Self Storage Business Plan
Over the past 20+ years, we have helped over 9,000 entrepreneurs and business owners create business plans to start and grow their self-storage facilties. On this page, we will first give you some background information with regards to the importance of business planning. We will then go through a self storage business plan template step-by-step so you can create your plan today.
What is a Self Storage Business Plan?
A business plan provides a snapshot of your self-storage business as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategy for reaching them. It also includes market research to support your plans.
Why You Need a Business Plan for a Self-Storage Facility
If you’re looking to start a self-storage or storage unit business, or grow your existing self-storage business, you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your self-storage business in order to improve your chances of success. Your self storage business plan is a living document that should be updated annually as your company grows and changes.
Sources of Funding for Self Storage Facilities
With regards to funding, the main sources of funding for a self-storage business are personal savings, credit cards, bank loans, and angel investors. With regards to bank loans, banks will want to review your self storage business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to confirm that your financials are reasonable, but they will also want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business.
The second most common form of funding for a self storage facility is angel investors. Angel investors are wealthy individuals who will write you a check. They will either take equity in return for their funding or, like a bank, they will give you a loan. Venture capitalists will not fund a self-storage business. They might consider funding a self-storage business with a national presence, but never an individual location. This is because most venture capitalists are looking for millions of dollars in return when they make an investment, and an individual location could never achieve such results.
How to Write a Business Plan For a Self Storage Business
If you want to start a self storage facility or expand your current one, you need a business plan. Below we detail what should be included in each section of your business plan for a storage facility.
Executive Summary
Your executive summary provides an introduction to your self storage business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.
The goal of your Executive Summary is to quickly engage the reader. Explain to them the type of self-storage business you are operating and the status. For example, are you a startup, do you have a self-storage business that you would like to grow, or are you operating a chain of self-storage facilities.
Next, provide an overview of each of the subsequent sections of your plan. For example, give a brief overview of the self-storage industry. Discuss the type of self-storage business you are operating. Detail your direct competitors. Give an overview of your target market. Provide a snapshot of your marketing plan. Identify the key members of your team. And offer an overview of your financial plan.
Company Analysis
In your company analysis, you will detail the type of storage business you are operating.
For example, you might operate one of the following types of storage businesses:
- Portable container: this type of storage business allows customers to easily transport self storage units.
- Climate controlled storage: this type of storage business protects and preserves property against harmful temperature and humidity levels.
- Vehicle storage: this type of storage business allows customers to safely store various types of vehicles.
In addition to explaining the type of storage business you will operate, the Company Analysis section of your storage unit business plan needs to provide background on the business.
Include answers to question such as:
- When and why did you start the business?
- What milestones have you achieved to date? Milestones could include the number of occupied self storage units, contract renewals, number of referrals, etc.
- Your legal structure. Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.
Industry Analysis
In your industry analysis, you need to provide an overview of the self storage facility.
While this may seem unnecessary, it serves multiple purposes.
First, researching the self storage industry educates you. It helps you understand the market in which you are operating.
Secondly, market research can improve your strategy, particularly if your research identifies market trends.
The third reason for market research is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.
The following questions should be answered in the industry analysis section of your storage business plan:
- How big is the storage industry (in dollars)?
- Is the market declining or increasing?
- Who are the key competitors in the market?
- Who are the key suppliers in the market?
- What trends are affecting the industry?
- What is the industry’s growth forecast over the next 5 – 10 years?
- What is the relevant market size? That is, how big is the potential market for your self storage facility? You can extrapolate such a figure by assessing the size of the market in the entire country and then applying that figure to your local population.
Customer Analysis
The customer analysis section of your storage unit business plan must detail the customers you serve and/or expect to serve.
The following are examples of customer segments: students, business owners, families, and people who are relocating.
As you can imagine, the customer segment(s) you choose will have a great impact on the type of self-storage business you operate. Clearly, students would want different service options and would respond to different marketing promotions than families who are relocating, for example.
Try to break out your target market in terms of their demographic and psychographic profiles. With regards to demographics, including a discussion of the ages, genders, locations, and income levels of the customers you seek to serve. Because most self-storage facilities primarily serve customers living in the same city or town, such demographic information is easy to find on government websites.
Psychographic profiles explain the wants and needs of your target customers. The more you can understand and define these needs, the better you will do in attracting and retaining your customers.
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Competitive Analysis
Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.
Direct competitors are other self storage facilities.
Indirect competitors are other options that customers have to purchase from that aren’t direct competitors. This includes businesses with their own storage space and people who store extra items in their attics or basements. You need to mention such competition to show you understand that not everyone who needs storage will utilize a self-storage company.
