Starting any kind of business can be intimidating. There are laws and market analyses and finances and taxes and inventory and profit and loss and so much more. Where do you even begin? If you want to know how to start your own storage company, take a deep breath and relax because you’ve come to the right place. We’re going to walk you through the process from start to finish.
There are lots of steps to starting your own storage business, and we’ll get to them all. However, let’s take a look at the big picture first. There are three parts to this whole process: Planning, Getting Started, and Expanding.
It may not be the most exciting part of starting a business, but it is one of the most important. The planning phase happens at the very beginning because you need to know some basic things about what you want to do and the market you want to do it in. Otherwise, you’re flying blind, and you might make costly mistakes that can easily be avoided.
Before you do anything else, figure out what kind of company you want to own. Are you looking for a small, local affair that gives you enough income for a comfortable life? You want to work, but you don’t want anything to take over your life, so to speak. Or, are you looking for something that you can grow significantly? You won’t stop until you are the storage king.
Everything else you do will depend on this decision. Once you know what you want, you need to know if it will work.
Let’s get one thing clear right now: Research matters. You need to figure out the lay of the land, and we mean that literally. Storage businesses, whether mobile or permanent (more on that later), need land. You can’t just rent some office space and call it a day. You need room to roam.
Market research involves figuring out how much demand there is for the product you want to sell in a particular area. In this case, the product is storage space, so some helpful things to know will be how many other storage businesses are in your area and what their rate of occupancy is. In other words, how many competitors do you have and how much of their space is rented out?
Figuring out what your competitors are doing and how likely your business is to succeed will give you a good idea of what to expect and what you should do with your own business.
You also should think about joining the Self Storage Association. They have lots of helpful information to offer and are storage company advocates in state governments.
Determining what your costs will be is tricky. You’ll need to take into account many factors including the price of land, buildings, labor, etc. In order to do this, you’ll need to know not only the things from step one but also what kind of storage company you want to own.
Mobile vs permanent storage Put simply, permanent storage involves storing items inside a standing building while mobile storage involves storing items inside mobile storage containers. The permanent option is the one most people are familiar with, meaning the large buildings with many units which are accessed through sliding garage-style doors.
Despite its being less common, mobile storage is a highly viable type of storage. In fact, mobile storage units are often a better option for both business owners and clients because the mobile storage containers are usually dropped off via truck and picked back up again when the client is done filling them. That means some costs are lowered, not the least of which being that the land needed for this type of business can be further away from hubs of activity, so land prices are usually lower.
You’ll need to decide which type of storage company you plan to start and then calculate the costs accordingly. You can use this nifty cost calculator to get a rough idea of what your expenses will be.
Once you have all of the relevant information, start writing your business plan. A business plan is a formalized version of all the aspects that you’ve done so far. You’ll want to include the nature, size, and services of your business and any research you’ve done that shows why your business is likely to be successful. If you feel nervous about writing a business plan, look at some examples online.
One important part that you’ll need to cover is the structure of your business. In other words, are you going to be a Limited Liability Company (LLC), a sole proprietorship, or a corporation? Most entrepreneurs will choose to be an LLC, but be sure to consult an expert like an attorney or an accountant so that you make the right choice.
We can now move on to the second phase of getting your storage business off the ground. This part will be where the rubber meets the road and your company becomes a reality.
You’ll need to get your hands on enough money to actually get the ball rolling. The most common form of funding for starting a business is a small business loan, and banks that offer these loans will ask you for a business plan, which you already have. You may also look for other sources of funds like private investors. However, especially if this is your first time to start a business, a small business loan will likely be your best bet.
Once you have secured funding, it’s time to start buying supplies and building facilities. If you are starting a permanent storage business, you’ll need to get your buildings up and running. If you are starting a mobile storage business, you’ll need to buy mobile storage containers and a way to transport them. You’ll need to buy land for both.
There are also plenty of other, smaller things that you’ll need like business cards, advertising materials (see next step), and templates for forms. However, these things are small potatoes compared to the actual storage containers.
You’ve got a great business up and running. Now, you need customers, preferably lots of them. To that end, you’ll need to start marketing. There are plenty of options for this including newspapers, billboards, websites, and everything in between. Because your business is still new, you should start with the most reliable methods that have the lowest costs.
An online presence is crucial to doing business these days, and social networking sites, like Facebook, are a great way to reach lots of people for relatively small amounts of money. You can put all of your information on a Facebook page without having to pay the cost of building and hosting a website. Though you’ll want to eventually cast a wide net and use many different marketing forms to reach a diverse audience, starting with social media is a good first step.
You’ve done so well with your first storage company that you want to expand to new locations or upgrade your current location. While you’ll largely be repeating the process you went through the first time, some important new septs need to be taken.
The first step in your expansion project is to figure out exactly if your business is ready for expansion. Look at your company with a fresh eye to be sure that it is stable enough for you to risk expanding.
Things may go well on a day-to-day basis, but you’ll need to have people you can trust to take care of things while you work on getting another location up and running. In short, reassess your business to see if it can weather the storm of expansion.
There are big jumps when expanding your business. Increases in costs, the need to hire more employees, and your attention being split among more places all make the list. The term for making a small business larger while keeping it profitable is “scalability.” Ensuring scalability is more complicated than you might think.
For one, you’ll have to pay close attention to your bottom line and be sure that it can support another, less successful business for a while. You also may need different prices and practices in the new location because the market will be different. A good rule of thumb is to keep the core of your business but be open to changing everything else.
So, stay committed to the things that make your company what it is, but be willing to shake up organizational structures, prices, and branding to make your new locations successful. Be sure to talk to your lawyer and accountant about this idea because your legal obligations will also likely change.
Once you’ve ironed out the scalability kinks, start at Part I, Step 1 and do the whole thing over again. Decide what your goals are, do the research, make a plan, and put that plan into action!
Starting a business is complicated, but it’s not impossible. After all, people do it every day. If you want to start your own storage company, there’s no time like the present. The information here should help you bring your idea into the world. So, what are you waiting for?
