

Income Statement

An income statement is generally called a profit and loss(P&L) statement. It defines the revenue and then deducts your self-storage operating expenses to show your gross profitability.

For this, you have to make practical assumptions that help you measure the actual profit margin of your business. Here’s an example of a projected profit and loss statement for 3 years:

Balance Sheet

A balance sheet helps you show your assets and liabilities. While it includes a lot of information, you may simplify it to highlight the most important details, like equity, goodwill, debt ratio, or other intangible assets.

Cash Flow Statement

Your cash flow statement helps you determine how much money you need to start a new self-storage business or grow an existing facility. It also makes sure that you never run out of money.

Once your business is started, you should maintain these cash flow projections even for certain months before you start making profits.

Well, in most cases, you earn profits but still face financial problems that could lead you to bankruptcy. So, you will need proper cash flow planning to avoid such possibilities.

Funding Sources for Your Self-Storage Business

You can access different funding sources to support your self-storage startup or expansion efforts. Here are some common sources to get funding from:

Bootstrapping

Many entrepreneurs use personal savings as initial capital for starting a self-storage business without attracting investments or borrowing money from banks.

Family and friends

After deciding how much money you’ll need to start a business, you may ask family & friends to invest in your self-storage business. Show a solid business plan to the interested ones and assure them that they will make a profit.

The most common source of funding is to cover startup costs and self-storage facility expenses. However, banks will ask for a professional self-storage business plan to make sure that you’ll be able to pay money back with interest.

Investors and partnerships

Bring in some external capital by seeking investors or partnering with individuals or businesses interested in your self-storage industry.

Apart from the above, you may explore other funding sources for your self-storage business:

• Crowdfunding
• Small Business Administration(SBA) loans
• Private equity & venture capital
• Grants and subsidies
• Real Estate Investment Trusts(REITs)

Download a sample self-storage business plan

Are you ready to start writing your self-storage business plan? Here you go; download our free self-storage business plan pdf to get started.

It’s a modern business plan template specifically designed for your storage business. Use this sample business plan as a guide for creating your own plan.

Import data into your editor and start writing!

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

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

Start Preparing Your Business Plan with Upmetrics

No doubt, creating a comprehensive business plan is daunting; but it’s a lot smoother with the help of Upmetrics! It offers easy-to-follow steps, 400+ sample business plans, and AI support that will serve you perfectly.

If you are not good enough at finances, our financial forecasting tool will help you create realistic financial forecasts for 3 or more years.

Whether you’re venturing into a new business or aiming for expansion, Upmetrics provides valuable resources to create successful, professional business plans.

So, what are you waiting for; start planning now!

Related Posts

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Real Estate Business Plan

Key Components of Business Plan

Sample Business Plan Template

5-Year Business Plan

3 Year Business Plan

Frequently asked questions, what are the key components of a self-storage business plan.

A successful self-storage unit business plan involves the following key components:

• Executive summary
• Company overview
• Self-storage industry analysis
• Customer analysis
• Competitive analysis
• Marketing plan
• Operational plan
• Management team
• Financial plan

What is the average profit margin for self-storage?

Depending on the location, size of the self-storage units, and operational efficiency, the average profit margin for self-storage facilities may range from 30 to 50%.

What are the legal and regulatory considerations for a self-storage business?

A self-storage unit business should consider various legal and regulatory aspects:

• Business legal structure
• Licenses and permits
• Lien rights & late fee policies
• Tax regulations
• Zoning laws
• Vehicle towing

How much capital is needed to start a self-storage facility?

The capital required to start a self-storage business may differ widely. On average, the startup costs can range between $500,000 to $1 million for a small self-storage facility, while larger facilities need the initial capital of several million dollars.

What types of self-storage units should I offer?

There are various types of self-storage units, including:

• Standard units
• Climate-controlled storage
• Drive-up units
• Interior storage units
• Exterior units
• Vehicle storage

About the Author

Vinay Kevadiya

Vinay Kevadiya is the founder and CEO of Upmetrics, the #1 business planning software. His ultimate goal with Upmetrics is to revolutionize how entrepreneurs create, manage, and execute their business plans. He enjoys sharing his insights on business planning and other relevant topics through his articles and blog posts. Read more

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How To Start a Self Storage Business In 6 Steps

Follow these six prep and planning steps to learn how to start a self storage business that’s primed for success from the ground up.

Starting a new business in an unfamiliar industry can be a bit daunting. But you’re not alone; most new self storage facilities are started by folks who are completely new to self storage. You’ve probably had a successful career in another sector, heard tales of the generous returns self storage generates for investors (they’re true!), and are now pretty set on starting this new adventure. We’ve been there , and we’re here to help.

How to start a self storage business?

Before you get caught up in picking a catchy business name and looking at fit outs, there are six prep and planning steps we recommend in order to give your new business the strongest chance of success:

• Decide your investment amount
• Choose the right location
• Plan your storage type + size
• Find your premises
• Decide your operational model
• Research the red tape

Here’s what to do.

1. Decide your investment amount

Work out how much you have to invest, because during this planning phase, your budget will affect:

• where you can afford to get property;
• which types of self storage are feasible; and
• which operational model will be your best option.

Later on, your budget will influence the spec of your fit out, how sophisticated you can get with technology, etc.

Phase your investment?

Starting a self storage business doesn’t have to be an all-at-once proposition. In fact, self storage lends itself particularly well to a phased, modular approach. So when working out your budget, it’s worthwhile breaking out how much you want to invest now, and how much more capital you’re certain you could invest in a year or so to complete your facility if things go well (either from your own funds or with the help of external investors). For example, when our CEO started a self storage business for the first time, he used an initial $130k investment to cover one-off set up costs (taking out a long lease, signage, website and tech costs) and fitted out 1/3rd of the total space, just 49 units initially. Then, a year later, he released a further $120k of home equity to complete the final two fit out stages, taking the facility to 149 units.

2. Choose the right location

Will your facility be in your hometown, the next town over, near where your office is located? Will you spend your days manning the site or will you run it remotely without staff there? Or will you have staff there and you’ll simply check in now and again? Finding the right location for your business makes success more likely.

Every business requires some degree of face-time, so a good starting point is to decide the max you’re willing to commute a few times per week to manage operations, or to commute every day if you plan to work from there. Even if this diminishes over time as you’re able to delegate work, when getting set up (and especially during the fit out phase), you’ll be back and forth a lot.

Starting your search

Use a map like this to work out your search radius (we know it’s not the prettiest tool, but it works!). For example, input your full home address (city, state, zipcode, etc) and the distance you’re willing to travel, then click ‘New Circle’. Make a note of all of the cities/towns in your catchment area.

Researching populations

To decide which locations are viable contenders, list out the towns or cities within your commute area in a table or spreadsheet and work out their populations. This can take a bit of time depending on how many places are on your list and where in the world you’re researching, but here are few links to help you:

• US Census Bureau —Scroll to the ‘Incorporated Places’ section and click on your state. An Excel file will download listing every town’s/city’s population as of 2020 and a 2021 projection.
• Statistics Canada —Scroll midway down the page to use their city/zip code search box.
• United Kingdom—Getting population details on all UK towns and cities still isn’t easy online, but you can use the Scotland Census Area Overview (2011 stats), and try this Area Explorer for Northern Ireland data. In addition, non-government sites like citypopulation.de aggregate publicly-available population data worldwide, and you can search English or Welsh town names to view 2020 population estimates (we just don’t know how accurate their data is).
• Ireland’s Central Statistics Office— Download this spreadsheet of the 2016 census’ total populations for 874 towns in Ireland.
• Australian Bureau of Statistics —Enter your town name in the ‘Search by Area’ field. A search results section will appear a little further down the page. Click its ‘All Persons’ button to quick-view the ‘People’ stats for that location.

Finding unmet demand

With your population table complete, the next step in picking your location is to work out which area presents you with the best business potential.

Start by applying your country’s figure for the average square footage per person. Most Self Storage Associations have this figure available on their website.

In the US, it’s 9.44 sq.ft./head, so you’d multiply the population of each town by this to determine how much self storage the area can support. So a town of 20,000 people could support 188,800 sq.ft. of rental storage space.

The next question: How much self storage space is already on offer in each location on your list? Go online, find out approximately how much space your competitors have built in each town/city and add this to your spreadsheet. Then subtract the two values for each town to see how much space is up for grabs in each area. The more space for the taking, the better your returns should be.

If you want to get even more precise about potential vs competitor capacity, go back to your radius map and plot 3 or 5-mile radius circles around each competitor’s address. Most customers won’t drive more than 5 miles from their home for self storage, and this could help you visualise any lucrative unclaimed locations between your competitors’ catchments.

It’s worth noting that the current supply of self storage per head isn’t necessarily the same as the current demand. There’s likely to be significant unmet demand in most markets. The biggest opportunities are often found in smaller towns. They can present a number of benefits including:

less-expensive commercial properties than cities;

lower property taxes;

less or no competition for business;

faster word-of-mouth promotion;

nobody to outbid in online advertising; and

nobody to get into a price war with.

3. Plan your storage type + size

Once you’ve found a good area to base your business in, you need to decide what type of self storage business you want to open. It might surprise you to hear that there are dozens of types of storage businesses to choose from, including climate controlled storage, portable/mobile storage, vehicle storage, student storage, military storage, boat storage, business storage, 24 hour storage and more. But most of these fall into one of three simple categories: indoor storage, outdoor storage and drive-up storage. At this step, your investment size comes back into play.

What $61K–$122K will buy

If you have between $61K and $122K to invest, outdoor storage or drive-up storage are probably your best options. Both involve buying or leasing some land.

With outdoor storage, you provide a plot where goods are stored unsheltered or semi-sheltered (perhaps with a canopy covering overhead but no walls). A private parking lot is a familiar example of outdoor storage, where cars or large camper vans are stored.

With drive-up storage, on the other hand, you either fill your land with storage containers (usually shipping containers) or rows of units with rollup doors like on your home’s garage. Customers park their vehicles in front of their unit to load and unload, and they store their belongings within these—fully covered and better protected from the elements, their fellow storers using your facility, or passersby. What’s great about the containers approach is you can buy them as you grow. You can limit your risk by buying a few and seeing how long they take to rent out. And if you end up with more than you can fill, they’re easy to sell on to others and relocate.

What $122K+ will buy

If you have $122k or more, then, depending on you can afford to go the indoor route. For this type of self storage business, you buy or lease a warehouse and fit it out with indoor storage units. To keep initial costs down, you can do this fit out across multiple stages, too.

Investment inflators

There are a few variables worth mentioning that will push up your initial investment:

Buying instead of leasing—Obviously buying land or a warehouse will cost you more upfront than leasing will.

Extent of construction and repairs—The more work needed, the more money you’ll need. For example, outdoor sites may require you to tarmac the ground for cars and build a high, quality fence and gate for security. Indoor sites might require a mezzanine floor or a new roof.

To help you fine tune your numbers, try our free self storage financial modeller to work out the initial and maximum funding you’ll need for your self storage business in years one through four.

4. Find your premises

When it comes to visibility, footfall, demand, ease of access, your precise property location matters. So when you’ve narrowed down your location(s), start shopping for premises:

Check out every real estate website there is.

Drive around the towns or cities.

Pay attention to where the outdoor advertising billboards are located.

Meet with realtors and let them know what you’re looking for.

It’s impossible to get the perfect site, but look out for (and perhaps score each site against) benefits such as:

Lots of passing traffic with a building visible from the road

Lots of nearby houses and businesses

Ideally new home building going on nearby

Not too much competition in the area

The ability to rent or buy land or a warehouse at prices that work

Finding all of the above is almost impossible, so simply try your best to get a good combination of each, but don’t rule a site out if it’s missing one or more because it could still work.

This is the fun part of the process, but it’s also the bit where a lot of people give up … because finding suitable sites isn’t easy. It takes time, hard work, and luck!

5. Select an operational model

The final step of how to start a self storage business is deciding how you’ll operate. In other words, what way are you going to run this business?

Staffed, semi-manned, or unmanned?

On premise or remotely managed?

Success is possible with any model, if you’re willing to invest the necessary time, money, and manpower in the business. And of course there are perks, drawbacks, and special considerations for each approach—from flexibility, customer experience and company culture to job satisfaction, sales processes, technology costs, and site security.

6. Research the red tape

If you’ve run businesses in the past, you will already be familiar with the local laws and regulations that will impact your build and operations. If not, make sure to carefully familiarise yourself with the following in your location, as failure to comply can result in unwanted fines and penalties:

Planning permission

Legally permitted opening hours for your location

Building control requirements

Fire safety requirements

Self storage insurance

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Useful links

Check out some of our other helpful resources for those new to self storage.

The Self Storage Academy Explore our wide-ranging guides and resources.

The Self Storage Growth Guide The ultimate guide to growing your self storage business.

Self Storage Brand Marketplace Still need a logo? Check out our ready-to-go brands.

Self Storage Investment Calculator Quickly see what you can earn from investing in self storage.

Stora is self storage sales and management software for modern operators who want to run their businesses with as little admin and as much profit as possible. Our platform offers automated web sales, facility management + marketing all in one.

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Small Business Trends

How to start a storage business.

People are on the move, and they need self storage units. They are changing jobs, buying houses, going to college, downsizing and more.

A business may also need a self-storage facility. A business might need to temporarily store a piece of equipment or products while remodeling or moving.

With so many possibilities for profit, it’s no wonder that storage businesses are consistently in high demand. This guide will walk you through how to start a storage business, including a full business startup checklist tailored to this industry.

The Self Storage Industry

The self-storage industry has generally been doing well in the United States. It tends to be relatively recession-resistant, as people often need storage during life changes like moves, divorces, or downsizing, which can happen regardless of economic conditions. However, like any industry, success can depend on various factors like location, management, and market saturation.

What is a Self Storage Business?

There are various types of self storage businesses:

• Traditional Self-Storage : This is the garage-style unit most people think of.
• Climate-Controlled Storage : These units have temperature and humidity control.
• Vehicle Storage : For boats, RVs, and other vehicles.
• Portable Storage : Companies deliver a container to your door, which you fill up, and they take it away for storage.
• Indoor Storage : Units are inside a building and may have more security.
• Outdoor Storage : Mostly for vehicles or large machinery.
• Specialty Storage : For specific items like wine, art, or documents.

Why Self Storage Facilities Are In Demand

People seem to always have a need for a self storage unit, whether it’s short or long term. Businesses also regularly use storage facilities.

• Life Events : People often need storage during significant life changes.
• Downsizing : As people age, they might downsize but want to keep their belongings.
• Business Needs : Companies often need storage for equipment or inventory.
• Seasonal Storage : Storing items like holiday decorations or seasonal gear.
• Student Storage : Students may need storage during breaks.

Steps to Starting Your Successful Self Storage Business

Before you start, take the necessary steps to lay the groundwork for a successful business. The following steps walk you through how to start a business in this field.

Market Analysis for a Profitable Storage Business

A thorough market analysis is a must. In some areas, it may seem that there are self storage businesses everywhere. Does that indicate an ongoing need for the self storage facilities, or is the market saturated?

What are the local demographics? Are there entities nearby, such as colleges/universities or military bases, that generate an ongoing need for self storage businesses? Is the housing market in the area booming or stagnant?

Drafting a Business Plan for Your Own Self Storage Business

A self storage unit business owner should draft a detailed business plan . The plan should describe the business, including its structure (limited liability corporation, partnership, corporation).

Other key elements of the business plan include the financials of the key people involved and plans for marketing strategies. Many businesses start small and grow, and the business plan should include the timeline and strategy for that.

When it’s time to grow, a lender will want to see all the financials and the business plan.

Buying an Existing Self Storage Facility

• Existing customer base
• Established location
• Immediate cash flow
• Potentially high upfront cost
• May inherit issues like outdated equipment
• Limited flexibility for changes

Franchising Opportunities in the Self Storage Industry

Franchises like Extra Space Storage and Public Storage offer storage franchise opportunities, although many storage facilities are independently owned.

Selecting the Right Location for Your Self Storage Business

Of course, zoning is your first concern. Research local zoning ordinances and requirements to be sure such a business can get approval to be located in your area.

Other considerations include ease of access. Many people and businesses moving items will use a truck and trailer, so access roads to and within the facility should be easy to navigate.

Also, consider the demographics of the area, which can feed demand. Is the area growing in population? Are there new businesses or housing developments coming to the area?

Creating a Self Storage Business Website

You should hire a professional to ensure your website will pop up during online searches with words such as “Self Storage” or “Storage Unit”. No matter how good your website is, it won’t help you unless it is found on a search.

Your website should include a map/directions feature and a link to do online bookings and registrations. The sizes and locations of the units should be accurately described. You’ll also need a list of items not permitted in the storage units, such as gasoline-powered equipment.

Hours of operation should be noted. State the most desirable features of the business, such as 24-hour video security. Pictures of the units’ interiors are helpful, as well as descriptions of how much square footage is typically needed for household goods.

Choosing a Business Structure

Different business structures are common in the storage unit business. Some common business structures are a limited liability corporation, or LLC, with a sole proprietor.

In other cases, a business structure could be a partnership, with two investors starting the venture. This can be common when one of the partners owns the land or an existing building, such as a warehouse.

The corporation as a business structure may be developed when a self storage business expands and opens one or more additional locations.

Secure Necessary Permits and Licenses for a Self Storage Company

You’ll need building permits for construction and business licenses to operate. Some facilities may also require small business insurance . Specifics vary by jurisdiction but could include fire safety permits, environmental permits, etc.

Zoning is another concern. Often, neighbors who live nearby are concerned about an increase in traffic and the lighting requirements of a storage business. A self-storage business owner can alleviate these concerns by establishing certain hours for the facility, but good lighting is important for security reasons.

Designing Your Self Storage Units for a Successful Self Storage Business

As you design the facility, make sure the aisles between the units are easy to navigate outdoors and indoors. Clients may use trucks and trailers outdoors and pallet jacks and carts indoors.

Outdoor facilities should be high-fenced, and you’ll need to allow access to the fencing for repairs or weed/snow control.

Areas for outdoor storage of items such as campers or trailers should be large enough to allow for vehicles to be maneuvered and backed up into spaces. The spaces should be clearly defined and numbered.

If the business will be located in a northern climate, be sure to allow room for the removal of snow/ice.

Setting Prices for Units in Your Storage Facility

One great technique used to build a clientele for a self-storage facility is offering significant introductory discounts. For day-to-day operations, there are various factors to consider:

• Location : Urban vs. rural rates differ.
• Unit Sizes : Different sizes command different rates.
• Features : Climate control, security features, etc.
• Competitor Pricing : Know the market rate.

Hiring and Training Staff

Some self-storage businesses operate with on-site staff members. Customers make appointments and are met by a staff member, especially for the initial signing-up process.

More often, bookings are done online or through a customer service representative. That person must, of course, be courteous and informed, and also be able to advise on the unit size that will be needed.

For example, here is key information staff members should know:

Approximate Storage Unit Sizes

• 5×5 (25 sq ft) : Suitable for boxes, small furniture, or seasonal items. Probably too small for an 800-square-foot apartment move.
• 5×10 (50 sq ft) : Can hold some furniture and boxes. Might work if you only have a minimal amount of furniture and are good at packing.
• 10×10 (100 sq ft) : Often recommended for a one-bedroom or studio apartment. Could be tight for an 800-square-foot apartment, depending on how much stuff you have.
• 10×15 (150 sq ft) : More appropriate for a two-bedroom apartment. This would likely give you enough space for an 800-square-foot apartment, especially if you have several pieces of large furniture or appliances.
• 10×20 (200 sq ft) : Suitable for a multi-bedroom house and would provide ample space for an 800-square-foot apartment.

