How to Start a Car Storage Business?
Starting a car storage company can be complex. If however you already own a building, ideally of agricultural nature - the premises are ideal in our opinion especially for the preferred target market. After more than half a decade know the Industry in many regions of the UK do possess excellent insights on what perhaps can work.
When we advise "work" we mean to ensure quick Return on Investment.
Once the building is ready, is secure with CCTV, dry and insulated as a minimum the storage business is ready to go. Then, the owner must concentrate efforts on developing the clientele via lead creation. We find that Marketing certainly with Google is very expensive for companies. Social media consumes a lot of time.
With a small unit the owner may be able to source client cars just by talking to people and handing out a few fliers.
Larger premises 60+ vehicle plus usually outweighs the word of mouth method certainly or the first 5 years. An owner of a car storage business must absorb these costs. We say costs, because in-essence could it be rented out or used for something else? Having said this, we find now that one reason why a farmer perhaps switches to car storage as a source of income is because they've been unsuccessful is renting the building out.
Many farmers we talk to say, they just want the rental money - then quote us a rental fee that consumes 80% of the actual capacity income generated when full. Some just want the rent. However, they can't get the rent meaning, they must put the time and effort into growing the car storage business themselves.
Then, they can run into other issues due to a lack of awareness in Marketing. Not only this, but as it is a new Business to them they must also learn about the customer service side. This is important to ensure clients stay long-term.
Long-term clients are ideal because once in they can stay for many years.
Please see www.carstoragebusiness.co.uk if you are a new car storage company.
Car Storage Business for Sale:
The barrier to entry if renting a place can be much higher than if a property is owned. Some suitable storage facilities are based on the outskirts of cities with strong transport links. We find recently that the owners especially if leasing seek premium rates on the basis that the prior tenants were larger, if not multi-national companies who used the premises for Wholesaling. But when you do have the correct facility a car storage business is valuable, profitable and very rewarding.
When buying a business you must consider the possibility to also purchase the land or building. If not then the rental lease must be 10 years minimum and incorporate a fixed amount that won't increase.
We say this because a under the table deal with a farmer for example could then lead to issues of them conveniently increasing rent when they see all the cars in storage.
If you purchased a Business perhaps it would be viable to seek ways to bring clients in quickly as the ROI must be met.
The below example is that of an unsuitable car storage building in our opinion. The location was excellent, situated in Oxfordshire near Chipping Norton. It was owned by a larger group and used for Cold Storage distribution.
The part available was Phrase 3 - we took into account the single entrance way and estimated around 40-50 cars to fill capacity. The person leasing said he'd look to install a mezzanine thereby doubling capacity almost.
We took the decision to advise that perhaps it was not best suited for car storage. We could have taken fees for this, and proceeded with obtaining some client cars.
However:
- The Rental amount and Business rates due to location made the monthly fixed costs extreme.
- The mezzanine was quoted just above £80k.
The return of Investment at double the average storage rate for the area would take several years. This just to break-even on the basis that cars would enter the facility thick and fast. In our opinion the owner would be taking too much of a Financial risk. Interestingly, it was not his money but a silent partner of his.
We advised accordingly.
We have been Operational since 2019:
More than half a decade advising Automotive owners - mainly providing them with new clients using our specialized creative system that reduces the costs in Marketing substantially. We have knowledge of the UK market.
