SELF-STORAGE

FACILITY
BUSINESS PROPOSAL

Unit 4: Designing, Proposing, and

Managing a Project

Scott Houle
 Business Proposal
For
Miss Enger

Prepared For English 320

By: Scott Houle

Distributed
December 3, 2010
 Table of Contents
List of Figures.............................................................................................................................................iii
Executive Summary....................................................................................................................................iv
Introduction.................................................................................................................................................1
Legal Regulations........................................................................................................................................2
Cost Analysis...............................................................................................................................................3
Cost of Land............................................................................................................................................3
Cost of Buildings.....................................................................................................................................4
Cost of Concrete......................................................................................................................................4
Cost of Security.......................................................................................................................................5
Cost Summary.........................................................................................................................................6
Market Analysis..........................................................................................................................................7
Considerations.............................................................................................................................................8
Conclusion...................................................................................................................................................9
Works Cited...............................................................................................................................................11

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 List of Figures
Figure 1 Self-Storage Floor Plan.................................................................................................................5
Figure 2 Self-Storage Buildings..................................................................................................................6
Figure 3 Summary of Costs Table...............................................................................................................7

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 Executive Summary
This business plan is to determine which option is best for me when owning a self-

storage business. I would like to start a self-storage business in Forest Lake, MN for many

reasons. The first is that it is a business that can be easily managed that many people need in the

area. The population has been steadily increasing for the past ten years and the city is going

through some big changes.

The legal regulations that must be filed before you can start a business are the Articles of

Organization, Reserve Name, Trade Name, Trademark, and local licenses to run a business in

Forest Lake. The legal regulations will depend on how you run your business. The above

documents will have to be filed if I start a limited liability company.

The costs of starting a self-storage business can vary greatly depending on how much

land and how many storage buildings you want to build. After determining the cost of 1.5 acres

of land, 2 buildings, all the concrete, and the security features it totaled to 187,600 dollars. This

is a base price for a small start up storage business. This does not include any signs or

advertising, computers, or an office space. I feel a small business like this can be ran from an

extra room in your house and does not need a separate office building to start. When everything

is up and running the costs could be well over 200,000 dollars. This would give you about 56

individual storage units to rent out.

The market in Forest Lake is great because the population is increasing and all of the

recreational activities that are in the area. There are some competitors in nearby towns but very

few in Forest Lake itself. The other option is to buy an existing storage business which can be

expensive but also have many other desirable options. In conclusion starting a self-storage

business in Forest Lake could be easily maintained and profitable.

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 Introduction

Coming up with a business proposal is easy but determining a location and how to make

that business profitable can be extremely difficult. To start a business you need to have a good

idea of who you will be competing against and if there is a market for your business to succeed.

Understanding some of the major costs and legal regulations is also a huge area to cover when

starting up a business from scratch. In this proposal I will evaluate the market for a self storage

business in the Forest Lake area, determine the main costs to start it, determine what legal

regulations would need to be completed, compare buying an existing business with starting your

own.

This proposal will give a general idea of what commercial land will cost in the Forest

Lake, MN area, the price of concrete, the building itself, the security gates, and the security

cameras. I will get this information through online quotes from businesses and from businesses

in the Fargo area. I will also do a basic market analysis based on personal experience, population

growth, and meeting with other local businesses.

Starting a self-storage facility can be a very profitable business that needs very little

attention and employee time. It is a great first business because the cash flow is slow which gives

the new entrepreneur more time to adjust compared to some other businesses. After evaluating

the market, determining the costs, and finding the legal regulations I will determine if starting a

self storage facility would be a good investment or is there a better alternative.

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 Legal Regulations

Starting a business legally can be very easy if an attorney does all of the paperwork. This

can be very costly and is not usually the way an entrepreneur would like to spend his/her money.

Although starting a business on your own takes time it helps you understand more about the

business. All of the information needed to start a business can be found on the state’s website.

The website will have a list of items that must be completed within the state and what has to be

finished elsewhere.

The first thing to decide is how you want to run your business. You can operate a

business with one owner in multiple ways. The main three ways that businesses are formed for a

single owner is through a sole proprietorship, limited liability company, or a corporation. I would

start my own business as a limited liability company for the following reasons: 1. the owner can

manage the business 2. the owner is only liable up to his/her capital contributions 3. they are

affordable to start up. The positive to starting a proprietorship is that they are very inexpensive

but you are personally liable for anything that happens. Starting a corporation with one person is

very expensive but it has a perpetual existence and has many options to create funds for the

business.

