How to Start a Self Storage Business

A self-storage business makes it easy for people to store their personal belongings without the hassle and clutter of keeping things at home. These businesses also cater to other businesses who need storage space for equipment like office supplies, furniture, and more.

The lack of space in homes and offices, and the desire to be able to store and forget about items, are the driving forces behind self-storage businesses.

Learn how to start your own Self Storage Business and whether it is the right fit for you.

Ready to form your LLC? Check out the Top LLC Formation Services .

Self Storage Business Image

Start a self storage business by following these 10 steps:

  • Plan your Self Storage Business
  • Form your Self Storage Business into a Legal Entity
  • Register your Self Storage Business for Taxes
  • Open a Business Bank Account & Credit Card
  • Set up Accounting for your Self Storage Business
  • Get the Necessary Permits & Licenses for your Self Storage Business
  • Get Self Storage Business Insurance
  • Define your Self Storage Business Brand
  • Create your Self Storage Business Website
  • Set up your Business Phone System

We have put together this simple guide to starting your self storage business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.

Exploring your options? Check out other small business ideas .

STEP 1: Plan your business

A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:

What will you name your business?

  • What are the startup and ongoing costs?
  • Who is your target market?

How much can you charge customers?

Luckily we have done a lot of this research for you.

Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Self Storage Business Name Generator

If you operate a sole proprietorship , you might want to operate under a business name other than your own name. Visit our DBA guide to learn more.

When registering a business name , we recommend researching your business name by checking:

  • Your state's business records
  • Federal and state trademark records
  • Social media platforms
  • Web domain availability .

It's very important to secure your domain name before someone else does.

Want some help naming your self storage business?

Business name generator, what are the costs involved in opening a self storage business.

MakoSteel says to allocate 25% to 30% of the total development project budget to buy the land. If land costs $1.25 per square foot and there is the ability to build out the coverage to 40% of the job site, then the land cost for the building would be about $3.13 for each rentable square foot.

A single story facility costs $25 to $45 per square foot to build. A multi-story building is $42 to $70 per square foot for construction. For a businessperson wanting to start up a new self-storage facility, they would have to have the financial clout (or investor support) to be able to finance the land purchase and the construction costs. Typical projects require financing of $2 to $3 million with 10 to 20% down payment.

Inside Self Storage gives an example of a development budget:

Statement of Development Cost Annual

Financial Image

What are the ongoing expenses for a self storage business?

The monthly expenses include loan debt service, staff expenses, maintenance, marketing expenses, utilities, security expenses, and insurance.

Inside Self Storage gives an example of the financials for a business able to rent 50,000 square feet for $9 per square foot per year. This is about half the current national average because the example is based on the year 2000. Even so, a modest operation such as this one is still nicely profitable.

Financial Model

Financial Image

Who is the target market?

The best customers are the ones that have a longer-term need for storage, such as a military member who is on active duty outside of the United States, and who are able to pay for the monthly rental by using some method of automatic payment, such as a monthly credit card payment or an electronic fund transfer (EFT) from a bank account.

The most popular storage size is a 10’ by 10’ by 10’ space with the best customers renting one for up to two years or more.

How does a self storage business make money?

The income streams include monthly rental collections, auction proceeds from past due accounts, fees, and sales of related products such as moving supplies and locks.

These businesses make extra money from administrative fees, lost key fees, lock removal services, late fees, and other fees, in addition to the normal rental fee structure. Some charge a premium rate for the rental of storage spaces in a climate-controlled building. Others offer insurance, for an additional monthly premium, to insure the contents of the items placed in a storage space.

Easy Storage reports the average monthly rate per square foot (PSF) of non-climate controlled storage units in America is $1.26 PSF and for climate-controlled space the average monthly rate is $1.60 PSF. The overall average is $1.42 PSF. The most popular size is a 10’ by 10’ unit. This means the average rental income for each of these units would be $126.00 to $160.00 per month, depending on whether the building was climate-controlled.

During 2015, there was a national average of 90%+ occupancy for all storage units. Some that are located in more popular areas have waiting lists and therefore may charge rates that are higher than these national averages.

An average moving truck rental customer, pays around $200 to $500 for the rental truck and equipment needed to make the move, if the move is a local one. They may pay up to three or four times this amount if the move is long distance, depending on the distance driven.

How much profit can a self storage business make?

The Parham Group says that an average storage facility will be 60,000 to 80,000 of rentable square feet and break-even once occupancy reaches about 40 to 60%. A successful facility will operate with 83% to 93% occupancy and produce net income of about 26% of rental income after paying for expenses and loan debt service.

At the average rent of $1.42 PSF per month ($17.04 per year), this example would produce $1,022,400 to $1,363,200 in annual rental income and $265,824 to $354,432 in before tax cash flow per year.

How can you make your business more profitable?

Adding moving truck rental services, moving equipment, and supplies to the business will increase income by about 5% according to the Parham Group.

Many self-storage facilities extend their business operations to include managing a fleet of rental trucks, vans, and moving trailers, such as those offered by national franchises like U-Haul or Budget . These businesses can operate side-by-side or as one combined enterprise. Besides offering moving vehicles, the moving equipment offered for rent includes furniture dollies, furniture pads, and hand trucks. The rental office may also sell moving materials such as packing tape, packing supplies, and moving boxes.

Want a more guided approach? Access TRUiC's free Small Business Startup Guide - a step-by-step course for turning your business idea into reality. Get started today!

STEP 2: Form a legal entity

The most common business structure types are the sole proprietorship , partnership , limited liability company (LLC) , and corporation .

Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your self storage business is sued.

Form Your LLC

Read our Guide to Form Your Own LLC

Have a Professional Service Form your LLC for You

Two such reliable services:

You can form an LLC yourself and pay only the minimal state LLC costs or hire one of the Best LLC Services for a small, additional fee.

Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services . You can choose to hire a registered agent or act as your own.

STEP 3: Register for taxes

You will need to register for a variety of state and federal taxes before you can open for business.

In order to register for taxes you will need to apply for an EIN. It's really easy and free!

You can acquire your EIN through the IRS website . If you would like to learn more about EINs, read our article, What is an EIN?

There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.

STEP 4: Open a business bank account & credit card

Using dedicated business banking and credit accounts is essential for personal asset protection.

When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil .

Open a business bank account

Besides being a requirement when applying for business loans, opening a business bank account:

  • Separates your personal assets from your company's assets, which is necessary for personal asset protection.
  • Makes accounting and tax filing easier.

Recommended: Read our Best Banks for Small Business review to find the best national bank or credit union.

Get a business credit card

Getting a business credit card helps you:

  • Separate personal and business expenses by putting your business' expenses all in one place.
  • Build your company's credit history , which can be useful to raise money later on.

Recommended: Apply for an easy approval business credit card from BILL and build your business credit quickly.

STEP 5: Set up business accounting

Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.

Make LLC accounting easy with our LLC Expenses Cheat Sheet.

STEP 6: Obtain necessary permits and licenses

Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.

State & Local Business Licensing Requirements

Certain state permits and licenses may be needed to operate a self-storage business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.

Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses .

Services Contract (e.g. MSA)

Self-storage businesses should require clients to sign a services agreement before leasing a space to a new customer. This agreement should clarify client expectations and minimize risk of legal disputes by setting out payment terms and conditions, service level expectations, and length of the rental. Here is an example of one such services agreement.

Liability Waiver

Labor safety requirements.

It is important to comply with all Occupational Safety and Health Administration requirements.

Certificate of Occupancy

A self-storage business is generally run out of a warehouse. Businesses operating out of a physical location typically require a Certificate of Occupancy (CO) . A CO confirms that all building codes, zoning laws and government regulations have been met.

If you plan to lease a location:

  • It is generally the landlord’s responsibility to obtain a CO.
  • Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to a self-storage business.
  • After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommended to include language in your lease agreement stating that lease payments will not commence until a valid CO is issued.

If you plan to purchase or build a location:

  • You will be responsible for obtaining a valid CO from a local government authority.
  • Review all building codes and zoning requirements for your business’ location to ensure your self-storage business will be in compliance and able to obtain a CO.

STEP 7: Get business insurance

Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.

There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance . This is the most common coverage that small businesses need, so it’s a great place to start for your business.

Another notable insurance policy that many businesses need is Workers’ Compensation Insurance . If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.

FInd out what types of insurance your Self Storage Business needs and how much it will cost you by reading our guide Business Insurance for Self Storage Business.

STEP 8: Define your brand

Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.

If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners , we'll give you helpful tips and advice for creating the best unique logo for your business.

Recommended : Get a logo using Truic's free logo Generator no email or sign up required, or use a Premium Logo Maker .

If you already have a logo, you can also add it to a QR code with our Free QR Code Generator . Choose from 13 QR code types to create a code for your business cards and publications, or to help spread awareness for your new website.

How to promote & market a self storage business

The location of a self-storage facility is a critical factor. It is best if it is located near a highly populated area that has many renters. Large billboards are effective advertising on the nearby freeways. Bus stop ads are also effective. Having the facility painted with signage to be a prominent advertisement can be very helpful. Easy access to major freeways is very desirable.

National companies that offer franchise opportunities have cooperative media advertising campaigns that coordinate efforts on the Internet with websites using standardized branding and style. They make use of radio promotion, physical ads, and television ads to create more brand awareness and advertise the locations in the local area.

How to keep customers coming back

In order to compete with larger national companies, smaller self-storage companies may consider offering more competitive rates and cater to a previously underserved area. Hand delivery of discount flyers to apartment buildings and neighborhoods that contain potential renters helps attract customers. Active digital marketing is important using the best search engine optimization techniques available.

STEP 9: Create your business website

After defining your brand and creating your logo the next step is to create a website for your business .

While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.

