Self-Storage Business Plan Template
Getting your own self-storage business off the ground requires a business plan. Here is a self-storage business plan template that includes the important elements you need to include in your business plan.
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To ensure your self storage business success in this highly competitive market, you need a properly structured business plan for your self storage business. With over 12 years of experience, we have helped over 5,000 entrepreneurs create business plans to start and grow their self storage businesses.If this is your first time writing a business plan, we’ll walk you through these sections and give you some key things to consider.
Things to Know Before Writing a Self Storage Business Plan
Do you ever feel like you have too much stuff in your house? There are a lot of people with this problem, which is why the self-storage industry is worth $23 billion.
The industry is mainly engaged in the rental of self-storage space. The establishments provide secure spaces where customers can store and retrieve their belongings at any time. Storage units in the industry include include, compartments, lockers, containers, and outdoor spaces.
It is one of the fastest-growing sectors in commercial real estate since self-storage facilities were first introduced in the 1960s.
Operators in the industry have low overhead costs, few staff, few utilities, and little maintenance, which result in substantial profitability (measured as earnings before interest and taxes) of 46.8% in 2021.
As the economy recovers following the Coronavirus pandemic, the industry is likely to see a rebound in the next five years. Overall, according to IBIS-WORLD, revenue for the industry is expected to rise at an annualized rate of 0.6% to $24.0 billion by 2026.
Key Success Factors for Selfstorage Business
Despite industry challenges, these 6 factors will help you boost profitability, efficiency, and ultimately success.
- Scale economies: Storage operators that can provide more storage services at lower costs can develop economies of scale and increase profits in this industry.
- Access to key markets: Ideally, mini-warehouses and self-storage facilities should be located near or within population centers. Customers prefer to access their storage items within a short distance.
- Economies of scope: Companies that provide a variety of storage sizes and solutions are able to reach a wider market.
- Maintaining a good reputation: Self-storage companies that are known for their accessibility, security, and pricing are more likely to attract patrons. Friendly staff can also be a major point of differentiation in such a crowded industry.
- Specialized equipment and facilities: The best self-storage companies offer high security, on-site help, temperature control, specialized storage sizes, and dust-free environments.
- Excellent financial and debt management: Operators with a high level of success in this industry are able to control expenses and manage debt.
What is a Self-Storage Business Plan?
A business plan for self-storage facility is a written document that sets your company’s financial goals and discusses how you’ll reach them.
A solid, comprehensive strategy will serve as a road map for the next three to five years of the self-storage business. Any bank or investor you approach will require a business plan for self-storage facility, so putting one together will be critical to securing funding.
In short, writing a business plan can help you succeed if you’re thinking of starting a self-storage business or pitching to investors or venture capitalists.
Free: Business Plan Examples
Do you need help creating a business plan? Check out these six free, proven business plan examples from different industries to help you write your own.
Why You Need a Self-Storage Business Plan
If you want to start a self-storage business or expand an existing one, the first thing you need to do is to write a business plan. A business plan is also necessary for attracting investors who want to know if your self-storage is on the right track and worth investing in.
A solid, detailed plan gives you a clear path to follow, forces you to examine the viability of a self storage business idea, and may help you better understand your company’s finances and competition.
Self-storage owners who have a business plan grow 35% faster than those who don’t, and 71% of fast-growing businesses have one.
A self-storage business plan is a living document that should be updated annually as your company grows and changes.
Funding Sources for Self-Storage Businesses
Asking family and friends to invest in your self-storage business is a great way to start. Once you’ve set a budget and identified what you’ll need to start the business, take the services of your friends and family to help you get it off the ground. You might need to present the willing ones a solid business plan to reassure them that their chances of making a profit are good.
Bank loans and angel investors are the two most common sources of funding for a self-storage business. When it comes to bank loans, banks will want to look over your self-storage business plan to make sure you’ll be able to pay it back with interest.
The loan officer will not simply want to ensure that your financials are reasonable in order to gain this confidence. They will, however, expect to see a professional plan. They will be more confident in your ability to run a business successfully and professionally if you have a plan like this.
The following are nine options for financing a self-storage business:
- SBA 504 loans
- SBA 7(A) loans
- Construction loans
- Conventional loans
- Credit lines
- Bridge loans
- Hard money loans
- Mezzanine loans
- Working capital loans
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How to Write a Self-Storage Business Plan
To write a self-storage business plan, you don’t need to be an expert. Our step-by-step guide will show you how to write a business plan for self-storage facility business, or you can just download our proven sample business plans to get a better idea.
Executive Summary
The executive summary is the most important part of the document since it outlines the whole business plan. Despite the fact that it appears first in the plan, write the executive summary last so you may condense key concepts from the other nine parts.
It’s a part that catches the investor’s eye and provides key information about your company’s overview and upcoming short- and long-term goals.
Tell them what kind of self-storage business you have and what stage you’re in; for example, are you a startup, do you have a self-storage that you want to expand, or do you have a lot of self-storage business?
Finally, an executive summary should provide investors with a preview of what they may expect from the rest of your document.