Questions staff members should ask:

• Furniture Size : Do you have bulky furniture like sofas, beds, or dining tables?
• Appliances : Will you be storing a fridge, washer, or other large appliances?
• Boxes : The number and size of boxes can add up quickly.
• Vertical Space : Remember, you can stack items to take advantage of vertical space.

Marketing Your Self Storage Business

You may wonder, “what is marketing for a self storage business, anyway?” Your strategy should include building an online presence, with at least a website and Facebook page. Our website startup guide can walk you through how to create one and what to include.

You can do lots of marketing offline. Definitely join your local Chamber of Commerce, where you can network with other business owners. If there’s a military base or educational institution in the area, see if you can post information about your facility with those entities.

Embracing Technology: Online Bookings and Security

There are software solutions specifically for self-storage management that help with online bookings, payment processing, and security monitoring.

For example, a new client can book entirely online. The new client is given an access code to use on a keypad which will open a gate into the facility. An online map of the business gets the client to the storage unit. A combination lock is on the unit, and a keyed lock is inside the unit for the customer to use. The customer drops the combination lock in a dropbox.

Security monitoring can be done remotely using cameras and live feeds. Also, a camera or cameras are positioned so that the license plate of each vehicle entering/leaving the facility is recorded.

Customers will choose one self-storage business over another based on the ease of booking and security monitoring.

How to Start a Storage Unit Business with No Money

It’s challenging to start with no money due to the costs of land, construction, and operation, but leasing existing structures for conversion might be an option. Some also start small with just a few units.

It may be possible to start a facility by partnering with a property owner, such as the owner of a vacant warehouse or fenced lot. If a space is unused, the property owner may be willing to lease the property to gain some income from it.

Container-based storage units could be an option for that type of arrangement. The container is dropped at the client’s residence or business to be filled. When full it is picked up and brought to the storage facility. It can be delivered to a new location when the customer is ready for it.

Navigating the Challenges of a Self Storage Business

Though there are many benefits of running a storage business, there are also challenges. Here are some of the most common:

• Nonpayment : Customers not paying fees.
• Vacancies : Keeping units filled.
• Security : Theft or vandalism.
• Maintenance : Regular upkeep is essential.

FAQs: How to Start a Self Storage Business

How profitable are self storage businesses.

The self-storage business has the potential to be profitable, especially when well-located and well-managed. Profit margins can be decent due to the low overhead after initial setup.

Earnings can vary widely based on size, location, and other factors. Some estimates suggest profit margins between 11% and 20%, but this can fluctuate.

What security measures are needed for a self storage facility?

24-hour video surveillance is a must. Also, the facility should be physically checked, especially its fenced perimeter, at a minimum of two times daily.

If the owner of the facility is going to be away on business or vacation, be sure to ask the local law enforcement entity to make patrols in the area.

What is the best location to start a self storage unit business?

The best location for starting a self-storage business is one where the area isn’t saturated with similar entities.

The self-storage unit business should be positioned in a growing area, and be situated along a road system which provides easy access to customers driving a truck and trailer, or large cargo vans and vehicles.

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How To Start a Storage Business

Our Comprehensive Guide to Launching a Profitable Self-Storage Rental Unit Business in 2023

We’re about to dive deep into the thriving, fast-paced world of the self storage business. 

Believe it or not, this under-the-radar sector of commercial real estate has been steadily growing, churning out a staggering $39 billion in annual revenue as of 2023, with the U.S. leading the charge. It’s a veritable gold rush, and it’s time you staked your claim.

So, you might be thinking, “That sounds great, but how do I start a self-storage business?”

Don’t worry, we’ve got your back.

In This Article

Flexible Pricing

Brand awareness, customer service, property selection, getting to grips with the landscape of the mini storage unit business, identifying the key drivers of demand when starting a self-storage business, licenses and permits, zoning laws, business structure, average occupancy and facility size, construction costs, technology and operations, revenues and profit margins, startup costs, financing options, establish a strong brand identity, build a robust online presence, implement a referral program, collaborate with local businesses, deciphering the average cost, implementing a pricing strategy, the most in-demand cities for self storage units, revenue generation, wrapping up: starting and running a successful self storage business – a recap, self-storage keys to success.

Adapt your storage unit prices to the ever-changing demand in your local market.

Integrate your company into the community and make sure residents know who you are!

Meet your customer’s needs to reduce turnover and increase word-of-mouth advertising.

Find land that is affordable, yet accessible. Work with a real estate agent to identify the best fit.

This comprehensive guide is packed to the brim with all the crucial information you’ll need. From breaking down financial projections to unraveling the complexities of operational strategies, and even unveiling insights from industry case studies, we’ve left no stone unturned.

After navigating through this guide, you won’t just understand the ins and outs of how to kick-start a storage business, you’ll be pumped and ready to plunge into your very own storage unit venture.

So, are you ready to turn the key and open the door to your future in the self storage business? 

Let’s hit the ground running!

Let’s flip the lid and take a peek at the vast expanse of the self-storage industry. Now, if you’re wondering whether there’s room for one more in this arena, let’s crunch some numbers. As of 2023, this buzzing beehive of a business is generating a hefty $39 billion in annual revenue right here in the U.S. alone. That’s no small change, my friends! And get this, the U.S. is not just playing in the big leagues, it’s practically owning the entire stadium, accounting for 90% of the global self-storage inventory.

But what about the competition, you ask? Well, there’s no sugarcoating it – the storage business is a bustling marketplace. With over 182,000 storage businesses operating nationwide, you’re certainly not alone. But don’t let that intimidate you! This number also serves as a testament to the industry’s robust nature and the vast demand for storage space.

The beauty of the storage unit business lies in its versatility. From folks looking to declutter their homes to businesses in need of extra space storage, there’s a demand across the board. And that’s precisely what makes this business such a good bet. It caters to a need that’s not going away anytime soon.

Starting a self storage business may seem like a daunting task, but with the right plan, resources, and a dash of entrepreneurial spirit, it’s a mountain you can conquer. So, are you ready to ride this wave and make your mark in the storage industry? Let’s roll up those sleeves and get down to business!

Now, let’s get down to brass tacks and look at who is driving the demand in the mini storage business. As a potential new business owner, understanding consumer demand is the compass that’ll guide your storage unit business towards success. Here’s a snapshot of the movers and shakers in the storage market:

• The Nomads: With life on the move becoming the norm, moving remains the primary reason folks seek out mini storage solutions. Be it a job relocation, downsizing, or even a gap year spent globetrotting, having a safe space to store their belongings offers peace of mind during these transitional periods. So, if you’re wondering how to start a self storage business that resonates with this demographic, consider offering flexible rental terms and hassle-free access to the storage units.
• The Space Savers: Did you know that over 1 in 5 renters in the U.S. utilize self storage units? That’s a significant market slice to cater to! From apartment dwellers looking to declutter their space to small businesses needing extra inventory storage, the demand spans across various user groups. Offering a range of unit sizes can help you cater to this diverse clientele.
• Generation X: Representing a considerable user group within the self-storage industry, Gen Xers often require storage space for myriad reasons. From moving homes to storing inherited items, their demand for storage facilities is quite robust. To start a storage business that appeals to this demographic, you might want to consider offering services like controlled storage or extra space storage.
• The Ladies: Female renters constitute another significant user group in the self-storage industry. Safety and cleanliness are often high on their priority list. To attract this demographic, focus on ensuring well-lit facilities, 24/7 surveillance, and immaculate storage units.

It’s clear as day that the storage business is not a one-size-fits-all kind of deal. The key to running a successful storage business lies in understanding the unique needs of these consumer groups and tailoring your services to meet them. And with the right approach, you could be well on your way to turning your business idea into a thriving self-storage business in 2023!

Comprehending Legal and Regulatory Essentials for Running a Self Storage Unit Business

When you’re ready to start your mini storage business, it’s crucial to get your ducks in a row when it comes to legal and regulatory requirements. It might seem like you’re jumping through hoops, but each step is essential for getting your business off the ground and avoiding potential hiccups down the line. Here’s a breakdown:

Every business, including a storage facility, requires specific licenses and permits to operate legally. Typically, you’ll need a general business license, but depending on your location and the nature of your business, additional permits may be required. For instance, if your self-storage unit business plans on offering RV storage, you might need extra permits. Remember, it’s important to register your business and open a business bank account to keep your finances in order.

Do you know the saying, “location, location, location”? Well, it’s not just about finding a spot with high demand. Zoning laws can dictate what type of business you can run in certain areas. These laws vary widely, so you’ll need to check with your local planning or zoning department to ensure your storage facilities are in compliance.

Here’s the deal: starting a self-storage business in 2023 without the right insurance policies is like walking a tightrope without a safety net. Different types of insurance, such as property insurance, liability insurance, and workers’ compensation insurance, will protect your business from potential financial losses. It’s also worth considering specialized insurance that covers customers’ belongings in storage.

Deciding on your business structure isn’t just a box to tick—it’s a decision that can impact your business in many ways, from how much you pay in taxes to your personal liability. You can choose to set up as a sole proprietorship, partnership, corporation, or Limited Liability Company (LLC). Each type of business entity has pros and cons, so it’s essential to get advice from a professional or the Small Business Administration.

Starting a storage business involves more than just renting out storage units—it requires a good understanding of the legal and regulatory landscape. However, with a little bit of elbow grease and the right guidance, you can navigate these waters and launch your business with confidence. 

Planning Facilities and Operations for Your Startup Self Storage Business

Starting a mini storage business is no small task—it requires careful planning and efficient operations management. It’s not just about having space; it’s about making the best use of that space and providing exceptional customer service. To give you an idea of what you’re stepping into, here’s a bit of data and a few considerations for you.

If you’re thinking about starting a storage company, the numbers are promising. In the U.S., the average occupancy rate for storage facilities sits at an impressive 96.5 percent.

When it comes to facility size, the average mini storage facility in the U.S. covers approximately 56,900 square feet. This doesn’t mean your facility must fit this mold—it’s just the average. Your facility size will depend on factors like location, demand, and your business plan.

When it comes to construction costs, figures can range from $1.25 million to $3.5 million. The costs can vary depending on factors like location, land cost, facility size, and construction materials.

Remember, starting a business is an investment, and the initial costs can be steep. However, with the right planning, management, and a good business loan, you can navigate these costs and set up a profitable storage unit business.

In today’s digital age, the incorporation of technology into your storage business operations is more of a necessity than a luxury. There’s a wealth of management software and online booking systems available that can streamline your operations and enhance the customer experience. Consider the following:

• Management Software : These tools can help you track your occupancy rate, manage rental rates, and handle other administrative tasks.
• Online Booking Systems : These can offer convenience to your customers, allowing them to book storage units at their leisure and streamline the rental process.
• Security Systems : High-quality surveillance systems and access control are a must for any self-storage unit business. Customers need to know that their belongings are safe.
• Website : Your business online is essential in this digital age. An intuitive, user-friendly website can help you reach more customers and provide them with the information they need about your storage services.

Starting a self storage business might seem daunting, but with the right planning and a clear understanding of the industry, it’s a journey you can confidently embark on. Remember, every business requires dedication and hard work—yours will be no exception. So, are you ready to take the leap?

Financial Aspects to Consider: From Business Plan to Small Business Loan

Money makes the world go ’round, and it certainly sets the wheels in motion for your storage business. Understanding the financial aspects, from revenues and profit margins to startup costs and financing options, is crucial. So let’s dive into the numbers, shall we?

Let’s talk earnings. The average annual revenue for a self-storage business is about $450,000, boasting a healthy profit margin of 41%.

These figures can vary based on factors like location, unit sizes, number of units, and additional services you may offer. So, while you might start a bit lower as a newcomer, with strategic planning and excellent customer service, there’s potential for growth.

The start-up cost for a mini storage business can seem a tad intimidating, ranging from $1.5 million to $2.4 million, averaging around $2 million. These figures account for land acquisition, construction, operational setup, and initial marketing efforts.

While it might seem like a lot, remember that starting a business is a significant investment. It’s about putting in the capital now to reap the benefits later.

With numbers like these, it’s no wonder you might be considering financing options. One viable route is through SBA (Small Business Administration) loans. These loans are designed to help entrepreneurs like you get their dreams off the ground.

• SBA 7(a) Loans : This is the most common type of SBA loan. It can be used for a variety of purposes, including purchasing land or buildings, construction costs, or even as working capital.
• SBA CDC/504 Loans : These loans are specifically for purchasing major fixed assets like land or buildings. If you’re looking at building a new facility, this could be a great option.

Remember, it’s crucial to have a solid business plan when applying for these loans. The lenders want to see that you’ve thought things through and have a plan for making your business profitable.

The journey of starting a self storage business might seem daunting, especially when you’re staring at these numbers. But don’t let it deter you. With the right planning, a clear understanding of your costs, and the help of financial tools, you’re one step closer to opening for business. Remember, every successful business started with someone taking that first daunting step. Are you ready to take yours?

Mastering Marketing and Customer Acquisition for Your Self Storage Business

In a world where competition is fierce and standing out is vital, setting up a winning marketing and customer acquisition strategy for your storage business is a must. From brand identity to digital marketing, let’s roll up our sleeves and dive into the nuts and bolts of getting your business noticed and attracting customers.

A strong brand identity sets your business apart from the competition. This goes beyond just your business name. It includes everything from your logo and tagline to your company’s mission and values.

• Choose a Unique Business Name : Research existing storage businesses to avoid duplication and check if the name is available for trademark. Your business name should be easy to spell, pronounce, and remember. It should also hint at the services you provide. Use tools like a business name generator for inspiration and don’t forget to check domain availability for your website.
• Design a Memorable Logo : Your logo should reflect the nature and values of your business. Consider hiring a professional graphic designer who can bring your vision to life. Tools like Canva also offer easy-to-use design templates for those on a budget. Remember, your logo will be on your website, marketing materials, and possibly even on the signboard of your storage facility, so it’s worth the investment.
• Define Your Mission and Values : This involves a deep understanding of your business, your goals, your customers, and the market you operate in. A mission statement should clearly communicate what your business does, who it serves, and how it does it. Your values should reflect the principles and beliefs that guide your company’s actions. These will help you to create a business culture and a brand that resonates with your target audience.

In 2023, your digital footprint matters more than ever. From your website to social media, make sure your self-storage company is easy to find and hard to forget.

• Website : Your website is your virtual storefront. Make sure it’s clean, easy to navigate, and mobile-friendly. Highlight your services, provide clear pricing information, and include a simple booking system. It’s also crucial to have your contact information prominently displayed.
• SEO : SEO, or search engine optimization, is about making your website more visible on search engines like Google. This involves keyword optimization, quality content creation, and building backlinks. Consider hiring an SEO expert or using SEO tools like SEMRush or Yoast SEO.
• Social Media : To start, choose the social media platforms where your target customers spend most of their time. Create engaging content that provides value to your followers. This could be tips on how to pack a storage unit or a behind-the-scenes look at your facility. Be consistent in your posting and engage with your followers by responding to comments and messages.
• Google My Business : To set this up, go to the Google My Business website and follow the prompts to add your business. Include as much information as possible, like your address, hours of operation, and photos of your facility. Encourage happy customers to leave reviews to boost your credibility.

Word-of-mouth is a powerful marketing tool. Implement a referral program that incentivizes your existing customers to refer their friends and family.

• Offer Discounts : For every successful referral, you might offer your existing customer a percentage off their next month’s rent. The key is to make the discount enticing enough that customers want to participate.
• Provide Extra Services : This could include providing a free moving truck for a day, offering complimentary moving supplies, or providing a free upgrade to a larger storage unit for a certain period.

Build relationships with local businesses and explore potential collaboration opportunities.

• Moving Companies : Reach out to moving companies in your area and propose a partnership. This could be as simple as distributing each other’s marketing materials or as formal as a referral fee agreement.
• Real Estate Agencies : Similar to moving companies, real estate agencies can be a great source of referrals. Introduce your business and offer promotional materials they can share with their clients.

Last but not least, invest in advertising. This can range from traditional methods like print ads and billboards to digital advertising like Google Ads or social media promotions.

Starting your self-storage business involves many moving parts, and marketing and customer acquisition are crucial pieces of the puzzle. Implementing these strategies will help you attract and retain customers, ensuring your business doesn’t just survive, but thrives in the competitive storage industry. Ready to make your mark?

Pricing Strategies and Revenue Generation in the Storage Unit Business

Taking the plunge into starting a storage business can be a lucrative venture, but let’s not skip over the crucial aspect of pricing and revenue generation. After all, a well-thought-out pricing strategy could be the difference between a storage facility that’s half-empty and one that’s making bank.

The price is a major determinant for customers choosing between different storage companies. As of 2023, the average monthly cost for a storage unit is a cool $100.04. Now, you might be wondering, “How much does it cost to provide these storage units?” Well, that’s where your cost analysis comes in. It’s vital to consider expenses like maintenance, security, and overhead when setting your prices.

For a mini storage business, utilizing market-based and target-based pricing approaches can help you set competitive and profitable unit prices.

Market-based Pricing

This approach involves setting your prices based on the going rate in your specific market. It’s a simple concept – you’re essentially pricing your units similar to (or slightly lower than) your competitors to attract customers. However, it’s vital that you’re still covering your costs and securing a profit.

Target-based Pricing

Target-based pricing, on the other hand, is when you price your units based on the profit margin you aim to achieve. You calculate this by adding your desired profit to the cost of running a storage unit. This approach requires a solid understanding of both your costs and the value your customers place on your service.

While Houston, TX, holds the crown as the most in-demand city for self storage units, it’s not the only city with a buzzing market. The demand for storage units varies greatly from city to city, often in line with factors such as population growth, real estate trends, and local economic conditions. Below is a table highlighting the top five cities in the U.S. for self-storage demand and their average monthly prices.

Los Angeles, CA

The City of Angels comes in second place, with an average monthly price of $112.35 for a unit. Given its dense population and high real estate prices, it’s no surprise that people in LA are turning to self-storage as a space-saving solution.

New York, NY

With space at a premium in The Big Apple, New Yorkers are willing to pay an average of $176.42 per month for storage. This city is a prime example of high demand driving up prices in the storage industry.

Texas makes the list again with Dallas, where the average price for a storage unit is $91.87 per month. The city’s growth, combined with a strong economy, has led to an increased demand for storage units.

Chicago, IL

Chicago, the Windy City, rounds out our top five with an average monthly storage unit price of $98.73. Like the other cities on this list, Chicago’s dense population and urban living conditions contribute to the demand for storage facilities.

Aside from rental income from your storage units, there are other revenue streams to tap into:

• Late Fees : It’s common practice to charge late fees when customers don’t pay their rent on time. Make sure these fees are clearly outlined in your rental agreement.
• Sales of Packing Supplies : You can offer boxes, packing tape, bubble wrap, and other packing supplies for sale at your facility. It’s a convenient option for your customers and an additional revenue stream for you.
• Insurance : Many self-storage companies offer optional insurance coverage for the items stored in their facilities. If a customer chooses to purchase this, it can add to your revenue.
• Truck Rentals : If you have the resources, offering truck rentals can be a profitable add-on service.

It’s worth noting that running a self-storage business requires a keen understanding of your local market and a flexible approach to pricing. Keep an eye on your competitors, stay aware of the need for storage in your area, and adjust your pricing strategy as necessary to keep your business thriving. Remember, starting a self storage business is not just about providing space – it’s about offering a service that meets your customers’ needs at a price they’re willing to pay.

