How to Start a Self Storage Business in 2024

Are you considering the booming self storage industry as a potential business opportunity?

With more people and businesses seeking convenient storage solutions, self storage facilities have become an increasingly lucrative venture. If you're an entrepreneur looking to capitalise on this growing demand, this guide will walk you through all the essential steps to launch a successful self storage business from the ground up.

Starting your own self storage company can be an extremely rewarding investment when done right, providing a steady stream of recurring revenue. Let's dive into the key considerations and strategies for establishing a thriving self storage company.
 

Step 1: Understand the Self Storage Industry

Before diving in, it's crucial to grasp the dynamics of the self storage industry. Storage supply has been growing at a massive 10% year on year in 2024. According to a report by the Self Storage Association UK, the self storage market size in the UK is projected to reach £1.2 billion by the end of 2024, with forecasts indicating continued growth. This rising demand is fueled by factors like population growth, urbanisation, and the overall need for extra space.

One key aspect to consider is the recurring revenue model of self storage businesses. Unlike many industries, self storage facilities generate monthly income from customers who need to store their belongings for extended periods. This steady cash flow can be incredibly attractive for entrepreneurs like you.

Step 2: Conduct Market Research

Like any business venture, thorough market research is essential to identify the opportunities and potential challenges in your target area. Start by analysing the local demographics, population density, and economic conditions. We advise you to look for areas with high residential and commercial density growth, as these tend to be prime locations for self storage facilities.

Next, assess the competition in your desired location. How many self storage businesses already exist, and what are their offerings, pricing structures, and occupancy rates? Understanding your competitors will help you distinguish your services and determine the ideal size and features for your facility.

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Step 3: Choose the Right Location

The success of your self storage business relies heavily on its location. Most people store within a 5 mile radius of their home, so ensuring adequate density around your storage site is key. Ideally, you'll want to find a site that's easily accessible, visible from major roads or highways, and situated in a high-traffic area near residential or commercial hubs.

When evaluating potential locations, consider factors like zoning regulations, property taxes, and the availability of utilities. It's also wise to look for areas with minimal competition from other self storage facilities within a 3-5 mile radius. Here are a list of companies that can help you with this –

• Jones Lang Lassel
• Cushman & Wakefield
• Saviles UK
• Levy Real Estate

Step 4: Determine Your Facility Type

Self storage facilities come in various forms, including traditional drive-up units, climate-controlled indoor units, and portable storage containers. Each option has its pros and cons, and your choice will depend on factors like your budget, target market, and local climate conditions.

Traditional drive-up units are often the most affordable option, while climate-controlled indoor units cater to customers who need to store temperature-sensitive items like furniture or electronics. Portable storage containers, on the other hand, offer a convenient solution for customers who need temporary storage during moves or renovations.

Remotely-managed self storage sites, also known as unmanned or automated facilities, have gained significant popularity due to their lower overhead costs and the ability to operate with minimal staff. However, manned facilities with on-site managers can provide a higher level of customer service and security, which may appeal to certain demographics. Additionally, sustainability is becoming an increasingly important consideration in the self storage industry. Explore eco-friendly design options, such as solar power, efficient lighting, and water conservation measures, to reduce your facility's environmental impact and operating costs.

Step 5: Secure Financing and Planning permission

Starting a self storage business requires significant upfront capital for land acquisition, construction or renovation, equipment, and marketing. You'll need to secure financing through options like small business loans, investors, or personal savings. Here are some places you can source Self Storage Finance

• Cynergy Bank
• HH Business Finance Limited
• Satellite Finance Ltd
• Approved Business Finance

Additionally, be prepared to navigate the permission process, which can vary depending on your location. You may need to obtain permission for construction, zoning, signage, and environmental compliance, among others. Working with a knowledgeable real estate solicitor such as Rooks Rider can help streamline this process.

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Step 6: Invest in Self Storage Management Software

Efficient operation of your self storage business relies heavily on implementing robust management software. This technology streamlines various processes, including rental management, payments, security access, and more. Some popular self storage management software providers to consider include:

• Stora Self Storage Software
• Storganise Self Storage Manager
• Capteera Self Storage Manager

These platforms often offer features like online rental capabilities, automatic billing, integrations with access control systems, and reporting/analytics tools. Taking the time to research and invest in the right software solution can significantly enhance operational efficiency and profitability.

Step 7: Design and Build Your Facility

Once you've secured the necessary financing and permissions, it's time to design and construct your self storage facility. Work with an experienced architect or contractor who specialises in self storage design to ensure your facility meets all building codes and industry standards. Here are some companies that can do this for you: Janus Interantional, Kuboid, Universal Storage Containers, Mr Box.