- Provide a high-level overview of the self-storage industry
- The name, location, and mission of your self-storage business
- A description of your self-storage business, including management, advisors, and a brief history
- Discuss the type of self-storage business you are operating, Give an overview of your target customers., and how your product differs from competitors in the industry
- Create a marketing plan that describes your company’s marketing strategies, sales, and partnership plans.
- And give an overview of your financial plan
Check out these executive summary examples to help you write a perfect one for your business plan.
Free: Executive Summary Examples
An executive summary is the most important part of your business plan, and it need not be challenging to write. This is why we have put together some awesome free Executive Summary examples for you.
Company Analysis
- Company summary: Your company analysis will describe the type of self-storage business you are operating and its future goals. The type of self-storage you might be focused on are: (Warehouse storage, Containers, Lock-ups, Depositories for furniture, etc.)
- Company history: When and why did you start your self-storage business?
- Management team: Who runs the company, and other key positions.
- What milestones have you achieved so far? Your milestones could include sales goals achieved, new store openings, etc.
- Legal structure and ownership: Your reader will want to know what business entity your company is: a sole proprietorship, LLC, partnership, or corporation.
- Locations and facilities: Information about your workspaces or plans to acquire them.
- Mission statement: An overview of your company’s guiding principles. Learn how to write a perfect mission statement.
Industry Analysis
You need to include an overview of the self-storage business in the industry analysis you performed before sitting down to write your self-storage business plan.
While this research may appear to be unnecessary, it helps you to build strategies that maximize business opportunities while lowering or avoiding the identified risk.
You may learn a lot about the self-storage industry by doing research. It helps you in understanding the market wherein you operate.
The third purpose for conducting market research is to demonstrate to readers that you are an industry expert.
Industry analysis can be presented as a 8-step process when written as part of a company’s business plan.
- Give a quick overview of the self-storage industry. Define the self-storage business in terms of size (in dollars), historical background, service region, and products.
- Examine previous trends and growth patterns in the self-storage industry.
- Identify the market’s major competitors.
- Age, gender, and general lifestyle of the targeted market
- Who are the market’s main suppliers?
- Determine the factors that have an impact on the self-storage industry. These might include government regulatory rules and other businesses’ competitive activities.
- Using research data, the industry forecast expected growth. Predictions should be made for both the long and short term.
- Describe how your self-storage business intends to position itself in the industry. Concentrate on how your self-storage business can benefit from opportunities highlighted in the industry.
Customer Analysis
The customer analysis section is an important part of any self-storage business plan since it evaluates the consumer segments that your company serves. It identifies target customers, determines what those customers want, and then explains how the product will meet those requirements.
Here are some examples of customer segments: People who are relocating, Business owners, Families, Retailers etc.
Customer analysis may be divided into two parts: Psycho-social profiles (why your self-storage services suit a customer’s lifestyle) and Demographic profiles (descriptions of a customer’s demographic qualities).
In terms of demographics, you should include information on the ages, genders, locations, and income levels of the consumers you want to serve. Because most self-storage serves consumers who live in the same city or town, such demographic data is easily accessible on government websites.
The psychological profiles of your target clients reveal their wants and needs. The better you understand and identify these demands, the better your chances of attracting and retaining customers will be.
Competitor Analysis
It is necessary to do a competitor analysis. Not least because you may use their data to define your goals, marketing plans, tactics, new product lines, pricing, and more. Use competitor analysis to:
- Identify the strength and weaknesses of your self-storage competitors.
- Search for opportunities to distinguish your self-storage from competitors.
- Set your product’s price.
The first step is to determine who your direct and indirect rivals are.
The direct competitors consist of other self-storage businesses that offer essentially the same services to the same people as you do.
Customers have other options for purchases that aren’t direct competitors, such as indirect competitors. This applies to both businesses that have their own storage space and individuals who keep extra items in their attics or basements.
Once you’ve identified the competitors, concentrate on the direct, head-to-head competitors, since they are the most threatening to your self-storage business — but keep an eye on the indirect competitors as well, just in case.
Provide an overview of each direct competitor’s business and detail their strengths and weaknesses.
You will be able to position yourself competitively in the market if you perform proper competitors research. Perform a SWOT Analysis to learn your competitors’ strengths, weaknesses, and competitive advantages in the following areas:
- Prices – Are they cheaper or more costly than you and other self-storage companies, what value do buyers get for that price, and does shipping significantly raise the price?
- Quality – The quality services they provide, the perceived worth in the eyes of the customers
- Customer service – How they respond to their consumers, whether they treat them poorly or well, and the degrees of satisfaction customers show
- Reputation — The sum of everything mentioned above: their credibility, how loved the brand is, and the loyalty of their customers
The final section of your competitive analysis should include a list of your areas of competitive advantage. for example: Are you going to offer premium self storage services? Will you offer unique services that your competitors don’t offer? Will you offer better pricing or will you offer greater customer support?
Consider how you will outperform your competitors and include them in this portion of your self-storage business plan.