As we wrap up this guide on how to start a self storage business, it’s clear that the storage industry presents a significant business opportunity. With the average occupancy rate of self storage facilities standing at an impressive 96.5% and a robust annual revenue, it’s no wonder entrepreneurs are drawn to starting such a business. However, running a storage business requires a comprehensive understanding of the market, strategic planning, and a credible business plan to ensure success.

When considering the cost to launch a self storage business, it’s crucial to factor in both the initial construction or acquisition costs and the ongoing operational expenses. Remember, there are various ways to open a storage business, each with their pros and cons. For those starting with no money, options like small business loans and other financing alternatives can make your business dreams a reality.

The key to a successful self storage company in 2023 and beyond will be in offering competitive rental storage rates, providing excellent customer service, and staying ahead of the technological curve. The storage market is evolving, and those who adapt will thrive. Don’t forget, the location of your storage units plays a crucial role in your business’s potential success, with cities like Houston, Los Angeles, and New York being particularly in-demand.

In conclusion, starting your own self-storage business is one venture with immense business potential. However, you need to know the ins and outs, from average storage unit prices to ways to generate business income. With this guide as your starting point, you’re well on your way to carving out your own corner in the storage industry. Go ahead, learn how to start, run the business like a pro, and get ready to open for business!

LaunchKit Founder

Tim loves building businesses and has a long history of buying, developing, and selling them successfully. He was featured on Entrepreneur.com as a top online entrepreneur and has now dedicated his career to helping others launch their own business in pursuit of personal and financial freedom.

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As I was reading through your post, one question popped into my mind: With the self-storage market being so competitive, how can new businesses set themselves apart from the existing players and attract customers? With over 182,000 storage businesses operating nationwide, it’s crucial to find unique strategies that can give entrepreneurs an edge. Any ideas?

Hey Michael!

Great question. Pricing and branding would be the obvious first places to start. Undercutting your competition and potentially taking an early loss to get customers in the door could mean a fruitful year 2. On the other hand… investing in high quality marketing efforts from the start could allow you to charge more. Be very careful about selecting a business name that lends itself to a memorable campaign.

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How to Start a Self-Storage Business? A Beginner’s Guide!

• September 18, 2023
• Storeganise

Have you ever thought about starting your own business?

The self-storage market could be perfect if you’re looking for an industry with high demand and significant profit potential. You’ve probably seen storage facilities all over your city and wondered what it takes to get into the self-storage game. This beginner’s guide answers possible questions you may have about the process by walking you through everything you need to know to launch your self-storage business.

Starting a business is never easy, but with some hard work and the tips in this guide, you’ll be well on your way to becoming the next self-storage mogul.

Ready to take the plunge into entrepreneurship? Keep reading to learn how to start a storage business!

Evaluating the Profitability of the Self-Storage Business

You need to evaluate several factors to determine if a self-storage business will be profitable, including the following:

• Pricing strategy
• Startup costs
• Amenities and features
• Staffing requirements

Location, Location, Location

Finding a good location is one of the most significant factors in a self-storage business’s success; the right location can make or break your business. Look for areas with high visibility, easy access, and a large population — industrial parks, business districts, and residential areas are all great options. Make sure there are no competing storage facilities nearby, too.

Pricing Strategy

How much does it cost for a storage unit around your neighborhood?

You’ll want to set competitive rates to attract customers while generating a good profit margin. Study rates of other self-storage businesses in your area to determine a range, then set your prices on the higher end. You can always run promotions and discounts to bring in new tenants and upgrade your pricing later.

Startup Costs

Be prepared for substantial upfront costs, such as land purchasing and construction costs for your facility, marketing expenses, and legal fees. Are you buying storage units or constructing them yourself? Make a detailed budget and business plan to determine if the potential return on investment makes sense. Getting business financing or loans may be necessary to cover costs.

Amenities and Features

Today’s customers want more than just a basic storage unit. Consider offering amenities like climate control, wide driveways, loading docks, carts or trolleys, security cameras, and digital locks. These extras may cost more but will also allow you to charge higher rates.

Staffing Requirements

While self-storage businesses are typically low maintenance, you’ll still need staff to handle administrative work, cleaning, maintenance, and customer service. Decide how many employees you need and factor their salaries into your operating costs and financial projections.

A self-storage business can be very profitable with careful evaluation and planning. However, go in with realistic expectations about the investment required and the challenges involved. Self-storage can provide stable cash flow and income for years if done correctly.

The Pros and Cons of Owning Storage Units

Running a self-storage business has many pros and cons you should consider before diving in.

• Owning self-storage units can be very lucrative.
• People always need extra space for their belongings, so demand remains steady.
• Once your units are built, the day-to-day operations are relatively straightforward. You don’t need specialized training or education to manage the business.
• Another benefit is the tax advantages and deductions of commercial property ownership.
• The initial investment in land and constructing storage units can be pretty expensive. It may take years to become profitable or break even.
• Competition is also increasing in many areas, so you have to work to attract and retain long-term customers.
• Managing and maintaining the property requires ongoing time and money. You must handle security, pest control, unit repairs, landscaping, and more. Delinquent customers who don’t pay rent on time can also negatively impact your cash flow.

Certain benefits like steady demand and passive income are appealing; a promising self-storage profit margin also makes the business lucrative.

However, do your research, develop a solid business plan, and ensure you have enough capital to launch and sustain your self-storage company properly. Self-storage can be an advantageous industry if you go in with realistic expectations and expert guidance from us at Unwired Logic.

Creating a Business Plan for Your Self-Storage Facility in 4 Steps

Developing a solid business plan is critical to building a thriving a self-storage business. A good plan will help you outline your vision, mission, and operational details to determine if the business can be viable and help you obtain funding from investors or loans.

Here’s how to craft a business plan for your self-storage business in four steps:

• Define your vision and mission.
• Analyze the market.
• Create an operating plan.
• Develop financial projections.

1. Define your vision and mission.

Consider why you want to start a self-storage business and what you hope to achieve.

Do you want to provide a needed service to your community? Or are you focused on generating a stable source of income? Your vision and mission will guide all the other details in your plan.

2. Analyze the market.

Research other self-storage facilities in your area to determine potential competitors and see what they offer. Look at the sizes of units, features, locations, and pricing to determine how to differentiate yourself. Also, evaluate your city’s overall demand for self-storage to ensure enough customers support another facility.

3. Create an operating plan.

Figure out the nuts and bolts of how your business will run.

Determine things like:

• The size and number of storage units you’ll offer
• Pricing for different unit sizes
• Staffing needs and job descriptions
• Important policies and procedures
• An initial marketing plan to attract customers
• Required licenses, permits, and insurance
• Automating your self-storage business

4. Develop financial projections.

Create projections for your business’s income and expenses over the next 3–5 years. Factors include purchasing or leasing a facility, building storage units, marketing expenses, staffing, taxes, loan payments, and other overhead. Determine how much revenue you need to generate a profit. These forecasts will show if your business idea is financially viable.

A comprehensive business plan may seem daunting, but it’s crucial to launching a successful self-storage company. Do your homework, make realistic projections, and refine the details to build a roadmap for getting your business up and running. With hard work and persistence, you’ll be on your way to establishing and running a profitable self-storage facility.

Building and Designing Your Self-Storage Units

Building and designing your storage units is one of the most critical aspects of following a successful self-storage business model. The units are your product, so you must ensure they meet your customers’ needs.

Here are four factors to look into when building and designing your self-storage units:

• Size and type
• Access and security

Construction

• Layout and amenities

Size and Type

Offer a range of unit sizes to suit both residential and business customers. Standard sizes are 5×5, 5×10, 10×10, 10×15, and 10×20 feet. You’ll also want to determine if you want to offer climate-controlled, drive-up, and RV/boat storage units. Climate-controlled units, for example, typically charge a premium but attract more long-term tenants.

Access and Security

Your customers want 24-hour unit access, so you’ll need a secure gate system. Consider keypad or card access. Install security cameras to monitor the facility and provide good lighting for customer safety. You may also want to offer unit alarms as an add-on.

Use high-quality and durable materials that will withstand heavy use and weather. Metal roll-up doors, galvanized steel frames, and concrete floors are typical. Make sure the units are weather-resistant and well-insulated. Install sturdy shelving for customers to organize their items.

Layout and Amenities

Design an efficient layout with wide driveways and easy access to all units. Provide amenities like handcarts, dollies, packing supplies, and trash dumpsters. You may also want to include an on-site office, restrooms, and additional parking spaces. Keep everything clean, well-maintained, and looking professional.

Your self-storage units are the foundation of your business. Taking the time to build, design, and outfit them properly will pay off by ensuring happy, long-term customers.

If you need help figuring out the details for your storage units, don’t hesitate to contact the Unwired Logic team . We’re a group of technologists, industry experts and official partners of Storeganise , an established self-storage software solutions provider with years of experience.

5 Tips to Help You Market Your Self-Storage Business for Success

Having a detailed self-storage marketing plan is critical to gaining new customers and ensuring long-term success.

Here are five tips to get started:

Build a website: A professional self-storage website is essential in today’s digital age. It allows potential customers to learn about your business, view photos of your facility and available units, check prices, and rent units online. Storeganise gives you templates so you can build your website in minutes.

Start a blog: Creating an informative blog is a great way to rank higher in search engines and establish authority. You can blog about moving tips, storage solutions, or updates about your facility. Keep your posts friendly and helpful, and be sure to mention related terms like “portable storage,” “climate-controlled storage,” or “RV storage” to improve searchability.

Advertise locally: Publish ads in local newspapers, magazines, and websites. Sponsor nearby events and advertise on community Facebook groups and NextDoor. You may also offer move-in specials and coupons to attract new tenants.

Provide excellent customer service: Offer a hassle-free move-in experience. Greet new tenants warmly and show them available units; explain the rental process and make them feel welcome to ask questions. Provide friendly reminders about payments and lease renewals. Happy customers will leave positive reviews and refer others.

Network: Build mutually beneficial relationships with local moving companies, real estate agents, contractors, and nonprofits. Offer them discounts or commissions for referrals. Attend networking events to make valuable connections and donate storage space or funds to charities and organizations in your area.

With proper marketing and customer service, your self-storage business will thrive. Focus on online and traditional strategies to reach your target customers. And don’t forget that word-of-mouth marketing from happy tenants is the most powerful means of promoting your business.

Frequently Asked Questions

Is owning a storage unit business profitable.

Self-storage is a profitable business if managed effectively; a typical storage business has a profit margin of 41% and is poised to generate $350,000 to $800,000 on average annually.

A self-storage business offers individuals and businesses a secure and convenient solution for storing their belongings. The demand for self-storage facilities is relatively stable and can provide a steady income stream. However, like any business, there are factors to consider, such as location, competition, market demand, and operating costs. Before you start, contact us to guide you on the best way and place to invest in.

Can I invest in self-storage?

Yes, you can invest in self-storage. Investing in self-storage can be lucrative, as the industry has shown steady growth and stability over the years. There are a few ways to invest in self-storage, such as purchasing shares of self-storage real estate investment trusts (REITs), or investing in self-storage properties directly.

However, as with any investment, it’s essential to do your due diligence, assess the market conditions, and consider factors such as location, demand, and potential returns before making an investment decision. Consulting with a financial advisor or real estate professional can guide your investment journey.

Is self-storage recession-proof?

While self-storage can be more recession-resistant than other industries, it’s not entirely recession-proof. During economic downturns, people may relocate, or face financial difficulties, affecting the demand for self-storage units. However, self-storage has historically demonstrated more stability than many other sectors, as people still require storage solutions even during challenging times.

Additionally, well-managed self-storage facilities in areas with consistent demand may be better positioned to weather economic fluctuations. It’s essential to conduct thorough market research and assess the local factors when considering the resilience of self-storage in a specific area.

Do I need planning permission for a container storage business?

The need for planning permission for a container storage business depends on various factors, such as the intended use and location of the containers. In the UK, for example, if you plan to use the containers as permanent structures, you’ll likely need planning permission from your local planning authority.

However, it’s essential to note that container businesses typically require planning approval, so it’s advisable to check with your local planning authority to ensure compliance with regulations.

So there you have it, a quick guide to getting your self-storage business up and running. While it may seem daunting, if you start with a solid business plan, secure financing, find a good location, build or lease storage units, market your services, and provide excellent customer service, you’ll be well on your way to success.

Running your own business is challenging work but also rewarding. You can build something great if you go in with realistic expectations, learn from your mistakes, and don’t get discouraged easily. Starting a self-storage company could be a perfect way to be your own boss and help your community simultaneously.

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• Beginners Guide , Self Storage

Your Complete Guide to Owning a Self-Storage Business

Written by simplystoring team.

Are you ready to embark on an exciting journey into the world of self-storage? Before you dive in, equip yourself with the essential knowledge and strategies to make your venture a resounding success.

From understanding the intricacies of the industry to navigating the legal and financial aspects, our complete guide has you covered. Discover the secrets to setting up and managing a thriving self-storage business, and unlock the potential for growth and profitability. Get ready to turn your passion for storage into a lucrative and fulfilling enterprise. Let’s dive in!

A self-storage business allows you to allow people in need of a storage unit to store their belongings. They’ll not have to struggle with too much clutter at home and in the office. A self-storage business helps clients with the storage of furniture, office, equipment, and more. Owning a business that will help people store their items and declutter their homes and offices can be profitable because many people need such services.

If the idea of starting a self-storage business sounds good, then it’s time for you to make the first step. Here is everything you need to know about starting a self-storage business.

Start With a Market Research

Before you open the doors to your self-storage facility , you first need to conduct some market research. A good grasp of how the market looks like will help gain traction into the business right from the start. Doing some market research will help you understand whether this business is worth the effort, time, and money.

Of course, you understand that people already need the storage facility, but what’s in it for you? You must understand the profit margin of this business and the competition around it. You need to understand how the local market looks like for you.

Start by having a look at your competitors. Remember, there are other people who’ve been there before you, and other businesses are yet to enter the market. Find out the competitors’ prices, their customers, and their marketing strategies. Find out if the competitors are already meeting the market demand and if there’s anything left for you. You don’t want to invest in an already saturated market.

In your research, you should also consider factors such as the weather in your area. Consider whether you need storage for an RV or boat. Consider how valuable a climate-control unit can be valuable in your business location. Think about the unit sizes and the layout of your business. And finally, consult with security advisors for suitable technology and security layout for your facility.

What’s Your Target Market

Your market research must also put into consideration the target market. You need to define your market. Consider targeting customers who’re likely to need your storage facility for a long time basis. People like the military members can pay for storage on a monthly basis when they’re out on duty.

Consider families that are in the middle of a move and need some space for temporary storage. Think about those families that don’t have enough space at home and will rather store their extra items than sell them out. Other customers may be business facilities that are moving or undergoing renovations. They could also be expanding or need extra space for seasonal storage.

Consider the Location

During your marketing process, you should also find out a good location for your business. You don’t want to locate your storage facility where the market is already saturated. A good business should be able to fulfill the demands on the market. It won’t work for you if you place it where there’s no demand. You’re going to have a hard time finding customers in a place where the demand is already met.

Choose a location with good potential for business. You should ensure there are no established competitors already in the area. You need to build your clientele without having to struggle to steal some from your competitors.

Choose an area that’s already populated. Cities with mixed housing solutions can work well. It will even work better if you find areas where people are likely to downsize. You can also choose areas where people live in temporary apartments and are likely to look for storage needs from time to time. Make sure you’ll get the locals who need your services because they’re better customers to start with.

Don’t forget to consider security in the area where you choose to locate your business. As far as you want to make money by attracting many customers, make sure their precious belongings are safe. So, when it comes to your business location, you need to think about traffic, the zone for business development, accessibility, and security. You’ll also need to consider whether you’re going to build the storage unit, buy, or rent.

Plan Your Business

To succeed in your business endeavor, you need to have a clear business plan. Your business plan should contain all the key information for your storage business. The plan should include your findings on the market research, your services, and your management structure. The plan should contain how you plan to run the business for the first few years, including your goals and objectives for these years.

Have a clear plan of what you need to achieve. Do you want to run your business on a part-time basis, or do you want to build a large business that will need much time and money? Based on your answer, you can come up with your estimated startup cost as well as your development plan.

A clear and good business plan will help you source support and financial aid. Many lenders will want to see a business plan before extending their loans. You can even attract good investors to help boost your business plan. Take your time to plan and develop an incredible plan if you want to show a good impression.

Here are the sections you must include in your business plan :

• An executive summary with all the details of your goal and development plan
• A summary of the location, entity, and nature of your business
• A summary of the services you plan to deliver
• A detailed analysis of the market
• Marketing strategies
• Management structure and approach
• A financial plan with all the costs and projections of the first years

Come Up With a Marketing Strategy

How are you going to market your business and get the customers? When you open your business doors, customers are not going to come to you out of nowhere. You’re the one who has to get to them first and introduce your services. That’s where a good marketing strategy and plan comes in.

Marketing your business and finally getting the first customer is not an easy thing. One thing you must know that one method will not work for you. You need to be flexible and adaptive to any approach that can work for your business.

A good marketing plan should contain how you plan to penetrate the market, communicate, and grow your business. You also need to come up with a website for your business. This will increase your credibility and help you command trust. You can also consider digital marketing services once your business starts to grow and bring in some capital.

Don’t forget about traditional marketing methods such as the use of fliers, cards, and posters. Embrace any kind of advertisement that can help put your business get out there and boost it.

Legalizing the Business

The next step is to get your business to stand and open its doors for customers. But that won’t take place without a permit, license, and registration. After getting everything in order, the next step will be to register the business, acquire permits, and get licensing. Visit the website of your state secretary to do all these.

Ensure proper registration and compliance with the tax laws to avoid getting into problems with the authorities. Research the State License and Federal License before you launch your business.  Contact the US Small Business Administration to find out everything you need on licensing and navigating the red tape of your storage facility business.

You should also consider getting an experienced attorney to help you decide on a suitable business entity. You’ll also get a tax identification number so you can comply with the tax laws of your state. Your attorney can also offer you advice on the best grants and financial aids suitable for your small business. You can then open a business bank account and start applying for necessary financial aid.

Consider the Costs of Opening a Self-Storage Business

There is no general cost of opening a self-self-storage facility, although you don’t expect to spend much at the startup stage. The cost depends on whether you’re going to build, buy, or rent . If you’re going to build a new facility, you’ll have to account for the land, the building materials, and the builders. The cost of buying or renting will depend on the location and size of the facility.

You also need to consider the size of the facility in your budget. A small facility that will only run part-time will cost less than a larger one that requires more time. You also need to compute ongoing expenses. These include maintenance, staff salaries, equipment like temperature control, loan debt, marketing expenses, insurance , security, and utilities. If you’re going to operate online, then you need to budget for the costs of hosting a website.

Remember, the business might not be able to pay for itself during the first few days. The costs you’re going to spend to get your storage facility off the ground are called sunk-up costs. You must have a plan of where you’re going to get the money to finance all the expenses before the business catches up.

Check the Financing Options for a Self-Storage Facility

When the costs of starting your self-storage business are too high for you to finance, you don’t have to worry because there are various financing options for you. Consider various options that can help get your business to its feet. One of the options includes the small business association (SBA) that offers loans to self-storage investors. SBAs can be highly competitive, but it’s worth giving a short.

Another great alternative is conventional financing. You’ll need at least 20% down to apply for these loans. This will not include working capital or improvements. Another option that gives you more chances is owner financing. This is where the owner offers to finance for the buyer. Others that are not so popular include crowdfunding, private funding, and bridge loans.

