Transforming Self Storage into a Thriving Small Business

As a consultant helping entrepreneurs launch and expand small businesses, I often come across those looking to break into the self storage industry. And I welcome them with open arms. Because despite the simple appearance of rented spaces, within these unassuming units lies immense entrepreneurial potential. In 2021 alone, the US self storage industry generated over $44 billion in revenue. And with the right strategy, anyone can tap into this flourishing market.

Site Selection – The Cornerstone of a Successful Venture

Identifying the optimal location is the foundation of any thriving storage business. Based on over 15 years of experience in the industry, I have a streamlined site selection process. Here are key aspects I evaluate:

Zoning Regulations: Storage facilities typically fall under commercial or industrial zoning. Approval timeframes range from 3-9 months depending on municipal councils.

Access and Visibility: Convenient access from main roads and highways drives visibility. Prime locations have over 20,000 vehicles passing daily.

Population Density: Areas with higher populations and smaller housing units posit strong demand. I target regions with 500+ people per square mile.

Competitor Distance: New facilities should be at least 3 miles from existing storage businesses at minimum.

Site Attribute Ideal Specification
Vehicular Traffic 20,000+ daily
Population Density 500+ per sq. mile
Distance from Competitors 3+ mile radius

Getting zoning and layout right from the outset sets the stage for profitability through an array of ancillary services.

Ancillary Services – Added Revenue Streams

While rental income forms the core revenue stream, ancillary services provide crucial add-ons. Based on rental rates and utilization rates, here are income projections from these offerings:

Packing Supplies: $5,000+ in annual sales

Truck Rentals: $15,000+ in annual revenue with 1-2 vehicles

Climate Control: 30-60% increased rates generating $30,000+

Security: $45/month premium per monitored unit

Valet Service: $80+ per customer with 2 attendants

By maximizing these channels, storage operators can increase profits by 40% or more. However, poor execution risks reputation damage and loss of core rental income. The key is providing quality, seamless service.

Creative Usage – For Entrepreneurs, By Entrepreneurs

Storage spaces also enable small business ventures. I’ve seen cases of units transformed into:

Shared Commercial Kitchens: Renting to home bakers, caterers. Requires proper permitting/licensing.

Pop-Up Shops: Short-term retail spaces for online businesses to test markets. Also event/holiday sales.

Artisan Workshops: Craftspeople using storage as workshop and inventory storage.

My client Amanda rented a small unit to develop her organic skincare product ideas, which she now sells via a thriving e-commerce site. Self storage can be a launch pad for entrepreneurial dreams.

Optimizing Operations – The Path to Profitability

To extract maximum profitability, I guide clients in fine-tuning business operations…

Streamlining Processes: Implement automated scheduling, billing and ID verification using software systems tailored for storage operators.

Benchmarking Performance: Build financial models analyzing key cost and revenue drivers based on factors like unit mix and occupancy rates.

Strategic Expansions: Assess opportunities to add units, increase prices and introduce ancillary income channels.

With the right location, services and operational strategy, self storage can be an extremely lucrative small business play. Let the income streams flow!