Free: SWOT Analysis Examples
Take advantage of our free SWOT analysis examples. Make your business future-proof by identifying your strengths, weaknesses, opportunities, and threats using this free SWOT Analysis Template.
Marketing Plan
Creating a marketing plan for a self-storage business involves identifying the target demographic and finding products that suit their preferences. Self-storage owners need to constantly seek out self-storage businesses that their competitors do not carry.
As part of your marketing plan for a self-storage, you should include:
Pricing and Product Strategy
Your self-storage business must offer services that are unique, need in public, and different from those of your competitors. Research what your competitors carry and how they price their products. A unique self-storage collection identifies your store as the place to go for unique self-storage business and differentiates it from others.
Placing and Promotions
The location of your self-storage business is referred to as place. Make a note of where you’re going and how it’ll affect your success. Is your self-storage facility, for example, near a major highway or public transportation? Discuss how you can ensure a steady flow of customers at your location.
Promoting your self-storage is the final part of your marketing plan. In this step, you document how you will drive customers to purchase your self-storage. A few marketing methods you could consider are:
- Marketing in local newspapers and magazines
- Approaching bloggers and websites
- Billboards and Flyers
- Marketing on social media
- Marketing through websites
- Pay Per Click marketing
- Online Rentals
- Email Marketing
- Ongoing Customer Communications
- Keeping in Touch With Previous Clients
Operations Plan
While the previous sections of your self-storage business plan described your goals, your operations plan discusses how you will achieve them.
An operations plan is helpful for investors, but it’s also helpful for you and employees because it pushes you to think about tactics and deadlines.
Your operations plan should be divided into two individual parts, as seen below.
All the daily tasks involved in running your self-storage business, such as serving customers, cleaning self-storage place, etc., are short-term processes.
Long-term goals are milestones that you aim to reach. These may include the dates when finalizing the lease agreement for the self-storage space or Reach break-evens. It might also be when you plan to launch a new self-storage business or to serve 1000th customer.
Management Team
When writing a self-storage business plan, the management section’ outlines your management team, staff, resources, and how your business ownership is structured.
A strong management team is necessary to demonstrate your self-storage’s ability to succeed as a business. Highlight the backgrounds of your key players, emphasizing the skills and experiences that demonstrate their ability to grow a business.
You and/or your team members should ideally have prior experience working in a self-storage company. If so, emphasize your knowledge and experience. However, you should emphasize any experience that you believe will help your self-storage business succeed.
Consider forming an advisory board if your team is lacking. An advisory board would consist of 2 to 8 people who would act as mentors to your company. They would assist in answering questions and providing strategic direction. If necessary, seek out advisory board members with experience running self-storage and small businesses.
Financial Plan
As part of your financial plan, you should present a 5-year financial statement broken down monthly or quarterly for the first year, and then annually. Business financial statements include your income statement, balance sheet, and cash flow statement.
Income Statement
A profit and loss statement is more commonly called an income statement. It shows your revenue and subtracts your expenses to determine whether you were profitable or not.
As you develop your income statement, you need to develop assumptions. For example, will you serve 20 clients per day or 50? Will sales increase by 3% or 15% per year? As you can imagine, your assumptions have a significant impact on your financial forecast. Do your best to verify your assumptions by conducting research.
Free: Income Statement Template
Create a financial statement for your business by downloading our free income statement templates.
Balance Sheet
While balance sheets include much information, to simplify them to the key items you need to know about, balance sheets show your assets and liabilities.
The balance sheet shows your self-storage’s net value at a specific point in time. It categorizes all of your company’s financial data into three categories:
- Assets: Tangible goods with the monetary worth that the company owns.
- Liabilities: Debt owing to a company’s creditor.
- Equity: The net difference when the total liabilities are subtracted from the total assets.
The equation that expresses the relationship between these financial data elements is Assets = Liabilities + Equity.
Create a pro forma balance sheet for your self-storage business plan that highlights the information in the income statement and cash flow projections. A balance sheet is normally prepared once a year by a company.
Balance sheets indicate your assets and liabilities, and while they contain a lot of information, they are simplified to highlight the most important things you need to know.
For example, spending $150,000 to build out your self-storage business will not result in instant revenues. Rather, it is an asset that should help you earn money for many years to come.
Similarly, if a bank sends you a check for $700,000, you do not have to pay it back right now. Rather, that is a liability that you will repay over time.
Free: Balance Sheet Template
Create a financial statement for your business by downloading our free balance sheet templates.
Appendix
List any additional material you cannot include elsewhere, such as resumes from key employees, licenses, equipment leases, permits, patents, receipts, bank statements, contracts, and personal and business credit histories.
Attach your full financial projections along with any supporting documents that make your plan more compelling in the appendix. You may, for instance, include some of your apparel designs.
Bonus Tip: Learn what to include in a business plan appendix for your self-storage business.
Summary of the Self-Storage Business Plan
A self-storage business plan is a worthwhile investment. As long as you follow the template above, you will become an expert in no time. By following the template, you will understand the self-storage business, your competitors, and your customers. The plan will help you understand the steps necessary to launch and grow your self-storage business.
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