By Marc Goodin. Of course, everyone asks this before they start any business. I like to say that is asking how much a house costs. Impossible to say without setting a lot of parameters. In self-storage, some of the parameters are how efficiently are YOU and your team going to run the facility like the Ritz vs Motel 6. Are you going to design it to be the Ritz vs Motel 6? Are you going to choose a location that deserves and warrants a premiere facility?
Do you even know what it takes to be a premier self-storage facility? Most people do not. and that is why self-storage is generally not run as a marketing business or an over-the-top customer service business. Can you rapidly list 25 items that will make your self-storage different such that you can charge $30/month/unit more than the competition?
The owner of this facility became a self-storage multi-millionaire. Will You? Most likely not because most people reading this blog will never get started. They are going to wait for that just right time that does not exist. (Did you notice the blue Amazon boxes?)
Before I give you my thoughts on self-storage profitability here is what ChatGPT says about self-storage profits.
Self-storage can be a profitable business venture if executed properly and located in a suitable market. However, the profitability of a self-storage facility can vary depending on several factors, including location, market demand, competition, operational efficiency, and management expertise. Here are some key points to consider:
Location: A well-chosen location is crucial for the success of a self-storage facility. Areas with high population density, urbanization, or limited space for personal storage are generally more favorable. Accessibility, visibility, and proximity to residential or commercial areas can also impact profitability.
Market Demand: Assessing the demand for self-storage in the target market is essential. Research the local population, demographics, and economic indicators to gauge the need for storage solutions. Factors such as housing trends, business activity, and relocation rates can influence demand.
Competition: Evaluate the competitive landscape in the target area. A saturated market with numerous existing self-storage facilities might make it more challenging to attract customers and maintain higher occupancy rates. However, limited competition can create opportunities for increased profitability.
Occupancy Rates: Maintaining high occupancy rates is critical for profitability. Effective marketing, competitive pricing, and exceptional customer service are key factors in attracting and retaining customers. Offering incentives, discounts, or referral programs can also help drive occupancy.
Pricing Strategy: Determining appropriate rental rates is crucial. Conduct a thorough analysis of local competitors' pricing, balancing affordability with profitability. It's essential to find the right balance to attract customers while generating sufficient revenue.
Operational Efficiency: Managing costs and optimizing operational efficiency can significantly impact profitability. Effective inventory management, security systems, maintenance, and utilities should be streamlined to minimize expenses. Implementing technology solutions can also enhance efficiency.
Expansion and Growth Opportunities: Assess the potential for future growth and expansion in the target market. If the market shows signs of increasing demand or population growth, it may present opportunities for expanding the facility or establishing additional locations.
It's important to note that individual results can vary, and thorough market research and financial analysis are necessary before investing in a self-storage business. Consulting with industry experts or professionals experienced in the self-storage sector can provide valuable insights and help you make informed decisions.
Here are my quick thoughts on self-storage profits.
Self Storage is very profitable! It has given me an incredible lifestyle. But if you think it will not take a lot of work and specialized talents you will be in for a big surprise.
If you are not willing to do these three things for premium profits you should consider not getting into the self-storage business:
1) Treat it jo a job for 5 years
2) You must be learning something new every week for the next five years.
3) You will need a mentor that owns self-storage, and understands development and self-storage marketing & sales. Otherwise, it will take twice as long to make half the profits.
Cheers,
Marc
If you want to have a 15-minute call to learn how Storage Authority helps insure the above items and more are accomplished at your facility and how we help you find land and get your facility built please send me an email or call me – no appointment needed:
marc@StorageAuthorityFranchise.com or 860-830-6764
Get more information on Storage Authority Franchise at www.storageauthorityfranchise.com/opportunity3
Marc Goodin is the President of Storage Authority Franchising. www.StorageAuthorityFranchise.com 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 marc@StorageAuthority.com 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.