Constructing a self-storage facility is a huge investment, and a customer base is no longer guaranteed. Before you make a million-dollar mistake, consider some of the following issues. The better you build your site, the better you can market it in the future.
Before you even think about construction, youll need to invest in a feasibility study. Some developers ignore this step, which is a bad move. Ive seen people fall in love with a piece of property and build on it, only to discover it wasnt a viable location. Ive seen others conduct their own feasibility studies and regret it. Even if you have a real estate background or youre a veteran storage owner, its always wise to get an unbiased opinion from a qualified expert. No matter who you use, make sure he can provide hard numbers as well as understand the marketing perspective of the property.
When choosing a piece of land, youll often find you can steal a piece in an undeveloped area or spend a bundle on the premier lot in town. Your best option is usually somewhere in between. Unless you have unlimited funds and can afford to wait several years to break even, avoid the high-priced land in the best location. Instead, take a forward-looking approach and try to anticipate which areas may be blossoming.
When you have a choice to buy more or less land, always buy extra. As long as you can afford it, youll never regret having bought a larger parcel. Inevitably, youll want more space, whether to build another building, add boat and RV storage, or sell off a piece for a profit.
Survey the Competition
Before you build, research your competition. This survey can be completed in a few weeks and should be done concurrently with the feasibility analysis. There are several ways to accomplish the task, but a simple method involves drawing a 5-mile radius around your facility on a map (if youre in a rural area, use a 10-mile radius). Then visit every facility within the area youve identified, pretending to be a potential customer.
Bring a notebook and write down all the things you like and dislike about each site, looking at amenities, physical attributes, staff, etc. Try to determine the level of occupancy at each facility. Most operators wont willingly share this information, but its helpful if they do.
Unit mix is often a tough issue for new self-storage builders. There are two key things to consider when deciding the number and size of your units. First, which of your competitors unit sizes are almost fully occupied? These are the sizes you definitely want to offer. Keep in mind, however, that every site is different. What works at one may not work at another. Attempt to build with flexibility so you can make adjustments to your unit mix if necessary. This brings us to the next point: If possible, build in stages. This will allow you to gauge demand for specific sizes in your area and add units accordingly.
Building amenities into your site will increase your overall construction budget and, ultimately, the facilitys profitability. Consider moneymakers such as individual door alarms or climate control. Ancillary profit centers are always worthwhile. The trick is finding the ones most attractive to your target market. Choose amenities that will lend your site a unique selling point and help you battle your competition.
The Right Manager
A facility manager can make a break or business, so dont treat hiring as an afterthought. Have the right manager in place and trained before you open. You can hire someone with self-storage experience or find someone outside the industry. In some cases, experience can be a con if the manager has bad habits or doesnt possess a marketing mentality. It may be better to employ a novice and train him to your expectations. More important than storage experience is sales experience.
A Marketing Plan
Finally, you need a marketing plan. When it comes to promoting a facility, victory is the result of many small efforts, not just one big push. Some owners think a Yellow Pages ad is all they need. This simply isnt the case. Just as site construction involves a lot more than throwing up a building, a marketing plan includes lots of interconnecting elements. Pay attention to marketing details from the planning stages of your site, and youll greatly improve your chances for success.
Fred Gleeck is an expert in the field of information and seminar marketing. Hes also the author of more than 10 books and an accomplished coach and consultant. To receive his insights regularly via e-mail, send a blank message to [email protected]. For more information, visit www.fredgleeck.com.