Develop an Online Presence

The internet is taking over all kinds of businesses. A self-storage facility that doesn’t have an online presence is none existent. You need a strong online presence to reach your customers and build credibility. Make sure you have an informative website that’s easy to navigate. A user-friendly website will ensure you convert any customer that visits your site.

People will always go online to look for a self-storage facility near them. If your storage facility has an online presence, its name will appear in the search. Adopt various online strategies to make your storage facility visible to online customers.

Take care of the reviews on your site, as many people will go through the online reviews before hiring you. Any negative review on your site spells doom in your search for customers.

You can also consider creating various social media pages for your site where you can interact with your customers and answer their queries. Establish a strong online presence on social media platforms such as Facebook, Instagram, and LinkedIn. Most of your customers are always on these platforms, and you need to follow them there. A social media platform is a great way to show the human side of your business as you engage and answer the queries of your customers.

Map Out the Challenges and Threats to Your Business

No business ever operates smoothly, whether it’s a startup or an established one. You’re likely to face several threats and challenges that might even push you out of business. Map out the potential obstacles that are likely to get in your way and work out how you’re going to tackle them.

Some challenges may start when you need to register your business and establish a legal entity. You might face some strict rules and requirements that seem impossible to achieve. You’ll need higher professionals such as lawyers to help you register your business and acquire a permit.

Other threats include theft and unforeseen disasters such as water damage. You’ll need to ensure your business right from the day you open its doors. Customers always have confidence working with insured businesses as they’ll get compensated in cases of damages or theft. Without a good insurance policy, you might lose your business in case of a disaster as you might not be able to compensate your customers.

Invest in a Climate-Controlled Unit and Other Tools

One of the essential equipment you need to have in your facility is a climate control unit. Theirs is a tremendous demand for storage facilities with a climate control unit, especially among clients who will store their items for an extended period. If you don’t invest in this unit at your startup levels, you’re still going to consider it in the future.

A climate control unit will give you more competitiveness in the market. Just the impression that your facility has premium equipment is enough to attract the attention of your customers. Some of your customers will store highly prized possessions that you can’t expose to heat, cold, and humidity.

A climate control unit will ensure the storage room remains 55 and 88 degrees even with constant weather changes. This unit will cost you a lot to invest in, but it’s worth it because you’ll be able to keep your client’s possessions for a long time and not expose even a single one to humidity and high temperatures.

Here is a list of items that you’ll need to store in a temperature control unit:

• Leather and wooden furniture
• Music instruments
• Electronics
• Household appliances

Final Remarks

A self-storage unit is a good investment, but only if you take your time to think about the ins and outs of the business. Like any business, self-storage is highly competitive, and you need to come up with the best strategies to cut through the competition. Expect to put a lot of hard work into it because the road to developing a business is not smooth.

You need to cut through all the aspects of running your business, including all the paperwork, financial aspects, and marketing. You also need to come up with a solid work ethic and dedicate yourself to the community to succeed. If you do your research and find out all the ways to overcome challenges, you’ll end up a successful entrepreneur for the self-storage business.

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How to Start a Storage Business in 14 Steps (In-Depth Guide)

Updated:   March 6, 2024

BusinessGuru.co is reader-supported. When you buy through links on my site, we may earn an affiliate commission. Learn more

Self storage is getting more popular. As of 2023, the market hir more than $58 billion with a projected compound annual growth rate (CAGR) of 7.5%. As of 2030, the storage industry could reach $89.9 billion.

Careful site selection, competitive pricing, and utilizing technology to maximize efficiency will be key factors in successfully starting a storage business.

In this guide, we’ll explain how to start a storage business. Topics include market research, competitive analysis, registering an EIN, obtaining business insurance, and more. Here’s everything you need to know to start a self storage business.

1. Conduct Storage Market Research

Market research is important in a multitude of ways to a new self storage facility. When starting a self storage business you need to know your target market, the local market saturation, competitor pricing, service trends, and more.

Several key factors are driving this continued growth and presenting a strong market opportunity:

• Population growth and urbanization lead to more demand for storage. The US population grew by 7.4% between 2010-2020 according to US Census data . The higher population density in urban areas also fuels demand.
• Downsizing trends like tiny homes and minimalism require more separate storage space. Google searches for “tiny homes” have grown over 500% since 2010.
• Small businesses need offsite space for inventory, equipment, files, etc. Small business revenue has grown 27% over the past 5 years.
• Consumers want storage for recreational vehicles, collectibles, seasonal items, and more. RV ownership hit a new high in 2021 with over 11 million households owning an RV so offering RV storage space is a viable idea.
• Moving/relocations create temporary storage needs. US relocation rates have increased in recent years, with almost 16% of Americans moving each year per US Census data .

The self-storage business model has several attractive attributes for investors:

• Steady and predictable cash flow once occupied. Typical occupancy rates range from 85% to 90% for established storage facilities according to industry data.
• Limited staffing requirements compared to other business models. Many locations can be efficiently operated by just 1-2 employees.
• Scalable by adding new units/locations. Storage can be expanded on existing land or replicated with new facilities.
• Recession resilient. Demand held up reasonably well even during the 2008 financial crisis.
• Leverage. Traditional financing is available at 60% to 80% loan-to-value ratios.

While initial capital outlay can be significant, storage offers an essential service with proven demand. Careful underwriting and site selection to choose locations with strong populations and job growth is key. Utilizing industry-specific technology platforms and implementing best practices can provide a significant advantage.

2. Analyze the Competition

Thoroughly evaluating the competitive landscape is crucial when starting a storage facility. This involves assessing both local brick-and-mortar rivals as well as analyzing your online presence versus competitors.

Some ways to evaluate local self storage businesses include:

• To evaluate nearby storage businesses, drive around the area and note current facilities, occupancy rates, conditions, and amenities.
• Talk to managers to learn pricing. Check reviews on Google Maps to see feedback. Look for well-rated facilities doing high volume.
• Consider the distance to the closest competitors. Having facilities very close together eats into demand. But being too far reduces convenience.
• Optimal distance is 2-3 miles according to industry experts like Jake Ramage.
• For online competition, search industry keywords on Google to see which rivals rank highest. Check their websites for design, messaging, ease of booking, pricing, and promotions.
• Set up Google Analytics and Search Console for your website to track traffic sources, top pages, conversions, and keywords. See where you rank for target terms vs. competitors.
• Build online reviews via Google, Facebook, and industry sites like SpareFoot . Positive reviews build credibility and SEO.
• Use paid ads via Google, Facebook, and Instagram to gauge customer demand and cost per click/conversion in your market. Start limited testing early.

Ongoing competitive analysis lets you continually refine pricing, offerings, and marketing to stand apart. This market intelligence fuels smarter strategies to compete.

3. Costs to Start a Storage Business

Starting a storage facility requires significant upfront capital investment, with ongoing expenses related to staffing, property maintenance, utilities, taxes, and financing costs. Here are typical start-up and ongoing costs to expect:

Start-Up Costs

• Land Acquisition: $500,000 to $2 million+ depending on location and acreage needed for planned storage capacity. Prime locations near population centers typically start around $1 million.
• Permits & Fees: $5,000 – $20,000 for zoning approvals, construction permits, municipal fees, and professional services.
• Site Development: $150,000 – $500,000 for grading, paving, fencing, lighting, gate system, security cameras, and utility access.
• Storage Construction: $50 – $100 per square foot based on materials (steel vs wood) and unit sizes. A 50,000 sq ft facility would cost $2.5 – $5 million.
• Office & Amenities: $100,000+ for leasing office, restrooms, moving carts, and package supplies.
• Initial Marketing: $20,000 – $50,000 for brand identity, website, brochures, signage, and grand opening.
• Start-up Admin & Professional Fees: $30,000 approximately for business licensing, legal fees, and accountant.
• Initial Staffing Costs: $5,000 – $10,000 for training wages, uniforms, and background checks.
• Total Start-up Costs: $2 million – $8 million depending on size and components.

Ongoing Costs

• Staffing Expense: Manager ($35k salary), assistant mgr ($30k), part-time staff ($15/hr). Total around $100,000/year.
• Property Taxes: 1-1.5% of assessed value annually. Could be $40,000+ on a $5 million facility.
• Insurance Premiums: $10,000 – $20,000 may cover property, liability, worker’s comp.
• Utilities: Electricity, gas, water, phone/internet. Around $6,000/month or $72,000 annually.
• Financing Costs: 5-7% on bank loans or 8-10% on private capital. $200,000+ annually on a $5 million build.
• Maintenance & Supplies: $7,500+ monthly for repairs, cleaning, carts, locks, admin supplies.
• Advertising: $1,500+ per month for PPC ads, flyers, signage.
• Professional Services: Legal, accounting, IT, marketing help. $3,000+ monthly.
• Miscellaneous Expenses: Credit card fees, theft/damage, taxes. Estimate 5% of revenue.
• Total Ongoing Costs: $600,000+ per year excluding loan payments.

Starting a storage facility requires major capital outlays upfront. However, the model can generate strong cash flow over time given adequate occupancy. Conducting diligent cost analysis and creating detailed financial projections is key to determining viability.

4. Form a Legal Business Entity

When establishing a storage business, the legal structure you choose determines taxation, liability protection, and ease of expansion. For most storage entrepreneurs, a limited liability company (LLC) offers the best blend of benefits.

Sole Proprietorship

A sole proprietorship is the simplest structure with no formal registration required. The owner reports all income and expenses on their tax return. However, the owner has unlimited personal liability for debts and lawsuits against the business. This poses a major risk when accidents occur like customer injury on the property.

Sole proprietorships also lack credibility with banks/investors and have limited options for bringing on co-owners. While simple, this structure has considerable downsides for those starting a storage facility.

Partnership

A partnership allows two or more co-owners to establish and grow a storage business together. Profits pass through to owners who report their share of income on personal tax returns. However, similar to sole proprietors, each partner has unlimited personal liability.

The actions of one partner can expose the other’s assets to risk. Partner disputes can also cause major issues. Overall, partnerships have many drawbacks for those launching a storage startup.

Limited Liability Company (LLC)

Establishing an LLC provides legal and tax advantages including liability protection and pass-through taxation. LLC owners have limited liability–the company’s debts/lawsuits are not the responsibility of individual members. An LLC limits exposure if customers get injured on the property.

LLCs also allow unlimited owners, making it easy to bring on investors and partners. Owners can get taxed at the individual rate while avoiding corporate double taxation. LLCs provide the most flexibility and protection for storage entrepreneurs.

Corporation

A corporation is a more complex entity with additional regulations, legal requirements, and corporate taxes. Corporations limit liability for shareholders but have double taxation where income is taxed at both the corporate and shareholder level.

A corporation can raise investment capital by issuing stock but often makes sense at a larger scale. Overall an LLC provides simplicity and flexibility for the needs of most storage startups.

5. Register Your Business For Taxes

One key legal step for starting a storage business is obtaining an Employer Identification Number (EIN) from the IRS. An EIN acts like a social security number to identify your business for tax and banking purposes.

Acquiring an EIN is mandatory if you have employees, operate as a corporation or partnership, or need business bank accounts. An EIN is free and easy to obtain directly from the IRS.

Here is the step-by-step process for applying online:

First, gather any information you may need like names/SSNs of owners, business name, and address. Then go to the IRS EIN Assistant and click “Apply Online Now”.

You will answer a short eligibility questionnaire. When asked the reason for applying, select “Started a new business”.

On the application, provide basic information about your storage business – legal name, address, ownership structure, start date, and industry classification.

Submit your contact details and owner/officer information. The primary person listed should match the identified owner/founder.

Carefully review the application summary before submitting it to ensure accuracy. Once submitted, you will receive an EIN assignment immediately on the screen.

The EIN is also mailed to you within 2-5 weeks for your records along with instructions for filing requirements.

With your EIN, you can open business bank accounts, apply for required permits/licenses, hire employees, and operate legally.

In addition to the federal EIN, make sure to register with your state to obtain sales tax IDs/permits, any needed specialty licenses, and cannabis permits as applicable. Many states allow online or one-stop registration.

6. Setup Your Accounting

Maintaining accurate financial records is critically important for storage entrepreneurs. Proper accounting helps optimize profits, manage cash flow, track deductible expenses, and stay compliant with IRS regulations.

Accounting Software

Using small business accounting software like QuickBooks can automate much of the process. QuickBooks seamlessly syncs with bank/credit card accounts to log transactions and generate financial reports. This eliminates manual entry and reduces errors. For around $20/month, Quickbooks provides essential accounting capabilities tailored for storage businesses.

Hire an Accountant

However, it is advisable to partner with an accountant for additional services like:

• Setting up a foolproof bookkeeping system
• Handling payroll, taxes, and quarterly filings
• Performing reconciliations and auditing books
• Guiding tax planning and strategy
• Preparing and filing annual tax returns

A full-service accountant may cost $1,000 – $3,000 annually but provides invaluable expertise. At a minimum, engage an accountant for year-end tax preparation to maximize deductions and avoid IRS issues. Expect fees of around $500+ for tax prep.

Open a Business Bank Account

Maintaining completely separate finances for your storage business is crucial. Open dedicated checking/savings accounts to keep personal and business funds apart. Never co-mingle money to simplify accounting and avoid tax headaches.

Apply for a Business Credit Card

Also, apply for a small business credit card in your company’s name. Business cards don’t use your credit – you’ll need to provide your EIN, business financials, and ownership information. Approved limits are lower than consumer cards but sufficient for operating expenses.

7. Obtain Licenses and Permits

Before opening your storage business, it is essential to acquire all required federal, state, and local licenses and permits. Get information on federal licenses through the U.S. Small Business Administration . The SBA also offers a local search tool for state and city licensure requirements.

Business License

Nearly all jurisdictions require a general business license to commercially operate within city/county boundaries. Business licenses verify you are compliant with zoning ordinances and registered with the Secretary of State. Fees are typically under $100 annually.

Building Permits

Construction projects like developing a storage facility require multiple permits for each phase. These include grading permits, utilities permits, demolition permits, and building permits for the units themselves. Each permit has its application process and fees based on the scope of work.

Fire Department Permits

You may need permits for the fire suppression system, fire alarms, emergency lighting, hazardous material storage, and more. Fire inspections are also required to ensure life safety before opening. Keeping up with the fire code is crucial for any commercial property.

Signage Permits

Most areas regulate the types, sizes, and placement of business signage. You’ll need approvals for monument signs, building signs, directional signs, and any digital displays. Make sure to follow sign codes for proper permitting.

Stormwater Management

New construction requires plans for erosion control and preventing contaminant runoff. You may need stormwater drainage permits and regular inspections after the buildout. Proper drainage is also important for customer access.

Zoning Approval

Your property must be properly zoned for commercial use as a storage facility. If not, you’ll need to file for a zoning variance with the planning department before proceeding. Even with correct zoning, site plans usually require separate zoning permits.

8. Get Business Insurance

Carrying proper business insurance is strongly advised when starting a storage facility to mitigate risk. Without coverage, a single incident could lead to financial ruin.

Insurance protects against scenarios like:

• The customer slips and falls, sues the facility, and wins a $100k+ judgment.
• An electrical fire sparks from outdated wiring and destroys half the storage units, causing $1 million in repairs.
• A disgruntled employee deliberately crashed a truck into the building, resulting in $500k of damage.

The right insurance policies safeguard against the many threats that can affect a storage business. Common coverages to carry include:

• General liability – protects against bodily injury, property damage, and personal injury claims.
• Property – covers damage to your buildings, equipment, and inventory from perils like fire, storms, theft, and vandalism.
• Business interruption – provides an income if you cannot operate due to a covered loss.
• Workers’ comp – mandated coverage for injuries/illnesses employees sustain on the job.
• Umbrella liability – additional liability limits above general liability and other policies.

To get insured, first, assess your risks and required coverages. Look for an insurance brokerage experienced in commercial policies. They will shop rates with multiple providers. You’ll need to provide details on operations, premises, security, occupancy, and financials. Coverage for a $5 million storage facility may run $25,000 annually.

Protect your livelihood by securing business insurance before opening. The Small Business Administration provides guidance on the types of policies to consider. Don’t wait until it’s too late!

9. Create an Office Space

Having a professional office space helps meet with prospects, and handle paperwork, and administrative tasks when launching a storage business. The right office setup projects an established image while providing functionality.

Home Office

Working from home can offer convenience and cost savings initially. Expect around $2,000 in expenses for a basic home office setup—desk, computer, phone, filing cabinets, and supplies. However, working where you live has downsides like distractions and lack of separation between work/personal life. It may also feel unprofessional to meet clients at your residence.

Coworking Space

Shared coworking spaces like WeWork provide an upscale, collaborative environment for around $300/month per desk. Coworking offers office infrastructure without the hassle of leasing your own space. Networking with other entrepreneurs is also beneficial. The only potential downside is the lack of privacy for sensitive conversations.

Retail Office

If planning to operate an on-site leasing office, properly furnishing this space creates convenience for renters. Invest around $5,000-$10,000 for reception seating, desks, filing, decor and supplies. An inviting rental office also projects professionalism. Ensure compliance with ADA and local ordinances.

Commercial Office Lease

Leasing dedicated office space provides the most professional setup but also carries the highest cost. Expect to invest around $20,000 for the first month’s rent, security deposit, and office build-out/furnishings for 750-1,000 square feet of space. While optimal for meeting clients, the ongoing expense may not make sense initially for tighter budgets. virtual office services could be an interim solution.

10. Source Your Equipment

Launching a storage facility requires acquiring ample equipment for site construction, units, office furnishings, and daily operations. Here are the top options for procuring necessary materials and equipment:

Purchasing shiny new equipment from dealers and retailers provides reliability and warranty protection. Storage-specific suppliers like Janus International and Trachte Building Systems offer steel storage units, doors, and building components for delivery and installation.

Buying Used

Major savings can come from buying gently used equipment from prior storage operators. Check industry forums, Craigslist , Facebook Marketplace , and auction/liquidation sites for constructed units, office fixtures, surveillance systems, and maintenance equipment coming from storage businesses that closed.

Renting certain equipment on a short-term basis can make sense for the construction phase. Consider renting excavators, bulldozers, trenchers, and compactors rather than purchasing this heavy machinery. Cranes and boom lifts may also need temporary renting during vertical building. Avoid buying equipment needed only temporarily.

Leasing storage units themselves through a dealer partnership lets you launch operations without huge upfront unit purchases. Look for lease-to-own options so monthly payments eventually gain you ownership.

11. Establish Your Brand Assets

Developing a strong brand identity is crucial for storage startups to stand out, connect with customers, and build recognition. Essential steps include:

Getting a Business Phone Number

A professional business phone number establishes credibility and provides a centralized contact option for prospects. Options like RingCentral offer toll-free and local numbers with call routing, voicemail, and analytics starting around $30/month. A dedicated business line makes your storage operation look legit.

Creating a Logo and Brand Assets

A logo encapsulates your brand visually. Consider bright colors and simple designs given the storage industry. Use style guide elements like fonts, colors, and graphic treatments consistently across platforms. Services like Looka offer fast logo creation starting at $20.

Business Cards and Signage

Professionally printed business cards establish credibility when meeting vendors, investors, clients, and more. They also make it easy for happy customers to refer others. Signage like monument signs, directionals, and building signage help route customers on-site. Order affordable cards and signs from Vistaprint .

Purchasing a Domain Name

Secure a domain name that matches your storage brand for customer discoverability and an authoritative web presence. Use target keywords if possible. Extensions like .com and .storage work best. Registrars like Namecheap offer domains for around $15/year.