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 To start a limited liability company you have to file Articles of Organization and a

Reserve Name with the secretary of state. This legally allows you to conduct business under a

certain name in the state at which you apply. The next step to legally start a business is filing

your Trade Name with the secretary of state. You will also have to file a Trademark with the

secretary of state and with the United States Patent and Trademark Office. Other forms for the

business can be made but do not have to be filed such as an Operating Agreement and bylaws.

To have the business located in Forest Lake, MN I will have to register with the city and

receive a license to conduct business. These licenses are usually cheap to file since they are

through the city. Another legal regulation that I will have to follow if I buy land is that it has to

be commercially zoned so I can conduct business. This process can be very hard or easy

depending on the location. In some cases it can also be very expensive to have the zoning

switched on a property.

The above documents will cost about 1,000 dollars to file without an attorney aiding in

the process. The costs can sky rocket if you decide to have an attorney do the paperwork for you.

Most first time business owners need to use as much capital in the actual business itself to make

it succeed.

Cost Analysis

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 The costs to start a storage business can vary greatly depending on how much land you

buy, how many storage buildings you have, and the quality of security you have. I will start my

cost analysis with determining the price of land. After determining the price of the land I will

figure out the cost of the actual building or buildings that will be used for storage. Once the

buildings are decided we can determine how much concrete we will need for the buildings to be

on. After the buildings are up I will be able to determine the cost of a security fence and cameras.

Cost of Land

According to Realtor.com the price of commercial land in Forest Lake, MN can range

from 40,000 dollars to about 100,000 dollars. These lots are different sizes but most stay around

1.5 acres. This is a great size lot because it will allow the company to have room to expand in the

future. For my cost analysis of the self storage business I am going to assume that the price of the

land was 75,000 thousand dollars due to location. Location is very important in this kind of

business because customers are going to want something that is easily accessible.

Cost of Buildings

The size and type of buildings you have can have a great affect on cost and your return on

investment. In most cases a start up storage facility is going to want basic sizes for each

individual unit while trying to put as many storage units in each building. The more units that

can be put in the same size building the more customers you can obtain. According to Olympia

Steel Buildings one 30’ by 100’ by 10’ building will cost about 25,000 thousand dollars. This

price includes everything the buildings will need except for the concrete they sit on. Each

building has 28 storage units. Having two buildings would be necessary so the business has some

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room for growth. So for cost of two buildings would be about 50,000 dollars and you would have

56 units to rent out. The diagram of the building is shown below.

Cost of Concrete

According to Jay Enderson a local contractor in my home town the cost of a concrete slab

for a project like this would cost between 45,000 and 55,000 dollars depending on how much

excavation needs to be done to the land before the concrete is laid. He said that the concrete and

materials are very cheap its labor and the machines that make the cost of concrete so expensive.

The concrete would not only go under the buildings but would overhang so the cars have a stable

area to drive on. For the estimate of my project I am going to assume that it would cost about

50,000 dollars to have the concrete slab laid and completed properly.

Figure 1 Self-Storage Floor Plan

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http://www.olympiabuildings.com/applications/pub_storage.html

Cost of Security

A secure storage area allows customers to feel that their belongings are safe. One of the

biggest things that people notice is if a business has cameras. According to

securitycameraworld.com a complete 16 camera system would cost about 1,600 dollars. The

system includes the cameras, monitors, hard drive, and all of the hardware to wire it up. The

great thing about this company is that they allow you to connect the cameras to the internet so

you can have a back up memory and you can watch your business from any computer. This gives

your customers peace of mind and allows you to operate the business smoothly.

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 Another big security feature is a fence with a gate that operates by a password. Jay

Enderson said that to fence in the two buildings with room for cars to get in and out it would cost

about 10,000 dollars for everything. This price would include the electric gates which allow

people to access their belongings whenever necessary even if the business itself is not open.

According to CommercialGates.net the cost for an electronic password activated gate would cost

about 2,000 dollars alone.

Figure 2 Self-Storage Buildings

http://www.olympiabuildings.com/applications/pub_storage.html

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Cost Summary

The costs can add up very quickly depending on how big you want to make the business.

I estimated the cost of land to be $75,000, cost of the buildings to be $50,000, cost of the

concrete to be $50,000, cost of all security equipment to be $11,600, and cost of all legal

documents to be 1,000. All of these total to a cost of 187,600 dollars for the main parts of a self

storage business. Notice that I did not include any office space because I feel that it can be

started from home. If you were to include an office building to own or lease it could add tens of

thousands of dollars. I feel that 187,600 dollars would have all the basics of the business

covered. The other things that might have to be considered depending on the property are if there

is access to water and electricity on the land. These both can add up very quickly if they are not

located near the buildings. After doing research I feel in the best case scenario the business

would cost 187,600 dollars without any setbacks or unexpected changes.

