How to Build a Self Storage Empire: The Entrepreneur's Guide to Starting a Successful Facility

Have you ever dreamed of owning your own business? Starting a self storage facility could be a great option. Self storage is a thriving industry, with over 50,000 facilities in the U.S. alone generating over $38 billion in annual revenue.

If you're an entrepreneur looking for a business opportunity with low overhead costs and the potential for high profits, self storage may be for you. In this blog post, we'll walk you through the key steps to get your own self storage business up and running:

•Developing your business plan
•Finding the right location
•Building or buying your storage units
•Setting your pricing
•Marketing your new business
•Growing your customer base

Starting any new business is challenging, but with some hard work and determination, you can build a successful self storage company. If you're ready to take the plunge into entrepreneurship, read on to learn everything you need to know to start your own self storage business!

The Self Storage Market Landscape

The self storage industry targets a wide range of customers, from residential to business users. The majority of customers are residential, renting smaller unit sizes to store excess belongings that won't fit in their homes. Business customers may rent larger unit sizes to store inventory, equipment, documents, or other items.

The self storage market can range from basic to high-end. Basic facilities target budget-conscious customers with few amenities and lower prices. High-end "boutique" storage facilities target customers willing to pay more for additional amenities like climate control, high security, truck rentals, and extended access hours.

Most self storage facilities operate on a local level, attracting customers from the surrounding community. However, some national chains and franchises are expanding into multiple regions and states. The industry as a whole continues to grow due to factors like declining home sizes, increased mobility, and business needs for off-site storage.

Developing Your Self Storage Product

The core product for a self storage business is, of course, the storage units themselves. You'll need to decide what types of units to offer based on your target customers and local demand. The most common options include:

•Smaller units (5x5 to 10x10 feet) for residential customers. These are typically the highest demand.
•Larger units (10x15 feet and up) for business customers or residential customers with more belongings.
•Climate-controlled units for customers storing items sensitive to temperature and humidity. These units can charge a premium.
•Drive-up units for easy loading and unloading. These are very convenient but may require more land.

To stand out from competitors, you may want to focus on certain amenities or perks. Some options include:
•24-hour keypad access for customers
•Truck rentals for move-ins and move-outs
•Packing supplies and moving equipment on-site
•Extended office hours and customer service
•High security with features like gated access, video surveillance, and unit alarms

Your self storage product will be delivered through your facility itself, including the office area where customers sign leases and pay rent. Be sure to keep your facility and all storage units clean, well-maintained, and secure to provide the best experience for your customers. Developing the right mix of unit sizes, amenities, and customer service policies will be key to your success.

The Economics of Self Storage

The costs to operate a self storage business are typically low, while profit margins can be quite high. The largest costs are usually the land or property where your facility is located and the construction of the storage units themselves. However, once your units are built, ongoing costs are minimal.

For pricing, most self storage businesses charge by the square foot, with rates varying based on unit size, amenities, and local competition. You'll need to price units high enough to cover your costs and generate a profit, while still remaining competitive in your market. Many facilities offer discounts and deals for long-term rentals or bundling multiple units.

A good rule of thumb is to charge at least $1 per square foot for basic, non-climate-controlled units in a suburban area. Rates for climate-controlled or more secure units typically start around $1.25 to $1.50 per square foot. Monthly rates for a standard 10x10 unit would be $100-$150 or more.

Your profit margins will depend on factors like your total costs, occupancy rates, and how much you can charge for rent. Most self storage businesses target at least 60-70% occupancy to break even, with the potential for 80% or higher occupancy and profit margins of 50-60% or more for mature facilities.

Keeping costs low, setting the right rental rates, and maximizing occupancy are the keys to running a profitable self storage business. With the potential for high profit margins and a large customer base, self storage can be a very lucrative industry for entrepreneurs.

Marketing Your Self Storage Business

To build your customer base, you'll need to actively market your new self storage facility. Some of the most effective strategies include:

•Search Engine Optimization (SEO) - Optimize your website and online listings to rank higher in search results for terms like "self storage" and "storage units" in your area. This can drive organic traffic and leads.
•Social Media Marketing - Create profiles on Facebook, Instagram, and Google My Business to help customers find your business online. Post regularly about your facility and current promotions. Engage with followers by replying to their posts and messages.
•Pay-Per-Click (PPC) Advertising - Run targeted ads on search engines like Google and Bing to attract customers looking for self storage solutions in your local market.
•Direct Mail - Send postcards or flyers to local residents and businesses advertising your facility. Offer a discount or free rental period to incentivize them to rent from you.
•Referral Program - Offer existing customers a discount for referring new customers to your facility. Word-of-mouth marketing and referrals can be very effective.
•Local Sponsorships - Sponsor or donate to local schools, sports teams, charities, and events. This raises brand awareness in your community and establishes you as an involved business owner.
•Drive-by Advertising - Use large signs, banners, and curbside marketing to attract drive-by traffic and make your facility as visible as possible to people passing by.