Here are the main reasons why you shouldn’t delay building your website:

  • All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
  • Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
  • Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.

Recommended : Get started today using our recommended website builder or check out our review of the Best Website Builders .

Other popular website builders are: WordPress , WIX , Weebly , Squarespace , and Shopify .

STEP 10: Set up your business phone system

Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.

There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use. Check out our review of the Best Business Phone Systems 2023 to find the best phone service for your small business.

Recommended Business Phone Service: Phone.com

Phone.com is our top choice for small business phone numbers because of all the features it offers for small businesses and it's fair pricing.

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Welcome to the Startup Savant podcast , where we interview real startup founders at every stage of the entrepreneurial journey, from launch to scale.

Is this Business Right For You?

People who succeed in this business enjoy working with people and are excellent when it comes to tenant relations. It helps to have simple maintenance skills to fix some of the things that may need repairs. You should be able to use a ladder to change light bulbs and be able to keep the place painted nicely.

Want to know if you are cut out to be an entrepreneur?

Take our Entrepreneurship Quiz to find out!

Entrepreneurship Quiz

What happens during a typical day at a self storage business?

Many of the storage spaces are owned and operated by a team. Marketing of available spaces is ongoing. Interested new tenants are shown the facilities. Applications need to be taken and processed with background and credit checks. Security deposits, key deposits, and the collection of rental payments, all need to be handled properly. Monthly accounting records need to be up-to-date and accurate.

The facility needs to be kept clean and constantly supervised to prevent vandalism and theft. Rent for any storage space that is past due needs to be collected, and if there is a serious problem with the rental payments, the proper legal processes need to be taken to manage the problem. This may include turning the account over to collections, filing court papers, giving eviction notices, and/or selling the items left abandoned in storage spaces after the correct amount of time has passed according to the local laws and the rental contract agreement.

Statistics Brain says that the contents of about 155,000 storage spaces are auctioned each year, for the average price of $425, because of past due rental payments.

What are some skills and experiences that will help you build a successful self storage business?

As this type of business bears many similarities to the real estate business, previous experience in the real estate field may be a helpful skill when starting this type of business. Renting and maintaining storage spaces is similar to renting apartments.

What is the growth potential for a self storage business?

This industry sector has everything from locally run single storage facilities, to huge major national operations with thousands of locations. There are over 54,000 storage locations in America with over $30 billion in annual revenues. The SpareFoot Storage Beat reported on the largest public storage companies, their market valuation, and revenues for 2015. They are:

  • Public Storage: Market Valuation $2.38 billion
  • Extra Space Storage: Market Valuation $782.27 million
  • CubeSmart: Market Valuation $444.5 million
  • Sovran Self Storage (Uncle Bob’s): Market Valuation $366.6 million
  • U-Haul: Market Valuation $211.1 million (self-storage revenue only)

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Take the Next Step

Find a business mentor.

One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.

Having a support network in place to turn to during tough times is a major factor of success for new business owners.

Learn from other business owners

Want to learn more about starting a business from entrepreneurs themselves? Visit Startup Savant’s startup founder series to gain entrepreneurial insights, lessons, and advice from founders themselves.

Resources to Help Women in Business

There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:

If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.

What are some insider tips for jump starting a self storage business?

If you plan to open a new facility, be prepared to finance a negative cash flow for about 18 month to two years before the facility has an occupancy rate that is high enough to create long-term sustainable profitability. The key in the early years is to focus efforts on getting the facility rented and work hard to reach higher occupancy rates.

Once a self-storage business has stabilized with plenty of renters, it has a tendency to create a long-term profitable revenue stream and become much easier to manage after the first two years.

How and when to build a team

There needs to be enough staff to cover the hours of operations for the administrative office. This depends on the size of the facility. Smaller facilities, usually have just two people running the administrative office. If there is a larger volume of new customer flow, then additional staff may be necessary during certain times to respond to the customer needs. You want to make sure the customers do not have to stand in line for extended periods.

Most storage facilities are highly automated and require very few staff. Statistics Brain notes that during 2015, there were 58,000 storage facilities in the United States, with an average of 566 units each. They employed around 172,000 people in total. This means there was only an average of three people per location across America.

A storage facility may also offer extended hours of operation for tenants who wish to move things in and out of their storage space. Some facilities allow 24-hour access by issuing security codes for the drive-in gates. During the extended hours, the administrative office may be closed so that the only requirement for staff is to cover facility security, which can be done remotely by video surveillance.

Useful Links

Industry opportunities.

  • Self Storage Association
  • Franchise opportunity with U-Haul, a popular storage/moving company

Real World Examples

  • Public Storage - the number one self-storage company in America
  • UHaul - a large self-storage company
  • Business profile with president of Affordable Storage

Further Reading

  • How-to guide detailing the process of starting a self-storage business
  • Resource detailing the costs associated with opening a self-storage facility
  • Resource for further information about opening a self-storage facility
  • Book: Creating Wealth Through Self-Storage

Have a Question? Leave a Comment!

Is a Self-Storage Business Profitable?

storage business model

Profitability is in the eye of the beholder. But, generally speaking, a self-storage business can be profitable. In fact, it can be more profitable than many other types of business out there.

“Self-storage has evolved from the homely stepsister to the Cinderella of the commercial real estate industry. Once relegated to sites unsuitable for other productive uses and stigmatized as unsightly metal buildings, self-storage properties historically haven’t attracted sophisticated investors’ attention,”  according to the CCIM Institute , a commercial real estate network. “Yet in recent years, the segment’s solid performance and stable returns have piqued the interest of a growing number of investors.”

Starting a storage business

What makes a self-storage facilities profitable? A self-storage facility is an attractive investment because of the relatively low operating costs. It requires less upkeep than an office building or multifamily complex, for instance, and demands less overhead — namely in the form of labor — than most other kinds of income-generating real estate .

Furthermore, aside from the main business of renting out storage units, a self-storage facility can make money by selling locks, cardboard boxes, packing tape, insurance, and other products and services.

Additionally, the month-to-month nature of self-storage leases enables a facility owner to raise rent more easily than for properties that traditionally offer long-term leases, such as office buildings and multifamily complexes. This allows for more frequent pricing increases if desired.

As  noted by Marc Goodin , co-founder of Storage Authority Franchising, “a properly planned, operated and funded facility can be a very rewarding and profitable business.” This includes creating and adhering to a  self-storage business plan , which most lenders will want to see from someone considering the purchase or construction of a storage facility.

Pros and cons of owning a storage unit business

Among the five pros and five cons of owning a self-storage business are:

  • Pro:  Great potential for profit.
  • Pro:  Growing demand.
  • Pro:  Low overhead compared to other real estate investments.
  • Pro:  Often-minimal management.
  • Pro:  Prospects for lucrative add-on products and services.
  • Con:  Self-storage facility is a business, not just a piece of property.
  • Con:  Possibility of picking poor location.
  • Con:  Up-and-down movement in occupancy and rental rates.
  • Con:  Constant concerns about hiring and managing employees.
  • Con:  Stiff competition from other storage operators, particularly ones with a big regional or national footprint.

Profit margin of a self-storage business

As you’re mulling the pros and cons of a self-storage business and you’re pondering the moneymaking potential, keep in mind that there’s not necessarily one right or wrong way to look at profitability. In many cases, someone may use the word “profit” as a proxy for financial success.

For instance, one self-storage business owner might measure profitability based on the profit margin. According to one estimate, a self-storage facility generates a typical  profit margin of 41% .

Net operating income of self-storage units

Meanwhile, another self-storage investor might focus on net operating income, or NOI. Owners of income-generating properties use NOI as a yardstick for profitability. To come up with NOI for your small business, you subtract operating expenses from revenue.

The five publicly traded self-storage REITs in the U.S. like to emphasize NOI when they are reporting financial results to investors.

Public Storage, the largest of the REITs, posted same-store NOI (an apples-to-apples financial comparison of facilities open at least a year) of nearly $1.75 billion in 2020. Public Storage forecasts same-store NOI growth of 9.4% to 11.9% in 2021 versus the previous year.

Extra Space Storage, another self-storage REIT, notched same-store NOI of nearly $770 million in 2020. For 2021, the company predicts NOI growth of 13.5% to 15.5% compared with the previous year.

Revenue is only one part of boosting NOI, controlling expenses for your small business is the other. Some major expenses that can hamper your facility’s profitability include property taxes, snow removal, and debt service.

Return on investment for self-storage businesses

Another way to approach profitability, in the loosest sense of the word, is to examine the return on investment, or ROI. In self-storage, there are two key types of ROI: cash-on-cash ROI and cap-rate ROI.

According to Investopedia, cash-on-cash ROI measures — normally on an annual basis — the amount of cash flow relative to the amount of cash invested in a property. Cash-on-cash ROI is expressed as a percentage. “It is considered relatively easy to understand and one of the most important real estate ROI calculations,” the website says.

Then there’s cap-rate ROI. As Chron.com explains, the cap-rate ROI is the profitability ratio obtained when you divide ROI by the purchase price of a storage facility. In the self-storage industry, you’ll often hear folks refer not to the cap-rate ROI but simply to the cap rate, or capitalization rate, of a facility.

In calculating the cap rate, “the purchase price is used rather than down payment because down payments can vary widely, which can skew the results; your cash-on-cash ROI for the identical facility using the same NOI will be a lot different if you buy a facility with a 20% down payment compared to a 5% down payment,” Chron.com says.

A cap rate in self-storage might be 6.5%, whereas the cap rate for a retail or office building might be 5%. Cap rates vary according to a property’s fundamentals and location, and fluctuate over time.

Building a self-storage facility

Of course, the profitability equation almost certainly will change if you’re going to build a new facility from the ground up instead of buying an existing facility.

