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.
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.
Despite industry challenges, these 6 factors will help you boost profitability, efficiency, and ultimately success.
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.
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.
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:
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.
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.
Check out these executive summary examples to help you write a perfect one for your business plan.
The company analysis follows the executive summary as the second section of a business plan. Your company overview will be short and clear, similar to the executive summary.
Even if they just have a few minutes, your reader has to understand what your company does and who your customers are.
The following sections will be included in your business plan’s Company 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.
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.
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:
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:
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.
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:
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.
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.
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.
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.
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:
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.
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.
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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Since 2010, Wise business plans’ MBA professional business plan writers has developed business plans for thousands of companies that have experienced tremendous success.