Building a Website

Every business needs a website to showcase services, attract leads, and publish info for customers. Build one yourself via user-friendly website builders like Wix or hire a freelancer from Fiverr for around $500. Keep it simple initially. Focus on easy booking, basic pages, and establishing your brand online.

12. Join Associations and Groups

Joining relevant organizations and networking groups is highly beneficial for storage facility owners to gain insider knowledge, partnerships, and marketing exposure. Great options include:

Local Associations

Area storage associations provide the chance to regularly connect with other local facility owners and managers. Top groups include regional chapters of the Self Storage Association and independent associations like the California Self Storage Association . Membership fees are reasonable (under $500/year) for access to events, resources, and promotions.

Local Meetups

Attend local small business meetups and storage-specific trade shows to make connections. Sites like Meetup help find regular networking events nearby. The Inside Self Storage Expo is one of the largest national shows attracting storage operators across the U.S. Rub shoulders with seasoned vets to learn winning strategies.

Facebook Groups

Dozens of niche Facebook groups provide storage tips from fellow facility owners nationwide. Top examples include Self Storage Owners, Operators, and Investors . Read other members’ questions and join discussions. Online groups offer free peer knowledge day and night.

13. How to Market a Storage Business

Implementing an ongoing marketing strategy is essential for storage entrepreneurs to fill units, boost visibility, and drive referrals. With the right methods, robust promotion can happen without breaking the bank.

Personal Networking

To start, tap into your inner circle and existing customer base. Satisfied customers are likely to recommend you to friends, and family, and on sites like Yelp. Make it easy for happy renters to share your business. Offer a referral bonus of one month free for any new customer they bring in.

Next, focus on digital and traditional marketing across multiple channels:

Digital Marketing

• Google/Facebook paid ads targeted locally by interest and intent
• Search engine optimization to rank for terms like “storage units near me”
• Active social media pages with special offers and facility photos
• YouTube videos showcasing your storage business and processes
• Local business citations on directories like Yelp, YellowPages, etc
• Retargeting ads that follow site visitors across the web
• Email newsletters with helpful storage tips and promotions
• Partnerships with moving companies, realtors, and colleges
• Online reviews via Google, Facebook, SpareFoot, Yelp

Traditional Marketing

• Direct mail flyers to neighborhood homes and businesses
• Attending local networking events as the “storage expert”
• Domain-specific billboard ads on frequented roads
• Local TV commercials if the budget allows
• Radio spot ads on popular stations
• Promotions at high-traffic community events
• Yard signs and banners near your facility
• A monthly newsletter to existing customers

The most effective approach blends digital and traditional marketing for omnichannel visibility. Focus on affordable tactics like optimizing your Google Business profile, cultivating reviews, social media outreach, and leveraging partnerships.

14. Focus on the Customer

Providing exceptional customer service needs to be a top priority when starting a storage business to drive referrals, boost retention, and build your reputation.

Some ways to increase customer focus in self storage units include:

• Small touches like greeting all visitors, quickly answering phones and questions, and addressing issues promptly can set you apart from the competition. Make renters feel valued.
• Going above and beyond with existing self storage customers also pays off. When renters access their unit, offer to assist with moving items or provide moving equipment like dollies and blankets for free. Help protect their treasures.
• Follow up after key interactions via phone or email to ensure satisfaction. Check-in periodically on longer-term renters and ask if they need any help.
• Consider periodic perks like free coffee and donuts on the weekends for your customers. Send a birthday or holiday card to make them feel special.
• Train staff to be storage experts who can educate clients and provide solutions. Take time to explain options and recommend ideal unit sizes and features.
• If a customer has a problem or files a complaint, address it immediately and offer a concession like a free truck rental. Turn frustrations into goodwill.

With self-storage largely a commodity business, stellar customer service creates a true competitive advantage. Word spreads quickly about great experiences, driving referral business your way.

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April 9, 2024

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How to Start a Storage Business

Starting a storage business can be very profitable. With proper planning, execution and hard work, you can enjoy great success. Below you will learn the keys to launching a successful storage business.

Importantly, a critical step in starting a storage business is to complete your business plan. To help you out, you should download Growthink’s Ultimate Business Plan Template here .

Download our Ultimate Business Plan Template here

14 Steps To Start a Storage Business :

• Choose the Name for Your Storage Business
• Develop Your Storage Business Plan
• Choose the Legal Structure for Your Storage Business
• Secure Startup Funding for Your Storage Business (If Needed)
• Secure a Location for Your Business
• Register Your Storage Business with the IRS
• Open a Business Bank Account
• Get a Business Credit Card
• Get the Required Business Licenses and Permits
• Get Business Insurance for Your Storage Business
• Buy or Lease the Right Storage Business Equipment
• Develop Your Storage Business Marketing Materials
• Purchase and Setup the Software Needed to Run Your Storage Business
• Open for Business

1. Choose the Name for Your Storage Business

The first step to starting a self-storage business is to choose your business’ name.  

This is a very important choice since your company name is your brand and will last for the lifetime of your business. Ideally you choose a name that is meaningful and memorable. Here are some tips for choosing a name for your storage business:

• Make sure the name is available . Check your desired name against trademark databases and your state’s list of registered business names to see if it’s available. Also check to see if a suitable domain name is available.
• Keep it simple . The best names are usually ones that are easy to remember, pronounce and spell.
• Think about marketing . Come up with a name that reflects the desired brand and/or focus of your storage business.

2. Develop Your Storage Business Plan

One of the most important steps in starting a storage facility is to develop your storage business plan . The process of creating your plan ensures that you fully understand your market and your business strategy. The plan also provides you with a roadmap to follow and if needed, to present to funding sources to raise capital for your business.

Your business plan should include the following sections:

• Executive Summary – this section should summarize your entire business plan so readers can quickly understand the key details of your storage business.
• Company Overview – this section tells the reader about the history of your storage business and what type of storage business you operate. For example, are you a self-storage, data storage, or a wine storage business?
• Industry Analysis – here you will document key information about the storage industry. Conduct market research and document how big the industry is and what trends are affecting it.
• Customer Analysis – in this section, you will document who your ideal or target market are and their demographics. For example, how old are they? Where do they live? What do they find important when purchasing services like the ones you will offer?
• Competitive Analysis – here you will document the key direct and indirect competitors you will face and how you will build competitive advantage.
• Marketing Plan – your marketing plan should address the 4Ps: Product, Price, Promotions and Place.
• Product : Determine and document what products/services you will offer 
• Prices : Document the prices of your products/services
• Place : Where will your business be located and how will that location help you increase sales?
• Promotions : What promotional methods will you use to attract customers to your storage business? For example, you might decide to use pay-per-click advertising, public relations, search engine optimization and/or social media marketing.
• Operations Plan – here you will determine the key processes you will need to run your day-to-day operations. You will also determine your staffing needs. Finally, in this section of your plan, you will create a projected growth timeline showing the milestones you hope to achieve in the coming years.
• Management Team – this section details the background of your company’s management team.
• Financial Plan – finally, the financial plan answers questions including the following:
• What startup costs will you incur?
• How will your storage business make money?
• What are your projected sales and expenses for the next five years?
• Do you need to raise funding to launch your business?

Finish Your Business Plan Today!

3. choose the legal structure for your storage business.

Next you need to choose a legal structure for your storage business and register it and your business name with the Secretary of State in each state where you operate your business.

Below are the five most common legal structures:

1) Sole proprietorship

A sole proprietorship is a business entity in which the owner of the storage business and the business are the same legal person. The owner of a sole proprietorship is responsible for all debts and obligations of the business. There are no formalities required to establish a sole proprietorship, and it is easy to set up and operate. The main advantage of a sole proprietorship is that it is simple and inexpensive to establish. The main disadvantage is that the owner is liable for all debts and obligations of the business.

2) Partnerships

A partnership is a legal structure that is popular among small business owners. It is an agreement between two or more people who want to start a storage business together. The partners share in the profits and losses of the business. 

The advantages of a partnership are that it is easy to set up, and the partners share in the profits and losses of the business. The disadvantages of a partnership are that the partners are jointly liable for the debts of the business, and disagreements between partners can be difficult to resolve.

3) Limited Liability Company (LLC)

A limited liability company, or LLC, is a type of business entity that provides limited liability to its owners. This means that the owners of an LLC are not personally responsible for the debts and liabilities of the business. The advantages of an LLC for a storage business include flexibility in management, pass-through taxation (avoids double taxation as explained below), and limited personal liability. The disadvantages of an LLC include lack of availability in some states and self-employment taxes.

4) C Corporation

A C Corporation is a business entity that is separate from its owners. It has its own tax ID and can have shareholders. The main advantage of a C Corporation for a storage business is that it offers limited liability to its owners. This means that the owners are not personally responsible for the debts and liabilities of the business. The disadvantage is that C Corporations are subject to double taxation. This means that the corporation pays taxes on its profits, and the shareholders also pay taxes on their dividends.

5) S Corporation

An S Corporation is a type of corporation that provides its owners with limited liability protection and allows them to pass their business income through to their personal income tax returns, thus avoiding double taxation. There are several limitations on S Corporations including the number of shareholders they can have among others.

Once you register your storage business, your state will send you your official “Articles of Incorporation.” You will need this among other documentation when establishing your banking account (see below). We recommend that you consult an attorney in determining which legal structure is best suited for your company.

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4. Secure Startup Funding for Your Storage Business (If Needed)

In developing your storage business plan , you might have determined that you need to raise funding to launch your business.

If so, the main sources of funding for a storage business to consider are personal savings, family and friends, credit card financing, bank loans, crowdfunding and angel investors. Angel investors are individuals who provide capital to early-stage businesses. Angel investors typically will invest in a storage business that they believe has high potential for growth.

5. Secure a Location for Your Business

When looking for a location for your storage business, it’s important to consider the following factors:

• First, consider the needs of your business. What kind of storage do you need: personal or commercial? Do you need climate controlled units? What are your storage space requirements?
• Once you’ve determined what kind of storage you need, research the areas in your city that best meet those needs. Consider factors such as cost of living, population density, and proximity to highways and public transportation.
• Narrow down your choices to a few neighborhoods that fit your criteria, and then take a closer look at the individual locations to see if they meet your specific needs (e.g., access, security, parking).
• Finally, visit each location at different times of the day to see how busy the roads are, and whether there’s enough parking for your needs.

Make sure to consult a commercial real estate specialist before you sign a lease. You may save yourself some time and money because they may be able to help find a location that meets all of your needs from the start.

6. Register Your Storage Business with the IRS

Next, you need to register your business with the Internal Revenue Service (IRS) which will result in the IRS issuing you an Employer Identification Number (EIN).

Most banks will require you to have an EIN in order to open up an account. In addition, in order to hire employees, you will need an EIN since that is how the IRS tracks your payroll tax payments.

Note that if you are a sole proprietor without employees, you generally do not need to get an EIN. Rather, you would use your social security number (instead of your EIN) as your taxpayer identification number.

7. Open a Business Bank Account

It is important to establish a bank account in your storage business’ name. This process is fairly simple and involves the following steps:

• Identify and contact the bank you want to use
• Gather and present the required documents (generally include your company’s Articles of Incorporation, driver’s license or passport, and proof of address)
• Complete the bank’s application form and provide all relevant information
• Meet with a banker to discuss your business needs and establish a relationship with them

8. Get a Business Credit Card

You should get a business credit card for your storage business to help you separate personal and business expenses.

You can either apply for a business credit card through your bank or apply for one through a credit card company.

When you’re applying for a business credit card, you’ll need to provide some information about your business. This includes the name of your business, the address of your business, and the type of business you’re running. You’ll also need to provide some information about yourself, including your name, Social Security number, and date of birth.

Once you’ve been approved for a business credit card, you’ll be able to use it to make purchases for your business. You can also use it to build your credit history which could be very important in securing loans and getting credit lines for your business in the future.

9. Get the Required Business Licenses and Permits

Before you can start a storage business, there are a few licenses and permits you will need. 

The most important license you need is a business license from your local government. In addition, you may need a special license to store certain types of items, such as hazardous materials. You will also need the local fire department to review and approve the installation of a fire alarm system in your business.

Make sure to check with your local government to find out what licenses and permits you need to start a self-storage business.

10. Get Business Insurance for Your Storage Business

The type of insurance you need to operate a storage business will vary depending on the state in which you operate.

Some business insurance policies you should consider for your storage business include:

• General liability insurance : This covers accidents and injuries that occur on your property. It also covers damages caused by your employees or products.
• Auto insurance : If a vehicle is used in your business, this type of insurance will cover if a vehicle is damaged or stolen.
• Workers’ compensation insurance : If you have employees, this type of policy works with your general liability policy to protect against workplace injuries and accidents. It also covers medical expenses and lost wages.
• Commercial property insurance : This covers damage to your property caused by fire, theft, or vandalism.
• Business interruption insurance : This covers lost income and expenses if your business is forced to close due to a covered event.
• Professional liability insurance : This protects your business against claims of professional negligence.

Find an insurance agent, tell them about your business and its needs, and they will recommend policies that fit those needs.

11. Buy or Lease the Right Storage Business Equipment

In order to start a storage business, you’ll need some basic equipment. You may need a truck or van to transport items, a self-storage unit to store them in, and locks and packing materials to keep them secure. You will also need some office equipment like a computer, phone, and printer.

12. Develop Your Storage Business Marketing Materials

Marketing materials will be required to attract and retain customers to your self-storage company.

The key marketing materials you will need are as follows:

• Logo : Spend some time developing a good logo for your storage business. Your logo will be printed on company stationery, business cards, marketing materials and so forth. The right logo can increase customer trust and awareness of your brand.
• Website : Likewise, a professional storage business website provides potential customers with information about the services you offer, your company’s history, and contact information. Importantly, remember that the look and feel of your website will affect how customers perceive you.
• Social Media Accounts : establish social media accounts in your company’s name. Accounts on Facebook, Twitter, LinkedIn and/or other social media networks will help customers and others find and interact with your storage business.

13. Purchase and Setup the Software Needed to Run Your Storage Business

To run a storage business, you will need accounting software, customer relationship management (CRM) software, and invoicing software.

14. Open for Business

You are now ready to open your storage business. If you followed the steps above, you should be in a great position to build a successful business. Below are answers to frequently asked questions that might further help you.

How to Finish Your Ultimate Business Plan in 1 Day!

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With Growthink’s Ultimate Business Plan Template you can finish your plan in just 8 hours or less!

How to Start a Storage Business FAQs

Is it hard to start a storage business.

It is easy to run a self-storage facility successfully. The reason for this is it only requires minimum investment to start. In fact, you can do it by using your own garage or even a spare room in your house.

How can I start a storage business with no experience?

There are a few things you can do to get started in the storage business with no experience. First, do some research on the industry and learn as much as you can about it. Next, try to find a mentor or someone who can help guide you through the process. Finally, start small and gradually grow your business as you learn more about it.

What type of storage business is most profitable?

The most profitable storage business is the self-storage business. Self-storage businesses are those that allow customers to store their belongings in a storage unit that the customer rents. Storage facilities charge a rental fee that may be paid monthly, yearly or by another time period specified in the rental agreement. Self-storage businesses generally have higher average prices per square foot than other storage types because the customer is paying for the convenience of the short-term use of a storage unit and to keep a valued possession safely stored away.

Self-storage facilities are generally very profitable because the average revenue per storage unit is high. The self-storage business model has a lot of flexibility, allowing its owners to vary rental prices according to demand by offering discounts during slow periods and charging premium rates when occupancy is high.

Self-storage businesses are attractive to investors because of the business model's high average revenue per square foot, relatively low overhead expenses, and government regulations that protect storage owners from liability for stored items. 

How much does it cost to start a storage business?

To start a storage business, you will need to invest in some initial equipment and supplies. The cost of setting up your business will vary depending on the type of storage business you want to start, but can range from a few thousand dollars to several hundred thousand dollars. You will also need to factor in the cost of marketing and advertising your business.

Some startup costs estimates for storage businesses include: 

• $500 to $5,000 for a used storage container and trailer
• $12,000 to $25,000 for a new storage container and trailer
• $4,800 to $11,200 for a portable storage unit
• $7,400 to $1M+ for a prefab facility
• $200-$500 for packing materials and boxes
• $1,000-$5,000 for advertising and marketing

What are the ongoing expenses for a storage business?

The ongoing expenses for a storage business can vary depending on the size of the business, the services offered, and the location. However, some of the most common operating expenses include rent or lease payments, insurance, employee salaries and benefits, and advertising and marketing costs.

How does a storage business make money?

Many self-storage facilities make money by charging customers to store their belongings. They may also charge for access to the self- storage units, or for certain services such as moving items in and out of the units. Another way storage businesses make money is by subletting the storage space they control to third parties.

Is owning a storage business profitable?

Storage businesses are profitable. One reason is that the storage market is growing rapidly. In addition, the storage industry is fragmented, which means there are many small players in the market. This presents opportunities for consolidation. Finally, the storage industry is recession-resistant, meaning that demand for storage services remains relatively stable during economic downturns.

Why do storage businesses fail?

One of the main reasons storage businesses fail is because they do not have a solid business plan in place. This includes having a detailed marketing plan, pricing strategy, and financial plan. Other businesses also fail because they do not have the right team in place to help them run the business. It's important to hire employees who are knowledgeable in the storage industry and have the same values as your business. Finally, another reason storage businesses fail is because they do not have a good customer service strategy in place. Make sure you are responsive to customer inquiries and complaints, and always provide excellent customer service.

Other Helpful Business Plan Articles & Templates

How to Start a Storage Unit Business: Everything You Need to Know

How to start a storage unit business tends to be one that requires a lot of capital to get started. 3 min read updated on January 01, 2024

The Rental Storage Unit Business: Industry Overview

How to start a storage unit business tends to be one that requires a lot of capital to get started. It can also consume a lot of your time. But, there is one area of real estate that is not capital intensive nor is it time-consuming. That area is the rental storage unit industry. 

People use storage units to keep their belongings secure when they can't fit it into their living quarters. A unit can be a box or a locker, containers or rooms, or even an empty lot. The amount of construction of new storage unit facilities is on the low side which means there is room for new players to enter the market. 

The storage unit industry started in 1958 and has been an industry that makes money for investors. The potential for profit is  there if you do your research and make sure you have a strategic location.  Storage units are susceptible to supply and demand forces, but people will always look for extra room to store their stuff. Rents may not always stay high, but there's almost a guarantee of income for the long run.

Market Research and Feasibility Studies

Just as with any other business you might want to get into, you need to do your research. Gaining an understanding of this industry before you commit your time and money into getting a business off the ground is important. You need to understand the demand for storage in the area you have chosen, along with the potential costs and profits. Ask yourself what type of facility you want to operate. Do you want a facility with:

• Units locked by the renter
• Self-storage rental warehouse
• Coin-operated lockers

Understanding the competition is also important to your market research . Location trumps all when it comes to running a storage unit facility. You may find you are able to charge more than your competition due to the location. Or you may find your competition is willing to do what it takes to get as much business as possible and undercut you. That means you pay the premium for a high-profile location but still wind up losing money. The more you can learn about the lengths your competition will go to rent units, the better you can counter their efforts.

Outline Your Goals 

Once you know as much as you can possibly learn about the local market conditions for storage units, you should focus on a clear-cut business plan . Do you want a small business that you can run part-time from home and supplement income? Or, do you consider this a stepping stone that you can grow into a larger business? Remember, you can always start small and grow your business over time, especially if you're not ready to fully commit to operating a fully-fledged storage unit facility. 