The Millionacres investment website  points out  that developing a facility “is the most cost- and labor-intensive method for investing in this industry; however, it can be extremely lucrative if done properly. It takes a high level of experience, knowledge and resources to help make this a successful endeavor.”

Bottom line: development costs and construction costs can eat into your business venture’s profits if you aren’t careful.

Maintaining occupancy

Regardless of whether you build or buy a self-storage facility, the business’ long-term profitability and viability rests largely on maintaining healthy occupancy numbers. While a 65% occupancy rate might cover operating and debt expenses, experts generally recommend shooting for an occupancy rate of 80% to 90%. Buoyed by pandemic-driven demand, the industrywide occupancy rate averaged 91.7% in 2020.

Industry observers say the robust occupancy rates achieved during the pandemic and the accompanying economic downturn further underscored the recession resilience of the self-storage sector. The sector’s resilience likely will remain for some time to come, with one forecast indicating an annualized growth rate of 8% in the U.S. market from 2020 to 2025.

Long term outlook

In August 2021, Joe Russell, president and CEO of Public Storage, said the rise of hybrid work arrangements “gives us confidence that overall adoption of self-storage will continue to grow, and is looked upon favorably by consumers and businesses as a cost-efficient alternative to storing goods in residential or commercial space.”

The long term feasibility of the self-storage industry seems to be stronger than ever.

Building a Fortress: A Guide to Self-Storage Security

Building a Fortress: A Guide to Self-Storage Security

Need a little inspiration for advertising your self-storage facility? Check out these three examples to get your creative juices flowing. Keep Reading

How Much Does it Cost to Build a Self-Storage Facility?

How Much Does it Cost to Build a Self-Storage Facility?

When you’re looking to develop a self-storage facility, you obviously must decide where to build it. Be prepared, finding a great site for storage can be tricky. Keep Reading

How to Start a Self-Storage Business

How to Start a Self-Storage Business

Launching a self-storage business for the first time? Start here and learn everything you need to know before you buy or build. Keep Reading

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Starting a Self Storage Business in 2024: Ultimate Guide

In this extensive guide, we delineate how to start a self storage business.

Self Storage Business

The self storage industry is a rapidly growing market that provides vital services for individuals and businesses who need to store their belongings. There are various self storage units available and several ways to start your own self storage business.

To start a self storage business, one must first understand the basics and then learn how to run a self storage business. This entails finding out what the market needs and identifying potential customers.

As complex as these may seem, we’ve compiled all you need to know and how to go about the entire process in this extensive guide. We’ll walk you through the process of starting your self storage business. We’ll cover the basics of a self storage facility, how to find a location, and what you need to get started, including setting up reliable self storage software .

Download the ultimate Self Storage e-book

Everything you need to know about setting up your self-storage facility.

Important Trends of the Self Storage Business You Must Know

Before outlining the process of starting a self storage business, let’s examine what the self storage niche entails and associated trends.

What is a self storage business?

A self storage business is a venture that provides consumers with their own space to store goods. The enterprise has exploded in popularity over the past few decades, hitting a global market value of $51.32 billion in 2021 .

starting-a-self-storage-business.jpg

A Chron report indicates that over 80% of self storage facilities are privately owned and operated. This means people use private self storage facilities for storing their belongings more often than government-owned enterprises — the latter make up only 30% of self storage clients.

self storage

Customers who require storage space for travel or a temporary move tend to take advantage of the ease and adaptability offered by self storage services. Similarly, businesses typically deem renting a storage container as a more cost-effective means to accommodate their goods than moving to larger quarters.

With self storage, there’s no binding long-term commitment, and this in itself is a significant selling point that attracts patronage. Notably, the average person rents storage space for 11 months, and the average business rents for 24 months. This flexibility makes it a good fit for a wide variety of customers’ demands.

Why Should You Invest in Self Storage?

A self storage business is usually successful because it provides an essential service that many people need. The more people who need this service, the better for your business.

If you decide to start a self storage business, know that you won’t be alone. The need for storage space has increased in recent years, leading to the proliferation of storage facilities in unexpected places like shopping malls and downtown areas.

A fairly recent Multi-Housing News post opined that the self storage industry is more resilient to economic downturns than most sectors of the real estate market. Self storage units continue to be a valuable solution for the storage needs of modern society as more and more people relocate and need somewhere to keep their valuables.

Want to learn more about self storage investment , check out the below figure from Self Storage Association Asia .

Why-Should-You-Invest-in-Self-Storage

There are speculations that the self storage market presents fewer complexities than residential housing since the human element is less pronounced in the former. A facility manager may have to deal with tenants, for instance, if they can’t keep up with payments, but otherwise, their paths rarely intersect. However, it’s not a passive investment and has more in common with retail than real estate.  For more data-driven insights on why investing in self-storage is a wise decision, check out our self storage industry statistics .

How to Start a Self Storage Business: A Step-by-Step Guide

Steps-to-starting-a-self-storage-business

1. Find a suitable location.

For a company to be successful, it must first be able to meet a need in the market.

Customers may be hard to come by if you set up shop in an area where the demand is already satisfied. On the other hand, if you pick a spot with commercial potential but few existing businesses, you increase your odds of attracting and retaining customers. Hence, it’s vital to identify your options before settling on a spot.

It’s no secret that densely populated regions have a greater need for self storage options. Cities with a variety of housing options benefit greatly from them as well. Similarly, people downsizing or staying in an apartment temporarily often choose to keep their items in storage until they can move into a larger dwelling.

In summary, ensure a sizable customer base in the area before settling on a permanent site for your company. Also, see if any nearby storage facilities aren’t in use and may benefit from some redesign or upgrade. Considering the growing demand for versatile and cost-effective storage solutions, starting a shipping container storage facility could offer a unique opportunity within the self-storage market, combining flexibility with efficiency.

2. Develop a business plan that outlines a detailed strategy for success.

Including critical information about your self storage business in your business plan is crucial. Your business plan needs to outline everything from your target market and how you want to reach them to how you intend to run your company financially and operationally in the first few years.

When starting a business, every company needs a business plan. A credible business plan is crucial to attracting investors or acquiring funding from outside sources, with most financial institutions requiring one before loan approval. A well-thought-out business plan can serve as a powerful catalyst for your company’s development by helping you reach your goals and circumvent potential roadblocks.

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You can develop a business plan independently, as many examples are available online . Other options include hiring a professional business plan writer or enlisting the services of a nonprofit organisation like SCORE , which provides free business counselling.

Remember that the business plan for an already operating self storage facility will differ significantly from a brand-new site’s.

Although business plans should be written with the specific needs of the company in mind, a self storage facility business plan would typically include the following elements:

  • Mission statement
  • Vision statement
  • Ownership structure
  • Sources of capital
  • Revenue streams
  • Market research analysis
  • Competitive analysis

3. Obtain the funding required to launch your business.

Self storage facilities have lower startup and development costs than many other businesses. There are, however, expenses to look into/consider.

Locate a suitable storage facility that can be used as is or modified into units with minimal effort. Regardless of the path you choose, it’s a good idea to talk to an organisation that provides storage engineering and design services. They’ll be able to advise you on how to best organise your company.

For added safety, double-check that your property is adequately secured and fenced. Locks must be installed on all units and feature a secure key-locking system.

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Don’t forget to add the price of having full-time workers on site whenever the business is open. Cleaning materials, upkeep charges, and advertising must also be factored in.

After figuring out how much money you’ll need in the first month of business, you’ll have a better sense of the total amount you’ll require in the first year. As a rule of thumb, you should have enough money to cover at least a year’s operating costs before kickstarting your self storage business.

Are you thinking of how to start a self storage business with no money?

A small business loan could be an option if you lack the necessary funds to launch your self storage business. Alternatively, you could seek appropriate investors to join forces in the early stages of your company’s development.

4. Acquire all necessary licences and permits.

Never launch a business, of any kind, without first securing the appropriate licences and permissions. Such endeavours can lead to severe financial penalties or possible closure of the enterprise altogether.

Carefully investigate the prerequisites for opening a self storage company in your chosen area, such as licences, permits, and registrations. You can discover such information about your town of choice by contacting them directly or looking at their website.

A certificate of occupancy, service contracts, small business permits, and other legal paperwork will be required before you can open for business. In a recently published article, we discussed whether you need planning permission for a storage container business , so you should consider having a read.

5. Make a marketing game plan.

Consistently incorporating a strategic self storage marketing plan into your business strategy is essential for reaching your goals.

At the very least, you should have a website and business cards. Digital marketing services and printed marketing materials, however, can help your firm reach its maximum potential through advertising and promotion.

6. Get a business insurance policy.

Insuring a self storage company requires special considerations. The primary service (the rental of self storage units) can’t be separated from the facility itself.

Insuring your commercial structure is a no-brainer because if a customer is injured while visiting your establishment, general liability insurance might help cover the costs. Storage facility insurance provides additional, specialised protection for the assets of self storage business owners beyond the basic coverages mentioned above.

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You may modify your self-service storage insurance in various ways to meet your requirements. One method is to offer clients the option of purchasing additional property liability insurance. This may seem extremely kind, but it’s good business sense; we’ll explain how.

The cost of this insurance may be much lower than the expense of defending against negligence claims for failing to safeguard customers’ property when you had the opportunity to do so. You gain an advantage over the competition by insuring your clients’ property while safeguarding your assets by including this provision in your policy. A lot of storage facilities don’t provide this extra perk.

Your customers’ belongings should be insured, especially if they’re being removed or discarded, which is a unique extra. It’s a bummer to sell or otherwise get rid of the belongings of customers who haven’t paid for them.

This insurance might help cover costs if a client successfully sues for the return of their property after it has been removed. It helps keep costs down and offers some security.

