Thinking of Starting a Storage Company in New York City?
While there may be as many storage facilities in the US as there are Subway, Starbucks and McDonald’s locations across the country combined (roughly 50,000) there continues to be a growing demand for storage facilities in the US.
That’s another way of saying the potential in the storage industry is there, so despite the high number of providers, starting a storage company NYC is still a great business investment.
Without trying to sugarcoat anything, however, it’s important to highlight the fact that starting a storage company can be work (and takes patience) especially in instances where you have to build your own facilities.
But when managed properly, this is a business with the potential to be profitable. It’s also the kind of business that allows you to step back and explore other ventures if you can manage to bring in talented staff.
Before you get to that point, though, you need to know what it takes to get the idea off the ground.
Here are the steps involved in starting a storage company in NYC.
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Step 1: Write a Business Plan
As with every other business, you need to solidify your storage company idea through a business plan.
The plan is important for securing financing, especially if you intend to approach banks or investors. It also forces you to think about other important aspects of the business, including construction costs, competition, rate of occupancy to break even etc.
Step 2: Establish a Business Entity
You have the choice of four business entities to choose from a sole proprietorship, partnership, a corporation, and LLC (limited liability company).
Each has its own advantages and downsides you need to be privy to.
Step 3: Name the Business
Find a name that’s both available for use and resonates with your customers.
Step 4: Choose your Location
Purchasing a sizable piece of land outright in NYC is not only costly but nigh on impossible to find.
For that reason, you might want to explore renting a place, although the cost will (expectedly) vary drastically depending on location. Renting a lot in Queens, for example, is going to cost less than one in Brooklyn.
Step 5: Register for Business Permits and Licenses
Launching a self-storage business in NYC doesn’t require specific licensing, with the exception of zoning.
However, an employer identification number is a must, as is an occupancy permit. You can check the requirements with the New York Department of State.
Step 6: Secure Financing
Have you saved up enough to start off on your own? If you’re sourcing financing from a lender, they might ask for a Small Business Administration (SBA) guarantee to make a loan depending on the equity, project cost, and collateral.
Step 7: Open a Business Bank Account
It’s easier to stay on top of business accounts when you keep your personal and business finances separate.
Step 8: Ready your Marketing Plan
A marketing plan will help you grow your initial pool of customers. Done properly, it can also be useful in ensuring your facility rents out most of the available space on a regular basis.
Consider a mash-up of digital and traditional marketing avenues, including social media marketing and other online marketing strategies, in addition to radio and print advertising.
As well, consider networking with other businesses (including local movers who don’t provide storage space) for referrals.
Step 9: Get Business Insurance
For full coverage, a self-storage company needs several types of insurance, including:
- General liability insurance
- Workers compensation insurance
- Customer property legal liability insurance
- Commercial property insurance
- Crime insurance
The cost of the insurance policy will depend on a host of factors such as the size of the business, your location, and the number of employees on the payroll.
Get quotes from several providers to better understand how much to budget for insurance, factoring aspects like coverage limits, premiums, exclusions and deductibles.
Step 10: Hire Staff
When recruiting your employees, your budget should factor in their salaries as well as other staff-related expenses like paid time off, worker’s compensation and vacation time.
Step 11: Set up an Accounting System
A good accounting system is critical to the success of your storage business as it helps keep you on track with customer billing and taxes – and in the good books of the IRS.
Staying updated on taxes also helps in tracking and monitoring cash flow and trends in the business while maximizing profits.
These are basically the general steps involved in setting up a storage company in NYC.
It’s a field worth digging deeper before venturing into it, but we want to believe you’ll be doing your due diligence.
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