Determine Your Start-Up Costs

Now that you have an idea of what it is you want to do, and where you want to place your facility, you need to estimate your start-up costs. These are known as sunk costs or the costs you have to pay to get the business started. These costs are separate from your ongoing maintenance and business costs. It's important to make sure you can raise the money first.

Some of these costs may include:

• Land acquisition
• Franchise fees if working with a franchisor
• Website design and hosting
• Promotional materials
• Construction

Leave aside some money to deal with any unexpected costs during this time. 

Ensure You Comply With Tax and Legal Regulations

You need to make sure that you are registered and in compliance with all the relevant tax and regulations that apply to the storage unit industry. If you do not think that you are able to do this research on your own, you should hire an attorney who is capable of informing you of the laws, licenses, and regulations that you need to follow. Your attorney may also have information about grants and financial aid that exist for small businesses. You might be eligible for financial support from the government as you start your first storage unit facility.

If you need help with starting a storage unit business, you can  post your legal need  on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.

Hire the top business lawyers and save up to 60% on legal fees

Content Approved by UpCounsel

• Self Storage Contracts
• Breach of Contract Section
• How to Start a Business: A Comprehensive Guide for Entrepreneurs
• Cash Requirements From Startup
• Starting a Company
• Shared Service Agreement Template
• How Does a Business Operate: Everything You Need To Know
• Cost to Start a Sole Proprietorship
• How Much Money to Start a Corporation
• Partial Release Clause

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Home » Sample Business Plans » Real Estate

How to Write a Self Storage Unit Business Plan [Sample Template]

Are you about starting a self storage unit business? If YES, here is a complete sample self storage unit business plan template & feasibility study you can use for FREE . If you live In the united states and are interested in owning a business portfolio in the real estate industry and you have not made up your mind on what kind of business to engage in, then you should consider starting your own self storage unit business.

Although, you can also start a self – storage business in London or some couple of cities in Canada and Europe, but the United States of America still remains the only country where this type of business is indeed a big industry. First and Foremost, what you need to do before venturing in into self – storage business is to carry out your survey.

A Sample Self Storage Unit Business Plan Template

1. industry overview.

Self – storage units are mini storage spaces created for people to store their belongings for a short period of time, i.e. on a monthly basis and it is subject to renewal. The storage space could be lockers, rooms, boxes, containers or even an empty space in a secured environment. It is important to state that self – storage unit isn’t open for people to rent and live in it.

It is strictly for storing of personal belongings and goods. For instance’ if you rent a storage space, in a facility, you will be the only one with the key to the storage unit / space and as such the goods you choose to store in your space won’t be covered by the facility insurance.

In the united states, the Self – Storage and Warehouse Facility Leasing industry experienced a solid rebound over the last five years. It is important to state that with increase in demand from households and businesses the revenue generated in the industry is expected to continue to experience appreciable growth and indeed there is a bright future for players in the industry.

Other factors that will boost revenue growth for the industry are steady population growth, increases in the residential rental market, rising per capita disposable income and the number of relocations by families and individuals.

The entry barriers for new operators in this industry can vary significantly by state and city. Overall, barriers are moderate, but are increasing across the United States. Costs to purchase or lease land or facilities vary across regions and are a major barrier to entry.

These expenses can be more manageable, though, in well-established, highly populated cities, whereas land costs can be significantly lower in smaller cities and suburban regions. There are several regulatory requirements that must be met by companies in the storage and mini warehouse business. The most difficult of these generally relates to zoning and land development conditions

The Self – Storage and Warehouse Leasing Facility industry is indeed a large industry and pretty much thriving in developed countries such as United States of America, Canada, United Kingdom, Germany, Australia and Italy et al.

Statistics has it that in the United States of America alone, there are about 32,437 licensed and registered self – storage and warehouse leasing facilities responsible for employing about 131,990 employees and the industry rakes in a whooping sum of $33bn annually with an annual growth rate projected at 6.1 percent. Public storage Inc. is the market leader in this industry.

Right from when self – storage unit became a business enterprise in 1958 in Fort Lauderdale – Florida, loads of investors have made money from the industry and loads of investors are still making huge profits from this line of business and the industry is still very much open for new investors. It is indeed a capital intensive business and at the same time, highly profitable especially if you are strategically located.

Over and above, starting a self – storage and warehouse leasing business in the United States of America can be started by anybody as long as you have the start – up capital to acquire a property and then design the property to fit into the purpose you want to use it for.

2. Executive Summary

Safe Lock® Self – Storage and Warehouse, LLC is a licensed, standard and secured self – storage and warehouse facility that will be located in a growing community in Asheville – North Carolina. Our basic aim of setting up the business is to make available self – storage and warehouse facility for our clients who are resided in Asheville and neighboring cities.

We have been able to secure a standard facility in a central and easy to locate location in Asheville. Our self – storage facility has a Five-by-5-foot storage spaces, Five-by-10-foot storage spaces, 10-by-10-foot storage spaces, 10-by-15-foot storage spaces, 10-by-20-foot storage spaces, 10-by-25-foot storage spaces, and 10-by-30-foot storage spaces available for rental or short – term leasing. We are well equipped to services the whole of the community as well as visitors and travelers.

We conducted a thorough research and feasibility studies and we were able to come to the conclusion that Asheville community is the right place to start our sport and recreation facility. We will ensure that we offer our facilities at an affordable fee that won’t in any way put a hole in the pocket of our clients.

At Safe Lock® Self – Storage and Warehouse, LLC, our client’s best interest would always come first, and everything we do is guided by our values and professional ethics. We will offer trusted self – storage and warehouse facility services to all to our individual clients, and corporate clients and also ensure that we work hard to meet and surpass our clients’ expectations whenever they rent or lease our self – storage facilities.

Safe Lock® Self – Storage and Warehouse, LLC will at all times demonstrate her commitment to sustainability, both individually and as a firm, by actively participating in our communities and integrating sustainable business practices wherever possible.

We will ensure that we hold ourselves accountable to the highest standards by meeting our client’s needs precisely and completely. We will cultivate a working environment that provides a human, sustainable approach to earning a living, and living in our world, for our partners, employees and for our clients.

Our plan is to position the business to become one of the leading brands in self – storage and warehouse line of business in the whole of Ashville, and also to be amongst the top 20 self – storage and warehouse companies in the United States of America within the first 10 years of operations.

Safe Lock® Self – Storage and Warehouse, LLC is owned by Pearce Gordon and Henry Michael his business partners for many years. The business will be managed by both of them since they have adequate working experience to manage such business. Pearce Gordon has well over 10 years of experience working at various capacities in the real estate industry in the United States of America.

3. Our Products and Services

Safe Lock® Self – Storage and Warehouse, LLC is in the self – storage and warehouse facility business to provide safe short – term storage facilities for residence of Asheville – North Carolina which is why we have been able to put up a facility that can help us achieve the goal.

We are optimistic that everyone who make rent or lease our self – storage and warehouse facility will definitely derive huge value for their money. These are the amenities and services that will be made available to our clients;

• 5-by-5-foot storage spaces
• 5-by-10-foot storage spaces
• 10-by-10-foot storage spaces
• 10-by-15-foot storage spaces
• 10-by-20-foot storage spaces
• 10-by-25-foot storage spaces
• 10-by-30-foot storage spaces
• Leasing or rental of mini warehouses and self-storage units
• Rental of self-storage warehousing
• Rental of coin operated lockers
• U-lock storage
• Other facility operation

4. Our Mission and Vision Statement

• Our Vision of starting Safe Lock® Self – Storage and Warehouse, LLC is to build a hedge brand that will become one of the top choices for residents and businesses in the whole of Ashville – North Carolina.
• Our vision reflects our values: integrity, service, excellence and teamwork.
• Our mission for establishing Safe Lock® Self – Storage and Warehouse, LLC is to build a standard and well – secured self – storage and warehouse facility that can favorably compete in the industry in the United States of America and in the world.

Our Business Structure

Safe Lock® Self – Storage and Warehouse, LLC is in business to become the leading self – storage and warehouse facility in the whole of Asheville – North Carolina and we are fully aware that it will take the right facility, management and organization – structure to achieve our goal.

We will ensure that we recruit only the best hands that can help us achieve all that we are set to achieve. Our business will not be built only for the purpose of giving our members / customers value for their money, but also we will ensure that we make our work environment highly conducive for all our employees.

We will provide them with facilities that will help them stay motivated and deliver on their various tasks and goals et al. In view of that, we have made provisions for the following positions to be occupied by highly qualified and experienced staff;

• Chief Executive Officer

Facility Manager

Admin and HR Manager

Marketing and Sales Executive

• Customer Care Executive / Front Desk Officer

5. Job Roles and Responsibilities

Chief Executive Office:

• Increases management’s effectiveness by recruiting, selecting, orienting, training, coaching, counseling, and disciplining managers; communicating values, strategies, and objectives; assigning accountabilities; planning, monitoring, and appraising job results; developing incentives; developing a climate for offering information and opinions; providing educational opportunities.
• Creates, communicates, and implements the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
• Responsible for fixing prices and signing business deals
• Responsible for providing direction for the business
• Responsible for signing checks and documents on behalf of the company
• Evaluates the success of the organization
• Responsible for handling leasing or rental of mini warehouses and self-storage units
• Responsible for handling rental of self-storage warehousing
• Responsible for handling rental of coin operated lockers
• Responsible for handling U-lock storage rentals
• Ensures operation of equipment by completing preventive maintenance requirements; calling for repairs.
• Handle other facility operations such as repairs and renovations et al
• Responsible for overseeing the smooth running of HR and administrative tasks for the organization
• Design job descriptions with KPI to drive performance management for clients
• Regularly hold meetings with key stakeholders to review the effectiveness of HR Policies, Procedures and Processes
• Maintains office supplies by checking stocks; placing and expediting orders; evaluating new products.
• Defines job positions for recruitment and managing interviewing process
• Carries out staff induction for new team members
• Responsible for training, evaluation and assessment of employees
• Responsible for arranging travel, meetings and appointments
• Updates job knowledge by participating in educational opportunities; reading professional publications; maintaining personal networks; participating in professional organizations.
• Oversees the smooth running of the daily office activities.
• Identify, prioritize, and reach out to new partners, and business opportunities et al
• Identifies development opportunities; follows up on development leads and contacts; participates in the structuring and financing of projects; assures the completion of relevant projects.
• Writes winning proposal documents, negotiate fees and rates in line with company policy
• Responsible for handling business research, marker surveys and feasibility studies for clients
• Responsible for supervising implementation, advocate for the customer’s needs, and communicate with clients
• Develop, execute and evaluate new plans for expanding increase sales
• Document all customer contact and information
• Represent the company in strategic meetings
• Helps to increase sales and growth for the company
• Responsible for preparing financial reports, budgets, and financial statements for the organization
• create reports from the information concerning the financial transactions recorded by the bookkeeper
• Prepare the income statement and balance sheet using the trial balance and ledgers prepared by the bookkeeper.
• Provides managements with financial analyses, development budgets, and accounting reports; analyzes financial feasibility for the most complex proposed projects; conducts market research to forecast trends and business conditions.
• Responsible for financial forecasting and risks analysis.
• Performs cash management, general ledger accounting, and financial reporting for one or more properties.
• Responsible for developing and managing financial systems and policies
• Responsible for administering payrolls
• Ensures compliance with taxation legislation
• Handles all financial transactions for the company
• Serves as internal auditor for the company

Client Service Executive / Front Desk Officer

• Welcomes guests and clients by greeting them in person or on the telephone; answering or directing inquiries.
• Ensures that all contacts with clients (e-mail, walk-In center, SMS or phone) provides the client with a personalized customer service experience of the highest level
• Through interaction with clients on the phone, uses every opportunity to build client’s interest in the company’s products and services
• Manages administrative duties assigned by the manager in an effective and timely manner
• Consistently stays abreast of any new information on the company’s products, promotional campaigns etc. to ensure accurate and helpful information is supplied to clients
• Receives parcels / documents for the company
• Distributes mails in the organization
• Handles any other duties as assigned my the line manager

Security Officers

• Ensures that the facility is secured at all time
• Control traffic and organize parking
• Gives security tips to staff members from time to time
• Patrols around the building on a 24 hours basis
• Submit security reports on a weekly basis
• Any other duty as assigned by the facility manager.

6. SWOT Analysis

Safe Lock® Self – Storage and Warehouse, LLC engaged the services of a core professional in the area of business consulting and structuring to assist the firm in building a well – structured self – storage and warehouse rental business that can favorably compete in the highly competitive self- storage and warehouse services industry.

Part of what the team of business consultant did was to work with the management of our organization in conducting a SWOT analysis for Safe Lock® Self – Storage and Warehouse, LLC. We hired the services of Dr. Garry Larson, a HR and Business consultant with bias in business structuring to help us conduct SWOT analysis for our company and he did a pretty good job for us.

We know that if we get things right before starting our self – storage and warehouse rental business, we will not have to struggle before attract loyal clients and building the business to a level where we can easily breakeven in record time.

Here is a of the result we got from the SWOT analysis that was conducted on behalf of Safe Lock® Self – Storage and Warehouse, LLC, Asheville – North Carolina;

One of the obvious strength that will definitely stand as a plus for Safe Lock® Self – Storage and Warehouse, LLC is the fact that our facility is centrally located in a densely populated – residential area in Asheville – North Carolina; our location and high level of security is in fact our major strength.

We equally have a team that can go all the way to give our clients value for their money; a team that are trained and equipped to pay attention to details and to deliver excellent services. Lastly our rental package is one of the best that anybody living in Asheville – North Carolina can get; it is cheap and affordable.

We critically looked into our Business model and we were able to identify two major weakness. One is the fact that we are a new business and the second is the fact that we may not have the financial resources required to match up with existing and well established self – storage and warehouse facility rental companies when it comes to acquiring large facilities in choice areas.

• Opportunities:

We are centrally located in one of the busiest area and densely populated area in Ashville – North Carolina and we are open to all the available opportunities that the city has to offer. We will be open 24 hours in a day during weekends (Fridays to Sundays) and from 6:00 am to 12 midnight from Mondays to Thursdays giving us the advantage to leverage on any available opportunity.

Some of the threats that are likely going to confront Safe Lock® Self – Storage and Warehouse, LLC are unfavorable government policies, demographic / social factors, downturn in the economy which is likely going to affect consumers spending and lastly, the emergence of new competitors within the same location where our self – storage and warehouse facility is located.

7. MARKET ANALYSIS

• Market Trends

The trend in the self – storage and warehouse rental industry is such that if a self – storage and warehouse facility is well positioned in a residential area or a place where people can easily access without much stress, there is the likelihood that the facility will enjoy high patronage.

Just like in other business ventures, the owner of self – storage and warehouse facilities are always looking for ways to increase their market share; they go as far as signing deals with merchants, importers and also business men and women   et al to make use of their facility.

It is a common trend that as self – storage and warehouse facility grow (fully occupied throughout the year), it becomes necessary for them to develop new service offerings or install new facilities that will help them attract more people. In order words, it is very important for self – storage and warehouse facilities to continue to improvise if they want to grow their business and generate their target revenues.

8. Our Target Market

We are aware of the fact that for any business to thrive so well in profit, it has to first and foremost define its market. The target market for self – storage and warehouse facilities cuts across people of different walks of life. The fact that people would need a secured place to keep their properties for a short period of time makes the self – storage and warehouse rental business a thriving and growing business.

Safe Lock® Self – Storage and Warehouse, LLC will work towards providing services, facilities and environment that will help us reach out to our target market. These are the category of people that we intend marketing our self – storage and warehouse facility to;

• Working Class Adults / Corporate Executives
• Sport Clubs (soccer team, athletics team and choreographers et al)
• College Students / Schools
• Community an Cooperate organization
• Business People / Entrepreneurs
• Government Officials
• Religious centers (Crusade Teams)
• Merchants, Importers and manufacturers
• Sports Men and Women
• Construction companies

Our Competitive Advantage

We also know that competition is one of the best things that could happen to a business because it makes any business tap more from within and be at their best at all times. No doubt, the Self – Storage and Warehouse Rental industry is indeed a profitable and highly competitive industry.

Clients will only rent your self – storage and warehouse facility if they know that your facility is highly secured and spacious enough to contain whatever property they want to store in your facility.

Our competitive advantage is that Safe Lock® Self – Storage and Warehouse, LLC is centrally located in a densely populated – residential area in Asheville – North Carolina; our location and high level of security is in fact our major strength.

Lastly, our employees will be well taken care of, and their welfare package will be among the best within our category (self – storage and warehouse facility rental businesses in the United States) in the industry. It will enable them to be more than willing to build the business with us and help deliver our set goals and achieve all our business aims and objectives.

9. SALES AND MARKETING STRATEGY

• Sources of Income

Safe Lock® Self – Storage and Warehouse, LLC is established with the aim of maximizing profits in the Self – Storage and Warehouse Facility Rental industry and we are going to go all the way to ensure that we do all it takes to attract both individual clients and corporate clients on a regular basis and to ensure that our facilities are fully occupied at any given time.

Safe Lock® Self – Storage and Warehouse, LLC will generate income by offering the following amenities and services;

10. Sales Forecast

From the very beginning it pays to have a sales forecast because this helps to go the extra mile in working so hard to meet the sales goals. It is important to state that our sales forecast is based on the data gathered during our feasibility studies and also some of the assumptions readily available on the field.

It would be hard to create a sales forecast with a newly opened business like self – storage and warehouse facility rental business. This is simply because the statistics that will be provided will be on a short term basis.

Experts said that usually a business should be in operation for at least one year before they can generate the statistics that will be need to help in accurate forecasting; statistics should be at least one year old in order to show the trends and pattern in consumer spending.

We expect to attain 65 percent occupancy of our self – storage and warehouse facility within our first year of operations and then in subsequent year we will grow to full occupancy (between 80 and 100 percent occupancy). Below are the sales projection for Safe Lock® Self – Storage and Warehouse, LLC, it is based on the location of our facility and the services and amenities that we will be offering to our clients;

• First Year-: $200,000
• Second Year-: $450,000
• Third Year-: $750,000

N.B: This projection is done based on what is obtainable in the industry and with the assumption that there won’t be any major competitor offering same additional services as we do within 4.5 miles radius from our self – storage and warehouse facility.

• Marketing Strategy and Sales Strategy

Our marketing strategies will be directed towards achieving specific objectives that support the strategic goals of the organization. The truth is that all we do will be geared towards creating new market channels, increasing sales and increase our market share. We will leverage on improving on our services and facility to ensure that we win new clients and retain old clients.

At Safe Lock® Self – Storage and Warehouse, LLC, our marketing strategies will be consistent throughout the marketing mix and we will take into consideration facility improvement, promotion, and price. As part of our sales and marketing strategies, we will pay attention to the promotion of our self – storage and warehouse facility so as to attract people to rent or lease our facilities.

Our unique selling proposition is that we are well positioned and people can easily access our facility, our prices are affordable and we have a complete package for families, schools and sport clubs. Part of the marketing and sales strategies that we will adopt are;

• Open our self – storage and warehouse facility with a big party.
• Advertise our self – storage and warehouse facility on community based newspapers, local TV stations and local radio station
• Promote our self – storage and warehouse facility online via our official website and all available social media platforms
• Introduce our self – storage and warehouse facility by sending introductory letters alongside our brochure to businesses, sports clubs, schools, corporate organizations, households and key stake holders in Asheville – North Carolina
• Print out fliers and business cards and strategically drop them in offices, libraries, public facilities and train stations et al.
• Delivering consistent customer experiences to all our members; making our first impression count positively to those renting or leasing our self – storage and warehouse facility for the first time
• Make use of attractive hand bills to create awareness and also to give direction to our self – storage and warehouse facility
• Adopt direct mailing coupon marketing approach
• Position our signage / flexi banners at strategic places in and around Ashville – North Carolina
• Create a loyalty plan that will enable us reward our loyal clients especially those that refers their family members and friends to us
• Engage on road shows within our neighborhood to create awareness for our self – storage and warehouse facility.

