28th January 2023
In recent years, especially with the pandemic and everyone being stuck at home, there has been a real rise in people using sites like eBay, Amazon, Etsy and Facebook Marketplace to run their own business or become sellers on these platforms. This has resulted in an increased demand for locations where these businesses can store their stock safely and securely.
Research shows that there are currently 1,500 self storage facilities in the UK. This is more self storage buildings than the well-known fast-food giant of the golden arches (McDonalds). Further research shows that 68% of self storage customers are less than 20 minutes from their self storage facility.
In this blog post we look at how you can start your own self storage business. We look at all the things that you may want to consider as an entrepreneur looking into starting your own self storage business. This includes why starting a storage business may be a good idea, top tips for starting your own self storage business and more. Grab a cuppa, sit back, relax and have a read.
Why Starting A Self Storage Business Is A Great Idea
Firstly, let’s look at why starting a self-storage business could be a great idea for you.
- LESS SPACE IN HOMES
Many of us have seen it with our own eyes and experienced it for ourselves, new build homes are getting smaller. New build housing offers less space for living and less space for storage within the home too. Many new homes don’t have garages, or the loft has been converted into an extra room. This also means less storage space for homeowners and renters. Due to less storage space available in homes, there are higher demands for self-storage units for personal items.
- STRESS FREE BUSINESS VENTURE
Generally speaking, setting up a self storage business is a relatively stress-free business venture. This is especially case when you compare setting up and running a self storage business to setting up and running a restaurant or catering business for example. A self storage business offers much less stress as there is less demand on a day-to-day basis. If you are looking for a business opportunity with minimal day to day demands, then running your own self storage business could be ideal for you.
- MULTIPLE REVENUE STREAMS
One of the great things about starting your own self storage business is that you can have multiple revenue streams. For example, you could have a shop in the self storage facility that sells packaging materials such as cardboard boxes, labels and packing tape. You could have a self storage insurance business or charge a fee for ‘man and van’ jobs to clear out properties and place belongings in storage.
Our Top Tips For Starting A Self Storage Business
There are lots of things that you will need to do and consider when starting your own self storage business. Below we share just some of the things you may want to think about consider when looking to start your own self storage business. Some of them may be obvious to you, but other you may not have considered.
- THE LOCAL COMPETITION
Take the time look at your competitors and really examine the local self storage competition in your area. This will help you gain an understanding of where self storage customers are already seeking storage facilities. It will also help you see how much storage customers pay for self storage units as well as how much they are willing to pay for a storage solution in their local area. When you have this information, you can consider ways of making your self storage business more visible. This could be done by large bright signage, or special offer prices for example.
Think about how populated the area is too, and who your target audience is. A self storage business that is clearly advertised in a highly populated area will be likely to receive more customers and interest than a business in the middle of nowhere, to example. However, if you are looking for business customers for their storage needs, you may prefer a self storage facility on a business or industrial site. Remember, if you have frequent people passing by your business, your will not need to spend as much on marketing to your local area.
However, on that note, it of course will not be possible to launch a storage business with 1,000+ shipping containers in the middle of the city centre. While you want to be somewhere you can be seen, you’ll need to think carefully about where this could be. Keep in mind that you want passing traffic as they will become potential customers but be sure to establish how you will attract customers as you will be off the beaten track for some.
- THE TYPES OF SELF STORAGE BUSINESS
There are three main types of self storage businesses that could start. These are a metal shipping container storage business, a warehouse storage business or a lock-up garage type self storage business. All of these self storage business types come with their positives and drawbacks.
We look into these main three self storage business types in more detail below. This should help you choose the right self storage business type for your unique needs and requirements.
- METAL SHIPPING CONTAINER SELF STORAGE BUSINESS
The largest shipping container available is around 160 square feet. This could be rented out as one larger space, or you could divide it into smaller storage units if your storage customers had smaller storge needs. Mental shipping containers will often be placed in a secure area when part of a self storage business. There will then be enough space for customers to park next to their metal storage container and unload their belongings with ease.
There are some metal shipping container storage companies that will run a large site made up of hundreds of shipping containers. Other metal shipping container storage companies will deliver the container to a location of the customers choice. The customer can then fill the container in their own time and keep it on their land or return it with the company to be stored in the companies’ secure storage facility. This reduces the need for potentially wasted space being left for parking.
The main positive about shipping containers is that they are convenient and cost effective for both business owners of metal shipping container storage companies, and the customers. A metal shipping container self storage facility will often be a cheaper option than more tradition warehouse storage options. This will be the case for both self storage business owners and storage customers.
