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Do Truck Rentals Make Sense for Your Self-Storage Business? Check Out This SWOT Analysis and Find Out

Truck rental is a service that can complement a self-storage operation extremely well, and for obvious reasons. If you aren’t certain it can work for your business, check out this SWOT analysis to help weigh the decision.

Daniel Garza

March 17, 2022

7 Min Read
Truck Rentals SWOT Analysis for Self-Storage Businesses

To prosper in a competitive market, self-storage operators need a way to differentiate their business. Offering truck rentals is a simple, effective way to make your brand ubiquitous within the markets you serve.

The aim of any add-on profit center is to enhance your self-storage facility’s offerings and make it a one-stop shop for any potential storage need. Many operators offer a typical mix of retail products (boxes, locks, bubble wrap, etc.), or even a tenant-insurance or tenant-protection plan, but none of those create the visibility a truck-rental program can provide, particularly if you emblazon the vehicle with graphics that promote your property. While you’re earning revenue from someone who’s renting the truck for a move, the vehicle is doing double duty as a mobile billboard, reinforcing your brand to prospects as it drives through town.

Put yourself in the mind of a potential tenant. Let’s say there are two storage facilities within a mile of each other. Both are well-run and attractive with similar rental rates, but only one offers a rental truck. Most prospects don’t own a moving truck and will likely need one to put their items into storage. So, the facility with the truck offers a major convenience. If the use of that truck is also offered for free with a new storage-unit rental, it’s easy to see which facility has the upper hand.

Of course, no program is that cut and dried. There are variables to consider before you commit to any new business venture, particularly one that carries extra work and expense. To see if adding a truck-rental program makes sense for your business, let’s perform a classic SWOT analysis (strengths, weaknesses, opportunities and threats). I’ll address them just slightly out of order.

Strengths

We’ve already alluded to a rental truck’s primary strength: visibility. Unless you’re the only self-storage facility in town, you need to draw people to your location. Every retail business needs marketing to succeed. If you’re a single-facility operator, a rental truck will bring people to your property.

This works for more than those customers with an immediate need for self-storage. It’s about building brand recognition. You want the truck to be on the road, so when someone sees your logo traveling down the highway, at a stop light or parked at a McDonald’s, your facility resonates. When someone sees your truck with your logo and the word “storage” on it, your brand becomes cemented in their brain.

It may be a week or year later, but when that individual needs self-storage, your brand will be top-of-mind. This is referred to as relational memory. The more the truck is on the road, the greater the chance that the same people will see it. The more views, the faster the relational memory works, and the quicker you’ll be at the top of their decision-making when the need for storage arises.

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Opportunities

A rental truck also has a revenue component. While this is certainly a strength, it’s more of an opportunity based on how you manage and operate the program. The visibility of the truck will drive new business to your facility long after the property is stabilized, which means there’s an ongoing opportunity to bring in new tenants at higher rental rates.

Let’s say you have a 400-unit facility at 100% occupancy. You raise rental rates by $5 per month and lose 10% of tenants. Now 360 units are full. You’re already making an additional $1,800 per month just based on the increase that was accepted by existing tenants. Now, your branded rental truck can help fill your vacant units at the higher rate, too. It plays a continuous, integral role in bringing in new business.

Your self-storage truck also makes money when you rent it out. Even if you offer free use of the truck at move-in for new tenants, you can still charge a fee for its use after an allotted time. Let’s say your promotion allows the truck to be used for free for up to four hours. Anything after that would be billable. You can also charge for refueling or cleaning if the tenant brings back the truck empty or dirty.

Of course, you also can rent the truck to the public even if they don’t rent a unit with you. In addition to the basic vehicle rental, you can charge for the use of hand trucks, moving pads, boxes, etc. Look at what competitors charge in your area. All of this will bring more revenue to your bottom line.

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Weaknesses

With self-storage truck rentals, it’s fair to take a hard look at expenses and impact. How much will it cost to launch and run your program, and what’ll be the investment in time and resources? Among your considerations will be what it takes to get staff trained to sell and market the program as well as ongoing expenses to maintain the vehicle. In terms of upfront costs, look into the difference between buying and leasing.

At the outset, I’ll always be cheaper to lease. In fact, you may be surprised to know the monthly lease payments can be 100% tax deductible. I recommend entering a TRAC (terminal rent adjustment clause) lease, which provides several upsides, including unlimited mileage. Fretting about mileage restrictions in the vehicle-rental business is like worrying about how many times a basketball is bounced during an NBA game.

TRAC leases also provide you with an opportunity to make beneficial decisions at the end, such as purchasing or returning the truck, or trading it in for an updated model and brand. Remember, your goal is to attract people to your self-storage facility. Newer trucks look a lot better than old, run-down ones.

The time and money it takes to train your self-storage staff shouldn’t be much of a concern. Most truck-rental applications are very user-friendly, and your vehicle provider should offer training services and webinars to ensure everyone involved is competent with the process.

Finally, consider ongoing maintenance. It’s important that your truck be under warranty in case any major repairs are required. Regular maintenance is typically simple. Oil changes, inspections, tire rotations, etc., can be done at any local mechanic or dealership and should be fairly inexpensive. The important thing is to stay on top of these tasks and schedule all services so they don’t conflict with any rental bookings.

Threats

To complete the SWOT analysis, we need to look at any potential threats to your self-storage business. With truck rentals, the main concern is liability. In fact, you may have shied away from them for this reason. Though understandable, this is why there’s insurance!

There are plenty of companies that offer rental insurance, but make sure yours is adequate and reasonably priced. Shop around to find the best coverage for the least cost, but express your intentions with the carrier to rent the vehicle. The last thing you want is for a customer to get into an accident and then learn you only have a commercial auto policy.

Your liability should be a minimum of $5 million. Make sure the rental forms follow state regulations, and try to find a policy that doesn’t raise your premium with each claim.

All things considered, the strengths and opportunities of a truck-rental program will greatly outweigh the weaknesses and threats for most self-storage operations. The largest wrinkles have been ironed out over the years, making truck rentals a very safe and lucrative business.

Daniel Garza is the national sales manager for On The Move Inc., which offers a complete rental-truck program for the self-storage industry. He began his career in marketing as well as research and development before heading up the company’s sales department. For more information, call 800.645.9949.

About the Author(s)

Daniel Garza

National Sales Manager, On The Move Inc.

Daniel Garza is the national sales manager for On The Move Inc., which offers a complete rental-truck program for the self-storage industry. He began his career in marketing as well as research and development before heading up the company’s sales department. For more information, call 800.645.9949.

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