Self Storage Development, News, & Profits October 2020 Newsletter
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October 21, 2020
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A Storage Authority franchise is right for anyone who wants to combine the best of three investment opportunities – make a solid real estate investment, own your own business, and operate a franchise — for example:
The examples go on and on. Let’s discuss your situation and decide how “the Storage Authority difference” can help achieve your financial and career objectives.
If you would like to review more information about Storage Authority and becoming a Franchise click here.
There are four ways for you to launch a Storage Authority business and we have the answers you need, regardless of the option – or the combination of options — that’s right for you:
A franchise gives you independence with guidance — you have the opportunity to run your own business, while benefitting from the support of a tested formula for success and an experienced team of skilled professionals.
Typically, our franchise will make the self-storage business much easier for you and reduces your risks. It provides benefits and profits that most people cannot achieve on their own.
Franchising is a popular option in a wide variety of industries, notably restaurants, hotels, health, fitness, beauty, and automotive services. And now self-storage.
Storage Authority is the only self-storage franchise in the United States, and we provide you with important benefits, including but not limited to:
Opening a business is never a piece of cake, but a franchise can significantly reduce your risk and increase your rewards. The internet offers many sources for more information about franchising.
To become a Storage Authority franchisee and open your facility, you should expect to go through these 10 steps:
One – Investigate Two Basic Questions
Two – Apply on our website: www.storageauthorityfranchise.com – Apply icon
There is no cost or obligation to apply – and by providing us with some initial background information, we can be better prepared to discuss the specific of your objectives, your situation, and your options.
Three – We’ll Talk So You Can Learn More
After we review your application, we’ll arrange a phone call or Zoom conference to discuss how the Storage Authority business opportunity can help you meet your financial and career objectives.
You’ll be assigned a Storage Authority Franchise Director to serve as your primary contact throughout the due diligence and discovery process. This enables you to get real answers from a real person. No long waits for service. No transfers to multiple staff people.
Typically, two or three phone conversations with your Franchise Director – in conjunction with your independent homework and research – are enough to learn the Storage Authority basics and to confirm that we’re a good fit together.
Four – Review Our Financial Disclosure Documents (FDD)
After you have been approved, we will send you our “Franchise Disclosure Documents and Qualification Package” that is prepared in compliance with the Federal Trade Commission (FTC) guidelines and required format. It provides thorough information about Storage Authority, about our franchise systems, and about the franchise agreement.
Read this package in detail so you are ready to review the contents with your Franchise Director.
Five – Continue Our Weekly Conversations
You and your Franchise Director will continue having thorough discussions to assist you with the manager-driven Storage Authority systems – from finding land and gaining approvals to designing, building, and financing your facility; from operations to our premium sales, marketing, and more.
Six – Financial Review
Your Franchise Director will discuss the minimum financial recommendations and requirements for developing a Storage Authority self-storage facility, based on your goals and finances. There are multiple financial options based on the location, type, and size of the development, as well as on the type of loan you plan to use – conventional or SBA.
We can introduce you to lenders who are familiar with self-storage, who understand the value of Storage Authority, and who underwrite both SBA and conventional loans, so you can explore loan options and qualification details.
Seven – Sign Your Franchise Agreement
This is often done as part of a discovery day during which we meet at our offices or at one of our self-storage facilities in Florida to get acquainted in person, but other signing options are possible. Of course, prior to signing, you may wish to reach out to a few of our existing franchisees – we’ll gladly provide names and contact information.
Eight – Local Site Research and Selection (see Questions #6, 7, and 8)
In close consultation with your Franchise Director, you’ll determine the most suitable location for your facility.
These detailed discussions will go beyond finding land to include building your team, developing facility designs, gaining approvals, and constructing your facility – and how we will assist. Discussions will also continue about all aspects of our manager-driven systems, notably operations, sales, and marketing.
Nine – Participate In The Storage Authority Owner And Manager Training
We offer a combination of classroom, online, and textbook learning in a variety of skills — such as pre-opening preparations; operations; sales; marketing; accounting; and human resources — so you are completely prepared to open and to do business effectively day-to-day, starting on Day One.