You should also talk to your agent about getting cyber, data, and commercial umbrella insurance . If you run a self storage business that relies on online bookings and payments, cyber and data insurance can help you get back on your feet after a hacking incident by covering the costs of defending your business and replacing lost revenue. As for commercial umbrella insurance, it can assist you in covering any losses beyond your general liability policy’s limits.

Customers visiting self storage facilities are at a higher risk of slipping and falling due to the increased activity of carrying items into and out of a unit. Without a comprehensive insurance plan, you may have to spend more on healthcare and legal fees.

However, commercial umbrella insurance provides excess liability coverage for a reasonable price, ensuring that your organisation can survive a substantial loss. It’s like an insurance policy for your company that ensures it doesn’t shut down when things become rough.

Size, location, number of employees, and other criteria should all be considered when deciding on the best self storage company insurance policy. You may tailor your insurance policy to your specific needs by having an open discussion with a local, independent agency.

7. Define your brand.

More than just a name, logo, and slogan, branding encompasses everything that represents a company . It implies all the things people think of when they hear your company’s name.

For example, the widespread recognition of real estate investment trusts (REITs) gives them an edge over regional competitors in the self storage industry. According to G5’s report on why you need a self storage brand , the importance of branding for a self storage operator seeking to compete with REITs and raise their company’s profile is growing. You can carve yourself a niche in the regional market if you prove that your product or service is the best option for your demographic.

Through consistent branding, you attract renters who’ll remain loyal to your business over time. Developing a memorable self storage brand evokes feelings, motivates your messaging, and spreads the word about your services to potential customers in your area.

As you build your business, the following questions should be at the back of your mind:

What makes your space unique from others?

Who’re you trying to reach?

What’s your primary message?

If you can give thoughtful answers to these questions, you’ll be well on your way to building a brand that stands out from the crowd and attracts your target audience.

self storage e-book

Build a name that people will recognise and trust to attract more prospective tenants and longer lease terms. Expanding your brand’s reach inside the self storage sector can create a more memorable message and establish yourself as the go-to provider for your target demographic.

Here are some helpful tips when branding your self storage business:

Find out what sets you apart from the competition first.

Explain what sets your business apart, what problems it addresses for customers, and how you can help them. If a consumer is considering a purchase, why should they opt for your company and not a competitor’s? What specific benefits do you offer to renters that they won’t find in another company?

Develop your personas.

Branding also involves researching and cultivating a specific demographic of consumers. Demographics, such as geography, and psychographics, such as preferences, motivations, and behaviours, are factored into creating a complete persona. Using these fictitious archetypes, you’re better positioned to relate to and market to your target demographic.

Examine your competitors through SWOT analysis.

SWOT is an acronym for “strengths, weaknesses, opportunities, and threats,” which is a common method for analysing a situation. You can use this potent tool to stand up to the competition.

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Utilise the SWOT analysis to assess the positives and negatives of your competitors. Figure out how to counteract their advantages and take advantage of their flaws. By conducting a SWOT analysis, your organisation can avoid pitfalls and seize the possibilities presented by your rivals.

Create a distinct visual identity for your brand.

Your promotional materials—from your website to your ads to your billboards—should look professional and draw in potential customers. Make sure that the primary selling points of your brand are prominently outlined on your website, above the fold, before your visitors have to scroll.

Picking a colour scheme and design that directly addresses your target audience strengthens your brand’s reputation amongst its competitors while increasing your chances of converting visitors into buyers.

8. Create your self storage business website, and invest in reliable self storage software.

A self storage firm should have a user-friendly website to attract as many consumers as possible. Like with just about anything else, buyers today often begin and conclude their search for self storage facilities online. With that in mind, it’s highly unlikely they’ll come across you if you don’t have a website.

Discussed below are some benefits of having a self storage business website:

Allows you to take control of your brand.

Unlike with a Facebook or other social media page, you may exert more control over your brand with a personalised website. Your marketing website should be unique by employing your brand’s colours, emblems, and other identifying features. When the website belongs to you, you decide what users can expect.

Makes it possible to offer online rentals.

Do you want to rent your property online but don’t know how?

Creating a promotional website for your storage facility is the least complicated option.

If you let out units through your website, tenants can reserve a unit at their convenience (day or night) and do the necessary paperwork and rental transactions on their own time. Investing in decent self storage software while setting up your website makes these processes even more seamless for your clients.

Eases the burden of payments.

You can expand how your consumers can pay you by launching a website. There’ll be fewer rent arrears if tenants can quickly and easily cover their payments.

If you set up the appropriate automatic billing processes , your tenants can use online tools to manage their accounts and pay their rent. The advantages of accepting payments on your website become readily evident when everything occurs mechanically, and you no longer have to spend time making collections calls.

All these and more are what the Storeganise self storage software offers , making it a must-have for most businesses in this niche.

Makes it easier for potential clients to find you.

A marketing website increases the likelihood that potential clients will find your storage facility through an online search. You may achieve this by implementing search engine optimisation (SEO) strategies, such as using the appropriate keywords, incorporating title tags and meta descriptions, and ensuring that your website loads quickly and without errors.

9. Enjoy the process of managing your self storage facility.

Self storage business ownership may seem mundane at first, but there are many ways to put your unique imprint on the industry.

Developing the company’s identity through advertising may be fun. Some business owners have found success by incorporating comedy into their marketing strategies, and you never know when your comedic juices will start flowing. The public’s perception of self storage facilities has also been improving recently, making it more likely that local media outlets will want to interview you.

As if that weren’t enough, there are also unintended advantages. If you’ve put money into a sizable area that needs people to run it, you might be in the fortunate position of being able to hire relatives or close friends.

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Moreover, you’re likely to encounter certain strange items in units, including taxidermied animals, film celebrity memorabilia, and even an electric chair. That means there’s also a wild side to self storage that, although it won’t harm your business, might offer you some fantastic tales to tell.

However, you shouldn’t let that give you sleepless nights because regulations dictate what can and can’t be kept in storage facilities and what must be done if you need to access and dispose of their contents.

10. Get the help you need — both technically and personnel-wise.

Due to the high initial cost of securing land for your storage facility, you must know how much money you’ll need to launch your business.

Customers will feel more at ease leaving their belongings in your care if they’re in a safe and secure area. As a result, you shouldn’t put up shop in a dangerous neighbourhood or somewhere too far from your target audience.

After purchasing land, the bulk of your work will comprise constructing the various storage units your clients would rent. Installing security equipment to keep tabs on the premises is a must. In addition to a computer, a landline phone, a cell phone, a vehicle, and security software, these items will be necessary for the smooth operation of your business. If money is tight, you can get by with somewhat used versions of several things.

As for staffing needs, a storage facility needs the following personnel a start:

  • A CEO (this could be the company owner)
  • An administrative and human resources (HR) manager
  • A business development and marketing executive
  • A customer service officer
  • An accountant
  • An information technology consultant
  • A security guard

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Today, many people in the United States and the United Kingdom, for example, now use storage facilities to keep their surplus household and commercial items out of the way. Thus, getting started in the self storage industry is quite simple since one only needs to identify a good site and purchase the land to construct the storage facilities.

Once the site is secured and the necessary permits obtained, you may begin construction on storage units of varied sizes, as not all customers will need to keep massive quantities of items.

However, before promoting and renting out the storage units to customers, you must have an attorney prepare the terms and conditions of usage and agreement paperwork.

It is also important to note that even once your business is set up, there will be operating expenses, such as electricity, security, labour, wifi and other ongoing costs.

Should You Buy an Existing Self Storage Facility?

It’s a good idea to purchase an already existing self storage facility, as it’ll save you the stress of finding land and building a new facility. You can renovate the facility according to your tastes and needs and even expand it.

The cost of purchasing an existing self storage facility varies widely, just like the wide variety of self storage options available. This explains why a self storage facility in London would cost tens of millions of pounds, while the same type of facility in rural Carlisle would likely cost less than a million pounds.

If you aren’t a trained real estate agent, you should engage a self storage broker to assist you in your search and purchase. An experienced broker has market knowledge and can negotiate a fair price.

You should buy a facility near your home if you plan to work there full-time. However, location is less of an issue if you want to outsource facility management to a third party. You should check that you and your broker have a solid understanding of the neighbourhood’s market conditions.

How Much Does It Cost to Start a Self Storage Business?

It’s no secret that launching a storage unit business can cost a lot. The cost of construction for a normal single-story building range from $25 to $40 per square foot .

The price per square foot for multi-story structures will be higher than that of single-story ones because of the additional cost of obtaining land. Depending on your location, you can pay between $42 to $70 per square foot for a high-rise apartment.

Building a state-of-the-art facility will require at least 70,000 rentable square feet at $50 to $70 per square foot (not including the land cost). This translates to an investment of almost $3 million to create a cutting-edge establishment.

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How do you profit after shelling out that kind of cash?

You should start seeing a profit at about 50–70% occupancy. This becomes even more realistic when you consider that the need for self storage facilities will never go away.

Throughout the year, an ultra-modern, conveniently located self storage facility may easily maintain an occupancy rate of 85–95%. What this means is that your self storage business should generate a respectable profit. Still, you should know when to adjust your marketing plan for when occupancy is high to enable you to reap the most profits.

How Much Profit Can a Self Storage Business Generate?

As was previously said, once occupancy hovers around 50–70%, you can expect to break-even. However, a well-located building can function profitably with about 85–95% occupancy rates, resulting in a net income of around 27% of rental income after deducting all operating expenditures and loan debt payments.

At a yearly rate of $17.04, renting a unit for $1.42 per square foot each month is a good example of how this works out. If your building is 80,000 square feet, you can anticipate a yearly rental income of around $1.4 million and an annual gross cash flow of up to $354,432.

