You are in the home stretch of your self-storage business plan. The last week should have given you a lot of ideas on how you want to structure your business and what the best entity is for your situation. Now you need to focus on what are the strengths and weaknesses of your business.
Every company has strengths and weaknesses, this is not something to be afraid of, this is something to evaluate as you build your self-storage business plan and then take those strengths and weaknesses to figure out how they will make your company stronger. When you do your SWOT analysis, you are going to take a look at the strengths and weaknesses inside your company, and then take a look at the outside opportunities, and the outside threats that you might face. Can this be any more vague? I don’t think so. That is the point. When you do a SWOT, you want to focus on specific areas of your business. If you do a vague self-storage business plan analysis, you will have a very weak document that won’t help you grown your business.
As you start building your self-storage business plan, there are 6 areas that you should evaluate. You are going to make a SWOT list section for each of the different aspects of your company:
Marketing and Acquisitions
Management or managing your current acquisition and new acquisitions
Training, Knowledge and Experience
Anything else that is relevant to your situation
Once you have your list of areas that you want to evaluate in your self-storage business plan, then make a list of two or three things that are strengths and two or three things that are weaknesses. Once you have identified those two or three things, figure out how you are going to turn them into opportunities. Your strengths are easy to figure out how to turn into opportunities. You might be really good at talking to people and so it is easy to network with other storage facility owners. However, taking a negative and figuring out how you can eventually overcome it and turn it into a positive is harder. Let’s say that you are new to the business and don’t know what pitfalls to avoid. The answer would be getting training and while you are getting training, network with fellow students so that you can grow your list of potential partners
Here is a quick example of how you could evaluate a SWOT section of your self-storage business plan. Look at your finances. Do you have money to invest? If not, how are you going to get that money. This might currently be a weakness, but there are ways to make money assigning contracts or bringing in partners that will help you build capital. Instead of ignoring the fact that you are short on capital, you want to face it right up front. Then you can create a plan of action to start obtaining the money that you need to begin acquiring properties. As part of your self-storage business plan you would want to put in that you need to talk to a lender and find out exactly what you need to do to be able to purchase a self-storage facility. You might not be as far away as you think you are. There are loan programs that allow you to purchase for as little as 10% down.
You also want to identify threats. What threats might you run into? This is easy to identify when you a brick and mortar company that is competing against the store down the street. You know that they are going to be marketing as hard as you are and so you must be more creative to maintain your share of the market. The truth is, that you are just like them. You are competing with other investors and Realtors to get a self-storage owner to work with you instead of them. There is very little difference. You must find a way to stand out. You must find a way to look the best and offer the best opportunity for the seller and you must make sure that you are in front of the seller at the right time. Time and circumstances change for everyone.
You also need to remember that while your self-storage business plan is a road map to guide you to your ultimate goals, it is also something that will need to be edited and changed as your business grows. You may exceed your goals and then your business plan will be obsolete. Make sure that you are updating this on an annual basis. This will help you make necessary course corrections as well. Your strengths will change rapidly as you acquire properties. Be prepared to update this section. Next time you do it you will be surprised at how much your business has grown. Happy Investing. Join us next time for our next installment on how to build your self-storage business plan.