Ten – Celebrate Your Opening Day
It’s time to put all your energy, enthusiasm, and education to work! We’ll guide you to and through a memorable ribbon-cutting that opens the door to your own special version of the American Dream.
The exact amount of your initial investment will be different based on the various factors associated with how you are proceeding — buying an existing facility, converting an existing building, or building a new facility.
And if you build a new facility, your investment will depend on factors such as the cost of land; the cost of developing either a single-story or multi-floor facility; and the cost of special features you choose to include.
As further background, it’s important to know about the federal government’s Small Business Administration (SBA) loans. They are a popular financing option for our franchise owners because the SBA 7a loan requires a down payment of as little as 15% — sometimes in certain situations 10% — on a loan of up to $5 million.
That is why we suggest that to start the Storage Authority process, you have $500,000 to $750,000 available in cash – or in suitable cash and equity in facility property you already own. This will allow you to make a reduced equity investment – meeting the SBA’s requirements of 10% to 15% — then pursue a loan of up to $5 million for the project construction and carrying cost for a suitably-sized facility in most locations.
Under this scenario, you can build a facility valued at up to $5.75 million. This represents a substantial self-storage project – one that is not a “hobby business” and one that can be expanded as warranted.
There are multiple options, but often the least expensive and most profitable is five usable acres that can accommodate at least a 50,000 to 60,000 sq. ft. one-story facility. A larger parcel of land allows you to offer vehicle storage for recreational vehicles, boats, and cars, plus it will facilitate future expansion, if appropriate.
If you envision a multi-floor building, you typically will require less land – about 1.5 acres or more. Of course, phased expansion is not typical and construction costs will be higher.
We will help you find the location that is “right” for the demands and competition of your market, which includes an evaluation of existing self-storage rates and the available demand for a new facility location. Other factors we will review: the size and shape of a location; basic zoning; traffic patterns; availability of utilities; and convenient entrance / exit.
After your offer for a piece of land is accepted, we will collaborate with you and the appropriate real estate professionals during the due diligence period to evaluate a myriad of details about the location that are essential to your success – details such as easements and setback requirements; zoning, typography and slopes; sight lines; wetland, endangered species, surface coverage, or other environmental restrictions; deed ownership / restrictions; and a third-party feasibility study.
We provide guidance as you negotiate purchase and financing of the “right” real estate, and we then work closely with you and your civil engineering / architectural / construction team to develop the optimum site plan and building drawings.
Building costs are different in different parts of the country, depending on costs for land; size of the facility; materials and labor; special features or finishes you choose; and zoning / ordinance requirements, to name a few.
For a detailed estimate of costs, review Item 7 of the Financial Disclosure Documents (FDD) package.
For very basic initial planning purposes – until you have more detailed costs for the location and facility that you envision – use these figures: an initial investment of between $5 million and $6 million in development, construction, and carrying costs for a 50,000 sq. ft. single-story facility on five acres of useable land that cost $800,000 or less. Remember that the project can be – and often is – split into two phases.
The development / construction timeline can be affected by many factors, but a useful initial planning estimate is:
Note that some of these timelines may overlap or be longer or shorter depending on a variety of factors.
For a free copy of Marc Goodin’s best selling Self Storage Development book and to learn more about Storage authority let us know here
Part of your initial investment is the one-time Storage Authority franchise fee of $35,000. You have the option of an additional one-time fee of $4,000 for our guidance with development if you are not buying or if you do not own an existing self-storage facility.
There is also a one-time fee of $4,000 for our assistance with preparing a customized Storage Authority website for your location.
There is a monthly 6% royalty fee and 2.5% marketing, sales, technology, and website fee.
Storage Authority has developed a proprietary system that carefully guides you step-by-step through the development / construction process — from finding land through pre-opening. Called the “Dynamic Ease Development Series,” it features seven detailed chapters of information, checklists, and worksheets.
In addition, your Franchise Development Director is available to guide you.
Although the development / construction process is never the same for any two projects, it is always a close collaboration between you, your Storage Authority representatives, and your development team. You get the guidance and the answers you need, when you need them, so you can make the decisions and initiate the actions necessary to move your business forward.
