By: Garrett Byrd
When considering the development of a self-storage facility, it is crucial to gather accurate market intelligence to make informed business decisions. One essential component of this process is obtaining a comprehensive feasibility study. Let's will explore the significance of getting a third-party feasibility report for your self-storage project and how the Storage Authority franchise team assists owners in understanding the data within these studies.
What is a Storage Feasibility Study?
A storage feasibility study is a comprehensive research analysis that helps determine the viability of your self-storage business idea. While it is possible to conduct this study independently, seeking assistance from a self-storage consultant is highly recommended. This study aims to assess whether your self-storage facility will generate sufficient revenue to cover expenses and generate profits.
One of the major benefits of being a Storage Authority franchise owner is we are conducting mini-demand studies with our owners as we have the same tools and software many feasibility experts use. The technology keeps us fast and efficient but all data needs to be verified from boots on a ground perspective and that's one of many synergies our franchise owners unlock with our model. A large number of feasibility studies come back as failed and they cost between $7K-$10K per feasibility study. By putting in the research early on with our owners we only want to order one feasibility study when all the data looks strong.
Why is a Storage Feasibility Study Essential?
Informed Decision-Making: A feasibility study provides market intelligence that helps you make smart business decisions. It ensures that the long-term profits outweigh the costs associated with land, development, construction, and operations.
Financing Requirement: Lenders often require a feasibility study before extending a construction or purchase loan. A well-prepared study enhances your chances of securing financing for your self-storage project.
Risk Assessment: A feasibility study offers a clear-eyed view of the risks and rewards associated with your self-storage project. It explores various scenarios, enabling you to assess different factors, such as unit mixes, pricing strategies, and the implementation of climate control or automation technology.
How to Choose a Self-Storage Feasibility Expert:
The Storage Authority team has several well-established and reputable feasibility experts we will introduce you to from our vendor list.
When selecting a storage consultant to conduct a feasibility study, consider the following:
Research and Referrals: Look for online reviews and seek referrals from professionals in the self-storage industry. Check if the consultant has completed feasibility studies for other clients and request samples for review.
Geographic Expertise: Ensure the consultant is familiar with the geographic area where you intend to build or purchase a facility. Local knowledge can provide valuable insights into market dynamics and demand.
Client References: Speak with a few of the consultant's clients to gain firsthand feedback on their experience and the quality of their work.
The Feasibility Report: A comprehensive feasibility report should cover the following key areas:
Market and Demographic Analysis: This section provides information on the local population, median household income, market growth projections, and square-foot-per-capita analysis.
Competitive Analysis: The report analyzes existing self-storage facilities in the proposed trading area, including occupancy rates, unit mix, rental rates, and amenities. It also assesses future competition and related developments.
Income and Expense Projections: Financial projections outline potential rental rates, unit mix recommendations, lease-up projections, and construction cost estimates.
Executive Summary: This section provides a concise overview of the report, summarizing the market analysis and financial projections, helping you evaluate the project's viability.
The feasibility study provides crucial market intelligence, allowing you to make informed business decisions. It helps you understand the revenue potential of your self-storage facility, taking into account factors such as market demand, competition, demographics, and income levels within the target area. Armed with this information, you can assess whether the long-term profits will outweigh the various costs associated with the project.
Moreover, a feasibility study is often a requirement from lenders before they extend the financing for construction or purchase. It demonstrates your preparedness and commitment to understanding the market dynamics and potential risks involved. Therefore, investing in a feasibility study not only aids in decision-making but also increases your chances of securing financing.
In the competitive landscape of the self-storage industry, a well-executed feasibility study acts as a guiding tool, mitigating risks and maximizing the potential for profitability.
By leveraging the findings of a comprehensive feasibility study and working closely with the Storage Authority Franchise team It is an invaluable investment that not only saves you time, money, and headaches in the long run but also sets the foundation for a successful self-storage venture.
If you would like to learn more and start your journey to self-storage ownership click the link here: http://www.storageauthorityfranchise.com/opportunity2
Storage Authority Franchising is about owning your own hometown self-storage business and having the professional systems and knowledge to assist and guide you. We like to say You are in business for yourself but not by yourself. If you are thinking about self-storage you owe it to yourself to contact Garrett Byrd at Direct: 941-928-1354 or Garrett@StorageAuthority.com to learn more about the Storage Authority Franchise opportunity.