Why would you open a new self storage business during the recession?

Self storage continues to expand

One of the most interesting results that came out of the recent Storage.co.uk survey of the UK self storage industry was that several of the companies who replied said they opened during 2010.

As everyone who hasn’t been locked in a self storage unit for the last few years knows, we are in the midst of a painful recession: unemployment remains stubbornly high, personal bankruptcies continue to go up, and economic growth is still very thin on the ground.

While the overall effects of this on the self storage industry remain largely unknown, the company reports of the major listed firms are full of remarks about a ‘hostile trading environment’ and that ‘market conditions remain poor’. The self storage industry certainly shouldn’t be recession proof: if you think about it, as in many areas of economic activity it is highly reliant on the housing market for new customers, and this has gone downhill sharply since 2007.

In other words, this shouldn’t be a good time for starting a brand new self storage business. Yet some optimistic entrepreneurs have taken the risk. Storage.co.uk contacted a couple of them to find out why.

Is there ever a good time to start a new self storage business?

‘Is there ever a good time to open a business, recession or otherwise?’ asks Greg Wilson, the founder of Will-Store in Keighley, West Yorkshire, which opened last year. His company offers 20,000 square feet of secure self storage space, and so far has done well getting it filled with tenants.

Since opening in September 2010, Will-Store has managed to achieve nearly 30% occupancy, while they impressively saw their biggest increase in tenancy during January, the traditional low-point in the year for new self storage customers. All 15 of their exterior containers have been leased to builders, suggesting that the local construction and home improvement sector is remaining buoyant despite the recession, and indicating that Will-Store has managed cleverly to spot a gap in the market.

Will-Store’s founders also received a lot of helpful advice from other self storage companies that were already well-established, and was also grateful for the professionalism and expertise of the firms who helped fit-out his premises.

The only problems they found in trying to set up their business were the difficulty of obtaining funding, which is a barrier for many aspiring entrepreneurs at the moment, and having to haggle with the local council over business rates.

Overall, Will-Store’s founder remains highly optimistic, both for the future of his business and UK self storage companies in general:

‘People will always need extra space from time to time. So as long as the pricing is sensible and the quality of service and product is there, then I see no reason why occupancy levels shouldn’t increase. Since January we’ve experienced a healthy uptake and enquiry levels are still very strong.’

‘There will always be a core demand for good value and high quality self storage’

This is the view of Stuart Hutchings, of South Downs Storage, based at New Barn Farm in Funtingdon, West Sussex. For them, one of the advantages of starting a new self storage business during the recession has been the good prices available from service and equipment providers who’ve been hungry for new business.

Another advantage they’ve found has been the high level of activity in their local property rental market, which has meant lots of people are moving near them and are on the look-out for self storage. Enquiries have also come from households taking advantage of cheap prices on home-improvement work, who briefly need to keep some things in self storage while their renovations are carried out.

South Downs Storage have found it harder because they started towards the end of the year when demand for self storage tends to be low, but this is a temporary issue that should resolve itself. The company says it is starting to make itself known locally and has been receiving more enquiries.

As you might expect, Stuart Hutchings ultimately shares the same optimistic view that Will-Store has of the industry: ‘We view self storage as a long-term business and the recession has not affected our decision to start a new storage centre.’

So there you have it: two new companies that started self storage businesses during the recession at opposite ends of the country, and both are doing nicely and are very optimistic about the future. Maybe it does make sense to start a new business during a recession after all.

4 Responses to “Why would you open a new self storage business during the recession?”

1. Indianloa RV Storage says:

   March 3, 2011 at 9:37 pm

   Since the market for self storage is expanding, there is never a bad time to start self storage business.

2. Self Storage Chicago says:

   March 11, 2011 at 3:54 am

   Congratulations to Will Store on the growth. We at Life Storage are also proud of our growing portfolio.

3. Paul Richardson says:

   August 22, 2011 at 10:38 pm

   We started Walton Self Store in Wisbech Cambridgshire in April 2011, business is very good & we are filling the containers as fast as we can get them. We only provide indoor self storage, both containers & insulated rooms & we expect the business to continue to grow.

4. Sean tattersall says:

   March 16, 2012 at 7:59 pm

   I fully agree with the above comments, Storebox is based in both Hornsey and Brent Cross North London. By offering excellent customer service, great value prices like the above companies a really strong growth is possible now.