Here is a simple outline of the “Dynamic Ease Development Series:”
Our business model includes a combination of classroom and textbook learning that covers your Storage Authority business, from start-up through day-to-day operations.
We have a training center in Florida where training classes are held regularly throughout the year. You and your manager will attend three days of initial training classes at a time that is most convenient for you. You and your manager will also receive online / phone training during the four-week period immediately prior to opening.
In addition, you will have our unmatched package of easy-to-understand, proprietary manuals for convenient reference at any time. Professional education reminders and updates are ongoing at Storage Authority, using a variety of platforms.
Together, the training classes, the manuals, and your Franchise Development Director provide comprehensive professional education:
We do not predict sales, costs, or profits for any Storage Authority facility because these figures are impacted by a variety of factors from market to market and from owner to owner. However, we do encourage you to carefully review the examples in our Franchise Disclosure Documents (FDD), which you will receive when your application is approved.
After you chose a location, you will arrange a feasibility study to be conducted during the due diligence period by a qualified independent third-party. The results will provide you with a lot of detailed information, including analysis of demand; construction and start-up costs; break-even projections; and profit estimates.
We urge you to discuss the Storage Authority business opportunity with your trusted financial advisors, notably your attorney and accountant.
We recommend that you research two topics — self-storage and franchising. There is abundant information about both subjects on the internet, and new articles are available regularly with the most up-to-date details.
If you conduct Google searches for “self-storage industry” and for “franchising pros and cons,” you will find a rich inventory of sources from which you can choose your reading.
Information about a specific market is typically available from a variety of local, county, and state agencies, business commissions, or planning groups that deal with economic development. However, acquiring data from government sources can take a lot of time and paperwork.
Online apps are available to deliver market information quickly and easily for a small fee. We can provide links to these services and guide you through using them.
Two other sources of information are:
You should consider joining these two groups for ongoing information and networking.
Why not you why not know. To get more information and to talk to a storage Authority Franchise Director: storageauthorityfranchise.com/opportunity1/ or call Marc Goodin @ 860-830-6764.
Marc & his wife GP enjoying a toast on a freshly poured self storage foundation
Marc Goodin is President of Storage Authority LLC. www.StorageAuthorityFranchise.com He owns 3 self-storages he designed, built and manages. He has been helping others in the self-storage industry for over 25 years. He can be reached at marc@StorageAuthority.com or directly at 860-830-6764 to answerer your self-storage franchise, development, marketing, sales and operational questions
Storage Authority Franchise Award Steps
The goal of the discovery process is for you to understand Storage Authority Systems, its high end “Ritz” Sales & Marketing, over the top, remarkable hometown customer service and operation philosophies so we can determine if we are a good fit for each other.
While we believe self-storage is the best business for many people, our role is not to convince you self-storage is for you. If you have not done enough research to know if self- storage is for you let us know and we can guide you on how to continue your research.
Basically, we do three main things for you:
1) We help make self-storage easier for you and reduce your risk.
2) We help you save time and money.
3) We put franchisees in a position to make more profits and have many other benefits
they typically would not have on their own.
Step 1
Continue learning more about Storage Authority by reviewing the materials we provided you and reviewing our website including FAQ’s, About us and our Blog/Newsroom.
Confirm you have the required $500K Minimum to $750K cash equity recommended to be approved for a franchise.
To get more reading material including Marc Goodin’s best selling Self Storage Development book and to talk to a storage Authority Franchise director: storageauthorityfranchise.com/opportunity1/
Call or Zoom # 1
#1 New Development #2 Operations #3 Customer Service, Sales, Marketing
1) Finding land 1) Manager Driven 1) Over the top customer service
2) Planning & Design 2) Automation 2) Remarkable PR
3) Construction 3) Scripts 3) Gorilla Marketing
4) Pre Opening 4) Manuals 4) 50% environment & 50% team
5) Avoid Land Mines 5) One on one 5) Ritz vs Motel 6
If you would like to continue the discovery process the next step after our first call/zoom is for you to complete our application on our website. Apply Icon Once we approve you, we will send you our Franchise Disclosure Document (FDD) & Franchise Agreement. The FTC requires every Franchise to present an FDD to interested buyers. The FDD provides a wealth of information and specific details about our franchise.
www.StrorageAuthorityFranchise.com
Once approved we will send out the Storage Authority FDD for your review
Call or Zoom # 2
Once you have read the Franchise Disclosure Document (FDD) we will have a call/zoom conference to review the FDD, finding land and the development process.