A multi-pronged marketing approach including both digital and traditional strategies will be key to launching your new self storage business. Focus on targeting local customers in your area who are likely to need self storage solutions. With time and consistent marketing, you can build up a loyal customer base and full occupancy at your facility.

Sales Strategies for Your Self Storage Business

To convert interest from your marketing efforts into actual customers, you'll need effective sales strategies. Some of the best ways to make sales for a self storage business include:

•Offering move-in specials and discounts for new renters. For example, give 50% off the first month's rent or a free month if they sign a 6-12 month lease. This provides incentive for new customers to rent from you.
•Having an engaging and informative website. Your website should highlight details about your facility, available unit sizes, pricing, and any amenities or services offered. It should also make it easy for customers to contact you or reserve a unit online.
•Focusing on customer service. Greet all potential customers promptly, give them a tour of your facility, and be knowledgeable about your products and services. Provide friendly and helpful service to keep people engaged and interested in renting from you.
•Upselling to larger unit sizes and add-on services. Once a customer expresses interest in a basic unit, mention your larger sizes and try to upsell them to a bigger space with more features like climate control. You can also upsell services like moving equipment rentals, packing supplies, and 24-hour access.
•Streamlining the lease signing process. Have all paperwork, policies, and payment information ready for customers who want to sign a lease. Be flexible in accepting various payment methods like cash, credit cards, checks, and even online payments. Make signing a lease as quick and hassle-free as possible.
•Following up and overcoming objections. If a potential customer does not seem ready to sign a lease right away, follow up with them by phone or email. See if they have any concerns or objections you can address to earn their business. Provide information to overcome common objections like price or lack of climate control.
•Building long-term relationships. Focus on providing great service even after customers have signed a lease and moved in. This will make them more likely to continue renting from you long-term and refer other customers. Loyal, long-term customers are key to success in the self storage industry.

Operations and Execution

To operate a successful self storage facility, you'll need to focus on efficiency, security, and customer service. Some key operational aspects include:

•Keep regular office hours, especially on weekends when many customers will move in and out. Staff the office with knowledgeable employees to assist customers.
•Maintain an up-to-date website and online reservation system. Many customers will book units or check availability on your website before visiting in person.
•Conduct regular maintenance and inspections of the facility and all storage units. Keep everything clean, well-lit, and secure. Fix any issues like leaks, damage, or access problems immediately.
•Install essential security features like perimeter fencing, gate access, video cameras, and unit alarms. This will help prevent unauthorized access and give customers peace of mind about the security of their belongings.
•Create detailed policies and procedures for renting units, payments, access hours, items prohibited from storage, lien sales, and other key operations. Provide copies to all customers when they sign a lease.
•Use management software to keep records of all units, customers, rent payments, and account details. Software can also help with tasks like automatically charging late fees, sending reminder notices, and tracking occupancy rates.
•Hire qualified staff to assist in overseeing the day-to-day operations. A small self storage business may only require a few office employees, while larger facilities may need additional managers, maintenance staff, and security personnel.
•Provide high levels of customer service by being available to answer questions, address issues promptly, and make the storage experience as easy as possible for your renters. Satisfied long-term customers will be key to your success.

Running an efficient, secure, and customer-friendly facility is essential to operating a self storage business. Focus on the details, use technology and software to your advantage, and build a team to help oversee daily operations. With hard work and dedication, you can build a self storage company that practically runs itself.

Legal Considerations

When starting any business, it's important to research the legal requirements and regulations in your area. For a self storage company, you will need to comply with zoning laws for commercial property and building codes for construction. There may also be specific laws regarding self storage facilities in your city or state.

You should also develop contracts, policies, and agreements that comply with federal and state laws. Work with a lawyer to create standard leasing agreements, lien sale contracts, and other legally-binding documents to use with your customers.

Be aware of laws regarding tenant rights, unpaid rent, and seizure of property. There are very specific procedures that must be followed to legally auction or dispose of the property of delinquent tenants. You need to ensure your policies and lease agreements also comply with these laws.

Some additional legal considerations for a self storage business include: •Obtaining proper business licenses and permits to operate •Registering your business as an official LLC or corporation •Understanding tax liabilities and obligations as a business owner •Complying with employment laws if hiring staff •Providing legally-required amenities like ADA-compliant access and restrooms •Carrying proper business insurance, especially for the value of customer property on-site •Staying up-to-date with any changes to laws and regulations affecting self storage

Ready to Start Your Self Storage Business?

Starting your own self storage business can be a highly rewarding endeavor for entrepreneurs. With low costs, high profit potential, and an ever-growing customer base, self storage is an industry ripe with opportunity.

By following the steps in this guide, you can develop a successful self storage business plan, find an ideal location, build secure and affordable storage units, set competitive prices, market your new facility, make sales, and operate an efficient self storage company. While launching any new business certainly comes with challenges, the self storage industry has key advantages for entrepreneurs.

If you're looking to start your own self storage business, now is the time. Do your research, create a solid plan, tap into resources to help you get started, and take that first leap into small business ownership. With hard work and determination, you can build a thriving self storage company that provides an essential service to your community. The opportunity is there—you just have to take it.