A successful business is a growing business. With careful consideration and planning, your self storage business can grow throughout each and every economic cycle. The key to a successful self storage business is recognizing how the market in your area is changing and adjusting your operations so that you meet consumer demand in the most efficient, cost-effective manner possible. To that end, the following are some signs that it is high time to consider expanding your operations.
Your Brand is Recognized
Brand recognition is the key to success in any business, and if you are receiving a significant amount of business from client referrals and third parties within your community, the time is ripe to expand your self storage business. Solid brand recognition means that you are offering the products and services that clients need, respect, and trust. As the tide rises, capitalize on your success by making the capital improvements that will allow you to handle the increasing flow of business.
The Area is Experiencing Growth
New businesses, apartment complexes, housing starts, transportation networks, schools, etc., all indicate that there will be a greater need for self storage solutions in the future. The more of these signs you see within your community, the greater your ability to prepare for and establish your facilities before the growth occurs.
Vacancy Rates are Consistently Low
If you are consistently turning away new business because you don’t have the space, then it is a good time to consider expansion. When your capacity is consistently less than market demand, it’s a clear indication that you have an opportunity to expand your operations.
Debts are Low and Cash Flow is Solid
Once your business is established, you will no doubt turn your attention towards reducing the debts incurred during the start-up phase. As these debts are reduced, they will increase the overall cash flow into your business. This gives you significant capital to reinvest in your operations. Moreover, because you have reduced your debt and proven your business model, you will find obtaining financing easier and more affordable than during the start-up process. This provides a significant opportunity to increase cash receipts by expanding operations at a lower cost per square foot than before.
Niche Markets are Emerging
Perhaps there is a new marina being constructed, or maybe a new recreational area has opened up. These provide opportunities to expand into niche markets, such as RV and Boat storage. While you shouldn’t build your business around the needs of a niche, you can move to satisfy them and use the references and recommendations they generate to build up your core business.
Competition is Growing
Increased competition can be a strong signal that there is room for growth within the market. If new facilities are opening up nearby and filling their spaces quickly, it is a good indication that the market is far from saturated. If your business is already well established, then your competitors are indicating that your self storage business has an opportunity to expand operations.
Timing the growth of your self storage business boils down to carefully managing your operations so that you are positioned to grow when the time is right. By establishing your brand and paying attention to your customer needs and the market evolution within your area, you can take advantage of growth opportunities when they arise. The secret to expansion success is knowing when to move and how to make the right moves for the community in which your facility is located.