Continue Learning
Call or Zoom # 3
Further review of The Storage Authority Operations, Sales & Marketing philosophies and your questions.
To learn more now: storageauthorityfranchise.com/opportunity1/
or Call Marc Goodin Direct at 860-830-6764
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We often get asked how does self-storage perform during a recession? There is nothing that is recession-proof but as you can see from the chart below referencing 30+ day delinquencies self-storage outperformed all of the other real estate asset classes during the last downturn. Self-storage has the lowest failure rate and lenders love lending to one of the safest real estate investments/businesses out there.
#selfstorage #franchising #realestateinvesting
Storage Authority Franchising is about owning your own hometown self storage business and having the professional systems and knowledge to assist and guide you. We like to say You are in business for yourself but not by yourself. If you are thinking about self storage you owe it to yourself to contact Garrett Byrd at 941-928-1354 or Garrett@StorageAuthority.com to learn more about the Storage Authority Franchise opportunity.
by: Josh Parker
When I became part of the Storage Authority Team one of the first things I had to do was read and re-read the Storage Authority Franchise Disclosure Document (FDD). I am not an attorney but I can say without a doubt an FDD is repetitive dry legalese. I say this because not only does it include the Franchise Agreement but it has a very detailed description of the Franchise Agreement, by section and sub section. By the time you’re done reading you feel like you read many things twice.
A Franchise Disclosure Document (FDD) is a document that every Franchisor must provide to a potential Franchisee for their review. It is a legal document in a format required by the Federal Trade Commission. Consisting of several parts, the FDD gives potential Franchisees insight into who the Franchisor is- even providing an idea about the past and the future of the Franchisor. The Franchise Agreement provides the responsibilities of both the Franchisee and the Franchisor. Typically a potential Franchise must acknowledge the receipt of the FDD at least 14 days before they can sign a Franchise Agreement.
The FDD along with several conversations with the Franchisor, will give you the insights and info to determine if you are good fit for a Franchise. An FDD also provides important financial information such as estimated expenses, development costs, Franchise fees, Royalty fees and more. There are 23 items in an FDD, and they are all important.
In his book Grow to Greatness, Steve Olson says this: “most people are overwhelmed when they first read an FDD. They’re thick, extensive and repetitious… You may want to review sections in intervals, rather than all at once. Be sure to make a list of questions as you go through it” That is spot on advise. The good news is the Storage Authority FDD is shorter than most.
Olson also makes this important observation, “You’ll notice that the documents are tough, one-sided, and biased… They are designed to protect the brand. They’re written to safeguard the quality of products and services that make a franchise system so successful.” The way I think of it is, we are protecting all our Franchisees by insuring one or two bad apples don’t ruin things for everyone else.
Getting a copy of the Storage Authority FDD is simple. All you have to do is take 10 minutes to complete the application on our website – www.storageauthrotiyfranchise.com, apply icon. And once you are approved we will send you our FDD to review.
When you ask what a FDD is, you should also be asking “What is a Franchise?” Franchising is one of the most successful business models ever introduced to entrepreneurs. One way we like to say it is this, “Franchising means being in business for yourself but not by yourself.” The mutually beneficial relationship that exists between Franchisors and Franchisees makes Franchising unique in the world of business. Franchisees combine knowledge and resources with entrepreneurial drive and spirit to form a business relationship unique to Franchising. Franchising is a field of expanding economic opportunity in which each and every person can play a part based on talent, initiative, and dedication.
Of course, you can’t learn everything about a Franchisor from an FDD and that is why is important to get to know the Franchisor team to confirm you are a good fit. Visiting them and one of their locations is a great idea, or at least have multiple of zoom meetings. It always a good idea to learn more about the Franchisor and his systems by talking with an existing Franchisee.
