When Building a Self Storage Facility, you need to create a budget to guide you from the start to the end. The process is exciting, but it can also be stressful due to the steps involved. However, with a clear financial plan, you can be sure of building for a self storage facility with ease. Below are the key areas you need to factor when planning your finances.
The cost of the area where you want to build your storage facility should be a top priority on your list. The total cost depends on the land’s square foot and the location. It should be about 20 to 30% of the total development cost.
The good thing is that if you spend more money in a high-end location, you’re likely going to charge higher for the services. You can also save more money if you build a multi-level storage facility that will not cost you much money.
It is one thing to buy land and another thing to construct the facility. First, you should consider development costs before you start building, depending on the location. For instance, you may need excavation, clearing and draining costs when Building a Self Storage Facility, which depends on the square footage.
The construction cost also depends on the amenities required for the units. For instance, you will spend more money when Building a Self Storage Facility in climate-controlled areas. This is because the units control temperatures from going below 55 degrees and while you may construct and operate at a higher cost, you can be sure of attracting more customers. Climate controlled units are good at preserving items against mould and mildew.
Building a self-storage facility at a new location requires good marketing strategies to help you grow your brand. Customers need to know about your business, and the best way is to ensure that you use marketing opportunities to let people know about your business.
Luckily, there are multiple ways you can market your business with ease and on a budget. The best way is to set aside about 8 to 10% of your total gross annual income for marketing.
Sometimes, you can decide to open a franchise business based on your needs. If this is the case, you will not need to budget for marketing since it already has brand visibility. However, you will need to cater for franchise fees and royalties.
If so, set aside up-front fee as per every rental. Remember, the fees depend on the company, and that is why it is crucial to contact the company to determine the costs of opening one of its businesses in your location.
Operating costs are also a crucial component to consider when Building a Self Storage Facility. The costs depend on the square footage of your facility and the market prices in your location. If the climate in your area is climate-controlled, you will experience an increase in operating costs. The costs include utilities, telephone, insurance, business ratios, and book-keeping.