You have a great new idea. You want to open a self-storage facility in your area. Your facility will be different and better than the others in your area, and you’re confident it will be a success.
But don’t get too ahead of yourself—while confidence is important, it alone won’t guarantee the success of your self-storage business. Before you invest time and money into your project, you should conduct a feasibility study.
As the name suggests, a feasibility study helps you determine if your idea is feasible and financially viable. In other words, it can help you determine if your idea is worth pursuing. If not, it can give you invaluable insight into what changes or improvements you can make to increase your chances of success. If it is, it can help you better understand the market and competition, identify potential risks and challenges, and make informed decisions about your business plan.
Sounds like a great resource, doesn’t it? Let’s go over what a self-storage feasibility study is in more detail so that you can get a better understanding of its purpose and benefits.
What’s a Feasibility Study?
A feasibility study is a thorough examination of a proposed project or concept to assess its viability. It takes into account all factors that may affect the project’s success, including but not limited to market demand, financial projections, potential risks and challenges, and legal requirements.
The goal of a feasibility study is to provide objective data and information that enables business owners to make informed decisions about whether to move forward with their projects.
What Happens During a Self-Storage Feasibility Study?
In a self-storage feasibility study, you consider several factors to determine the demand and potential success of a self-storage facility in a specific location. These factors include market demographics, competition analysis, land cost, site suitability, and projected financial performance.
The study also involves conducting surveys and gathering data from various sources to understand the local demand for self-storage units. This includes analyzing the population growth rate, household incomes, and existing storage options in the area.
Additionally, a feasibility study assesses the potential profitability of a self-storage facility by estimating its expected operating expenses, revenues, and return on investment. It takes into account factors such as construction costs, rental rates for similar facilities in the area, and occupancy rates.
Are Feasibility Studies Necessary?
Feasibility studies aren’t required by law. That said, many loan providers or investors may request one before financing a self-storage project. They want to ensure the development has strong potential for success and will generate a return on their investment.
And even if you don’t have any external investors, conducting a feasibility study is still highly recommended for developers as a means to mitigate the risks and ensure a successful project. By understanding the market demand and potential financial performance of a self-storage facility in advance, developers can make informed decisions about the investment. This reduces the chances of failure and increases the likelihood of a profitable venture.
How To Conduct a Self-Storage Feasibility Study
If you need a self-storage feasibility study done for your project, you can hire a professional consultant, like Box Pro, or conduct it yourself. Let’s cover the steps typically involved in conducting a self-storage feasibility study.
Market analysis: This step involves researching the local market demographics, including population growth, household incomes, and potential demand for self-storage units.
Site selection: Once the market analysis is complete, developers can start evaluating potential sites for the self-storage facility. Factors to consider include land cost, accessibility, and zoning regulations.
Competition analysis: It’s essential to understand the existing competition in the area and their offerings. This enables entrepreneurs to identify any gaps in the market and potential opportunities for a new self-storage facility.
Financial projections: Using the data gathered from the previous steps, developers can estimate the expected financial performance of the self-storage facility. This data includes projected expenses, revenues, and return on investment.
Risk assessment: A feasibility study should also assess potential risks that could impact the success of a self-storage development. These could include economic downturns or unforeseen obstacles during construction.
Final recommendations: Based on all the gathered information and analysis, the feasibility study should conclude with recommendations for or against proceeding with the self-storage project.
How Much Does a Feasibility Study Cost?
The cost of a feasibility study depends on the size and complexity of the project, as well as the consultant or company hired to conduct it. But typically, the cost can range from $5,000 to $15,000 or more.
If you choose to do a study yourself, the cost may be lower; the trade-off is that while you’ll save money, you’ll also need to put extra time and effort into research and analysis. Self-studies also tend to be less comprehensive and may not have the same level of objectivity as one conducted by a professional consultant.
If you hire a professional consultant, the cost may seem high, but you can consider it an investment in the future success of your self-storage facility. A comprehensive feasibility study can provide valuable insights and guidance that can save you time, money, and potential headaches down the road.
And while hiring a professional will cost you more than a self-study might, it doesn’t necessarily mean breaking the bank. Box Pro offers feasibility studies at competitive prices, making them an affordable option for developers of any size.
What’s a self-storage feasibility study? As we’ve covered, a self-storage feasibility study is an essential step for developers looking to invest in a self-storage project. It provides a comprehensive analysis of the market and financial potential of a proposed facility, which helps developers determine if a project is worth pursuing.
If you want to make sure your next project is a success, consider hiring a professional consultant like Box Pro for a self-storage feasibility study. During the study, we will analyze the local market, assess potential risks, and provide you with a detailed report outlining the financial viability of your proposed self-storage development. Our studies have a relatively quick turnaround (many times, it’s under one week), and the cost is minimal compared to the potential financial losses of an unsuccessful project. Don’t skip this important step in your self-storage development journey—contact us today for more information.