You’re considering starting your own self-storage business. But before you take the leap, it’s important to determine if your area has an oversaturated market. An oversaturated market means there are too many self-storage facilities for the demand, which can make it difficult for new businesses to succeed. You don’t want to invest your time and money in a business that may struggle to stay afloat in a competitive area. Here are some ways to tell if the self-storage market is oversaturated in your area.
Why Should You Check for Oversaturation?
To start, why do you need to determine if the market in your area has too many competitors? Can’t you just open your business and see how it goes? While that may be an option, it’s a risky one.
A saturated market means there are already established businesses that have loyal customers, brand recognition, and possibly lower prices. This can make it difficult for new businesses to attract customers and generate profit. By checking for oversaturation before starting your business, you can make a more informed decision and potentially avoid financial struggles down the road.
How Do You Determine if the Market Is Oversaturated?
How can you determine if your area has too many self-storage facilities? Is there some kind of formula or equation to calculate it? Unfortunately, it’s not that simple. To determine the saturation level of the market, you’ll need to gather data on points like the population in your area, the number of existing self-storage facilities, and the vacancy rates.
Here are some steps to help you get started.
Evaluate Demand
First, evaluate the demand for storage units in your area. Look at population growth trends, housing prices, and demographics to get an idea of how many potential customers you may have. If there’s a high demand for housing and a growing population, it’s likely there’ll also be a high demand for storage units.
Check Out the Competition
Next, visit existing self-storage facilities in your area. Take note of their location, size, amenities, and prices. If there are already multiple storage facilities near each other, it may be a sign of oversaturation.
Also, pay attention to occupancy rates. If most facilities have low occupancy rates, it could indicate the demand isn’t high enough for the number of existing facilities.
Look at Current Prices
Another way to determine market saturation is by examining the current prices for storage units in your area. If prices are much lower than neighboring cities or states, it could mean there’s an oversupply of units available. Customers will naturally choose the most affordable option, which could lead to lower profits for your business.
Consider Economic Factors
Economic factors can also help determine whether a self-storage market has reached saturation. If the economy in your area is struggling or there’s high unemployment, it may not be the best time to enter the market. People may not have extra income to spend on storage units during tough financial times.
Project Future Growth
It’s also important to consider the potential for future growth in your area. Is there an influx of new businesses or housing developments planned? This could lead to an increase in demand for storage units in the future, making it a more viable option to enter the market now.
Consult the Experts
Finally, consider consulting with industry experts to get a more accurate understanding of the saturation level in your particular area. These professionals might be able to see and predict market factors and trends that you might overlook.
What Can You Do if the Market Is Overly Saturated?
So you’ve discovered that too many competitors crowd the market in your area. Does that mean you should give up on your dream of owning a self-storage business? Not necessarily.
An oversaturated market doesn’t mean success is impossible. It’s harder to achieve, yes, but with the right strategies and determination, your self-storage business can still thrive. All you need to do is pivot a little on your original plan and adapt to the current market conditions. If you do so, you might be able to make your business stand out to the point where oversaturation no longer matters because you’re offering something your competitors don’t.
Here are a few options for you to consider.
Find a Niche
Instead of competing with existing self-storage facilities, consider finding a niche or specialty within the market. For example, you could focus on climate-controlled units, RV or boat storage, or offering additional services like moving truck rentals.
Differentiate Your Services
In an oversaturated market, it’s important to differentiate your self-storage business from the competition. This could mean offering unique services or amenities, such as 24/7 access or online reservation and payment options. By standing out from the crowd, you may be able to attract customers who are looking for something different.
Improve Your Marketing Strategy
A strong marketing strategy can help attract customers even in an oversaturated market. Consider partnering with local businesses or offering promotions and discounts to stand out from the competition.
Expand to a Different Market
If your area has too many competitors, consider expanding your business to a different location where demand for storage units may be higher. This could also help you gain experience and build a successful business before potentially entering a saturated market in the future.
Telling if a self-storage market is oversaturated can be challenging, but these are some ways you can make that determination. If, after analyzing the market yourself, you still aren’t sure if it’s oversaturated, consider seeking advice from an industry expert who specializes in self-storage. They can provide valuable insight and advice to help you make the best decision for your business.
At Box Pro Consulting, we do self-storage demand studies to help entrepreneurs like you decide if your idea is worth pursuing or if the market is too dense for you to make a profit. As part of our demand studies, we look at factors like population growth, demographics, and the number of existing self-storage facilities in the area. By examining these indicators, we help you determine market saturation and guide you toward making a successful business decision.