There are many risks when investing in commercial real estate. The cost of developing and building specific-use properties is expense with uncertainty that the use will be desired when the project is complete. Investing in a storage unit facility reduces risk, with 90 percent of self-storage companies owned by entrepreneurs who expect an industry growth of 3.3 percent by 2010 according to the Self Storage Association. Even with all the positive data promoting storage unit investments, you will need a specific plan to build and execute a profitable business model. Does this Spark an idea?
Instructions
1. Research the number of storage facilities in your area, where they are located and how full they are. Use phone book listings and Chamber of Commerce data to compile a list of competitors. Make phone inquiries as a prospective renter to determine availability.
2. Find a location that meets the objectives of your business plan. Units catering to businesses should be near office parks or business centers. Personal units are best situated at the fringe of residential communities where people have easy and convenient access.
3. Get quotes from contractors regarding the construction of the storage facility. Include security gates, security systems and parking areas in requested bids. Ask for estimates on completion as well.
4. Review anticipated monthly expenses once the facility is up and running. Expenses include staff, utilities, insurance and mortgage payments.
5. Put the plan together into a comprehensive business plan that describes what your facility will do, who it will target and the existing storage facility industry in your area. Show anticipated costs and monthly expenses compared to anticipated revenues. Use conservative revenue numbers such as 50 percent occupancy.
6. Finance the company through personal assets, venture capital, or loans. Provide prospective investors or lenders a copy of the business plan. Request enough financing to build the facility and get you through the first 1½ years of business to give yourself enough time to build and market the new storage facility.
7. Promote the new units with the local chamber of commerce, moving companies and office park tenants. Offer introductory deals for the first month's rent and find ways to cross promote your business in your area.
Tags: business plan, storage facility, your area, monthly expenses, storage unit