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In this article I want to walk you through the process of creating financial projections for a startup self storage facility. Out of your potential market, only a certain percentage would even consider using self storage. Your marketing efforts should lead to a successful conversion of some of your target market into customers. This is not part of  your revenue projections, but it is really important to know the cost to acquire 1 customer.
One of the most important pieces to your revenue projection puzzle is how long does a customer stay a paying customer? Then add your recurring customers to your new customers and you will get your total current customers.
Finally, estimate how much space each customer will rent on average and the rate they will pay per square foot to come up with the average rent per month per customer. You will likely have to pay 1 full time person to manage the facility, sign up new customers, collect payments, etc. Unless you can pay cash for the facility,  you are likely going to have a mortgage on the property. You will also need a good insurance policy to cover your facility and your tenants valuables. You will want to have good lighting at the facility at night which will probably be your primary utility cost. Now that you have your revenue and expenses projected, you can estimate what occupancy rate you must have in order to breakeven. When managed well, industry experts estimate that you should be able to generate a 30% Return on Investment when you have a 90% occupancy rate at your storage facility. Now that you have done all of the leg work, if you need to complete a 3 year financial projection for a potential investor or lender, you can use our ProjectionHub web app to complete a 3 year Income Statement, Cash Flow Statement, and Balance Sheet projection. Choosing to franchise a self-storage business provides you with a history of research, expertise and market knowledge to pull from, giving you an advantage in a competitive yet lucrative business segment. Starting a self-storage business from scratch on your own means there isn’t a single person on the planet who is already familiar with your operation. Between traditional and portable storage business models, you have options for your franchise.
With the demand for self-storage higher than supply, potential owners get so excited about entering the lucrative self-storage business that some do not consider a plan for when they eventually want to get out. Welcome.The Storage Facilitator is the modern self-storage professional's destination for useful education, intriguing news, diverse expert perspectives, technology updates, and beyond. Get our free white paperThe Four Pillars of Profitable Self-Storage Management is an in-depth resource that empowers facility owners and managers to get more out of your business and stay ahead. The information contained herein has been obtained from third parties and we cannot guarantee the accuracy or completeness of the information. For individuals, tax is becoming much harder to avoid, as George Osborne aggressively closes tax shelters and the government strongly discourages lawyers and accountants from inventing new ones. Wealthy people may also be offered unusual businesses to invest in when they are sold products using so-called business property relief to mitigate inheritance tax. In that context, leasing street sweepers or refuse collection vehicles to councils begins to sound logical.
As an aide-memoire to a shrinking asset class, FT Money has assembled a selection of “investments” currently on sale.
Other than taxes — and it is never possible to avoid them all — the only certainty in life is death. Kirkleatham Memorial, for example, is a new crematorium in north-east England that Rockpool’s investors have funded, while obtaining 30 per cent income tax relief and the opportunity to roll over capital gains tax liabilities under EIS. The crematoria are Rockpool’s “most popular investments”, says Elizabeth Orbell, its head of client services. Business property relief was originally developed for Steptoe & Son-style small businesses so that the 40 per cent death duty would not financially cripple the sons and daughters left running a family shop or farm. When asked if clients worried that inheriting a stake in a crematoria would not be well-received by grieving children, Ms Orbell says: “People definitely don’t come into it like that. Start-up pubs or restaurants can qualify for the same tax reliefs as Rockpool’s new crematoria. Martin Sherwood, who runs Enterprise Investment and is a veteran of structuring tax-break schemes, takes care to point out that anyone who invests with Imbiba is going into “a genuine risk business, although we try to de-risk it by working with experienced management teams”. The risks come from an array of threats to the industry, including competition from coffee shops, cheap supermarket booze and falling alcohol consumption.
Triplepoint, another financial product provider, sells what it calls an “inheritance tax strategy” that involves buying shares in a company that leases out assets to local authorities and NHS trusts.
Triplepoint likes leasing the municipal vehicles because they offer stable, steady cash flows. Asked if Triplepoint’s investors were more motivated by the underlying assets in the business or the tax break on offer, Mr Beaton insists the investment partners take “a very keen interest” in the former.
Jonathan Gain runs Stellar Asset Management out of a skinny office block on the corner of Conduit Steet and Regent Street in London’s Mayfair. Mr Gain says agricultural assets have been popular with his clients because they are “uncorrelated to the [financial] markets” as well as being “stable, reliable and tangible”. Still, some experts caution that while they offer shelter from death duties, inheritance tax-led products could be difficult for families who inherit them to sell on, if they want to turn the forest, farm and hotel stakes back into cash.