11. Publicity and Advertising Strategy

We have been able to work with our branding and publicity consultants to help us map out publicity and advertising strategies that will help us walk our way into the heart of our target market. We are set to become the number one choice for both corporate clients and individual clients in the whole of Asheville – North Carolina which is why we have made provisions for effective publicity and advertisement of our self – storage and warehouse facility.

Below are the platforms we intend to leverage on to promote and advertise Safe Lock® Self – Storage and Warehouse, LLC;

• Place adverts on both print (community based newspapers and magazines) and electronic media platforms
• Sponsor relevant community based events
• Leverage on the internet and social media platforms like; Instagram, Facebook , twitter, YouTube, Google + et al to promote our brand
• Install our Bill Boards on strategic locations all around Asheville – North Carolina.
• Engage in road show from time to time in targeted neighborhoods
• Distribute our fliers and handbills in target areas in Asheville
• Contact corporate organizations, sport clubs, households and schools by calling them up and informing them of Safe Lock® Self – Storage and Warehouse, LLC and the services and amenities we offer
• List Safe Lock® Self – Storage and Warehouse, LLC on local directories / yellow pages
• Advertise our self – storage and warehouse facility in our official website and employ strategies that will help us pull traffic to the site.
• Ensure that all our staff members wear our branded shirts and all our vehicles are well branded with our corporate logo et al.

12. Our Pricing Strategy

Our pricing system is going to be based on what is obtainable in the industry, we don’t intend to charge more (except for premium and customized services) and we don’t intend to charge less than what our competitors are charging their members in Asheville – North Carolina.

Be that as it may, we have put plans in place to offer discount services once in a while and also to reward our loyal customers especially when they refer clients to us or when they rent or lease of facility for a longer period. The prices of our services will be same as what is obtainable in the United States’ open market.

• Payment Options

At Safe Lock® Self – Storage and Warehouse, LLC, our payment policy will be all inclusive because we are quite aware that different clients would prefer different payment options as it suits them. Here are the payment options that we will make available to our clients;

• Payment by via bank transfer
• Payment via online bank transfer
• Payment via POS machine
• Payment via check
• Payment via bank draft
• Payment via mobile money
• Payment with cash

In view of the above, we have chosen banking platforms that will help us achieve our plans with little or no itches.

13. Startup Expenditure (Budget)

In setting up any business, the amount or cost will depend on the approach and scale you want to undertake. If you intend to go big by renting a place, then you would need a good amount of capital as you would need to ensure that your employees are well taken care of, and that your facility is conducive enough for workers to be creative and productive.

This means that the start-up can either be low or high depending on your goals, vision and aspirations for your business. The tools and equipment that will be used are nearly the same cost everywhere, and any difference in prices would be minimal and can be overlooked.

As for the detailed cost analysis for starting a self – storage and warehouse facility rental business; it might differ in other countries due to the value of their money. However, this is what it would cost us to set up Safe Lock® Self – Storage and Warehouse, LLC in the United of America;

This is the key areas where we will spend our start – up capital on;

• The Total Fee for Registering the Business in North Carolina – $750.
• Legal expenses for obtaining licenses and permits – $1,500.
• Marketing promotion expenses (8,000 flyers at $0.04 per copy) for the total amount of $10,000.
• Cost for hiring Business Consultant – $5,000.
• Insurance (general liability, workers’ compensation and property casualty) coverage at a total premium – $30,800.
• Cost of accounting software, CRM software and Payroll Software – $3,000
• Cost for leasing facility for the self – storage and warehouse facility – $500,000.
• Cost for facility remodeling – $250,000.
• Other start-up expenses including stationery – $1000
• Phone and utility deposits – $3,500
• Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $40,000
• The cost for Start-up inventory – $15,000
• Cost for acquiring security locks, CCTV and other security wares – $200,000
• The cost for the purchase of furniture and gadgets (Computers, Printers, Telephone, TVs, tables and chairs et al) – $4,000.
• The cost of Launching a Website – $600
• The cost for our grand opening party – $15,000
• Miscellaneous – $15,000

We would need an estimate of $1.5 million to successfully launch a standard and well – equipped self – storage and warehouse facilities in Asheville – North Carolina. It is important to state that the testing and evaluating expenses would be high because of the large amount of needed to secure a large facility in a good location.

Generating Funding / Startup Capital for Safe Lock® Self – Storage and Warehouse, LLC

Safe Lock® Self – Storage and Warehouse, LLC is a business that will be owned and managed by Pearce Gordon and his friend and business partner Henry Michael. They are the sole financial of the business which is why they decided to restrict the sourcing of the start – up capital for the business to just three major sources.

These are the areas we intend generating our start – up capital;

• Generate part of the start – up capital from personal savings and sale of his stocks
• Generate part of the start – up capital from friends and other extended family members
• Generate a larger chunk of the startup capital from the bank (loan facility).

N.B: We have been able to generate about $500,000 (Personal savings $350,000 and soft loan from family members $150,000) and we are at the final stages of obtaining a loan facility of One Million USD from our bank. All the papers and document has been duly signed and submitted, the loan has been approved and any moment from now our account will be credited.

14. Sustainability and Expansion Strategy

The future of a business lies in the numbers of loyal customers that they have the capacity and competence of the employees, their investment strategy and the business structure. If all of these factors are missing from a business (company), then it won’t be too long before the business close shop.

One of our major goals of starting Safe Lock® Self – Storage and Warehouse, LLC is to build a business that will survive off its own cash flow without the need for injecting finance from external sources once the business is officially running.

We know that one of the ways of gaining approval and winning customers over is to rent or lease of our self – storage and warehouse facility is to ensure that our facility is not just strategically locate, but also highly secured and affordable.

Safe Lock® Self – Storage and Warehouse, LLC will make sure that the right foundation, structures and processes are put in place to ensure that our staff welfare are well taken of. Our company’s corporate culture is designed to drive our business to greater heights and training and re – training of our workforce is at the top burner.

As a matter of fact, profit-sharing arrangement will be made available to all our management staff and it will be based on their performance for a period of ten years or more. We know that if that is put in place, we will be able to successfully hire and retain the best hands we can get in the industry; they will be more committed to help us build the business of our dreams.

Check List / Milestone

• Business Name Availability Check:>Completed
• Business Registration: Completed
• Opening of Corporate Bank Accounts: Completed
• Securing Point of Sales (POS) Machines: Completed
• Opening Mobile Money Accounts: Completed
• Opening Online Payment Platforms: Completed
• Application and Obtaining Tax Payer’s ID: In Progress
• Application for business license and permit: Completed
• Purchase of Insurance for the Business: Completed
• Acquiring facility and remodeling the facility to fit into our self – storage facility and warehouse: In Progress
• Conducting Feasibility Studies: Completed
• Generating capital from family members: Completed
• Applications for Loan from the bank: In Progress
• Writing of Business Plan: Completed
• Drafting of Employee’s Handbook: Completed
• Drafting of Contract Documents and other relevant Legal Documents: In Progress
• Design of The Company’s Logo: Completed
• Graphic Designs and Printing of Packaging Marketing / Promotional Materials: In Progress
• Recruitment of employees: In Progress
• Purchase of the Needed office appliances and security gadgets and software: In Progress
• Creating Official Website for the Company: Completed
• Creating Awareness for the business both online and in the neighborhood: In Progress
• Health and Safety and Fire Safety Arrangement (License): Secured
• Opening party / launching party planning: In Progress.

More on Real Estate

How To Start a Self-Storage Unit Business and How Much Will it Make?

October 13, 2022

Adam Hoeksema

IBIS World gives us a general insight into the $23 billion a year self-storage and warehouse leasing industry raging in the US. Over 182,000 businesses have opened nationwide to take their share of the pot. Increasing in both 2020 and 2021, despite the pandemic, profit is expected to reach the highest share of revenue since 2002 with a growth of 2.5% every year.

How Much Profit do Storage Unit Owners Make?

The average profit for a storage unit business owner is $184,500 annually. Of course the potential profit for any specific storage unit facility will depend on the size of the facility, the market rate for rent in the area, and the operating efficiency of the business. We estimated the annual profit of $184,500 by taking the average storage unit facility size of 50,000 square feet x the average annual rental rate of $9 per square foot = $450,000 in annual revenue. Then taking a profit margin of 41% gives us a forecasted annual profit of $184,500.

We will dive into the sources for these assumptions and the ranges in revenue and profit margins in the article below, and show you how to use our templates to create your own projections.  We have three templates that I will reference throughout the article:

• Simple Self Storage Facility Template - best for smaller and existing storage facilities.
• Self Storage Developer Template - best for developers looking to raise capital for new self storage facilities.
• Self Storage Acquisition Template - best for investors that are buying, renovating and selling storage facilities.

Common Steps to Starting a Self-Storage Unit Business

Such promising revenue numbers beckon forward when it comes to making the decision to start such a business. Let’s review some of the most common steps needed for a successful and profitable business.

• Budget for the business and determine the potential size
• Determine the target market and perform market research in the area
• Finance the business and purchase or rent space and equipment
• Complete all required paperwork and form a legal entity
• Obtain required permits and insurance to operate as a business in the area
• Set up necessary accounting and banking
• Start an advertising campaign
• Complete any necessary renovations before opening the doors to the public

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

The average cost to start a self storage unit business is $2 million.

Three sources ( Storable , LovetoKnow , MakoSteel ) give us estimated startup costs of starting a new self-storage unit business. 

• Minimum startup cost for a self-storage business = $1.5 million
• Maximum startup cost for a self-storage business = $2.4 million
• Average startup costs for a self-storage business = $2.0 million

The majority of the expenses incurred during the startup process fall into the following categories:

• Land purchase
• Construction
• Permits and licenses
• Outfitting the premises

What is the Average Size of a Storage Unit Facility?

The average size of a storage unit facility in the US is 56,900 square feet according to Easy Storage Solutions .  For easy math throughout this article we will use a 50,000 square foot facility as an example. 

Self Storage Facility Layout

The layout of your storage facility is going to be determined based on the land that you have.  Details around road access, drainage, zoning, etc.  The cost of your land and location will also determine whether you are building a multi story storage facility or spreading out the units on the same level.  Obviously the construction cost per unit will be more expensive if you build a multi-story facility, but if the land is expensive or you are landlocked your only option may be to build up.  Ultimately the goal of your layout will be to maximize your rentable square feet of storage space.  

Once you have solidified your facility layout that will maximize your rentable square feet, next you need to determine what your self storage unit mix should be. 

How Many Storage Units Per Acre?

On average you can fit between 130 and 215 storage units per acre assuming a 10 ft x 10 ft “standard” unit.  

We were able to calculate this based on the following assumptions:

• There are 43,560 square feet in 1 acre
• Most storage unit facilities will cover between 30 and 50% of the parcel with units according to SelfStorageNinjas .
• This means there would be between 13,000 square feet and 21,750 square feet available per acre.  
• Since the “standard” storage unit is 100 square feet, we estimate that you can fit between 130 and 215 storage units per acre.    

Of course if your average storage unit is larger than 100 square feet you will be able to fit fewer units per acre.  

Average Number of Units per Storage Unit Facility

According to a survey of 10,000 storage unit facilities the average number of storage units per facility was 546.

Self Storage Unit Mix

There is not a one size fits all unit mix when it comes to self storage facilities.  Although you might be able to charge a higher rate per square foot if you had all very small units, the reality is that your customers will need a more diverse mix of storage units.  If your target market is in the city, and your customers are typically in small apartments, then you might need more small storage units.  If you are located in a suburban area where the average home is 4,000 square feet, you are likely going to have more customers that need a larger unit.  

Average Unit Mix for Self Storage

According to Inside Self Storage the average unit mix for self storage is as follows:

Cost to Construct a Storage Unit Facility

The average cost to construct a storage unit facility can range from $1.25 million to $3.5 million.  We estimate this range based on an average size 50,000 square foot facility and a construction cost of $25 to $70 per square foot based on information provided by Storable . This does not include the cost of the land or other operational startup costs.  

Self Storage Construction Budget

Our self storage developer template will allow you to build a construction budget for your self storage facility as seen below:

Acquiring a Storage Unit Business

Rather than spending $1.25 to $3.5 million to build a new storage unit facility, you might want to consider acquiring an existing storage facility .  Although an existing facility would be older and might require some additional repairs and maintenance, if the facility is already fully operational and leased up with tenants, you will be able generate positive cash flow faster.  It can take 2 to 4 years to reach a stabilized occupancy rate for a new 50,000 square foot storage unit facility, so acquiring an existing facility with tenants can really speed things along.

You can find hundreds of self storage facilities for sale on LoopNet .  

Acquiring vs. Constructing a Self Storage Facility

One of the great things about our self storage financial models is that they will allow you to easily compare the differences between acquiring an existing facility versus constructing a new storage facility.  You can enter assumptions about the purchase price or construction price into the model, details about financing, and the number of units available to rent.  

Bonus Video Content - How to Acquire a Storage Unit Facility .

How Much Can a Self-Storage Unit Business Make in Sales?

The potential revenue for any business varies due to a number of factors. The size of the self-storage facility, whether it’s one or two floors, the market need for storage in the area, and how many units are likely to get rented at any time. 

How to Set the Price of One Unit?

The price of each unit is the key to running a successful business and making a profit. The revenue potential is held within this business element. There are two approaches to setting the right price. 

Market-Based Pricing

A quick and simple approach to setting a price is completing market research. Staying competitive in the market can make all the difference and it’s not time-consuming. Search engines provide quite a bit of information on prices in the same area. 

Target Based Pricing

This approach will require more work than the first, but it has an end goal in mind. Rather than setting the price to match those of competitors, you work to set the price of potential gross profit margin. 

The typical profit margin of a self-storage business, according to Storable , is around 41%. Target-based pricing means setting the price in such a way that you’ll meet that goal. According to QT Business Solutions , there are around $3 in operating expenses for every raw square footage of the facility.

Calculating the amount to charge per storage unit will depend on a couple of factors. For example, you’ll need the exact amount of square footage of the facility and the sizes of the units, and their number. Once you have the information, you can double any potential expenses to get to the required revenue to meet at least the 41% profit, unless you are aiming higher. 

Self Storage Rent per Square Foot

The average rent per square foot for self storage space in the US was $1.28 in 2022 according to Statista .  Although this is the average, the rate that you will be able to charge is going to differ based on your location.  Additionally, the rate per square foot for self storage units is related to the size of the units that you are renting.  You can check out SpareFoot for the most up to date rent per square foot data.  As of February 2023 you can see their estimates and the major differences in rent per square foot for small vs. large units. 

How full will the facility get?

Self-storage unit businesses run year-round which alleviates one potential worry. However, estimating revenue will depend on how many renters there will be. QT Business Solutions explains that most facilities see an occupancy rate sitting at around 90% in today’s market. 

Though most businesses in the industry will shoot for occupancy of around 80% to 90%, Storable tells us that 65% of occupancy will at least cover the operating and debt expenses of the business. 

With the current trend in downsizing homes and apartment versus home rentals, self-storage units are a popular choice among millennials. 2020 showed an occupancy average of 91.7% , and those numbers have been holding steady, if not growing. 

Of course, those who own a self-storage unit business should not shoot for anything higher than around 90% so that there is always storage to rent. You do not want to find yourself shooting for 100% occupancy and have nothing left for new customers.

Self-storage unit business revenue potential

The revenue potential for a self-storage unit business is quickly calculated once you have all the right information on hand. 

To start with our example, let’s say we are using a facility the size of 50,000 square feet -- the average for these types of businesses. To cover the expenses required to run the business, Truic advises setting the price at around $9 per square foot, per year. 

This estimates the yearly revenue around $450,000, or $37,500 monthly. Of course, this number is for 100% occupancy, which means we need to deduct vacancies of at least 10%. This brings us to a total of $405,000 a year before any other expenses are taken into account. 

Download the Storage Unit 5 year financial projection template

Self-storage unit business annual revenue.

The average revenue for a self storage business is $450,000 per year.

Three sources ( Truic , SweatyStartUp , BizFluent ) tell us the expected revenue amount for a 50,000 square foot self-storage unit business.

• Minimum revenue for a self-storage unit business = $90,000
• Maximum revenue for a self-storage unit business = $600,000
• Average revenue for a self-storage unit business = $450,000

What Are Common Operating Expenses for A Self-Storage Unit Business?

The common operating expense categories for self storage units include:

• Real Estate Taxes
• Property Insurance
• Repairs and maintenance
• Administrative Costs
• Off-site Management
• On-site Management
• Advertising
• Miscellaneous

Average Operating Costs for Self Storage Facilities

The average operating cost as a percentage of revenue for self storage facilities is roughly 35%. 

We calculated this number based on the SEC financial statement filings for Extra Space Storage, one of the largest and most diversified storage facility owners in the US.  In 2021 and 2022 their property operational costs and their general and administrative costs amounted to roughly 35% of revenue in both years.  This does not include depreciation or amortization costs.  Because depreciation costs can vary dramatically based on accelerated depreciation, we wanted to look at true operating costs only which are more stable.  Your depreciation and amortization costs will vary depending on your specific property and financing details.   

Typical Operating Costs for Self Storage Facilities

Based on a report from CBRE that analyzed 808 self storage facilities, the average operating cost per square foot was $4.03.  This is based on 2017 data, so you can expect these costs to have increased, but we can still gain some valuable insight from this information. 

Self Storage Operating Expenses as a Percentage of Revenue

Once we have estimated our expenses, we can now estimate our net operating income.

How much profit can a self-storage business generate?

Profit from a self-storage unit business will vary drastically. Depending on the area, the size, and the market need, this business has the potential for a high return on investment. 

Self-Storage Unit Business Profit Margin

The average profit margin for a self storage business is 41%.

Three different sources ( Storable , BizFluent , RoadLessTraveledFinance ) provide us with the expected profit margin for a self-storage unit business so that you too know what goals to set.

• The minimum profit margin for a self-storage unit business = 11%
• The maximum profit margin for a self-storage unit business = 60%
• The average profit margin for a self-storage unit business = 41%

Financing a Storage Unit Business

Whether you are looking to finance an acquisition of a storage facility or finance the new construction, a self storage SBA loan can be an excellent option for you.  Because a storage unit facility can be used as collateral and since the primary use of the proceeds will be for real estate, you will likely be able to secure a longer term than average with an SBA 7a loan.  SBA 7a loans offer terms of up to 25 years for real estate loans. 

Raising Investment for a Storage Unit Business

You will only be able to borrow a percentage of the acquisition price or construction cost of your storage unit facility, so you will need to raise some investment.  That could be your own personal investment into the business, or you might look to pitch investors to join you in the business.  If you are pitching investors, you should have a good understanding of what the internal rate of return that your potential investors expect.  Once you create a set of cash flow projections for your storage facility, you can calculate the IRR - internal rate of return that you expect investors would be able to generate. This video will teach you how to calculate IRR with our projection templates. 

Self Storage Business IRR

The average IRR for a self storage facility was 16.9% between 2009 and 2018 according to Forbes . So as you are calculating your forecasted IRR you will want to make sure that the facility can get within the range of returns that investors expect.  You can use our developer template as a self storage IRR calculator .

