It’s no secret that the pandemic greatly affected several budding and established local businesses during the past two years. Surprisingly, the storage rental industry has experienced extraordinary growth, with occupancy and rental rates at all-time highs. Though once considered a business behind the times, especially with innovations in businesses, storage rental facilities are continuously expanding, making it attractive to business people and investors alike.
You might be one of those who want to grow a local storage rental business. How profitable will it be for you? Do you know how this industry works, from securing substantial capital to brewing a solid marketing strategy?
Starting this type of business often involves figuring out how business loans work so you can create reliable funding for your new venture and analyzing the market to develop an effective marketing strategy. Moreover, it requires specific techniques to make it stable and thrive in the future.
This article explains how the storage rental process works and how to start a successful storage rental company. Let’s dive into them.
How Does the Storage Rental Process Work?
Whether for temporary or long-term storage, renting a storage facility is a safe, convenient, and cost-effective option for those who pay for them (usually every month). A self-storage business provides storage spaces of different sizes, like storage units or storage lockers, to various customers. They can gain access to their units with a form of ID and a lock. Residents and business owners alike take advantage of this, especially when they move to a new location and can’t imagine a safer place to store their valuables. They could stash anything, like art, furniture, TVs, documents, vehicles, boats, appliances, and office equipment.
Is a Storage Rental Business a Good Investment?
Storage rental facilities make life easier for those moving into newly constructed homes, staging a home, finding a place to stash heirlooms, protecting equipment from harsh weather, and eliminating clutter.
Operating it yourself, however, is not as simple as moving things from your space to a storage unit. Making it a business is similar to applying for a security license, wherein you can’t acquire it within a day. Investing in it requires specific qualities and requirements when you are just starting out as a new business owner.
Steps to Start a Storage Rental Business
Taking the risk of starting your storage rental facility is as critical as understanding how business loans work. You need to determine if you’re qualified to start it in the first place. You also need to understand every simple and complex technique associated with managing it to prevent significant losses.
Like every business venture, it requires your sound mind, body, and personality to engage customers, not to mention beat the high competition rate within your locality.
So, how can you tell you’re off to a promising start in providing storage rental services in your local area? Let’s go over the following steps:
Step 1: Determine your reason for starting this business and perform market research.
The basic rule in opening a new local business is asking yourself why you plan to venture into it. Experts say that in figuring out your first step, ask yourself, “If I create it, will they come?” For example, if you build a storage facility, will it generate enough revenue to cover debt service and operating expenses?
This goes together with conducting in-depth market research. Your research will help you determine if the business idea is feasible. You can even hire a self-storage consultant to speed up the feasibility study.
In addition, market research helps you pinpoint the demographics of the customer base within an ideal radius of the facility.
Step 2: Secure stable funding.
To start a successful storage rental business, you must crunch some numbers. You need to figure out how much it’ll cost and who will be running it apart from you. Multiple variables will affect the cost, including land, facility construction, acquisition, and location.
Remember that a self-storage facility is more than a structure; it’s a business. Before you scout locations for a self-storage facility, you need to have enough liquid assets to develop it on your own or perhaps have a good sense of how business loans work. This means determining if you don’t have enough funding for your undertaking and need to take out a loan. Or perhaps you need to recruit storage investors to finance the acquisition or development deal.
Step 3: Outline a business plan.
While learning how to get a loan, remember that most lenders also need a business plan before giving you the necessary funding. A business plan will propel a business toward success, helping you realize your goals and manage issues that will arise.
You can get a business plan from online templates. Most business plans will feature vital information, including your mission and vision statement, ownership and business structure, staff role and responsibilities, SWOT analysis (strengths, weaknesses, opportunities and threats), marketing and sales strategies, and competitive examination, among others. A powerful business plan also contains your pricing strategy (rents for storage facilities).
Step 4: Decide: should you buy an existing self-storage facility or build it from the ground up?
It is crucial to decide whether you will purchase an existing facility or build your facilities from the ground up if you plan to begin a storage rental business in North York, Old Toronto or any other district. One major reason is that the prices will vary, and both will consume your time and energy.
Prices for existing storage facilities will also vary from state to state. To find a self-storage facility that meets your needs, you need to hire a self-storage broker with industry knowledge unless you’re a licensed real estate professional. As for opting for a build-it-from-the-ground-up facility, the location and the land cost will affect the overall price. To accelerate the entire process, entrust the job to professionals.
Every new business venture is daunting, and starting a storage rental business is no exception. Like other budding enterprises, this requires you to get entirely on board—financial security, effort, knowledge, and commitment. While others find it unappealing when it comes to profit, the payoff can be substantial, considering that this is a continually growing industry. You’ll be driving growth in your newest business venture as long as you have determined your target market, created a solid business plan, and secured proper funding combined with excellent management skills.