If the government caved into popular pressure to scrap inheritance tax, for example, the secondary market for BPR-based financial products would be substantially weakened.
Because the government is only willing to offer EIS relief to the riskiest businesses, the draughtsmen of the tax rules have proven unwilling to extend the entrepreneurs’ tax shelter to companies that own valuable freeholds.
Tax relief product designers, however, have spotted a potentially lucrative exception in self-storage units.
Fund manager Octopus Investors has built a product around the Enterprise Investment Scheme tax relief that is reminiscent of the BBC programme where entrepreneurs pitch their (sometimes off-the-wall) business ideas to multimillionaire investors. Octopus takes stakes in small, unproven businesses, and offers retail investors a slice of its portfolio. Octopus takes a 5 per cent initial charge, or slightly less if accessed through a financial adviser. On principle, individuals should think very carefully about the assets they are gaining exposure to, before being dazzled by the tax breaks potentially on offer.
Foremost among these are accelerated payment notices, which have been issued to thousands of tax scheme users to demand tax within 90 days. The tax authority’s position on disputed schemes is being backed up by the courts, which are ruling consistently in its favour.
Barrister Jolyon Maugham QC said these tribunal decisions, combined with HMRC’s more hostile stance, have made the likes of film schemes less attractive to prospective investors. Amid the clampdown on more aggressive structures, the tax planning industry has moved into the more comfortable territory of government-sponsored reliefs, particularly those intended to support small business.

Companies that qualify for EIS and assets benefiting from business property relief (BPR) have proved especially popular for investors, and have not come under HMRC’s spotlight.
Where the government has tightened rules, such as the exclusion of popular solar generation projects from EIS, changes have not been applied retrospectively. Although EIS and BPR investors benefit from generous tax reliefs, designed to offset potential losses, management charges tend to be higher than those charged by actively-managed equity funds. Minimum subscriptions for EIS and BPR investments, typically ?5,000 and up, will preclude less wealthy tax-conscious investors, for whom maximising pension and Isa saving will usually be the first priorities.
The levels of risk involved in small company investments are also relatively high, restricting the appeal of many EIS and BPR arrangements for investors keen to minimise the inheritance tax (IHT), payable at a marginal rate of 40 per cent on estate assets above the nil-rate band of ?325,000. Lifetime gifts are a relatively straightforward alternative for those looking to reduce IHT. Transferring assets into a trust is often preferred by those who want to retain control of their assets. There are more self-storage facilities in the United States than there are McDonald’s, Subway and Jack in the Box restaurants combined.
None of these numbers surprise Maurice Pogoda, principal and president of Farmington Hills, Mich.-based Pogoda Companies.
Pogoda Companies proved this earlier this spring when it sold National Storage Center, a 749,436-square-foot portfolio of 12 self-storage facilities across the state of Michigan, to buyer Simply Self Storage. Self-storage investing is lucrative in any economy with opportunities in almost any location across the U.S. Self storage”, also known as “self-service storage” or “mini-storage” is an industry which provides storage facilities, such as rooms, containers, lockers or outdoor space to tenants, either on rent or on lease.
If you are a seasoned investor and looking forward to investing in a growing market, which will provide you with guaranteed return on investment (ROI), then self storage is a good investment option for you.
There is also a lot of flexibility in terms of the unit sizes and packages that are available, ranging from a very small size to large units and packages.
To sum it up, the rewards of making an investment in self storage facilities go way beyond your imagination. During good times and bad times, the self-storage industry does better than many other types of real estate. Whether you own an existing self-storage facility, rental center or are an independent business owner, consider adding a lucrative Mobile Storage Business to your current portfolio of services. The Lok-Box Mobile Storage System is a simple, low cost alternative to the many moving and storage franchising systems available in the market today.
Contact us today and wea€™ll share our vision of the mobile storage business and how you can profitably operate a mobile storage business in your protected territory. Selecting a Location for a Mini & Self-Storage StartupA variety of factors will determine the success or failure of your self-storage business. If you are interested in starting a different kind of business, please browse our directory of guides below. Because a franchise company has created a business plan, done the market research, started several similar businesses in other locations, and developed marketing materials, the turn-around time from when you agree to own the franchise to when you start welcoming customers is shorter than if you started from scratch.