Adding moving truck rental services , moving supply sales, and moving equipment sales could boost your self storage company’s bottom line. Including such services can augment your earnings by up to 5%.

Self storage companies often offer additional services, such as fleet management for vehicles, vans, and moving trailers. The good news is that these companies can function effectively as a unified entity.

As an added service, you can provide moving equipment like furniture pads, hand trucks, and furniture dollies in addition to using your moving vehicles. Selling packing materials, moving boxes, and tape is another option.

Moreover, diversifying into niche storage markets, such as offering specialised facilities for boats, can further enhance your business’s appeal and profitability. Learn more about the specifics of building a boat storage facility to explore this lucrative opportunity.

Final Thoughts

Investing in self storage facilities can be lucrative because the industry is well-established and widely believed to be less labour-intensive than other real estate ventures. Considering the sector’s resilience and that storage space costs far less per square foot than residential property, it may be an especially appealing prospect.

Have you started your self storage business and are looking for ways to strengthen it? Storeganise offers helpful software solutions for self storage businesses, providing them with tools and insights to manage and grow their business. Sign up for a personalised demo to see how we can help!

Frequently Asked Questions

A self storage company is reasonably profitable and offers an excellent opportunity to amass sizable passive annual revenue. Your greatest shot at success is to provide excellent service to your customers and offer additional services like valet storage.

Yes, it is.

Our research suggests that the allure of investing in self storage facilities hasn’t changed much. These firms do well when times are good and, if managed well, can weather the storms of economic downturn with relative ease.

As a result of the pandemic, more people are looking for ways to declutter their houses by renting out extra space for home offices, relocating to the suburbs, or consolidating their households with relatives. All of these have contributed to a surge in the patronage the self storage industry has recently received.

The appropriate fee for your self storage units depends on various factors, including unit size, location, items’ value, the unit’s unique features (e.g., climate control ), and the rent period. In the UK, for example, the Self Storage Association (SSA) UK annual industry report pegs the average price of renting a storage unit at £23.94 per square foot annually.

While you may charge more or less, it’s best to keep your pricing as low as possible while still making a profit. At the same time, knowing when to raise prices and how to do so without angering customers is essential.

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Starting a Self Storage Business

Profit and opportunity analysis, how to start a self storage business.

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Self Storage Business Profit Analysis

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How To Start a Self Storage Business In 6 Steps

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Follow these six prep and planning steps to learn how to start a self storage business that’s primed for success from the ground up.

Starting a new business in an unfamiliar industry can be a bit daunting. But you’re not alone; most new self storage facilities are started by folks who are completely new to self storage. You’ve probably had a successful career in another sector, heard tales of the generous returns self storage generates for investors (they’re true!), and are now pretty set on starting this new adventure. We’ve been there , and we’re here to help.

How to start a self storage business?

Before you get caught up in picking a catchy business name and looking at fit outs, there are six prep and planning steps we recommend in order to give your new business the strongest chance of success:

  • Decide your investment amount
  • Choose the right location
  • Plan your storage type + size
  • Find your premises
  • Decide your operational model
  • Research the red tape

Here’s what to do.

1. Decide your investment amount

Work out how much you have to invest, because during this planning phase, your budget will affect:

  • where you can afford to get property;
  • which types of self storage are feasible; and
  • which operational model will be your best option.

Later on, your budget will influence the spec of your fit out, how sophisticated you can get with technology, etc.

Phase your investment?

Starting a self storage business doesn’t have to be an all-at-once proposition. In fact, self storage lends itself particularly well to a phased, modular approach. So when working out your budget, it’s worthwhile breaking out how much you want to invest now, and how much more capital you’re certain you could invest in a year or so to complete your facility if things go well (either from your own funds or with the help of external investors). For example, when our CEO started a self storage business for the first time, he used an initial $130k investment to cover one-off set up costs (taking out a long lease, signage, website and tech costs) and fitted out 1/3rd of the total space, just 49 units initially. Then, a year later, he released a further $120k of home equity to complete the final two fit out stages, taking the facility to 149 units.

2. Choose the right location

Will your facility be in your hometown, the next town over, near where your office is located? Will you spend your days manning the site or will you run it remotely without staff there? Or will you have staff there and you’ll simply check in now and again? Finding the right location for your business makes success more likely.

Every business requires some degree of face-time, so a good starting point is to decide the max you’re willing to commute a few times per week to manage operations, or to commute every day if you plan to work from there. Even if this diminishes over time as you’re able to delegate work, when getting set up (and especially during the fit out phase), you’ll be back and forth a lot.

Starting your search

Use a map like this to work out your search radius (we know it’s not the prettiest tool, but it works!). For example, input your full home address (city, state, zipcode, etc) and the distance you’re willing to travel, then click ‘New Circle’. Make a note of all of the cities/towns in your catchment area.

Researching populations

To decide which locations are viable contenders, list out the towns or cities within your commute area in a table or spreadsheet and work out their populations. This can take a bit of time depending on how many places are on your list and where in the world you’re researching, but here are few links to help you:

  • US Census Bureau —Scroll to the ‘Incorporated Places’ section and click on your state. An Excel file will download listing every town’s/city’s population as of 2020 and a 2021 projection.
  • Statistics Canada —Scroll midway down the page to use their city/zip code search box.
  • United Kingdom—Getting population details on all UK towns and cities still isn’t easy online, but you can use the Scotland Census Area Overview (2011 stats), and try this Area Explorer for Northern Ireland data. In addition, non-government sites like citypopulation.de aggregate publicly-available population data worldwide, and you can search English or Welsh town names to view 2020 population estimates (we just don’t know how accurate their data is).
  • Ireland’s Central Statistics Office— Download this spreadsheet of the 2016 census’ total populations for 874 towns in Ireland.
  • Australian Bureau of Statistics —Enter your town name in the ‘Search by Area’ field. A search results section will appear a little further down the page. Click its ‘All Persons’ button to quick-view the ‘People’ stats for that location.

Finding unmet demand

With your population table complete, the next step in picking your location is to work out which area presents you with the best business potential.

Start by applying your country’s figure for the average square footage per person. Most Self Storage Associations have this figure available on their website.

Start Self Storage Business_Demand

In the US, it’s 9.44 sq.ft./head, so you’d multiply the population of each town by this to determine how much self storage the area can support. So a town of 20,000 people could support 188,800 sq.ft. of rental storage space.

The next question: How much self storage space is already on offer in each location on your list? Go online, find out approximately how much space your competitors have built in each town/city and add this to your spreadsheet. Then subtract the two values for each town to see how much space is up for grabs in each area. The more space for the taking, the better your returns should be.

Start Self Storage Business_Calculating Demand US

If you want to get even more precise about potential vs competitor capacity, go back to your radius map and plot 3 or 5-mile radius circles around each competitor’s address. Most customers won’t drive more than 5 miles from their home for self storage, and this could help you visualise any lucrative unclaimed locations between your competitors’ catchments.

It’s worth noting that the current supply of self storage per head isn’t necessarily the same as the current demand. There’s likely to be significant unmet demand in most markets. The biggest opportunities are often found in smaller towns. They can present a number of benefits including:

less-expensive commercial properties than cities;

lower property taxes;

less or no competition for business;

faster word-of-mouth promotion;

nobody to outbid in online advertising; and

nobody to get into a price war with.

3. Plan your storage type + size

Once you’ve found a good area to base your business in, you need to decide what type of self storage business you want to open. It might surprise you to hear that there are dozens of types of storage businesses to choose from, including climate controlled storage, portable/mobile storage, vehicle storage, student storage, military storage, boat storage, business storage, 24 hour storage and more. But most of these fall into one of three simple categories: indoor storage, outdoor storage and drive-up storage. At this step, your investment size comes back into play.

What $61K–$122K will buy

If you have between $61K and $122K to invest, outdoor storage or drive-up storage are probably your best options. Both involve buying or leasing some land.

With outdoor storage, you provide a plot where goods are stored unsheltered or semi-sheltered (perhaps with a canopy covering overhead but no walls). A private parking lot is a familiar example of outdoor storage, where cars or large camper vans are stored.

With drive-up storage, on the other hand, you either fill your land with storage containers (usually shipping containers) or rows of units with rollup doors like on your home’s garage. Customers park their vehicles in front of their unit to load and unload, and they store their belongings within these—fully covered and better protected from the elements, their fellow storers using your facility, or passersby. What’s great about the containers approach is you can buy them as you grow. You can limit your risk by buying a few and seeing how long they take to rent out. And if you end up with more than you can fill, they’re easy to sell on to others and relocate.

What $122K+ will buy

If you have $122k or more, then, depending on you can afford to go the indoor route. For this type of self storage business, you buy or lease a warehouse and fit it out with indoor storage units. To keep initial costs down, you can do this fit out across multiple stages, too.

Investment inflators

There are a few variables worth mentioning that will push up your initial investment:

Buying instead of leasing—Obviously buying land or a warehouse will cost you more upfront than leasing will.

Extent of construction and repairs—The more work needed, the more money you’ll need. For example, outdoor sites may require you to tarmac the ground for cars and build a high, quality fence and gate for security. Indoor sites might require a mezzanine floor or a new roof.

Self Storage Financial Model

To help you fine tune your numbers, try our free self storage financial modeller to work out the initial and maximum funding you’ll need for your self storage business in years one through four.

4. Find your premises

When it comes to visibility, footfall, demand, ease of access, your precise property location matters. So when you’ve narrowed down your location(s), start shopping for premises:

Check out every real estate website there is.

Drive around the towns or cities.

Pay attention to where the outdoor advertising billboards are located.

Meet with realtors and let them know what you’re looking for.

