Did you know that the self-storage industry was worth close to $40 billion in the United States of America as of 2022? Starting your own self-storage facility and business is a great way to generate passive income and become your own boss, though there are steps that you’ll need to take to get started.
Finding an appropriate facility for self-storage rental units is an important first step, but you’ll also need to take care of building a website and marketing your services to your target audience. Taking the right steps could help you turn a large profit once your storage unit business is up and running.
The good news is that you’ve found a comprehensive guide that will help you through each step of the journey. Keep reading this article to learn everything that you’ll need to know in order to start a rental storage unit business today!
1. Build a Business Plan
The first thing that you’ll want to do is come up with a good business plan for your self-storage business. Your business plan is vital for securing the financing that you’ll need to get things off the ground. Odds are that you’ll need money to rent or purchase the storage facility that you plan to use.
Take a look at the market in your area and try to identify any other competitors in the self-storage market. You should also perform a SWOT analysis to determine the areas where your business is vulnerable and the areas where it can capitalize on the market. Keep in mind that most investors and banks will require you to have a business plan in order to move forward with financing.
2. Form Your Business Entity
You’ll need to choose the business entity that meets your needs best when you start your rental storage unit business. Your business entity is the way that your business is legally organized to operate. Many businesses choose to become Limited Liability Companies when formed.
There are pros and cons to each option that you can choose when you decide to go into the self-storage industry. A partnership is a bit risky since it puts you in a position where you could get held liable for the actions of your partner and end up with nothing to show for all of your hard work.
Choosing to become an LLC is great because it eliminates much of the risk of owning a business. It allows you to separate the assets of your business from your personal assets. If someone chooses to sue your self-storage facility you won’t need to worry that you’ll lose your home or your car.
Keep in mind that LLCs are a bit more complicated than your other business entity options. Still, the peace of mind that your assets are covered is often worth the extra hoops that you’ll need to jump through.
3. Name Your Business
Naming your business is one of the more enjoyable tasks that come with owning a storage unit business. This is your chance to come up with a name that is creative and fun, and that will stick in the minds of your target audience. Do your best to choose a name that resonates with your customers.
It’s also important that the domain name is available for the business name that you choose. Consumers are far more likely to trust a storage company like The Storage Agency if they have a website that lists information about them and their physical addresses. It’s worth hiring a professional website builder to design and build your business’s website.
4. Choose Your Location
Your location is another essential aspect of forming and running a successful self-storage business. You’re going to need some big-time startup costs if you plan on pushing forward with your business idea, no matter if you purchase an existing structure or choose to build a new one.
Plan on hiring talented individuals to design and build your self-storage facility if that is the route that you choose to take. These professionals will know each step to take when breaking ground on your new facility.
Doing your own market research is also important if you want to succeed with your self-storage units. You don’t want to set up shop right next to your biggest competitor. Try to find an area in town where there isn’t any competition and where your facility is easy to see and access for your customers.
Don’t forget to prioritize security with your rental storage unit business. You’ll have a hard time attracting customers if you can’t convince them that you have the means to keep their valuables safe.
Unit size is another important consideration when you’re choosing the location for your self-storage building. Having units of different sizes will allow you to cater to a larger target audience. Make sure that you have the space you’ll need to meet these storage demands.
5. Register for Licenses and Permits
Once you’ve found that perfect location in town, the next step is to register your business for the necessary licenses and permits. Unlike other types of businesses, you don’t need a ton of licenses and permits to operate your storage unit business. The main thing that you’ll need to worry about is zoning for your business.
It’s also a good idea to visit your local chamber of commerce to get a better feel for the local rules and regulations for businesses. Getting all of the right registrations will make starting your own self-storage business a much easier task.
6. Secure Your Financing
Developing a strong business plan is a great way to get started with your self-storage business, but you still need to secure the necessary financing to make this dream a reality. You’ll need to sell yourself and your business plan to banks and lenders in order to secure the money that you’ll need to renovate an existing building or construct a new one.
If you plan on taking out a loan you’ll need to have a strong credit history and at least 25 percent of the money required for your business. Look into getting a Small Business Administration guarantee if you’re looking for an extra feather in your cap to get the right loan for your situation.
Once you’ve secured your financing you’ll want to take steps to set up a bank account for your new business. Many people make the mistake of trying to mix their personal finances with their business finances. Separating the two accounts will make it much easier for you to track your income as your business grows.
You can use these financial metrics to determine your progress and track where your money is going. Many banks will offer you a free checking account for your business, which is perfect for when you’re getting started.
7. Start Marketing
Now that you have a business website set up and your finances are sorted, you need to start putting money toward marketing your self-storage facility and business. Your marketing plan is vital for establishing your customer base and getting some revenue coming in.
You also need to make sure that you’re renting out all of your self-storage units on a consistent basis if you want to maximize your profits and continue growing. Many self-storage companies turn to radio marketing as an inexpensive way to reach a large audience in the area. Print advertising is also a great way to reach your target audience in a cost-effective manner.
If you’re handy with social media then it’s a good idea to start a Facebook page and an Instagram account. Social media marketing will make it easier than ever to connect with your target audience.
8. Hire Employees
If your self-storage business is up and running and you’re noticing that most of your storage units are rented out, you can take that step to hire employees to handle the day-to-day operations at your business. One of the biggest benefits of owning and operating a storage unit business is that it doesn’t require you to have a hands-on role.
You can continue making money with minimal work. You won’t need to hire a massive staff on a full-time basis to keep operations moving in a smooth manner. Hiring a few good employees will keep your business in good hands and allow you to focus your time and energy elsewhere.
Make sure that you budget for salaries for your employees as well as benefits packages to ensure that they are earning a livable wage. You should also conduct background checks to ensure that you’re hiring quality individuals to work for your business.
Start Your Self-Storage Business Today
Starting your own self-storage business is easier than you’d think, and it offers you the chance to earn a massive amount of passive income while living your best life. Take your time when coming up with a strong business plan since that will help you secure the financing to purchase your self-storage facility.
You should also invest in a professional website for your rental storage unit business, and use multiple avenues for your marketing needs. Most of all, separate your business accounts from your personal finance accounts to track the money that you’re making.
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