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Owning a storage unit can be a profitable business, but it's critical to understand all of the

associated costs and risks before diving in. Assess all costs so that you can properly plan your

business and maximize your chances of success.

The popularity of the self-storage business is evident in almost every town. There are over 50,000

self-storage facilities in the United States, and the number is still growing. People and businesses

looking for a place to store their belongings can find the exact amount of space they require at

an affordable price. Even though the industry has grown to be worth billions of dollars, it is

constantly expanding to meet demand, with new businesses opening every day. However, there

may be unexpected costs associated with starting a profitable self-storage business.

Location

Land costs will be one of the most expensive aspects of starting a business. However, the location

of your storage unit plays a significant role in how much you will pay. According to the Self Storage

Association, 32% of storage units are currently located in urban areas, 52% in suburban areas,

and 16% in rural areas.

The Cost of Construction

There will be land development costs to prepare the site for the building before you can even

begin construction. The Parham Group estimates that depending on the amount of excavation,

clearing, and draining required; you can expect to pay between $4.25 and $8 per square foot.

The unit's amenities, such as climate control, will also determine the construction cost. Climate-

controlled units keep temperatures from falling below 55 degrees or rising above 80 degrees,

and while they are more expensive to build and operate, they can attract more customers. Many

people require climate-controlled storage units in order to preserve items.

Marketing Costs

If you’re starting a new business, you’ll need to attract customers through billboards, mailers,

Internet ads, or other means. Regardless of how you market your company, you should budget 6

to 8% of your annual income for marketing.

Franchise Fees

If you plan to open a franchise of a well-known self-storage company, you may be able to save

money on marketing because the company will already have a reputation in the community.

However, you will have to pay franchise fees and possibly royalties.

Franchise fees and royalty fees will vary from company to company, so it is best to contact the

company directly to find out exactly what is required to open one of their businesses in your area.