Consider features like security systems, climate control, lighting, paving, and accessible layouts that make it easy for customers to navigate and access their units. Additionally, incorporate amenities like on-site management offices, truck rental services, and moving supplies to enhance the customer experience. Here are a list of companies that can help - Active CCTV & Surveillance Ltd, All Things Fire & Security, Garage Door Systems Ltd.

Step 8: Implement Robust Security Measures

Safety and security are paramount in the self storage industry. Customers entrust their valuable belongings to your facility, so it's essential to implement robust security measures to protect their items and your business.

Some standard security features include:

• Perimeter fencing and gated access
• Video surveillance systems
• Well-lit premises
• Keypad or biometric access control
• On-site security personnel (optional)

Regularly review and update your security protocols to stay ahead of potential threats and maintain customer trust.

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Step 9: Develop a Comprehensive Marketing Strategy

With your self storage facility up and running, it's time to attract customers. To do this, it's important to develop a comprehensive marketing strategy. In the digital realm, focus on creating a user-friendly website, optimising it for local search (SEO), and leveraging social media platforms to showcase your facility and promotions. Additionally, consider partnering with local real estate agents, moving companies, or businesses that cater to your target customers. The most popular channel for self storage operators is paid media, however, it turns out to be quite expensive.

Not sure how to market your facility? List it on Stashbee, it's free to list and you get access to our millions of impressions every month.
 

Step 10: Offer Exceptional Customer Service

In the self storage industry, outstanding customer service can set your business apart from the competition. Make sure to hire friendly, knowledgeable staff who can help customers with their needs and provide a seamless experience from start to finish.

Consider implementing convenient features like online reservations, autopay options, and 24/7 customer support to cater to modern customer expectations. Additionally, regularly seek feedback from your customers and address any concerns promptly to maintain a strong reputation.

Step 11: Stay Ahead of Industry Trends

The self storage industry is constantly evolving, with new technologies, regulations, and consumer preferences emerging regularly. Stay informed about the latest industry trends and best practices by attending trade shows, networking with other self storage operators, and subscribing to industry publications such as the Self Storage Association UK. 

Be open to adapting your business model, services, and facilities to meet changing customer demands. This proactive approach will ensure your self storage business remains competitive and sustainable in the long run.
 

Frequently Asked Questions:

Q: How much does it cost to set up a self storage business in the UK?

A: The cost of establishing a self storage business in the UK can vary depending on many factors such as location, facility size, and whether you're constructing a new facility or converting an existing structure. Startup costs typically include expenses like land/property acquisition, construction or renovation, equipment, initial inventory of storage units, and operating costs for the first months. Without specifics, it's difficult to provide an accurate cost estimate.

However, here are some general estimates for different types of facilities:

1. Land Costs: Depending on the location, land costs can range from £50,000 to over £1,000,000 per acre in the UK.
2. Construction Costs – Single-story Facilities: Approximately £30 to £50 per square foot. – Multi-story Facilities: Around £50 to £70 per square foot. – Climate-controlled Facilities: These typically cost more, approximately £60 to £80 per square foot.
3. Soft Costs: These include architectural fees, planning permission, and other pre-construction costs, generally accounting for 15-20% of the total construction budget.
4. Financing Costs: Interest on construction loans, which can vary based on the project's duration and the interest rate environment.
5. Additional Costs: This includes marketing, initial staffing, and equipment costs which can add another 5-10% to the overall budget. In summary, the total cost to build a self-storage facility in 2024 could range from £150k to over £20 million, depending on the size and complexity of the project. For a more precise estimate, consulting with a construction firm specialising in self-storage facilities is recommended.

Q: Is self storage still a good investment?

A: Absolutely. The self storage industry has demonstrated resilience and consistent growth, even during economic downturns. With urbanisation, population mobility, and the increasing demand for additional space, self storage remains an attractive investment opportunity. However, as with any business venture, thorough market research and a well-executed business plan are crucial for success.

Q: Is the storage business profitable in the UK?

A: Yes, the storage business can be highly profitable in the UK. According to industry reports, the self storage market in the UK is experiencing significant expansion, with rising demand from both residential and commercial customers. By offering convenient and secure storage solutions, self storage businesses can generate recurring monthly revenue streams and enjoy substantial profit margins when managed effectively.

Conclusion:

Starting a self storage business can be a rewarding and profitable venture if you follow the right steps and stay committed to providing exceptional service. By understanding the industry, conducting thorough market research, choosing the perfect location, and implementing robust security measures, you'll be well on your way to building a thriving self storage empire. Don't forget to continuously market your business, prioritise customer satisfaction, and adapt to industry trends for sustained success.