How to start a storage facility business

£990 million is the annual recorded turnover of the self storage industry in the UK.

That's a hefty figure! And it doesn't take into account the turnover from smaller independent or more niche storage operators who are off the radar.

There are 1,086 brands currently operating in the UK.

And you're looking to change that to 1,087, right?

The demand for self storage is very much alive. And it's not set for turning.

People need space to store things. So getting a slice of the action makes sense.

But where do you even begin when it comes to starting your own self storage facility business?

If you want a no-fuss guide that takes you through the essential steps, then this post is the very thing you're looking for.

You'll learn why you should start your own self storage facility business and the 6 core stages, with actionable advice, that you need to take.

Starting your own business can be scary, but the rewards are 100% worth it.

Let's cut to the chase and delve right in!

Table of contents

• Why start a storage facility business
• How to start a storage facility business in 6 steps
• Narrow down your idea
• Complete a competitor analysis in the area
• Figure out how much it will cost to start
• Write down a business plan
• Choose a site for your self storage facility
• How will you market yourself?
• Key takeaways
• FAQs

If you've made it to this post, you've probably got your own reasons why you want to start a self storage business.

But it's worth highlighting and reminding yourself just what it is that's extra appealing about this particular venture.  

Occupancy rates in 2022 were at 83.3%, an increase of 1% from 2020.

This figure also includes recently opened self storage facilities.

The demand is clearly there with such high figures.

And where there's demand, there's a need for more business to keep up. With stats to back this up, it makes sense to get in on the action. 

Profitability has never been higher!

Rental rates have been growing and now sit at an average of £27.19 per square foot.

Since 2019 rates are up by 18% and there has been a £4.11 increase in profitability per square foot too.

With such promising figures, it's little wonder many self storage owners and investors are attracted to the industry and seek to grow their portfolio. 

Ok, you're probably sold on the idea of starting your self storage business - let's get to the nitty-gritty of it.

First off, you need to hone in on what type of self storage facility you're going to offer.

You already know the general idea, which is great. You just need to file it further down to get down to what exactly it is you're offering.

What you choose will come down to:

●      How much money you have available

●      What materials and equipment you have access to

●      How much land you have

When it comes to self storage, you have a few options available to you:

●      Indoor Self Storage Rooms

This is the most established form of self storage in the UK - kind of like a hotel for your things. Usually found in towns, cities and built-up areas - they often have management on site, undercover loading bays and trolleys to wheel your things to your storage room / unit. They give the most flexibility for creating a range of sizes of units/rooms and are especially popular with city and town dwellers who may need a small amount of extra space for side hustles, flat moves or airbnb'ers. The https://www.ssauk.com/ is the UK member body which many indoor storage operators associate with.

●      External Self Storage / Container Sites

These sites are very popular for people who want to drive up to their self storage unit. Often found among industrial sites or on the edge of urban areas, they usually feature a secured yard area, on which are sited shipping containers, or similar bespoke containers. They usually come in standard sizes, the most common being 160sqft (a 20ftx8ft standard container which you would typically see on a lorry). But you can frequently find half size and double size ones too. These are a popular choice for business owners who want to test the water and grow incrementally by adding more containers as demand dictates. The https://www.containa.org/ team are very helpful at supporting this sector.

●      Warehouse Storage

A slightly different type of storage, these are warehouses where you can fill a wooden crate/container, which is then sealed up and forklifted into position by the staff on site. You usually schedule an appointment to deliver or collect your things. Containers tend to be one size 7ft2in x 5ft x 8ft (35sqft or 250cu.ft) and you can book multiple ones to suit your needs. It is often an economical storage solution for people who don't need frequent access to their things. Warehouses are also often run my removal companies, who can usually quote for collection and delivery too if you need it. The https://bar.co.uk/ can offer further advice if you want to get into removals.

●       Mobile Storage

Again a slightly broader definition of self storage, but definitely useful particularly if you have bulky items and don't have access to a vehicle. When you book mobile storage you will agree a time for collection of your things with the operator. They will collect your items and take them to a secure storage warehouse. Then when you need to access them you just make an appointment to have them returned. Some mobile operators offer the service by the box and others by a "pod" or "container". There are even franchise companies such as https://www.easystorage.com/franchise if you wanted to get into this business model.

Once you've got an idea of what it is you'd like to offer, take a look at who already operates the same type of storage in your area.

A quick Google search will bring up the main ones you want to look at.

Write a list of who your main competitors are and what exactly it is that they're offering.

How much do they charge? What's included with these prices?

Is there anything they're missing in their offering? Any gaps in the market where you could provide?