We are happy to review the Storage Authority Franchise opportunity including the Storage Authority Franchise Disclosure Documents with you! Just give me a call or send me an email.
Josh Parker is a Franchise Director at Storage Authority LLC, the only self-storage franchise in the US. When Josh is not helping out a Franchise Owner and their staff he is using his sophisticated computer and technology skills to make sure Storage Authority franchisees have access to the latest software and hardware that increase operating efficiency, heighten customer satisfaction, and improve the bottom line. Put simply, Josh knows that effectively managing large facilities means paying attention to small details. It’s how he is building the technology systems that are building value for our owners. He can be reached at Josh@StorageAuthority.com or directly at 203-213-7438 to answerer your self-storage franchise, development, marketing, sales and operational questions.
Has the Time Come for the Un Manned, Automated Self Storage Rental Office?
And how you can automate your self storage facility today for more profits.
By Marc Goodin
Lease by Phone, Website or Kiosk vs.
Lease by Phone, Website or Kiosk or with our Onsite Manager,
Which would you choose?
We know self storage automation to the point of an unmanned rental office it is possible because there are more and more unmanned facilities every year.
Full rental automation simply requires two major components. The first is an office manned by a kiosk connected to a good call center. Open Tech Alliance has you covered when it comes to the best self storage kiosks and call centers. Their kiosks even dispense locks. Even if you are not going fully automated a kiosk will make you more profits because you will not miss after hour rentals to your competition. With the recent flood of use of call centers due to COVID 19 call centers are on overload and have many new hires reducing the quality so it is even more important your well-trained manager answers the phone whenever possible.
Here is a facility I designed that opened with an Open Tech Alliance kiosk. We require all Storage Authority Franchise self storage facilities to have a kiosk because they are both a profit center and are a backup when a manager is not there for any reason.
The second item required for an unmanned self storage facility is an individual door look for each individual unit. Janus International is the leading provider of self storage door locks. The door locks are the major extra cost for an automated facility since every facility should rent online and have a kiosk. Presently individual door locks cost about $200+_ installed per door. For a 55,000 net rentable square feet facility, this would be about $100,000. Not unreasonable when you consider the cost of a manager year after year. I expect the price of individual door locks will come down significantly in the next 5 years and that they may become standard even for a manned facility.
Great self-storage management software, like Sitelink is already cloud-based and can be run from anywhere you have internet. Likewise, your self storage camera, security, HVAC controls, and gate systems should also be cloud-based so they can be operated and monitored from off-site.
As part of automation, your website should also fully rent units online. I know 99 percent of everyone reading this article has websites that do not make online rentals that permit renters to move in when you are closed. If your considering automation (and even if you are not) your first step is to update your website to rent units.
If we just looked at the facts above it would seem clear that automation is the way to go. But we have to look at one more set of facts: What do our clients want, which in turn relates to profits. The world is more automated day by day. In 2018 we hit the 50% mark for online shopping; Mc Donald’s are putting more ordering kiosks in their restaurants; I often use my bank ATM vs going inside the bank. But for ninety percent of the time I need something from Home Depot I go to the store. Maybe you make 50% or more of your purchases online? But that does not mean that it is time to make banks, retail stores or self storages 100 percent automated and loose customers by eliminating one on one service.
When you are checking out at Wal Mart or Home Depot have you noticed there are two or three people in line at the manned cash registers and 1 person at the kiosk checkout? Most people prefer to have someone help them check out. We still trust people more than machines, especially when we have a question. Of course, if I only have a couple of items and there are 4 people with full carts at each of the manned cash registers, I will head over to an empty checkout kiosk. Companies like Home Depot have figured this out and that’s why they have both.
If renters have a choice between two equal facilities most will choose the manned office vs the automated self-storage office. It is a myth that a manned and unmanned facility is equal. Both can have the same great locations, features, prices but only the manned facility has a real unique selling proposition. And that is a good manager who gets to know a client, builds trust and loyalty. A kiosk can not do that. An unmanned facility will often have a lower rental price but if you have not already learned a low price is the absolute worst-selling feature a self storage can have.