Once you complete your storage unit projections you will be able to see how your facility compares to industry standards in our Profit and Loss at a Glance table as seen below:

If you’re exploring starting your own self-storage facility and need to create comprehensive financial projections for planning, investors, or lenders we offer a CPA-developed, easy-to-use, and affordable template built specifically for self storage businesses, please check out our self storage pro forma template .

Self Storage Business Plan Outline

If you are moving forward with starting or buying a self storage business, your SBA lender may ask you for a business plan. Here is a quick business plan outline that you can use for your self storage startup.

I. Executive Summary

• Business Overview
• Management Team
• Business Goals

II.  Company Description

• Industry Analysis
• Company Objectives

III.  Market Analysis

• Target Market
• Competitive Analysis

IV.  Products and Services

• Description of Services
• Pricing Structure

V.  Operational Plan

• Business Hours

VI.  Financial Plan

• Sales Projections
• Income Statement
• Cash Flow Projection
• Break-even Analysis

VII.  Conclusion

You can get the self storage financial projection template.

The template is simple to use and will save you loads of time while still producing professional looking storage unit business projections. ProjectionHub has helped more than 50,000 businesses create financial projections so you can be confident that you can do it too.

The self storage projection template includes:

5 Year Self Storage Pro Forma Financial Statements

CPA Developed & Completely Customizable

Free Support & Projections Review

Compatible with Google Sheets

Free expert review of your completed projections

The template is easy to use and you do not need to be an excel wizard to fill it out. Editable cells are highlighted in blue, a video guide is included, and our team is available to answer any questions you have.

You can see the complete walkthrough and demonstration of the storage unit business forecast template here:

Get the template today for just $99

If you have any questions before purchasing, please feel free to begin a live chat or email us at [email protected]

100% money back guarantee in accordance with our terms and conditions

Top Right Photo by Ketut Subiyanto from Pexels

About the Author

Adam is the Co-founder of ProjectionHub which helps entrepreneurs create financial projections for potential investors, lenders and internal business planning. Since 2012, over 50,000 entrepreneurs from around the world have used ProjectionHub to help create financial projections.

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How Much Does it Cost to Start a Storage Unit Business?

Are you considering starting a storage unit business but wondering about the costs involved? The initial investment can vary greatly — influenced by factors like location, size, amenities, and operational expenses. This article will guide you through the financial aspects, whether you’re planning a small-scale operation or a larger franchise . 

We’ll break down the key elements that determine start-up costs, providing you with the insights needed to make informed decisions and manage your business effectively. When you’re ready, let’s explore what it takes financially to launch your storage unit venture.

Analyzing the Market

When entering the storage unit business, a thorough market analysis is key. This process involves a deep dive into various aspects, starting with the evaluation of construction and development costs. But that’s not all: it’s equally important to understand your target market. You need to be aware of rental price trends, which can have a significant impact on your income.

Factors such as expected occupancy rate and potential profit margin are also important metrics to consider. These indicators influence your financial projections and your business model that aligns with your goals and market conditions.

In addition to the numbers, a SWOT analysis — the assessment of strengths, weaknesses, opportunities, and threats — provides a comprehensive overview of your business landscape.

Creating a Business Plan

Creating a business plan for a warehouse is an important step that requires close attention to several factors that affect the overall cost. To develop a comprehensive business plan, consider the following steps:

• Location Analysis : Evaluate the cost implications of different locations, considering factors like land prices, accessibility, and proximity to potential customers.
• Facility Sizing : Determine the optimal size for your facility based on market demand and budget constraints.
• Material Selection : Choose construction materials that balance cost-effectiveness with durability and security.
• Business Model Development : Decide whether you’ll operate independently or as part of a franchise, and consider the cost differences between these options.
• Financial Forecasting : Prepare detailed projections of start-up costs, ongoing operational expenses, and potential revenue streams.
• Market Strategy : Develop a marketing plan tailored to your target audience, focusing on competitive pricing and visibility.
• Operational Plan : Outline day-to-day operations, including staffing, security measures, and customer service protocols.
• Risk Assessment : Identify potential risks and challenges, and devise strategies to mitigate them.

Choosing a Location

Choosing the right location for a self-storage facility requires a multi-layered analysis that begins with a market feasibility study. This study should consider demographics, site availability, competition, pricing, and special offerings such as climate control. A self-storage consultant and local broker can be invaluable in this process.

Additionally, site considerations such as accessibility, visibility, traffic volume, and proximity to potential customers are crucial. Prioritize safety to attract tenants and carefully assess land costs, aiming for them to comprise about 25%-30% of your total project budget. 

Securing Financing

Without a secure wallet, there is no cash flow , and if you want to start a warehouse business, you’ll want to find the financial foundation that will support your vision and turn your plans into reality. Here are some potential options for securing financing:

• Traditional Commercial Loan
• Real Estate Loan
• Construction Loan
• Personal Capital
• Private Investors

Identifying the Necessary Supplies

As mentioned earlier, selecting the right materials and supplies for your storage unit business is crucial, as it balances cost-effectiveness with durability and security. Here’s a list of potential necessary supplies:

• Storage Containers
• Buildings or Units
• Surveillance Cameras
• Access Control Systems
• Transport Vehicles
• Vehicle Storage Equipment
• Security Fencing
• Lighting Systems
• Office Supplies and Equipment
• Maintenance Tools and Equipment
• Signage and Marketing Materials
• Software Systems for Management and Security
• Fire Safety Equipment

Estimating the Costs

Cost estimation in the storage unit business varies significantly between constructing a new facility and taking over an existing property. New constructions typically involve higher initial investment due to land acquisition, construction, and development costs. 

In contrast, acquiring an existing facility might reduce these upfront costs but could entail renovation and modernization expenses. Additionally, operational costs including staff salaries, software for facility management, security systems, and maintenance should be factored into the budget for a realistic financial overview.

Purchasing Equipment and Supplies

Once funding is secured, purchasing equipment and supplies is a critical step. This includes acquiring storage containers, security equipment like cameras and access systems, office supplies, and potentially vehicles for transport services. 

Preparing the Facility

Preparing the facility for customers involves more than just construction and setup. It requires ensuring that all security measures are operational, the layout is customer-friendly, and the units are clean and ready for use. This stage also includes setting up office spaces, installing signage, and implementing maintenance routines. 

Establishing Policies and Procedures

Before opening your storage unit business, it’s imperative to establish clear policies and procedures. This includes drafting rental agreements, outlining move-in and move-out policies, and setting rules for facility usage. These policies should be legally vetted to protect both the business and its customers. 

Additionally, developing procedures for handling late payments, damages, and disputes is essential for smooth operation.

Advertising and Promoting the Storage Facility

With the storage facility prepped and policies in place, the next step is advertising and promoting your business to attract customers. This phase is vital for establishing your presence in the market and driving occupancy rates. From online campaigns to local community engagement, each advertising effort plays a key role in building your brand and growing your customer base.

Creating an Easy-to-Use Website

A user-friendly website is essential for attracting and retaining customers in today’s digital age. It should be intuitive, informative, and accessible, providing potential customers with all the information they need about your storage facility. 

Key components of a successful website include:

• Easy navigation and user interface
• Customer testimonials and reviews
• Online booking and payment systems
• Contact information and location details
• SEO optimization for better online visibility
• Clear and concise information about services offered

Adding Your Business to Local Directories

This step makes it easier for potential customers in your area to find your business when searching for storage solutions. Key directories to consider are:

• Google My Business
• Bing Places
• Local business chambers and directories
• Industry-specific directories

Note: Adding location-based information helps with on-page SEO (search engine optimization) to further bolster your chances of getting organic traffic. 

Local advertising can significantly increase the presence of your business in the community and attract nearby customers. It’s important to use different platforms to reach a wide audience. Some effective local advertising methods include:

• Facebook and social media ads
• Search engine advertising
• Local newspapers and magazines
• Billboards and outdoor advertising
• Community event sponsorships
• Direct mail campaigns

The Final Costs

In short, the cost of starting a storage unit business can vary greatly based on several key factors. Location plays a crucial role, as land and construction costs can vary drastically from one area to another. 

In addition, the decision between building a new facility or purchasing an existing one will affect the overall budget, with new builds usually requiring a higher initial investment.

Other variables such as the size of the facility, desired equipment, and operating costs also contribute to the final cost. So it’s important to consider these factors carefully to create a realistic financial plan for your storage unit venture, ensuring its long-term success and profitability.

How much does it cost to start a storage unit business?

The cost of starting a storage unit business can vary significantly, typically ranging from a few tens of thousands to several million dollars, influenced by factors such as location, size, and whether it involves building a new or purchasing an existing facility.

How profitable is a storage unit business?

A storage unit business can be quite profitable, especially in areas with high demand for storage. Its profitability hinges on factors like location, facility size, operational efficiency, and local market rates.

Is a self-storage facility a good investment?

Yes, a self-storage facility can be a good investment. They often offer stable revenue streams and have historically shown resilience in economic downturns, but success depends on factors such as market saturation, location, and effective management.

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Starting Up a Storage Unit Business: Everything You Need to Know

• by Hyatt Singas
• August 6, 2023 August 6, 2023

Starting up a storage unit business requires careful consideration of several important factors. From conducting thorough market research to selecting the optimal location for your facility, there are many critical steps involved in launching a successful storage business. This article aims to provide valuable insights and guidance on the key steps that you need to take to ensure the success of your storage unit business venture. Whether you’re a first-time entrepreneur or an experienced business owner, following these steps can help set you on the path to achieving your goals and building a thriving business.

Table of Contents

Conduct Market Research

Conducting thorough market research is a critical step that should not be overlooked when starting a storage unit business . It lays the foundation for identifying your target market and understanding their needs and preferences. You can use this information to create a unique value proposition that sets you apart from competitors and informs your marketing strategy .

To conduct effective market research , start by defining your target market based on demographic and psychographic factors, such as age, income, lifestyle, and behavior. Then, use both primary and secondary research methods to gather data on the demand for storage units in your local area. Primary research involves collecting data directly from potential customers through surveys, focus groups, and interviews. Secondary research involves analyzing existing data sources, such as government statistics, industry reports, and competitor websites.

Some useful sources of secondary data for storage unit businesses include the U.S. Census Bureau and the Self Storage Association. The Census Bureau collects data on population and household characteristics, which can help you understand the size and composition of your target market. The Self Storage Association provides industry-specific data on market trends, customer behavior, and operational benchmarks. You can also analyze competitor websites to gather information on their pricing, services, and promotions.

Market research is an ongoing process that should inform all aspects of your storage unit business, from product development to customer service. By staying up-to-date with industry trends and customer preferences, you can adapt your business to meet changing market demands and build a loyal customer base. Remember to always use reliable sources and analyze data objectively to make informed decisions that drive business success.

Choose a Suitable Location

Selecting the perfect location for your storage unit business is crucial and can be a determining factor in whether or not you will succeed. It is important that you carefully consider and evaluate all aspects of potential locations before making a final decision .

One of the most critical factors to keep in mind when selecting a location is accessibility. Your storage facility should be easy to reach, with direct access from main roads and highways. Clients will appreciate being able to conveniently drop off and pick up their belongings without having to travel out of their way or navigate through confusing side streets. Additionally, being visible from major thoroughfares will increase your exposure and draw attention to your business.

Another critical element to consider is zoning regulations. To operate a storage unit facility, you must ensure that the property you choose is zoned for commercial use. Otherwise, you may run into issues with local officials and face fines and penalties. You can easily check your local zoning regulations by visiting your city or county government website. If you have any questions or concerns about zoning requirements, it’s always a good idea to consult with a real estate attorney or zoning specialist.

Finally, don’t forget to consider parking space. Your customers will need ample room to maneuver their vehicles and load and unload their belongings. Be sure to choose a location with plenty of parking spaces available to avoid frustration and lost business.

The location of your storage unit business is one of the most important factors in determining your success . By choosing a site that is easily accessible, visible, properly zoned, and has adequate parking space, you can improve your chances of building a thriving and profitable business.

Create a Business Plan

A meticulously devised business plan is a fundamental aspect of any successful business venture. Not only does it serve as an essential tool for securing funding, but it also acts as a roadmap to guide you through the various stages of establishing and running your business. To ensure that your business plan covers all the necessary elements, there are several key areas that you should focus on.

Your mission statement is the foundation of your business plan and provides an overview of the purpose and goals of your business. Your financial projections are another critical component and should include realistic estimates of revenue, expenses, and profits. A comprehensive marketing strategy that outlines how you will reach and engage with your target audience is also essential. An operational plan detailing how you will run and manage your business is also necessary.

Fortunately, there are free resources available to help you create a well-crafted business plan. The Small Business Administration (SBA) offers a wealth of information, including online courses, webinars, and templates to assist you in developing a comprehensive plan. Additionally, there are numerous business plan software programs available that can guide you through the process of creating a professional and effective plan.

A well-designed business plan is vital to the success of your business. It should include your mission statement, financial projections, marketing strategy, and operational plan. Utilizing the resources provided by the SBA or investing in a business plan software program can help ensure that your plan is both comprehensive and effective.

Obtain Necessary Permits and Licenses

When starting a storage unit business, it is essential to ensure that you have all the necessary permits and licenses to operate legally. The licensing requirements vary depending on the state and locality in which your business operates, so it’s crucial to research and comply with the specific regulations for your area.

The first step is to check with your local government website or licensing office to determine what permits and licenses are required. This typically includes obtaining a business license, registering with the state, and securing any necessary zoning permits. Depending on your location, you may also need to obtain a construction permit if you plan to build a new facility or make significant renovations to an existing structure.

In addition to obtaining the necessary permits and licenses, it’s also important to ensure that you comply with all applicable laws and regulations. This includes following fire safety codes, meeting building code requirements, and complying with any environmental regulations that may apply to your business.

Operating without the proper permits and licenses can result in fines, legal action, and even the closure of your business. Therefore, taking the time to research and comply with all the necessary regulations is critical to the success of your storage unit business.

Acquiring the necessary permits and licenses is a crucial step when starting a storage unit business. Be sure to check your state and local government websites and comply with all the regulations to avoid legal issues and to operate your business efficiently and effectively.

Secure Funding

Starting a storage unit business requires a significant amount of upfront capital, as there are many expenses associated with setting up the business, such as purchasing land or leasing space, constructing or renovating the facility, buying equipment, and marketing the business. Fortunately, there are several options available for securing funding.

Traditional bank loans are a common option for obtaining funding. Banks typically require a solid business plan, financial projections, collateral, and a good credit score to qualify for a loan. The Small Business Administration (SBA) also offers various loan programs that provide financing at lower interest rates than traditional bank loans. To qualify, you’ll need to demonstrate a strong business plan, collateral, and good credit history.

Private investors are another option for securing funding. These can include family and friends, angel investors, or venture capitalists. Private investors typically invest in businesses that show high growth potential and have a well-crafted business plan and financial projections.

To increase your chances of obtaining funding, it is essential to have a solid business plan and realistic financial projections. Your business plan should include a detailed analysis of the target market, competition, marketing strategy, and operational plan. Financial projections should be based on realistic estimates of revenue, expenses, and profits.

Starting a storage unit business requires significant upfront capital, but there are several options available for securing funding. Traditional bank loans, SBA loans, and private investors are all viable options. It’s crucial to have a solid business plan and financial projections to increase your chances of obtaining funding and building a successful business.

Purchase or Lease Property

Once you have secured funding, the next step in starting your storage unit business is to purchase or lease a facility that meets your needs and budget. When acquiring property, it is critical to ensure that all legal requirements are met, and the transaction is legally sound.

If you are purchasing property, consider hiring a real estate attorney with experience in commercial transactions. Your attorney can help protect your interests and negotiate favorable terms in the purchase agreement. This includes ensuring that the property has all the necessary permits and licenses, addressing any zoning issues, and verifying that there are no liens or other encumbrances on the property.

If you are leasing property, negotiating favorable terms with the landlord is essential. Some aspects to consider include rent, maintenance responsibilities, length of the lease, and renewal options. It’s also important to review the lease agreement carefully and seek legal advice if necessary to ensure that you understand all obligations and restrictions.

In addition to these considerations, you’ll also need to evaluate the physical aspects of the property, such as location, size, accessibility, and security. These factors can significantly impact the success of your business and should be considered carefully when selecting your storage facility.

Once you have secured funding for your storage unit business, choosing the right facility is critical to your success. Whether purchasing or leasing, it’s important to ensure that all legal requirements are met and to negotiate favorable terms. Consulting with a real estate attorney and reviewing the lease agreement carefully can help protect your interests. Additionally, evaluating the physical aspects of the property can help ensure that your facility meets your needs and attracts customers.

Design and Construct Your Facility

Designing your storage facility to maximize space and provide easy access for customers is crucial to the success of your business. Several factors should be considered when planning the layout of your facility, including unit size, layout, security features, and climate control.

Unit size is an essential consideration because customers will have different storage needs. Offering a range of sizes can help ensure that you attract a broad customer base. The layout of the facility should also be designed to optimize traffic flow and make it easy for customers to navigate. This includes ensuring that there is enough space for vehicles to maneuver within the facility and that units are organized in a logical and accessible manner.

Security features are also essential to consider when designing your storage facility. This includes implementing measures such as surveillance cameras, gated access, and individual unit alarms to enhance the security of the property and give customers peace of mind. Additionally, offering climate-controlled units can help protect customers’ stored items from damage due to extreme temperatures or humidity.

When constructing your facility, it’s critical to hire a reputable contractor who has experience in building storage facilities. Your contractor should be knowledgeable about local building codes and ensure that all construction meets these requirements. This includes ensuring that the facility is structurally sound and able to withstand severe weather conditions.

Designing a storage facility that maximizes space and accessibility for customers is crucial to the success of your business. Factors such as unit size, layout, security features, and climate control should all be considered when planning the facility’s design. Hiring a reputable contractor who is knowledgeable about local building codes is also essential to ensure that the construction is safe and meets all requirements.

Market Your Business

Marketing is a crucial component of building and growing your storage unit business. It’s essential to create brand awareness and attract customers to your facility. There are several strategies you can use to promote your business.

One effective way to reach potential customers is through social media platforms. Create profiles for your business on Facebook, Instagram, and Twitter and regularly post updates about your facility, such as promotions, events, or new offerings. Engage with your followers by responding to comments, messages, and reviews to help build trust with potential customers.

Local advertising is also a useful tool for promoting your business. Consider placing ads in local newspapers, magazines, or online publications that target the community you serve. You can also invest in outdoor advertising, such as billboards or signs, to increase visibility for your business.

Community outreach programs are another excellent marketing strategy . Consider sponsoring a local event, donating to a charity or school, or holding an open house or customer appreciation day to increase awareness of your business in the community.

Offering promotions and discounts is an effective way to entice new customers to try your facility. Consider offering a discount for first-time renters or a referral program that rewards existing customers for referring friends and family.

Finally, providing excellent customer service is critical to retaining customers and building loyalty. Ensure that your staff is knowledgeable, friendly, and responsive to customer needs. Offering amenities such as 24-hour access or online bill pay can also improve the customer experience.

Marketing is essential to attract customers and build brand awareness for your storage unit business. Utilizing social media platforms, local advertising, community outreach programs, promotions, and discounts can all be effective strategies. Providing excellent customer service is also crucial to retaining customers and building loyalty.

Starting up a storage unit business requires careful planning, hard work, and dedication. By conducting thorough market research, choosing a suitable location, creating a solid business plan, securing funding, obtaining necessary permits, and marketing your business effectively, you can achieve success in this dynamic industry. Remember to stay up-to-date with industry trends and continually improve your services to provide value to your customers.

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