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1.0 Executive Summary
The purpose of this business plan is to raise and examine the allocation of $2,000,000 the development of a self storage facility based in Austin, Texas. Self Storage Facility, LLC (“the Company”) was founded by James Smith. Upon complete, the facility will feature 200 units. There will be three different sizes available for tenant use.
1.1 The Services
As stated above, Self Storage Facility, LLC will provide the greater Austin metropolitan area with seamless access to a state-of-the-art storage facility. Each unit is expected to generate $100 to $200 per month depending on the size. Tenants will be able to access the facilities 24 hours a day. The location will feature video surveillance technology in order to ensure that the premises are secure at all times.
In addition to renting self storage units, the business will also provide RV and boat storage. This will be an important secondary stream of revenue for the business. There are an immense number of RV owners within Austin.
To that end, the Company will work with RV dealers and boat dealers that will provide referrals when people need to store RVs/boats at the location.
The third section of the business plan will further describe the services offered by the Self Storage Facility.
1.2 Financing
Mr. Smith is seeking $2,000,000 via a convention business loan in order to commence operations. This business plan assumes that the Company will receive a 25 year loan carrying a 7% interest rate. This financing will be used for the following:
• Location development in Austin
• Financing for the first six months of operation.
• Furniture, fixtures, and equipment purchases
The Founder will contribute $200,000 towards the development. Moving forward, the Company could easily acquire additional rounds of capital in order to develop additional storage facilities throughout the State of Texas. Any further capital acquisitions will occur after the third year of operation.
1.3 Mission Statement
The Company’s mission is to provide cost-effective storage solutions for people living in the greater Austin metropolitan area.
1.4 Management Team
James Smith is a highly experienced real estate entrepreneur that has developed several profitable real estate projects in the past. He will be able to have this self storage facility reach maximum occupancy very quickly.
1.5 Sales Forecasts
1.6 Expansion Plan
After the third year of operation, Management may seek to develop or acquire other self storage facilities within Austin and economically viable markets within Texas. The business may partner with a national level firm in order to further create visibility for the Company’s initial location. The business will continually market its operations to real estate brokerages in the market.
2.0 Company and Financing Summary
2.1 Registered Name and Corporate Structure
Self Storage Facility, LLC.
2.2 Required Funds
Mr. Smith is seeking $2,000,000 in order to develop the operations of the Self Storage facility.
2.3 Investor Equity
At this time, the Company does not require an equity contribution from an investor. A down payment of $200,000 will be provided by James Smith.
2.4 Management Equity
The above named owner retains a 100% ownership interest while servicing as the sole member of the corporate entity.
2.5 Exit Strategy
If it is prudent to do so, the Company will hire a qualified real estate brokerage to sell the Self Storage Facility to a third party. Generally, these types of businesses have a price to earnings multiple of 10 times the previous year’s income. The Owner has no intention of divesting this business for at least ten years.
3.0 Services
As stated in the executive summary, the Company will develop a 200-unit self storage facility complex in Austin, Texas. Management has sourced a 10-acre parcel of land that will house the campus and its operations. In order to ensure that the business operates smoothly at all times, the Company will hire a property manager that will be onsite during normal business hours. The property manager will ensure the security of the facility while addressing any issues that a tenant may have. The Company will comply with all laws regarding the operation of self-storage facilities and tenant rights. The Company anticipates that its monthly rent roll will be $28,000 to $35,000 depending on occupancy.
The business will use state-of-the-art entry and security technology so that tenants can access their unit 24 hours a day. The Company will have round-the-clock video surveillance, which will be monitored by both the property manager and third-party security firm.
4.0 Strategic and Market Analysis
4.1 Economic Outlook
This section of the business plan will showcase the self storage facility industry, the current US economy, the tenant profile, and the ongoing competition that the business will face moving forward.
Currently, the US is enjoying a period of economic growth. Although inflation rates were very high, they have begun to decrease. Most importantly, interest rates are also starting to decline due to monetary policy implemented by the US Federal Reserve. Management anticipates that interest rates will return to normal levels within the next twelve months.
However, any issues with the economy will not impact the Company’s ability to generate revenues. Austin is a wealthy and population dense market area. People move to and from Austin on a regular basis, which necessitates self storage among these residents. The Company will have highly controlled fixed operating costs, which will ensure that the business can satisfy its debt obligations on a monthly basis.
