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This means being active on directories such as Google Places and Yelp! An increasingly large number of self-storage companies are also taking to social media in order to target prospective customers within the radius of their service area.While the marketing section is not extremely important to all investors, it will be critical when implementing your business plan to acquire new customers quickly and efficiently.
This sounds strikingly self-evident, but the industry has had a number of failures because entrepreneurs new to the self-storage business failed to do the research that would have told them their business plan couldn't be executed – sometimes because the local self-storage market was saturated or because their startup and operations costs were higher than the local market self-storage rates would support.
Often these failures were the consequence of both factors: As the saturation point for storage rentals is approached, owners lower their rates.
In this example, your effective cost per square foot of rentable space is $6500 divided by 7,000 or about $0.93 per square foot.
If the occupancy rate for self-storage in this building's area is 92 percent, you need to take this into account.
Assume that you've found an available building to lease that offers 10,000 square feet for $6,500 per month, which is $0.65 per square foot.
On the face of it, it would appear you can make a profit with this building, but you also need to take a few other things into account: A three-story 10,000 square foot facility might need about 30 percent of the space devoted to offices, elevators and corridors, which leaves 7,000 square feet of rentable space.When you can't afford one, do the feasibility study yourself, beginning with assessing the market demands in several local market areas with high traffic where zoning regulations allow self-storage businesses.Two critical questions you need to answer - and you can often get them chatting with an on-site employee - are: Armed with answers to these questions, you're prepared to look for affordable buildings to rent.Overall, investors will want to understand how your company compares to alternative self-storage options in the area in terms of price, location, and services.For instance, your self-storage business may offer free pickup and have additional security features in place in order to account for being in a less attractive location than competing locations.There are several differentiating points in each of these models that can each be equally profitable, but their feasibility and overall interest to investors will depend on how they compare to regional competitors relative to the market demand for a given area.The business model section of a self-storage company is designed to provide information on where the facility is located, the cost of construction/leasehold modifications, the qualifications of the management team, and several other variables.Self-storage is a huge and growing industry, with nearly .7 billion in revenues for 2016 and estimated to grow at 3.5 percent annually through 2021.There are several ways to start such a business, from teaming up with high-flying equity investment partners to a low-budget one-man operation operating on a shoestring.The clientele of a self-storage business can vary dramatically given the location, pricing, and quality of the facilities.A self-storage business located in an area where rent is very high, such as a dense urban area, will be substantially different than one in a rural community targeting the working class.