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Building an Effective and Realistic Self-Storage Budget for 2016

It’s time to take all of the lessons you’ve learned in 2015 and turn them into a solid projection of how you think your self-storage business will perform in 2016. That’s right—budget season! Here are a few things you should address in your annual budget, including revenue, expenses and more.

Matthew Van Horn

November 7, 2015

6 Min Read
Building an Effective and Realistic Self-Storage Budget for 2016

The first quarter of 2016 is almost upon us. That’s right—budget season! It’s time to take all of the lessons you’ve learned at your self-storage facility in 2015 and turn them into a solid projection of how you think your business will perform in 2016. So let’s hit on a few things we need to address in our brand-new budget, including revenue, expenses and your overall financial goals.

The Basics

If you’ve never created a budget, no big deal—it’s easy. If you create one every year, it’s now time to see how close your projections have been and where you can make some adjustments. However, there are a few things to consider:

  • Look to grow your top-line revenue. There are many ways to add revenue in the self-storage industry, so don’t just focus on expenses.

  • Consider which vendor and service expenses you absolutely need, and eject the ones that aren’t providing you a decent return in either time or money.

  • Who will have access to these projections, and who’s responsible for executing the operational functions to meet them?

Think about all of these issues before you put pen to paper or mouse to spreadsheet.


Once you’ve considered these questions, it’s time to start optimizing your 2016 budget. Let’s start with revenue, which is everyone’s favorite topic. The more the better! When you review your facility’s numbers from 2015, ask yourself if you took advantage of all your revenue options.

  • Did you implement new revenue-management techniques? For example, did you regularly update your street rates? Institute automatic rate increases for existing customers? Adjust rates based on the location of each unit or occupancy within a certain size?

  • Did you charge an administration fee?

  • Did you regularly charge late fees?

  • Did you sell any ancillary items such as boxes, locks, packing supplies, etc.?

  • Did you offer a tenant-insurance plan?

  • Does your facility have any other revenue-generating options such as truck rental or the ability to house a cell-phone tower?

Just implementing a few of these items can add thousands of dollars to your top-line revenue.


The downside of running any business is expenses. However, if you plan correctly, they won’t hurt as much as you think. Let’s start by focusing on some of the all-time favorites.


  • What are you going to pay your managers? What’s the going rate for storage managers in your area?

  • Do you offer an apartment that can be part of the compensation?

  • Do you want to give employees a raise each year?

  • Are you going to offer performance bonuses?

  • In 2016, do you need to add or eliminate a position at your facility?

  • Don’t forget to take into account workmens’ compensation, payroll-service fees and taxes.


  • A thorough marketing plan isn’t just about advertising, it’s an overall strategy. Do you have sufficient time and funds projected for your campaigns?

  • Will you increase, decrease or launch new Internet campaigns?

  • Do you have the correct business-to-business materials ready to go for apartment complexes, realtors, mobile-home parks, etc.?

  • Are you going to execute any direct-mail campaigns? If so, you need to project costs for the design, list acquisition and mailing.

  • Will you do any e-mail marketing?

  • Have you planned any customer-relationship-type marketing or new signage?

  • Have you considered any investment in software that will help you track these campaigns to make sure they’re generating an acceptable return on investment?


  • Have you projected an adequate amount to run your office? You need to consider supplies, management and accounting software, municipality licenses, computer support, printing, uniforms, and postage.

  • Office supplies are one of those expenses that need to be monitored closely. You want to make sure they don’t go out of bounds because someone thinks the facility needs seven types of Post-It Notes, 12 types of pens and 4,000 paperclips.

Utilities and Services

  • Electricity tends to be a constant, but if you can find ways of lowering this bill, look into it.

  • Water usage is the same as electricity. It will go up annually, but do your best to monitor it.

  • Regularly bid out waste removal.

  • Regularly bid out telecommunications. These companies specialize in charging you odd fees and providing invoices that can be difficult to interpret.

  • Also consider bidding out other services such as lawn maintenance, pest control, security monitoring, show plowing, etc. One word of caution: Cheaper isn’t always better, not by a long shot. If you find a vendor you like and does a great job, it might be cheaper in the long run to stick with it, especially when you consider the time it takes to find a great provider.

  • Review your merchant-account charges, service charges and other fees charged by financial institutions.


  • If you’re looking to increase top-line revenue, consider adding some funds for manager training. There are a number of resources this, and almost all managers would benefit from regular training sessions.

  • Review your property taxes. These are notoriously difficult to get adjusted, as there are many hoops you have to jump through; but in the end, it could be worth it. More often than not, we just have to pay the municipality what it wants.

  • Review your business insurance. This will be dependent on your property location and history. For example, if you live in Florida, insurance companies show no mercy. In most areas of the country, your agent can take your policy to the market and look for some type of reduction. In general, plan on this expense increasing on a regular basis.

  • Finally, make sure you’re putting some funds away for capital repairs. You never know when that heating and air-conditioning unit will decide it’s done.

The Big Picture

It’s critical that the person responsible for implementing your facility’s annual budget has a full picture of your financial goals. It’s not fair for this person to have limited access to income or profit-and-loss statements. He needs to know the facility’s financial status. You don’t have to share everything, but enough to know whether the business is meeting its goals.

Ask your managers for suggestions and comments on the proposed budget before the plan is implemented. If you’re not involved in the day-to-day operation of your property, it’s very easy to project numbers as you think they should be, rather than based on the reality of what they are.

Budgeting is a mix of skill and experience. No one set number or percentage is going to work for every property. Each market is different, and numbers need to be reviewed regularly. Take your time, review each area, and you’ll have a great 2016.

Matthew Van Horn is vice president of Cutting Edge Self Storage Management, which specializes in facility management, feasibility studies, consulting and joint ventures. He’s also president of 3 Mile Domination, a full-service self-storage marketing and strategy company. For more information, visit www.cuttingedgeselfstorage.com and www.3miledomination.com, where you can download a free e-book.

About the Author(s)

Matthew Van Horn

Founder, Black Swan Storage Advisors

Matthew Van Horn is the founder of Black Swan Storage Advisors, which specializes in self-storage consulting, feasibility studies, underwriting and investment analysis, site selection, and facility management. To reach him, call 855.720.6030 or email [email protected].

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