With regards to direct competition, you want to describe the other self-storage facilities with which you compete. Most likely, your direct competitors will be self-storage facilities located very close to your location.
For each such competitor, provide an overview of their businesses and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as:
- What types of customers do they serve?
- What types of storage services do they offer?
- What is their pricing (premium, low, etc.)?
- What are they good at?
- What are their weaknesses?
With regards to the last two questions, think about your answers from the customers’ perspective. And don’t be afraid to ask your competitors’ customers what they like most and least about them.
The final part of the competitive analysis section of your business plan is to document your areas of competitive advantage. For example:
- Will you provide superior services?
- Will you provide services that your competitors don’t offer?
- Will you make it easier or faster for customers to use your services?
- Will you provide better customer service?
- Will you offer better pricing?
Think about ways you will outperform your competition and document them in this section of your business plan.
Marketing Plan
Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For a storage business, your marketing plan should include the following:
Product: In the product section, you should reiterate the type of storage business that you documented in your Company Analysis. Then, detail the specific products you will be offering. For example, in addition to self storage, will you provide 24-hour security, electronic gate access, or on-site staff?
Price: Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of your marketing plan, you are presenting the services you offer and their prices.
Place: Place refers to the location of your self storage business. Document your location and mention how the location will impact your success. For example, is your self storage business located near a main highway, near public transportation, etc. Discuss how your location might provide a steady stream of customers.
Promotions: The final part of your self storage marketing plan is the promotions section. Here you will document how you will drive customers to your location(s). The following are some promotional methods you might consider:
- Advertising in local papers and magazines
- Reaching out to local websites
- Flyers
- Social media marketing
- Local radio advertising
Operations Plan
While the earlier sections of your self storage business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.
Everyday short-term processes include all of the tasks involved in running your storage business, including security management, facility maintenance, and customer service.
Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to lease 100 self storage units, or when you hope to reach $X in revenue. It could also be when you expect to expand your facility or launch in a new location.
Management Team
To demonstrate your self storage business’ ability to succeed, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company.
Ideally you and/or your team members have direct experience in managing self storage facilities. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.
If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act like mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in managing self storage companies or successfully running small businesses.
Financial Plan
Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet and cash flow statements.
Income Statement
An income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenues and then subtracts your costs to show whether you turned a profit or not.
In developing your income statement, you need to devise assumptions. For example, will you average 75% occupancy or 95%? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.
Balance Sheets
Balance sheets show your assets and liabilities. While balance sheets can include much information, try to simplify them to the key items you need to know about. For instance, if you spend $100,000 on building out your self storage business, this will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a bank writes you a check for $100,000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.
Cash Flow Statement
Your cash flow statement will help determine how much money you need to start or grow your business, and make sure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt. For example, let’s say a local office building approached you with a $50,000 contract to provide self storage services for their building occupants. Let’s further assume the contract would cost you $50,000 to fulfill in terms of increased staffing costs. Well, in most cases, you would have to pay that $50,000 now for employee salaries, utilities, etc. But let’s say the company didn’t pay you for 180 days. During that 180-day period, you could run out of money.
In developing your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting a self storage business and growing it:
- Location build-out including design fees, construction, etc.
- Cost of equipment like surveillance technology, dollies, and climate control systems
- Payroll or salaries paid to staff
- Business insurance
- Taxes and permits
- Legal expenses
Appendix
Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your location lease or a blueprint of your facility.
Summary
Putting together a business plan for your own self storage business is a worthwhile endeavor. If you follow the template above, by the time you are done, you will truly be an expert. You will really understand the self storage industry, your competition, and your customers. You will have developed a marketing plan and will really understand what it takes to launch and grow a successful self storage business.
Self Storage Business Plan FAQs
What Is the Easiest Way to Complete My Self Storage Business Plan?
Growthink's Ultimate Business Plan Template allows you to quickly and easily complete your Self Storage Business Plan.
What is the Goal of a Business Plan's Executive Summary?
The goal of your Executive Summary is to quickly engage the reader. Explain to them the type of self storage business you are operating and the status; for example, are you a startup, do you have a self storage business that you would like to grow, or are you operating multiple self storage businesses.
Finish Your Self Storage Business Plan in 1 Day!
Don’t you wish there was a faster, easier way to finish your Self Storage business plan?
With Growthink’s Ultimate Business Plan Template you can finish your plan in just 8 hours or less!
Click here to finish your Self Storage business plan today.
OR, Let Us Develop Your Plan For You
Since 1999, Growthink has developed business plans for thousands of companies who have gone on to achieve tremendous success.
Click here to see how Growthink’s business plan consultants can create your business plan for you.
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