Across the country, entrepreneurs are talking about the self storage business. The buzz is that investing in the mini storage business can be very profitable. What’s more, seasoned investors aren’t the only ones with their eye on the mini storage prize. With lower building and management costs than other real estate investments and a failure rate of less than ten percent, the self storage industry is drawing first-time business owners like moths to a dazzling flame.
The advantages are obvious, easy start up, easy maintenance, low risk, but what’s the catch? Can it really be that easy? There is no catch, but it does require work. An investment the mini storage business has a lot of potential, but it is an investment. No matter how you slice it, you need to be prepared to devote time, energy and of course, money to a self storage enterprise. If you’re ready to commit to the self storage industry, here are some things to consider before you invest:
If You Build it, Will They Come?
Before you spend even a nickel on land or buildings you’ll need to do some research into the self storage market. You should strongly consider hiring an experienced consultant to do a feasibility study in your area. Even if you have experience in real estate or the self storage industry, an unbiased opinion is invaluable when starting a new venture.
Location, location, location. Those three words are everything in the real estate world. The same is true for your self storage facility. You might be tempted to use a bit of land you already own, or buy the lowest priced land you can find but you should never sacrifice location for price.
According to the Mini Storage Messenger, a resource center for the self storage industry, choosing a site is one of the most difficult decisions to make. An ideal site is one that is located on a major travel corridor and is highly visible. Still, there are more factors to consider. Will you be needed in your service area? How much competition are you facing? Is the area you’re interested in already saturated with self storage businesses? If there are a lot more storage units than customers in your area you’re likely going to have empty storage units which lead to an empty bank account.
Measure Twice, Cut Once
You’ve considered where, next you’ll need to consider how. Since your storage buildings will be your business, a lot of thought should go into planning construction. The unit mix and amenities of your site can be greatly advantageous or, conversely, a huge drain on profits. There are quite a few construction details that are unique to the mini storage industry, such as driving space, size and placement of unit doors, lighting and security. Choose a builder a builder with experience in the self storage industry who can advise you in such matters. The right building plan will improve your occupancy rate and help you avoid costly renovations. For professional advice in choosing the best steel building supplier, visit http://www.gosteelgo.com/ChoosingSteelBuildingSupplier.htm.
Another aspect of self storage construction to consider is financing. Construction loans are dramatically different and more complex than other forms of permanent financing. Moreover, construction loans for self storage are different than those for traditional real estate. Before scheduling an appointment with your lender find out about the size and scope of loans they are able to make and if they make unique loans for mini storage businesses.
Holding Down the Fort
After deciding where and how to build your mini storage units there are still more things to consider. Many first time business owners fail to plan beyond grand-opening day. Advertising, staffing, and the day to day maintenance of your new self storage site should not be afterthoughts.
An important detail to consider is marketing. You’ll need more than a listing in the yellow pages and a big sign out front to keep your storage units full. Decide on a marketing strategy before you build. Expect to be analyzing and changing that strategy through out the life of your self storage business. Advertising is a necessity not an option.
Customer service and salesmanship will be vital to your business. Be prepared to find experienced staff members and to train them. Be cautious about hiring friends and family. It’s hard to treat loved ones like employees and hard for them to treat you like the boss. Also, don’t assume that you can do it all yourself. If you want your mini storage business to be a success you’ll probably need to be open a lot more hours than you’ll want to be standing behind the counter.
As with any business venture, the risks and decisions involved in starting a self storage business can be daunting. However, with proper planning and preparation, an investment in the self storage industry can be a dream come true for any aspiring business owner.