Building Your Future How to Start a Storage Unit Business from Scratch

Building Your Future How to Start a Storage Unit Business from Scratch A storage unit business provides lucrative income with no inventory, minimal overhead, and low operational costs. Heres how you can start one of your own. Youre sick of punching the clock day in and day out only to receive an income that you feel doesnt reflect your worth what you truly bring to the table. Now just may be the perfect time to create your own table in other words, hire yourself. If youre thinking about entering the storage unit business in particular, youre on the right track. After all, research shows the storage leasing industry in the United States has skyrocketed by nearly 4% during the past five years, reaching a revenue of $37 billion in 2018. So, why exactly is the storage unit industry so hot right now? Because a storage unit business provides lucrative income with no inventory, minimal overhead, and low operational costs. Weve compiled a guide for starting your own storage unit business from scratch so you can enjoy a piece of the pie this year. Lets get started! Psychographic and Demographic Market Research Before you start your storage unit business, you need to conduct psychographic and demographic market research to find out the answers to a couple of questions: In what areas are people interested in using storage unit services? What kinds of incomes will households need to earn to afford to rent storage units? As a general rule of thumb, people who live in the suburbs are more likely to want to lease storage units compared with those in rural or urban areas. But, businesses of all sizes may be interested in renting these units to securely store their extra business documents. Whether youre catering to business owners or homeowners, note that your customers will choose you only if your storage units are in a secure location and are easily accessible when they need them. The more research you do beforehand, the better youll understand the industry and where your units should ideally go before you commit money and time to this industry. Who is Your Competition? How much competition youll face in the storage unit business largely depends on where your units are located. However, as a general rule of thumb, here are a few top brands you may come across in your search for competitors: Public Storage Sovran Self Storage Extra Space Storage U-Haul Life Storage CubeSmart These companies stand out in the industry for several reasons: How long theyve been in the business Their publicity and marketing strategies Their quantity of units Their units locations Their security and safety measures Areas, where these companies storage units are already located, may be good places to set up your units, as these areas likely feature huge demand. Youll simply need to focus on making your offerings competitive in terms of price in these areas. Also, you can feel free to have more than one business location in a single area if you feel the area is thriving enough to support both locations. Storage Unit Business Planning As soon as you know where you would like to set up your units permanently, its time to construct a business plan. For instance, maybe youd like a part-time business that you can run from home starting out. Thats perfectly fine, as you can simply grow your company over time. Of course, if you want to start out big, then thats fine, too. Just be sure to determine where you see yourself in five years from now and map out a plan for getting there. What Are Your Start-Up Costs? You now know how youd like to approach your storage unit business and where your units should go. Now, you must estimate your companys start-up costs, also known as sunk costs. Keep in mind that your start-up expenses are not the same as the costs of maintaining your business long term. The start-up costs youll need to raise money or obtain financing for include the following: The purchase of land The construction of a building Promotional materials Website design Unexpected expenses When it comes to constructing a building, note that you dont necessarily have to create a brick-and-mortar facility. Instead, you could use used shipping containers, which are available through companies like Equipment Management Services. These containers offer the benefit of being easy to maintain, strong, affordable, and convenient. As a general rule of thumb, about $35 to $40 per square foot (plus site improvements) is what youll need to erect your business facility. It may take you a year and a half to a couple of years to fully realize your full revenue potential, especially if youre in a competitive market. The Legal Side of Your Business This side of your business is also important to consider, as you may end up facing customers who want to sue you. In addition, you might need to produce reports for regulatory authorities. A certified public accountant can help you to set up the most appropriate legal entity for your business. Your options include a Limited Liability Company (LLC), corporation, partnership, and sole proprietorship. When choosing your entity, you should take a number of factors into consideration. These include the following: The ease of setting up a certain legal entity Taxation issues The flexibility of the structure based on your business needs The liability protection youll receive Most business owners prefer the LLC option, as this legal entity allows you to keep yourself separate from your business. This means that if your business does end up facing a lawsuit in the future, the suit wont necessarily impact you personally, as your personal assets will remain protected. Also, you can enjoy a taxation benefit, as you will pay tax on your personal income return. If you choose to form a storage unit corporation, youll basically have a more formal, less flexible version of an LLC. To create a corporation, youll need multiple owners. However, you could create a certain form of a corporation called an S corporation with a single owner. With this structure, you can reduce your self-employment tax liability. The downside is that you cant grow past a certain point. Another form of corporation you may want to consider is the C Corporation, which is more formal than the S Corporation. A major disadvantage of this structure, though, is that every owner is taxed apart from the company, thus resulting in double taxation. Still, a C Corporation is ideal if you plan to build several facilities and thus will need to attract venture capital or private investors funds to your company. What about Insurance? Another way you can protect yourself before embarking on the road to storage unit business ownership is to secure insurance. Here is a rundown on a few types of insurance policies that may be worth looking into for your entity: General insurance Liability insurance Workers compensation insurance Insurance covering employment practices liability Property insurance Equipment insurance Insurance for errors and omission Insurance for payment protection If youre not quite sure which type of insurance to buy, an insurance broker or agent can point you in the right direction. Market Your Company This is one of the most important parts of starting your storage unit company from scratch. After all, you cant expect prospective customers to know about you if you dont market yourself. For starters, be sure to advertise your unit company in your local newspaper or magazine. TV and radio ads may also be helpful for getting the word out there about your new venture. Youll also need to create a website, which is why we mentioned earlier about including website design costs as part of your start-up costs. Of course, in addition to designing a site, youll need to find a company to host it. Then, youll need to use a search engine optimization (SEO) expert to make sure your website achieves as high of a ranking as possible on search engine result pages. In line with this, be sure your business is present on social media websites, such as Google Plus, Facebook, LinkedIn, Twitter and Instagram. This will help you to further publicize and promote your company. Other handy marketing tactics include installing billboards or flexi banners in strategic locations. It may also behoove you to take part in or sponsor local events to show that you are a major supporter of the local community. In addition, make sure that your company is present in online directories. An SEO consultant can help with this as well. How We Can Help If youre interested in starting a storage unit business, I can help. I have a wealth of experience in helping people to take their careers or businesses to the next level. Get in touch with me to find out more about how our business advice and branding services can help you to achieve your entrepreneurial goals long term.