A whole other post is needed on how to fully do one of these, but answering these basic questions is an excellent place to start! 

Ok, so at the end of the day the logistics of all of this comes down to money.

You might be entering this with a set amount already in mind, or perhaps you're looking to scout the money once you know what you're doing.

Wherever you're at with the financing, you need to know how much it's all going to cost. The core things you need to consider are:

●      How much will it cost to rent or buy the land?

●      Do you need to factor in any planning consultant services or fees?

●      How much will it cost to fit out or acquire the facilities or units for storage?

●      What are the running costs of the storage facility going to be? Will you hire staff, or will you appoint a Remote Management company to take care of the operations for you? (If the latter consider our Explorage.com Premium + Remote Management Services). 

●      What infrastructure will you integrate such as CCTV and lighting? And therefore will you need power etc?

As you start planning this, it will get more nuanced, and there will be many more things to consider. But at the outset, this can give you a rough idea of what you need to consider. 

A business plan written down and finalised is an extremely wise and sensible thing to do.

It forces you to think through things logically rather than idealistically. It also gets you to answer essential questions.

Business plans all vary and how detailed you go comes down to you.

When you thrash it all out, typically they cover 15-25 pages '3 but for the purpose of pitching your idea you should be able to then refine it down to 8 elegantly detailed pages!

You'll have covered some of the material if you followed the steps before, but now is your chance to formally write it down.

You'll want to ensure you include the basics below:

●      Summary - An overview of the company along with the mission statement (your aims and values).

●      Services - What are you offering, at what price, for how long, and what are the benefits for the customer? Are you going to run the facility yourself or are you going to work with a Remote Management company who can take care of the day-to-day stress for you?

●      Market analysis - A detailed overview of your competition and how you fit into the market. Consider including strengths and weaknesses you'll have.

●      Marketing strategy - How you will attract customers and retain them.

●      Financial planning - How are you going to finance this, and what are your projections? CASHFLOW, CASHFLOW, CASHFLOW!

●      Budget - What budget do you have?

●      Programme '3 think about timing, what is the market opportunity, economic conditions, perhaps if you don't hit certain deadlines the opportunity will be lost. Plan for worst case '3 time is money !

Easier said than done, right?

This is a big decision and one you need to think carefully about.

The perfect scenario would be choosing an area where they are underserved. A place you can swoop in and deliver what's needed.

Put on a map in your desired area where current self storage sites are. People don't like travelling far for self storage. Typically they want it to be within 15 minutes or less from their home!

Use this to plot potential locations, and then get creative....knock on doors, consider alternative sites, keep your ear to the ground '3 don't expect that the prefect site is going to appear on https://www.rightmove.co.uk/commercial-property-for-sale.html overnight. You could get lucky but the chances are if you are on the look out so will someone else be. As Seneca quoted 'Luck is what happens when preparation meets opportunity'.... Be lucky !

Once you have everything in place, you need to know how you're going to get customers...don't fall into the trap of 'build it and they will come' !

There are some core strategies you want to consider when it comes to marketing your self storage facility that are priorities for this industry.

This includes:

●      Knowing your audience

●      Creating a website and optimising for SEO

●      Making use of Google ads

●      Optimising Google maps

●      Facebook ads

●      Reach customers through email

●      Of course an absolute 'no brainer', (to quote multiple industry players), is to list your self storage space for free on Explorage.com

There's a lot of ground to cover here, and thank your lucky stars, we've covered this already for you to get stuck in and plan! Check out our article '7 self storage marketing ideas you can try right now'

You should now have a solid idea of what it takes to start a self storage facility business.

It can be daunting at the beginning, but the best thing you can do is to just start with the planning and logistics.

Once you get the ball rolling, there will be no stopping you!

To quickly go over again, you need to:

●      Hone in on your idea and identify what type of storage you want to offer.

●      Look at the competition in the local area and identify what they're offering and where you can fit in.

●      How are you going to finance it and what are the estimated costs for the land, facilities, and running the site?

●      Put down on paper a business plan and think logically about how you're going to do this.

●      Think carefully about your site, ideally a location that is underserved.

●      Establish how you will market yourself and get customers.

This is all just the first step. You'll learn more as you start setting things up.

For more free and impartial advice speak to our experienced in house team on 0800 0988864 or support@explorage.com

We work with hundreds of self storage operators and suppliers throughout the country and always have our ear to the ground.

If you're thinking about investing in a self storage business but don't want the hassle of day to day operations, the Explorage Premium + Remote Management Service could be exactly the solution for you. Speak to Jaqui Jeffries today on jaquijeffries@explorage.com to learn more.

Good luck!