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5 P & L Projections new developers need to Know.

By Marc Goodin,

Storage Authority just had a video training class on Profit and loss projections/ statements. The presentation consisted of 20 full slides and took an hour. But remember even a simple P & L projection can take several hours to properly gather all the data needed.

WARNING: This is a simplified partial example of P & L to provide the basic steps for a preliminary P & L before site-specific data is available and you have your accountant and feasibility expert input. It cannot be used for the viability of any given site. All factors including income, expenses, rent rates, interest rates, construction costs, and loan equity requirements have been assumed, not verified, and can’t be considered suitable or correct for your location.

You must get detailed input from your banker, accountant, feasibility expert, and other professionals to determine the viability of a site and the possible profits of a site. The ability to get a loan, especially a two-phase loan is highly dependent on many factors, and the ability to get a loan or the viability of a site should not be assumed even if these numbers match a given property. Even minor changes in changes can make a huge difference.

You must hire a self-storage feasibility expert to prepare a feasibility and profit and loss review and have it updated as things change

Here are the 5 main P & L's you need to understand well. Number 4 is easy in the sense you pay a 3rd party expert to prepare. But it is important to guide your expert on several items from type of bank loans (SBA vs traditional) to phasing and type of development such as single or multi-story.

Number 5 is pretty simple as is done based on known real income and expenses and prepared by your accountant monthly.

The first P & L helps you determine in general if an area has high enough rates to justify building self-storage. And the second P & L provides a preliminary P & L with a few more details because you have a specific site and associated data. This P & L is often skipped and is part of the reason why well over 50% of all 3rd party expert feasibility studies fail. Why not do one with y your team before paying for a feasibility study, rack up other significant bills, and spend significant time as well.

Above is a summary/example on projecting the rental income

In the example, we estimated a Gross Sf and converted it to Net rentable sf and then assume 92% rented. The hardest part to accurately determine at this stage is the average rental. Assuming a single-story facility with a mix of climate control and non climate control units we used the price of the expected rental rate of a 10 by 10 non-climate control as the facility average. Of course, this can vary for many reasons but for a preliminary first review but until ore detailed research is done this is a starting point.

Rental income is more accurately determined later when you have accurate net rentable square feet by unit by down by size with the projected rental rate for each size.

The additional income to add to the rental income for the total income includes Insurance, admin fee, product sales, late fees.

Operating expenses include a whole host of items from payroll to maintenance to property taxes that can and do vary making. So using until you get into the details and use an average it is good to look at best and worst-case scenarios. Please note for small facilities the operating expenses can be over 50%

The next step is to determine the interest expenses so the NOI including the mortgage is estimated. There are many factors at this point to estimate the interest expense including the construction costs, carrying costs, soft costs, interest rates, percent down, etc so the amount borrowed and interest rate expense can be calculated.

Without one on one explanations of these many factors, it would be too easy to misunderstand the accuracy and or possible variance of the factors that go into the calculation so we recommend you get guidance from your team so you can prepare your preliminary P & L before you make an offer on land.

Get more information on Storage Authority Franchise at

Marc Goodin is the President of Storage Authority Franchising. He owns 3 self-storages he designed, built, and manages. He has been helping others in the self-storage industry for over 25 years. He can be reached at or directly at 860-830-6764 to answer your franchising, development, marketing, sales, and operations questions. His best selling self storage books are available on Amazon.


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