Figure 3 Summary of Costs Table

Business Necessity Cost of Business Necessity

Land 75,000
Buildings 50,000
Concrete 50,000
Security 11,600
Legal Regulations 1,000
Total Cost 187,600

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 Market Analysis
The economy is in a slump in most places in the United States. Although in a slump the

population in the Forest Lake area has grown substantially in the last ten years. According to a

long time Forest Lake resident Nick Bratland it has doubled in population to 14,000 people

within 10 years. The surrounding cities have populations near 7,000 people.

Since the population is continuing to grow starting an affordable storage business could

be very profitable. Many people in these communities do not have any storage for all their

snowmobiles, boats, four-wheelers, etc. Although starting a storage business could be profitable

you have to determine if there is any competition in the area.

As I stated earlier I went to Wyoming and seen Hallberg Storage which was very large.

This business had about 125 individual storage units and was very well up kept. I called this

business to see how many units they had left and the sizes of the units. They said they had about

7 units that were unfilled. Now I do not know exactly why they are unfilled. It could be many

reasons such as the price is too high, no one else needs storage in this area, or his location

doesn’t work well for others.

I do feel a self-storage business would be self sustaining in the Forest Lake area due to all

of the recreational activity and the increase in population. There are many things to consider

when deciding to start a business. There is also the option of buying a preexisting business near

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the location you wanted. This can save a lot of hassle and people will already know that the

business is there.

Considerations
When starting a business you have to consider if you should buy a preexisting one or start

yours from scratch. According to BizQuest.com other self-storage businesses sell for 350,000

dollars to 700,000 dollars in the twin cities area. Some of these businesses not only have

individual storage units but they also rent out office space and apartments.

The price may be nearly double or triple to buy one but they have much more land,

storage units, and the other perks such as renting office space. Starting your own business at this

scale could cost much more since these buildings would require complete furnishing inside. One

constriction to a self-storage business is how much space you have to expand. In some cases 1.5

acres might not be enough space to expand but it is great to get started and is affordable.

There are many pros and cons between starting your own business and buying a

preexisting one. To determine which option you should do you will have to weigh all of the

options and see which one best fits your situation.

Conclusion
In this business plan I have determined all of the legal regulations that will need to be

filed either at the federal or state level. Making sure that the property is or will be commercially

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zoned is very important when opening a business. It must be zoned commercially so the business

can conduct commerce. I then evaluated the cost of land by looking at what was for sale on the

market now. I received an estimate for the buildings I specified from Olympia Steel Buildings.

After determining what size buildings I would have I sat down with a local contractor and had

him give me an estimate of how much it would cost to concrete a small parking lot, drive way,

and underneath the buildings themselves. To determine the cost of security I used multiple

sources for determining what the fence and electric gate would cost to put up. I also found a

great camera system online that could be easily installed. The total base cost to start a business

like this would be about 187,600 dollars. This would allow you to rent out 56 units which is a

small self storage business. Assuming everything goes right I think this price will stand up but if

something else is discovered it could be thousands of dollars more.

For the market analysis I went to Forest Lake and talked to many of the residents and

some competing business owners in a similar location. There were few self-storage businesses in

Forest Lake and the population has been steadily increasing due to more people starting families

and wanting to live outside of the big city. This area is also a hotspot for anyone in that area to

fish and do other recreational activities.

After I did all of the research to determine how much it would cost to start a small self-

storage business from scratch I decided to look into ones that were already up and running.

These businesses were much more expensive but were much larger and had other rental options

such as office space and apartments.

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 All in all think that starting a self storage business in Forest Lake from scratch would be

the best option for a first time business. It is much more cost efficient and could be easily

managed. I also think that I could get some pretty big breaks on the building process because I

have friends and family who work in that area of business. Buying a preexisting one has more

options but is much more costly and would take a lot more time to manage.

Works Cited

Bratland, Nick. Personal Interview 23 Nov 2010.

Enderson, Jay. Personal Interview. 23 Nov 2010.

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"Industrial Gate Operators." Commercial Gates and Controls. Commercial Gates and
Controls, Inc., 2010.Web. 21 Oct 2010.

"Mini Storage Buildings." Olympia Steel Buildings. King David Interactive Corp., 2009. Web.
21 Oct 2010.

"Realtor." Official Site of National Association of Realtors. National Association of

Realtor, 21 Oct 2010.Web. 21 Oct 2010.

"Security Cameras and DVRs." Security Camera World.com. security CamerasWorld.com,

2010. Web. 21 Oct 2010.

"The Original Business for Sale Website." BizQuest. BizQuest, 2010. Web. 27 Nov 2010.

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