It’s impossible to get the perfect site, but look out for (and perhaps score each site against) benefits such as:

Lots of passing traffic with a building visible from the road

Lots of nearby houses and businesses

Ideally new home building going on nearby

Not too much competition in the area

The ability to rent or buy land or a warehouse at prices that work

Finding all of the above is almost impossible, so simply try your best to get a good combination of each, but don’t rule a site out if it’s missing one or more because it could still work.

This is the fun part of the process, but it’s also the bit where a lot of people give up … because finding suitable sites isn’t easy. It takes time, hard work, and luck!

5. Select an operational model

The final step of how to start a self storage business is deciding how you’ll operate. In other words, what way are you going to run this business?

Staffed, semi-manned, or unmanned?

On premise or remotely managed?

Success is possible with any model, if you’re willing to invest the necessary time, money, and manpower in the business. And of course there are perks, drawbacks, and special considerations for each approach—from flexibility, customer experience and company culture to job satisfaction, sales processes, technology costs, and site security.

6. Research the red tape

If you’ve run businesses in the past, you will already be familiar with the local laws and regulations that will impact your build and operations. If not, make sure to carefully familiarise yourself with the following in your location, as failure to comply can result in unwanted fines and penalties:

Planning permission

Legally permitted opening hours for your location

Building control requirements

Fire safety requirements

Self storage insurance

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Useful links

Check out some of our other helpful resources for those new to self storage.

The Self Storage Academy Explore our wide-ranging guides and resources.

Self Storage Brand Marketplace Still need a logo? Check out our ready-to-go brands.

Self Storage Investment Calculator Quickly see what you can earn from investing in self storage.

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Westbury Storage, Inc.

Executive summary executive summary is a brief introduction to your business plan. it describes your business, the problem that it solves, your target market, and financial highlights.">.

This storage business plan describes a proposed self-storage facility to be established in Westbury, New York involving the conversion of an existing building. Total project costs are estimated at $1,054,487 including purchase price, conversion costs, and pre-opening expenses (see section on Start-up Summary). Based on current and projected strong demand for self-storage units, rental revenue is projected to grow rapidly as units fill up from the first year’s target of $320,000 to $684,000 by year three.

Self-storage business plan, executive summary chart image

After achieving experience and success in their present self-storage facility in Plainview, New York the principals of this proposed project plan to take advantage of the strong demand in the self-storage industry to achieve a major presence in Westbury. The ownership connection with Stote Moving will assist in gaining full occupancy quickly. Goals have been set to rent 50% of the proposed 300 unit spaces within the first six months of Year 1. An additional 25% will be rented in the second half of Year 1, with the remainder to be filled in Year 2.

The mission of the principals is to serve the Long Island community’s local residential and commercial storage and moving needs.

Keys to Success

The keys to success in the self-storage business are:

  • To be able to adapt as storage and market needs change.

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Company summary company overview ) is an overview of the most important points about your company—your history, management team, location, mission statement and legal structure.">.

Westbury Storage is a start-up project to be located in Westbury. The owners are experienced in the moving and storage field, owning a well-established moving company (Stote Movers) and a successful self-storage facility in nearby Plainview (Plainview Storage). The building to be purchased for this project is a large brick building originally constructed as a bleachers around 1910. This building as well as surrounding buildings, were connected with the now dying leather industry which flourished a few decades ago. A large building of similar size located next door and connected by a walk bridge has already been converted successfully and is operating well. The Westbury Storage building contains three floors of heavy-duty wood and steel beam construction ideally suited to the planned purpose of self-storage units. The building is heated by oil. One of the two elevator shafts will be the home for a new over-sized passenger elevator suitable for transporting storage contents from the ground level to the units on the second and third floors. A large separate parking lot area comes with the building but will not be needed for this project. This lot could be sold or could be the site of additional future storage units to be set up using one of several one-story steel storage systems.

It is estimated that, with purchase of the building taking place in June of this year, the conversion into storage units could be completed and ready for occupancy by the end of the year. Demand for the units is strong, as evidenced by the market survey of existing self-storage facilities. Bank financing for 70% of the project costs is expected with the remainder supplied by shareholder equity.

Company Ownership

The company will be incorporated as an S Corporation, and will be owned by three individuals: Roger Black, Sebastian Stote and Daley Thompson. Each will own 1/3 of the stock. Roger Black and Sebastian Stote are 50-50 owners of Plainview Storage which is a 110 unit self-storage facility converted in 1993 from a former piano factory. All units are fully rented. Sebastian Stote is owner of Stote Movers, which is a family business providing residential and commercial moving since 1917. In addition to being the source of many of the rentals at Plainview Storage, Stote Movers has 52 filled 45-foot trailers located in Roslyn-by-the-Sea. These trailers contain customers’ stored goods pending delivery at a new location.

Company Locations and Facilities

Westbury Storage will be located in Westbury, in a central location about 1/2 mile from the monument in the center of Westbury. The owners’ present self-storage facilities are located at in Plainview with further storage capacity in 52 trailers in Roslyn.

Start-up Summary

Advertising and promotion will rely heavily ads in the Yellow Pages, as well as initial local newspaper ads at the time of opening. We are assuming three directories for Yellow Pages ads with 1/8th page ads costing $165/month each. The ads in the local papers ( Springfield News and community newspapers) are estimated to cost $300 monthly for the first year only. They will be reduced in the second year to half this amount and eliminated in the third year.

Property taxes ($11,946) are projected at the actual rate of the last tax year. Significant increases are not expected.

Building maintenance is normally a very substantial item on a building of this size built in 1910. However, the roof has been completely redone fairly recently and the basic structure of the building is very robust. The start-up costs reflect adequate amounts to ready the building for opening in good order. Also, it should be noted that expenditures for building maintenance would need to be larger if the building were being used for offices rather than storage. We assume an annual amount for maintenance equal to 5% of the purchase price which works out to $27,500.

  • The total for utilities is estimated to be $900 monthly.

Insurance: Property and Liability Insurance amounted to $15,000 annually for the present tenant. We’ll assume the same annual cost.

Telephone: Most of the telephone bill will be the charges for the Yellow Pages ads. These costs are already included in advertising and promotion. We assume the telephone bill to amount to $150/month.

Bookkeeping/auditors/legal: Bookkeeping and billing will be handled by the same system used at Plainview Storage and charged at a rate of $300 per month. Auditor charges will run about $4,000 annually.

Self-storage business plan, company summary chart image

Westbury Storage will provide short- and long-term self-storage services in the North Shore community. The company owners have extensive experience in the storage business as well as the good connections in the moving business. The later will help utilize the storage space at the maximum capacity. Westbury Storage will provide about 45,000 square feet of well maintained self-storage units that will be offered for both residential and small business renters.

Competitive Comparison

All self-storage facilities that could be found in Westbury or the area bordering Westbury were surveyed with the following results:

Prices average at $1.20 per sq. ft. per month. Mean price is closer to $1.40.

Market Analysis Summary how to do a market analysis for your business plan.">

In a similar split experienced by management’s existing storage facilities, Westbury Storage is expecting to rent 70% of its available units to non-commercial renters and the remaining 30% to the commercial sector of the market. A total of 300 self-storage units of various sizes will be created and offered for rent by Westbury Storage in a central location in downtown Westbury. The present supply of these units is insufficient to meet the demand as evidenced by a survey of all self-storage facilities within easy reach of Westbury residents. The price realized by these existing units is more than double the national average.

Market Segmentation

Self-storage units are needed by residential customers for storage of personal items as well as by commercial customers for storage of stock. It is envisaged that 70% of the planned self-storage units will be taken up by the residential segment of the market and the remaining 30% will be directed toward the commercial segment. This split is expected based on the existing customers of management’s present self-storage facilities in Plainview. The commercial segment are small businesses, many of which are run out of people’s homes such as an interior designer who needs space to store hundreds of expensive sample fabric books, or a retail shop with inadequate on premises storage.

The market research shows that the annual market potential for the commercial self-storage service in the Westbury area is about 10,000 customers. As stated above, these are mostly small businesses. The residential segment potential is substantially higher at 150,000 customers per year and is based on the Self Storage Association’s assumption that 40% to 55% of population has used self-storage facilities.  This estimate includes individuals who need storage facilities due to moving arrangements or to store excess household property. Both of the market segments are expected to grow at a 5% annual rate. The table and chart below outline the market potential for the both customer segments.

Self-storage business plan, market analysis summary chart image

Target Market Segment Strategy

Since the demand for local self-storage services substantially exceeds the local supply, Westbury Storage will simultaneously market its services to the two major customer segments–residential customers and small business customers. The company will not pursue large business segment due to the limited service scope it can provide to such customers at the existing facilities.

The market analysis shows that local self-storage rates are substantially higher than the national averages. Westbury Storage will position itself to the both customer segments as a conveniently located and affordable quality self-storage facility. Both customer segments will be effectively reached via the local Yellow Pages ads and through the referrals of Stote Movers owned by one of the Westbury Storage’s co-owners.

Market Needs

Customer needs in the self-storage industry have certain similarity across different market segments. The underlying need is for a reliable, safe, dry and accessible self-storage facility. Due to the overwhelming demand, customers are less price sensitive and consider convenient location as the major buying decision criterion.

Residential customers use self-storage facilities to temporarily store their property while moving to a new location. This need originates in the mobility of the American population and the affordability of rental accommodations. Such customers usually rent 25 to 100 square feet depending on the size of their household and they rent on a weekly or monthly basis. The other cluster of residential customers rents self-storage facilities for longer periods to keep their oversize property like boats or other equipment that either does not fit in their garages or is not used on a constant basis.

Small business customer segment requires self-storage facilities to temporarily store their stock or merchandise. These customers may use the storage facilities more often than residential customers and they benefit from convenient loading areas, extended operating hours and better equiped storage units of bigger size.