Traditional self-storage involves the brick-and-mortar, self-serve storefronts we all know and love. Many new franchisees are not accustomed to marketing a business effectively, and therefore aren’t familiar with costs associated with creating good campaigns to announce the business.
You will know that you have an effective, well-thought-out brand that has an existing reputation, your marketing efforts have been tested and money is being spent based on experience.
This white paper identifies major trends and best practices in rate management, occupancy analysis, rental contracts and profit management.
And they support an industry of accountants, lawyers and financial salesmen who design investment products that offer wealthy individuals the chance to safeguard some of their money from the taxman’s grasp. One reason for this is that the government is narrowing the criteria for investments that minimise an individual’s tax bill. These often make the investor a part-owner of a company, and because they may be uncomfortable with taking on business risk, the tax-break investment industry seeks out dependable companies with steady, annuity-like cash flows.
These products come with multiple health warnings, however, as they tend to carry very high charges and performance fees. So crematoria, which are dependable businesses for obvious reasons, are proving popular investments for people seeking tax relief. They “get snapped up in days” because they are “a business model that people can understand, with a certainty to it and a natural source of demand,” she says.
As it applies to many types of unquoted companies, however, it is possible to buy stakes in such businesses to shelter money from IHT. Its EIS portfolio service, which channels clients’ money into start-ups that qualify for the 30 per cent tax relief, charges investee companies a 3 per cent upfront fee and a 0.5 per cent annual fee, reducing investors’ returns.
Britons drank 19 per cent less alcohol in 2014 than in 2004, according to the British Beer and Pub Association. The portfolio consists largely of municipal vehicles, says the City of London-based company’s head of leasing James Cranmer. That could be an important consideration for someone turning their cash into a BPR-sheltered investment that they plan to hold for the long term and leave as a legacy. These investments, says Charles Calkin of private client wealth manager James Hambro & Partners, are “at the edge of the risk scale and should be for a small amount of the pot. The designers and promoters of tax relief schemes often argue they create bona fide investment opportunities that would be attractive even in the absence of tax relief.
But, tasked with reducing the budget deficit, the UK government is increasingly targeting such practices — and has armed HM Revenue & Customs with new powers to recover tax it deems to have been deliberately avoided, writes Adam Palin.
The notices — which HMRC hopes will recover ?5.5bn — cannot be appealed, and the investors in disputed film partnerships and property schemes, among others, have already paid more than ?1bn to the exchequer.
The industry says this reflects the labour-intensive due diligence required in small company investment. Performance-related fees of about 20 per cent of realised returns are also standard, although some managers including Octopus defer these. To be wholly exempt from the tax, however, the benefactor must live for seven years after giving.
Inheritance tax is, however, payable on eligible assets above the nil-rate band at a rate of 20 per cent, and a charge is also levied on trusts every 10 years. The Self Storage Association reports that these facilities generated more than $24 billion in revenue in the United States in 2014.
Marcus & Millichap reported several big self-storage sales in the Midwest region during the first months of 2015. This kind of self storage facility is used for both personal as well as business purposes of storing and accessing their goods. Actually, a good investment is the one which is in a growing phase, promises guaranteed returns, and belongs to a market which has low entry and exit barriers.

Moreover, strong demand for these mini-storage units provides for quite a robust re-sale market, which is bound to remain attractive even during times of an economic downturn. Today, every small city or town offers these facilities, but still there is a lot of room for expansion. Considering the fact that there is still a massive untapped market, this most certainly makes for one of the most rewarding investment options in the recent times. Market saturation, lack of startup funding and other issues can complicate or even derail your efforts to create a lucrative and long-lasting storage company.But one of the most important factors will be your choice of location.
A franchise gives you the power of the parent company’s brand and the reputation it has developed with other outlets. If you are buying an existing business, franchising is still an advantage because the training and support you get from the franchise company gets you up to speed faster compared to learning the business on your own. An emerging and fast-growing segment is portable self-storage. In this case, a container is delivered to the customer’s home or business, they load it, and you haul it off to the facility.
But they are all being sold as tax-mitigating investments at a private bank or wealth management firm near you.
For example, the Enterprise Investment Scheme (EIS), a popular relief set up to encourage people to back early-stage businesses, now excludes new investments in some relatively mainstream industries, such as solar power generation.
More to the point, HMRC is clear that people making investments for which the main purpose is tax relief will not qualify for it. Rockpool, a London-based company that structures schemes to help people obtain tax reliefs, has funded several new crematoria.
