Store away for a rainy day seems to be our nation’s mantra! Whilst we’re all busy accumulating more and more belongings, our houses are getting smaller and smaller. It’s the same story for businesses where rental prices are sky-high and extra commercial space is priced at a premium. We’re all turning to storage units to help us keep our clutter at bay and stop our wardrobes and work supply closets from bursting at the seams!
If you’re thinking of starting a storage business, it’s a smart move! There's undoubtedly a growing demand. In this blog, we provide a step-by-step guide to help you set up a successful self-storage company.
What makes the self-storage industry an appealing investment opportunity?
As an industry generating £1.08 billion turnover annually (source: Self-Storage Association UK Annual Report 2024), self-storage is a sought-after venture.
The demand is evidently there for self-storage. New builds are smaller than ever before, with numerous properties lacking garages. It’s an attractive industry to invest in and here are the reasons why:
- It provides a steady income stream:
Self-storage units typically generate consistent, predictable income. - It is somewhat resilient to economic downturns:
Self-storage is considered recession-resistant, as people often prioritise retaining their belongings even during economic downturns. In fact, people may be downsizing due to financial challenges and a storage unit is cheaper than a huge mortgage! - It requires low maintenance costs:
Generally, self-storage tends to have lower maintenance costs. There is minimal wear and tear on the units and staff costs are low. - It has a diverse tenant base:
The diverse customer base helps lower risk by reducing reliance on any single tenant or market segment.
Step 1: Research your customers
Begin by considering the demographic that will require storage solutions. This will help you to understand their needs and preferences.
Self-storage customers are typically:
- Small business owners storing equipment or inventory
- Home movers downsizing or decluttering
- Homeowners undergoing renovations or redecorating
- Divorced or separated couples
- Family members clearing out a property following the loss of a loved one
- Students during summer break or studying abroad
- People who are between homes
- Travellers
- Hobbyists or collectors
- Military personnel
The majority of the examples above are home movers and according to the Self-Storage Association (SSA), they typically represent 32% of those that use self-storage solutions. Given that home movers are such a valuable audience, if you are targeting them, this is where MoverAlerts can help with your self-storage marketing. We can provide you with the addresses of people moving home in your local area. Rather than just sending out untargeted direct mail, we can help you target those in the home moving journey who may require self-storage. You can target those who have just put their home up for sale, completed, withdrawn, fallen through or put in for planning permission.
Thinking about your customer will help you to tailor your services to meet your customer's needs and understand their pain points. Some customers may require climate-controlled units to protect their items or prefer highly secured units if their belongings are expensive. They may have differing preferences and budgets, so you may need to offer various size units. By understanding your customers, you can better market to them.
Find out more about our self-storage lead service here.
Step 2: Research the location of your premises
It’s imperative to research the location to understand the demand in that locality. Find out what the average income is in the area to give you an idea of how to cost up your units. You don’t want to pick somewhere that’s oversaturated so identify competitors in the area. How much are they charging? Who are their customers? What are their strengths and weaknesses?
Pay attention to the type and volume of traffic that goes past the location. (Remember that your sign can be your best form of marketing, so you want it somewhere with a lot of passing traffic.) Is the area growing – are new housing developments being built nearby? Is the location easily accessible for customers? Is there room to expand your business in the future?
Step 3: Research the red tape
Familiarise yourself with the laws and regulations such as planning permissions, fire safety regulations and insurance so you’re fully prepared for any costs or restrictions. Thorough research and understanding of these regulations will provide a solid foundation for a compliant and well-functioning self-storage operation.
Step 4: Devise a business plan
Develop a thorough business plan including your goals, target market, pricing strategy and financial projections. This will be essential if you need a bank or an investor to finance your business.
Step 5: Come up with your choice of product
As part of your business plan, you need to decide the type of storage units you’ll offer. Will it be shipping containers, warehouses or lock-up garages? Will you offer varying sizes? What security measures will you use? Additionally, you might decide to offer climate-controlled units or storage spaces specifically designed for commercial clients.
Step 6: Devise a budget
You need a detailed budget including estimates of your start-up costs. Outline your ongoing operational expenses such as maintenance, security systems, marketing and salaries of employees.
Here is a list of potential costs:
- Property acquisition or lease cost
- Construction/renovation expenses
- Permits/licenses
- Parking facilities
- Lighting
- Staffing
- Equipment and supplies
- Waste facilities
- Fire safety
- Planning applications
- Utility bills
- Maintenance/repairs
- Insurance
- Marketing
Step 6: Plan the operation
Plan out the operation and day-to-day functioning of your self-storage business to ensure it succeeds. Develop a plan for managing your tenants and how you'll handle tenant enquiries. Remember that customer service is absolutely imperative. According to the SSA report, 10% of customers found their self-storage unit as the result of a referral from a friend or family member. Maintenance will be a key part of your operational plan. Develop protocols for regularly inspecting the units. You'll also need to consistently monitor the occupancy and revenue.
Consider the tools and technology that you can use to support the smooth management of your facility. Explore storage management software solutions such as a CRM, inventory tracking or accounting software. By planning the operation and day-to-day functioning of your self-storage business, you can create a solid foundation for success.
Step 7: Marketing
You'll need a robust marketing strategy to attract customers. As mentioned above start this by identifying your target market. Then use a mix of online and offline channels to reach your audience. We explore some marketing ideas for storage companies below.
Set up a website
Your website will be your shop front, it will be where the majority of your customers will either start their journey or go to find out more information throughout their buying journey. Therefore, alongside paid advertising you need content on your website that is search engine optimised (SEO). This will help you appear higher in search engine results and enable you to answer the questions people are searching for.
Choose your advertising channels
SEO alone won’t work so set up social media channels to build up brand awareness. Consider advertising campaigns like PPC to improve your business visibility online. Direct mail campaigns are a great way to get your name out there.
Spread the word
Ensure you collect reviews and encourage satisfied customers to refer others who would benefit from your service, rewarding them for spreading the word. Additionally, consider getting more involved in the local community to enhance brand awareness.
Join the industry association
Consider joining the self-storage association. It'll open up networking opportunities, provide you with credibility and keep you up-to-date with industry news.
Final thoughts
Starting a self-storage business requires careful planning and strategic decision-making. By conducting thorough research and devising a business plan including a marketing strategy, you can position yourself for success and grab a slice of that £1.08 billion annual turnover!
Find out more about our self-storage lead service here.