Service Business Analysis

According to an article in the November 15th issue of Inside Self-storage the national industry average rental income generated by self-storage units is $6.00 per square foot per year, or $.50/sq. ft. per month. In the market to be served by Westbury Storage the average storage rate (see section on Competitive Comparison) is more than double this amount. Washington Storage in Westbury is a typical example. They charge $50/month for an 8X6 ft unit which works out to $12.50 per sq. ft. per year. A 9X9 unit on the second floor also rents for this same amount only because there is no elevator. All of their units are fully rented! All units within the area were surveyed. The average rate is $1.20/sq. ft. per month ($14.40 per year) and the mean was closer to $1.40/sq. ft. per month ($16.80 per year). The story concerning availability was uniform. Either the facility was full or only had one or two available units to chose from. E-Z Mini Storage in S. Centreport said, “There’s some turn-over at the end of every month. Leave your name and we will call you when one becomes vacant.” Extra Space Storage in Springfield said, “We need one week advanced notice.” North Shore Self-Storage said, “We have nothing available on the ground floor.” U-Haul reported, “We have one small unit available, otherwise we are all full.”

The self-storage industry really only started in the late 1960’s when a few far-sighted people recognized the growing need for residential and commercial storage. The industry has doubled in size each decade. Returns on investment have been very impressive–often twice that of other forms of real estate investment. The reasons for this have been the mobile society, the tendency to live in rental apartments, and the general increase in the accumulation of property, especially leisure articles such as skis, wind-surfers, exercise equipment, etc.

The industry lends itself relatively easily to financial modelling. The magazine article mentioned earlier explains the economics of an average self-storage project which is of similar size to the proposed Westbury Storage project. The total building square footage in the model is 41,000 (Westbury Storage is approximately 45,000 after deducting the office space portion of 9,600 sq. ft.). The model shows total gross income based on $6.00/sq. ft. or $240,000 annually. (Westbury Storage’s gross revenues will be more than double that.) Total project costs for the model come to over $1,150,000 versus $1,054,500 for Westbury Storage. The loan amounts are virtually the same as well as the interest rates used (8.5%). Normal operating costs generally come to about $2.00 per sq. ft. Westbury Storage’s operating costs are projected at nearly twice this amount due to generous provisions for maintenance and payroll. However, the model’s net operating income is slightly less than $4/sq. ft. versus Westbury Storage’s $11.40/sq. ft.

It could be argued that the higher than national average rates enjoyed by local self-storage facilities may not continue indefinitely, but there is no indication of any downward pressure at this time. It should also be pointed out that during an economic down-turn the self-storage industry does not suffer to the extent that other industries suffer.

Should the supply of self-storage units begin to outstrip demand, Westbury Storage should be well positioned to deal with the competition due to its ability to offer heated units (nearly all competing units are unheated) and its ability to supply electric outlets to individual units (for hobby/workshop purposes).

Business Participants

Although there are a few nation-wide players in the self-storage market, the industry is still fairly dispersed in which many small companies take part. (See the section on Competitive Analysis for a complete listing.)

Competition and Buying Patterns

Convenience is probably the single most import factor in the decision of where to rent a self-storage unit. For example, Hicksville and Huntington have no self-storage facilities. Residents choose to rent one in a nearby town probably based on proximity to the route taken by the renter to and from work. If no units are available nearby, then renters will travel further afield. Units on the ground floor are favored, especially if no elevator is available.

Main Competitors

See the section on Competitive Comparison for names of competitors. In the present market situation, competition plays a very weak role.

Strategy and Implementation Summary

The sales and marketing strategy is fairly simple by virtue of the fact that self-storage facilities are in short supply. Westbury Storage will simply have to inform the public of its existence by advertising in local newspapers, and by placing Yellow Pages ads.

Competitive Edge

Although the current local demand exceeds the supply and Westbury Storage will have no problems fully utilizing its capacity, the market situation may change in the future. The company will fully utilize its management’s seasoned experience in the storage business in order to establish a strong foothold in the local community. This will be reached by providing excellent service and offering extra service features like the heated and well-lit rental units, which will supplement the great location of the storage facility.

Sales Strategy

Most inquiries will come through the Yellow Pages ads. Proper telephone manners and professional handling of on-site inquiries are essential. Even though there is an excess of demand over supply, an unfriendly manager or clumsiness over the telephone will cause needless lost sales.

As is the case with the owners’ present self-storage facility in Plainview, many sales are directed through Stote Movers, who are in constant contact with people on the move and, therefore are most likely to require temporary storage.

Sales Forecast

Due to the fact that demand has been outstripping supply in this market, Westbury Storage may well be able to rent out all of its new units within the first year of operation. Prices paid for self-storage units reflect this strong market demand. The ground floor units will rent at $1.40 per sq. ft. per month and the upper floors, served by an over-sized elevator will rent for $1.20/sq. ft. per month. It is assumed that half of the units will rent in the first six months of operation. The second half of 1999 will see a further 25% of the total space rented, leaving the final 25% to be reached in the year 2000. Within these time spans, the growth, for projection purposes, will be assumed to be straight line, i.e. the first 50% of the total space will be reached in equal monthly increments during the first six months, and so forth.

The building measures 240 ft. X 80 ft. A section at one end (40′ X 80′ =3,200 sq. ft. per floor) will be reserved for future offices. This leaves total space dedicated to self-storage units of 48,000 sq. ft. (16,000 per floor). Some space is lost when the partitioning is done. Floor plan “D” suggests a way to partition an area 200 ft. X 40 ft. Doubled, this is exactly the space available in the Westbury building after deducting the office area. This 16,000 sq. ft. (200′ X 40′ X 2′) would be reduced somewhat to allow walkway/passages on the sides. So instead of 16,000 sq. ft. of rental space per floor, we would end up with about 15,000 sq. ft. Total self-storage net rentable space would be 45,000 sq. ft. The 15,000 sq. ft. on the ground floor would rent for $21,000 monthly and each of the other floors would rent for $18,000 each on a monthly basis.

Sales for the first month would be $4,750 (50% of total $57,000 divided by 6). The second month would have $9,500 in sales, etc.

Many self-storage companies charge administration fees to first-time customers. Deposits are also not uncommon. In addition to these sources of income, the sale of certain related items such as cardboard boxes, tape, packing materials, storage containers, plastic mattress covers, etc. can be substantial. However, for projection purposes, it is assumed that income from these sources will wash out any credit losses.

Self-storage business plan, strategy and implementation summary chart image

Strategic Alliances

An important strategic alliance is the common ownership connection to Stote Movers. By virtue of its contact with people changing addresses, Stote Movers is in a position to direct a lot of storage business to Westbury Storage.

The following table shows the milestones that Westbury Storage has established.

Management Summary management summary will include information about who's on your team and why they're the right people for the job, as well as your future hiring plans.">

The management of Westbury Storage will rest with Roger Black and Sebastian Stote, both of whom are successful in the moving and self-storage industries.

Personnel Plan

Operating hours are planned to be 7 a.m. to 7 p.m. Monday through Friday and 9 a.m. to 5 p.m. on Saturdays. Westbury Storage will be closed on Sundays.

The manager will work a normal 40 hour week at an annual salary of $35,000. A maintenance man will be employed at a salary of $24,000. A night watchman will be employed at a salary of $24,000.

Financial Plan investor-ready personnel plan .">

A commercial loan needs to be negotiated to finance approximately 70% of the total project costs. A 15-year mortgage will be applied for with an 8.5% interest rate. First drawdown upon agreement of the seller and buyer concerning the terms of sale of the building. Last drawdown around the end of the year when all conversion to self-storage units should be completed. First repayment of principle is planned in April of 1999 with monthly installments of interest and principle to continue until the loan is fully repaid in 2013.

Important Assumptions

Interest rates for commercial loans as of this writing are 8.5% fixed for three years or 8.75% fixed for a five year period. Beyond this time frame, rates are quoted at 1% over the Fleet Bank floating rate.

Key Financial Indicators

The following chart shows the benchmarks for Westbury.

Self-storage business plan, financial plan chart image

Break-even Analysis

The following table and chart show our Break-even Analysis.

Self-storage business plan, financial plan chart image

Projected Profit and Loss

Property taxes ($11,946) are projected at the actual rate of the tax year 7/1/96-6/30/97. Significant increases are not expected.

Self-storage business plan, financial plan chart image

Projected Cash Flow

The following chart and table represent the cash flow for Westbury Storage.

Self-storage business plan, financial plan chart image

Projected Balance Sheet

The following table presents the balance sheet for Westbury Storage.

Business Ratios

Business ratios for Westbury for the years of this plan are shown below. Industry profile ratios based on the Standard Industrial Classification (SIC) code 4225, General Warehousing and Storage, are shown for comparison.

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Self Storage Business Plan

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Have you ever found yourself surrounded by a lot of stuff and wondered where to place those extra furniture or boxes of memories?

But you’re not alone; there are so many individuals who can’t get enough of all their belongings. And that’s where self-storage comes into the picture!

The self-storage facility stores people’s stuff by charging some rental fees. It offers a secure haven for your cherished items, from lockers to outdoor spaces.

Surprisingly, if you are planning to start a new self-storage or warehouse business, you will need a solid business plan for a successful business.

So, we have created this sample business plan for you to get a better idea about how a business plan should look and what details you have to include in your self-storage unit business plan.

But before diving right into a detailed business plan, let’s consider a few things you need to understand.

Things to Consider Before Writing a Self-Storage Business Plan

As per statistics, the global self-storage market is projected to reach an astonishing value of $71.37 billion by 2027, with a CAGR of 5.65% from 2021 to 2027.

The primary reason for this rapid market growth is due to the increasing need for commercial and residential storage.

The self-storage companies provide secure spaces and various storage unit types such as containers, compartments, lockers, and outdoor spaces. So that, customers can safely store and retrieve their belongings anytime.