People who hold on to stakes in Rockpool’s crematoria for can also eventually qualify for business property relief, which may reduce the inheritance tax their children pay after their death. Meanwhile, 21,000 UK pubs have disappeared since 1980, according to the Institute of Economic Affairs, with half of these having closed after 2006. Many of these, he explains, are refuse collection vans and street sweepers, as well as ambulances. What turns the business into an inheritance tax mitigation service is that forests and farms qualify for business property relief when they are passed down from parent to child, he explains. Because there are many failed start-ups for every Zoopla, this is high risk, so the taxman will give 30 per cent income tax relief for the money investors put into Octopus’s Eureka product. The company’s literature advises that someone putting ?100,000 into the product via an adviser will only see ?92,229.64 of that money invested in the start-up companies. But it pales in comparison to the number of self-storage facilities dotting the country: more than 48,500 at last count.
It ranks as the fastest-growing segment of the commercial real estate industry during the last 40 years. Pogoda says that about one in every 10 people in the United States has a storage unit somewhere. Even during the Great Recession, the occupancy rates for self-storage units were typically in the range of 75 percent, Pogoda said. Hoerth Storage in Fond Du Lac, Wisconsin, sold for $4 million, while Grand Central Self Storage in Ferndale, Michigan, notched a sales price of $3.265 million. However, unlike at a warehouse, the self storage facilities do not allow quick access to the storage space, which is usually secured under the supervision of the tenant himself. Investing in self storage facilities will provide you with all these advantages as compared to all other kinds of investments in commercial property. This form of good investment involves minimal risks and provides you with an option to choose your own level of involvement.
The right location will generate high traffic and full units, while the wrong location can make your first year of business feel like a long, uphill slog. A smart franchisee will create a self-storage business plan, calling on the franchise company’s expertise to anticipate issues, roadblocks and possible threats before they happen. Octopus funds a different business every month on average, so the portfolio changes frequently.
The industry pays more than $3.25 billion each year in local and state property taxes, according to the association. In addition to this, the investor does not face any development risk since there is a high availability of mini-storage units, which are ready to be rented out along with low operating costs, thus maximising the return on investment (ROI).
Apart from these benefits, you can significantly increase the value of your investment and establish quick cash flows as well.
Ideally, you'll want to look for an affordable location in a highly trafficked, residential area. Your marketing dollars can be used effectively by focusing on proven marketing tactics, including new opportunities with social media.
The ROI rates offered on most of these storage facilities are quite comparable to those offered on bank accounts or some other traditional investments.
A franchise company will have already tested out major marketing avenues such as print and broadcast ads, fliers, pay-per-click advertising, and SEO. At this stage of the startup process, it's usually better to tweak your target market than it is to risk investment dollars on an unsuitable location.Constructing an Efficient Self Storage CenterOnce you've settled on a location, the next major task will be to budget, plan and construct storage units.
Storage unit constructions run the gamut from the extremely affordable to high-end units designed to include climate controls or other premium features.Although it's possible to build your own units from scratch, we recommend enlisting the aid of a professional storage construction firm. Construction outfits that specialize in self-storage units can bring a high level of industry expertise to the design and building of your facility, increasing the likelihood that you can achieve maximum ROI from your construction dollars.Concerns for Self Storage EntrepreneursSelf-storage business owners must exercise diligence in maintaining clean and secure facilities.
Neglected facilities are magnets for crime and other activities that deter paying customers.
If maintenance and security is beyond your internal capabilities, you will need to develop relationships with third-party providers in your area.As a storage unit owner, you will also need to research the many legal issues related to self-storage in your state. If you think owners of nearby mini and self storage warehouses businesses will give you advice, think again. What's in it for them?Fortunately, somebody who runs a mini and self storage warehouses business in a location that is not competitive to you may be willing to share their entrepreneurial wisdom with you, once they realize that you are not going to directly compete with them in their community. It can take a while to find an entrepreneur who is willing to talk, but it's well worth the effort.How does one go about finding a mini and self storage warehouses business founder in another community?No problem! If you're careful in your research, the mini and self storage warehouses business you buy will have a track record of profitability – a big plus since it may take months or even years for a startup to turn a profit.Operational Efficiency. When you're shopping for a mini and self storage warehouses business, be sure to look for ones that have all of the necessary processes and systems to ensure seamless operations from your first day of ownership.Capital Acquisition.
The link below gives you access to our franchise directory so you can see if there's a franchise opportunity for you.

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