I have been renting self storage units to customers for a long long time and I estimate 30% (ie 60% walk-ins will rent even if your manager is a clerk) of our rentals would have walked out of the office without renting except for our high end remarkable, ridiculously over the top customer service, sales, and marketing provided by our well-trained managers. And our rates are 20% higher than our competition. Our number one rule at our facilities is every prospect is taken out the door in 30 seconds or less to see a unit. This gives us time to understand their needs, get to know them, build trust, and for the renter to have the opportunity to physically see the difference from one size to the next so they are comfortable and ready to rent. Viewing the size gives the prospect the ability to confirm the size they need so we can say “ looks like a 10 x 10 is the right size for you, let go back to the office and get one in your name.” A self-storage kiosk will never take a customer to see a unit or builds trust. It’s hard to rent an apartment or sell a house or sell a car, a person has not seen. To a big degree, the same goes for self storage.
When it comes right down to it the number one thing that makes your facility different from the facility down the street is your manager and great scripts. And a good manager will rent more units at a premium price and have more loyal customers and referrals than a similar unmanned facility or a facility with an untrained manager. You could argue the maned facility can’t rent before and after hours. But online rentals and kiosks provide manned facilities the best of both worlds. It serves as a backup to the manager busy with a customer and is there for the few individuals that would rather do the entire process at the kiosk or needs to rent after hours.
Some owners simply do not have the time to manage their facility as they have a busy career or are on too building their third and fourth facility. In this case, the loss in profits is a tradeoff for going with an automated system. I would suggest they have two more profitable alternatives: a good management company or a Storage Authority Franchise. Even if the facility office is unmanned who is doing the daily site checks and cleaning each unit before it is re-rented. Who is marketing the facility? Who is calling the nonpaying renters? Who is managing the auctions? A good manager with well-established systems and platforms should be doing these items in addition to renting units.
A second case for the unmanned facility would be for a very small facility. Maybe you have a 15,000 square feet facility. This would be a good candidate for an automated facility as the overhead of a full-time manager would not be warranted given the limited income potential.
There are companies that are only building automated facilities. Ten Federal is one of the leaders in unmanned facilities. Their website headline is Lease by Phone, Website or Kiosk. They have improved the unmanned system significantly and I am sure it is working for them.
But again, if you only have one facility, I believe you can add substantially to your bottom line profits with a good manager vs an unmanned facility. In my selling self-storage book Crush your Competition in week 1, of 52 weeks of self-storage marketing ideas, I outline how you can make well over a $100,000 a year with over the top marketing & sales. And a kiosk just does not have the ability to implement a sales and marketing platform for extra profits.
Ten Federal websites clearly note they do not have a move-in administration fee. I like administration fees! This fee is worth over $12,000 a year in profits for me and provides for one heck of a vacation every year for my family. And even more, concerning for the single operator is their prices are all web prices which are typically reduced from the office rental price. And they are also giving huge discounts for the first month, another no no for the single operator.
The bottom line, we will be seeing more unmanned facilities because many owners and management companies do not want to take significant time and effort to prepare and implement the self storage managers operations, sales and marketing systems and platforms and ongoing training programs But that is good news for those of us willing to get it right for our customers because we will have the opportunity for oversized profits, others have passed on.
To be competitive now and certainly in the future all facilities should have the unmanned components in the sense your potential clients should be able to rent when your office is closed. These tools will also be reducing costs by shortening the manager’s hours. The days of the self storage office having to be open from 8 am to 8 pm seven days a week can be replaced with closed Sunday and reduced hours the rest of the week if you have the automation and the right expertise.
Would you like more information and be contacted regarding a Storage Authority Franchise? Click Here
Marc Goodin is President of Storage Authority LLC, the only self-storage franchise in the US. He owns 3 self storages he designed, built, and manages. He has been helping others in the self storage industry for over 25 years. He can be reached at marc@StorageAuthority.com or directly at 860-830-6764 to answerer your self storage franchise, development, marketing, sales, and operational questions.
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We know how important positive review are, and we have systems in place to help ensure your managers have the tools they need to get 5-star review with every sale!