- WAREHOUSE SELF STORAGE BUSINESS
Warehouse self storage businesses are one of the most popular types of self storage for customers. In fact, it is the most popular storage option used by many storage companies in the UK. To get an understanding of warehouse self storage, envision a large building that is split into multiple small units. Each individual space is that seen and rented as a self storage unit and rented out to an individual customer.
An individual self storage warehouse facility could have hundreds or even thousands of self storage units within it. It is all dependent on the size of the warehouse and the size of the self storage units that you want to offer to your customers.
Self storage warehouse facilities will often be found in a convenient location. The main reason for this is that there have such a huge number of units. Many of these warehouse self storage facilities will also offer access 24 hours a day and 7 days a week. This means that need to be easily accessible by their customers. Warehouse self storage units will also offer temperate controlled storage units with 24-hour security. While these are perks for the customers, they will come at a heftier price tag than other self storage options available to them.
- LOCK-UP GARAGE SELF STORAGE BUSINESS
A lock-up garage self storage will tend to be a purpose-built storage unit. They will often be less spacious than other storage solutions such as shipping container or the units available in a storage warehouse, for example. Lock-up garages also won’t tend to vary in size. They will be around 124 square feet in size and that is the space you will have to work with for your storage facility.
You will tend to come across lock-up garage self storage options in more residential areas. They will often be cheaper to run and manage for business owners, and cheaper to hire for customers too. This is especially the case when compared to large shipping container storage options, or more secure warehouse self storage units. Dependent on the quality of the garage door, the security can often be a real concern for customers using a lock-up garage as their storage unit.
- THE SECURITY OF YOUR SELF STORAGE BUSINESS
It’s important to think about how you will keep your self storage safe and secure for your customers. One way of doing this is through your own padlock range. This means that padlocks are individually keyed and numbers for each individual self storage unit. These are then controlled by a master key that you have possession of as the owner of the self storage business. If this is the security option to choose, you need to make sure that the padlocks are of a high quality and standard.
Some self storage business owners will allow their customers to use their own locks. While this may be the preference of the customer, it can lead to some problems. For example, if the customer loses or misplaces their key then the unit may need to be broken into. This will be the same if the police have a warrant to search the storage unit and they key is no available.
If you are starting a self storage business within a warehouse, you may opt for keyless entry as an extra level of security for other customers with storage units within the warehouse. This will cost more to install and manage, but you can charge your customers a premium for this extra level of security. You could also have access control, intruder alarms and CCTV cameras installed too.
Is The Self Storage Industry Growing?
The self storage industry within the UK is a fast-growing industry. It is also a highly profitable niche. In addition to that there is significant headroom for growth too. Running your own self storage business could result in high margins and fast-growing revenues that will bring in more and more customers with storage needs.
Now could be the perfect time to start your own self storage business or invest in this lucrative and niche market. In 2020 revenues from self storage facilities grew by 17% hitting £890 million by the end of the year. The high profit margins of self storage businesses make them a very attractive industry, even though it is still in the early stages of development.
Am I Too Late To Start My Own Self Storage Business?
In short – no. Taking a look at the supply of self storage spaces in the UK we are currently at 0.73 square foot per capita When this is compares to similar countries such as America with 9.44 square foot per capita and Australia with 1.89 square foot per capita, we can see that the self storage industry is definitely in its early stages of development here in the UK. In addition to this, there is significant room for growth within the industry too.
Is A Self Storage Business Recession Proof?
Of course, nobody has a crystal ball so they can predict the future so we cannot say for sure that the self storage industry is recession proof. However, we can look at how the self storage industry has performed in the past, throughout previous recessions. For example, during the Great Recession of 2007-2009, the self storage industry survived. During the worldwide pandemic and subsequent lockdowns caused by coronavirus, the self storage industry and businesses within the storage industry actually thrived. For some self storage businesses, they saw some of their best growth figures during this time.
Overview Of Starting A Self Storage Business In The UK
If you are considering starting your own self storage business, now is the perfect time for you. There is a real need for self storage within the UK. Further to this, when you break down the self storage industry in sub-sectors, such as indoor storage and container storage for example, you can see that even more self storage business opportunities arise.
Research shows that over 19 million people live in UK towns will then than a 50k population. Most of these people do not have indoor self storage facilities. Think about how your self storage business could thrive in UK towns and villages like that!