4.2 Industry Analysis
Within the United States, there are 170,000 companies that operate self storage facilities. Each year, these entities collectively generate more than $20 billion of revenue. The industry employs 250,000 people.
This is a mature industry, and the future growth rate will mirror that of the economy. As interest rates decline, it is expected that more self storage facilities will be developed due to lower capital costs.
4.3 Customer Profile
Management has developed the following profile that will be used during the course of marketing operations:
• Annual household income ranging from $50,000 to $200,000
• Will rent their unit for one to two years
• Lives within a 20 mile radius of the Company’s facilities.
• Will spend $100 to $200 per month with the Storage Facility.
In this section of the business plan, you will need to document very important statistics regarding your specific market. This includes determining the number of people that need self storage units, population size, population density, median household income, median home value, and related information.
4.4 Competition
The self storage facility showcased in this document will maintain a pricing advantage while also providing 24 hour access to the facilities. Here, you should indicate the number of self storage facilities that are in your respective market. You will also need to indicate their pricing, and other attributes that makes them a successful enterprise. You can also discuss national level competitor that may establish similar locations in your market if they have not done so already.
5.0 Marketing Plan
In order to rapidly ensure that the business is able to achieve substantial occupancy, the Company will use a number of highly focused marketing strategies that will create significant brand name awareness for the business.
5.1 Marketing Objectives
• Foster ongoing relationships with real estate brokerages that will provide referrals.
• Maintain an expansive online presence that incorporates ecommerce functionality (for payments and new enrollments).
• Use social media to information the general public about the launch of the new facilities.
5.2 Revenue Overview
5.3 Marketing Strategies
The Company will use numerous strategies that will create substantial awareness for the storage facility. Foremost, the Company’s location will be located near a major highway in Austin. The Company is currently working with a commercial real estate brokerage to find a suitable parcel of land for the development. As stated earlier, this 10-acre parcel of land will feature substantial signage surrounding the property. It is expected that tens of thousands of people will pass by the campus each day.
In regards to online market, the Self Storage Facility will maintain an expansive website that showcases the units available and pricing. The platform will feature video walk-through tours of the facilities. This website will also feature ecommerce functionality so that individuals can remit payment on a monthly basis. This functionality will encompass auto-pay features as well. Users will also be able to reserve spaces for storage units as well as RV/boat storage spaces.
The Company, in order to further increase occupancy, will work with Austin based real estate brokerage that will provide referrals among people that need storage units. This is an important aspect of marketing given that many people (including college and university students) often need temporary storage of their goods. Austin has a high turnover rate as it relates to people moving from and to this market area. Ongoing referrals from real estate entities and colleges will be an important source of revenue for the Company through the life of the business.
The business will also establish relationships with boat and RV dealers. Many neighborhoods do not permit the ongoing storage or recreational vehicles, boats, and jet skis in the driveways of residential properties. Management sees a significant opportunity to generate referrals among these dealers as well as homeowners associations to increase this segment of the Company’s revenues.
6.0 Organizational Plan and Personnel Summary
6.1 Corporate Organization
6.2 Payroll
6.3 Management Biographies
Here, you can indicate your experience as it relates to owning and operating a self storage facility. If you have prior experience in a real estate based venture or several ventures, you can indicate how this experience will allow you to develop your self storage facility to profitability. Academic credentials and degrees can also be listed in this part of the plan.
7.0 Financial Plan
7.1 Underlying Assumptions
The Company has based its proforma financial statements on the following:
• A loan of $2 million will be acquired to develop operations.
• The annual growth rate of revenues will remain at 6%.
• Full occupancy will be achieved in Year 3.
7.2 Sensitivity Analysis
The business’ revenues are only modestly sensitive to a negative change in the economy. As has been the theme throughout this document, the business is going to operate in the wealthy and population dense market of Austin. Given the frequent moves among people coming to and from this area, the Company will find an immense audience of people that need these services on an ongoing basis. This will allow Self Storage Facility, LLC to service its long-term mortgage on a monthly basis.
7.3 Source of Funds
7.4 Profit and Loss Statement
7.5 Cash Flow Analysis
7.6 Balance Sheet
7.7 Breakeven Analysis
7.8 Business Ratios