In fact, the self-storage industry has been the fastest-growing sector in commercial real estate since it started in the 1960s.

And the cool part is that self-storage unit operators don’t need a ton of staff, utilities, or maintenance. So, it makes sure that your self-storage facilities earn substantial profits.

Now that you know a little about the industry, it’s time to discover what to include in your self-storage business plan.

What to Include in Your Self Storage Business Plan?

  • Executive Summary 
  • Company Overview
  • Industry Analysis
  • Customer Analysis
  • Competitive Analysis
  • Marketing Plan
  • Operations Plan
  • Management Team
  • Financial Plan

1. Executive Summary 

An executive summary is a brief overview of your entire business plan. Although it is the first section of the plan, entrepreneurs write it at the last when the whole plan is ready.

This section highlights the most important points, from business concept and mission-vision statements to financial outlook. 

You may start this section with a compelling introduction to your self-storage business, including the business name, owners, location, and type of business you are running.

Give a brief overview of your market opportunity, service offerings, management team, and marketing strategies. Highlight financial projections if you’re seeking funding.

Most of the readers will go through the executive summary before making a judgment. So, make sure to keep it clear, concise, and engaging to grab readers’ attention.

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2. Company Overview

The company overview section is a detailed description of your business, including the business idea, name, location, future goals, history, and other business-related facts.

This section helps you provide an in-depth understanding of your business, introducing and positioning your business as an ideal solution for your target audience. So, write it in a clear and concise yet impactful way.

First, you may discuss the basic details of your storage facility and what type of storage business you are operating. It could be a warehouse, portable containers, vehicle storage, lockers, climate-controlled storage, etc.

Have a look at Maxwell’s business introduction written using Upmetrics AI Assistant :

Apart from that, your company analysis section should include the following information:

  • Vision and mission statements
  • Business legal structure(Sole proprietorship, partnership, LLC, or corporation)
  • History and background of storage business (if any)
  • Owners’ names with qualifications
  • Future business goals(Short-term or long-term)
  • Milestones you have accomplished(number of self-storage units occupied, number of referrals, contract renewals, etc.)

3. Industry Analysis

The industry analysis section is an overview of the specific industry and market. It supports you in a better understanding of the external business environment.

While it seems unnecessary, it helps you develop strategies that maximize business opportunities and lower potential risks.

By doing thorough research, you may learn a lot about the storage industry and the market that you will serve. And this will show your readers that you are an industry expert.

So, start this section with a quick introduction to the self-storage industry. Describe the self-storage business in terms of size(in dollars) and mention whether the market is falling or growing in the USA.

You may conduct detailed market research to examine previous trends and market growth potential. This helps you identify the top competitors in the industry and their market shares.

Don’t forget to highlight a few factors that affect the industry, including regulatory rules, market trends, and other businesses’ competitive activities .

4. Customer Analysis

The customer analysis section of your self-storage business plan provides the details of the customers you serve or intend to serve.

It helps you identify your target customers, evaluate their needs, and explain how your services cater to them.

You may consider some examples of customer segments, such as business owners, families, individuals who are relocating, and students. Try to break your target market in terms of their psychographic and demographic profiles. 

For a demographic profile, you should include details of the age, gender, location, and income level of the customers. Most self-storage facilities mainly serve customers staying in the same town or city. 

You may explain the target customers’ wants and needs for demographic profiles. If you properly understand these demands, it will help you attract and retain customers.

You may refer to the below example written from Upmetrics’ self-storage business plan:

Target Market of Maxwell – Storage and Warehouse

We are aware of the fact that for any business to thrive so well in profit, it has to first and foremost define its market. The target market for self-storage and warehouse facilities cuts across people from different walks of life.

The fact that people need a secure place to keep their properties for a short period of time makes the self-storage and warehouse rental business a thriving and growing business.

Maxwell – Storage and Warehouse, LLC will work towards providing services, facilities, and an environment that will help us reach out to our target market. These are the categories of people that we intend to market our self–storage and warehouse facility to:

  • Working Class Adults / Corporate Executives
  • Sports Clubs (soccer team, athletics team, and choreographers et al)
  • College Students / Schools
  • Community and Corporate organization
  • Business People / Entrepreneurs
  • Government Officials
  • Religious centers (Crusade Teams)
  • Merchants, Importers, and manufacturers
  • Sports Men and Women
  • Construction companies

5. Competitive Analysis

Competitive analysis is essential to recognize key competitors within the industry, including direct and indirect competitors.

Also, this section will help you know your storage business’s unique selling propositions along with market positioning.

You may start by identifying direct and indirect competitors & other alternative self-storage companies in the industry.

Direct competitors can be other self-storage facilities that provide the same self-storage services as yours. While indirect competitors can be other options or storage businesses with their own storage space.

After specifying such competition, you need to focus more on your direct competitors. Such self-storage facilities are the most threatening to your self-storage company.

Describe an overview of their businesses. Describe their strengths & weaknesses and try to find out key things like:

  • Who(type of customers) do they serve?
  • What type of self-storage services do they provide?
  • What are USPs, including their quality service?
  • What is their pricing strategy(medium or low)?
  • What do they need to improve as per their customers?

After conducting the above analysis, understand the areas of competitive advantage. For instance, consider your superior self-storage services, unique offerings, better prices, and excellent customer service.

You may perform a SWOT analysis like below to get your storage business’s strong points.

SWOT analysis example of storage business

6. Marketing Plan

Your business’s marketing plan provides a detailed outlook of sales strategies and promotional techniques you will use to reach your target audience.

It will help you streamline your marketing efforts and create impactful marketing campaigns to acquire new customers and retain existing ones.

Here are some of the sales and marketing strategies for your self-storage company:

Unique Selling Propositions(USPs)

Specify the USPs that sets your self-storage facility apart from other self-storage businesses. Emphasize a few aspects such as quality services, security features, competitive pricing, etc.

Social Media Marketing

For a successful self-storage business, social media engagement can be very helpful. Use popular social media platforms to target specific audiences. Create visually appealing ads and content to drive traffic.

Partnerships

Establish collaborations with local businesses to promote your storage facilities and generate referrals. This can benefit your self-storage company and local partners.

Website and online reservations

Having a website can establish a strong, professional brand and help you reach a wider audience. Showcase all your storage services on the website and consider the online reservation procedure.

Loyalty programs and special offers

Try to retain existing customers with the help of loyalty programs, special offers, and referral incentives. This can encourage your customers to refer new clients.

7. Operations Plan

The operations plan chapter outlines the daily processes and activities centered on achieving the business objectives mentioned in the earlier sections.

A detailed operations plan helps you and your team define responsibilities, daily tasks, and short-term goals you need to accomplish, keeping track of your long-term objectives.

So, briefly discuss operational planning, highlight how it directly impacts the quality of services, and pique the reader’s interest.

Here are a few key elements to add to this section:

Staffing & Training

Describe your staffing plan, prioritize training programs, and foster a collaborative work environment for smooth administrative processes and excellent customer service.

Facility Management

Consider including security systems to provide the highest level of security for storage units. Also, mention regular maintenance checks to keep the condition and cleanliness of the facility.

Technology and Software

Describe the technology and software you use to easily reserve, access, and manage storage units. This will enhance your customer service and contribute to effective business operations.

8. Management Team

As the name suggests, the management team section introduces the owners and key managers, along with their roles & responsibilities, qualifications, work experience, and compensation plan.

A strong management team is essential to weigh authority and helps potential investors to be confident about your storage company’s idea and vision.

You may start this section with an introduction of the storage owner and team members, including the facility manager, admin & HR manager, sales & marketing executive, accountant, customer care executive, or front desk officer.

Highlight their responsibilities, industry experience, educational background, and skills that can benefit your business. For a better understanding, you may refer to the below example:

Management Team Example of Self Storage Business

You might include an organizational structure that depicts the reporting lines and the flow of the decision-making hierarchy. Also, discuss the compensation plan for each individual, part of your management.

If you have any advisory board members, mention them and emphasize their experience in managing self-storage companies or small businesses.

9. Financial Plan

The financial plan is the most important and demanding aspect of business planning.

When it comes to convincing potential investors and banks to invest in your business or lend money, a financial plan is one of the crucial factors.

This section of your plan describes your self-storage facility’s financial information and how it will achieve its financial goals or how much revenue potential it has.

Here are a few essential elements and financial statements you must add or provide while making a financial plan:

Income Statement

An income statement is generally called a profit and loss(P&L) statement. It defines the revenue and then deducts your self-storage operating expenses to show your gross profitability.

For this, you have to make practical assumptions that help you measure the actual profit margin of your business. Here’s an example of a projected profit and loss statement for 3 years:

Self Storage Business Income Statement Example

Balance Sheet

A balance sheet helps you show your assets and liabilities. While it includes a lot of information, you may simplify it to highlight the most important details, like equity, goodwill, debt ratio, or other intangible assets.

Cash Flow Statement

Your cash flow statement helps you determine how much money you need to start a new self-storage business or grow an existing facility. It also makes sure that you never run out of money.

Once your business is started, you should maintain these cash flow projections even for certain months before you start making profits.

Well, in most cases, you earn profits but still face financial problems that could lead you to bankruptcy. So, you will need proper cash flow planning to avoid such possibilities.

Funding Sources for Your Self-Storage Business

You can access different funding sources to support your self-storage startup or expansion efforts. Here are some common sources to get funding from:

Bootstrapping

Many entrepreneurs use personal savings as initial capital for starting a self-storage business without attracting investments or borrowing money from banks.

Family and friends

After deciding how much money you’ll need to start a business, you may ask family & friends to invest in your self-storage business. Show a solid business plan to the interested ones and assure them that they will make a profit.

The most common source of funding is to cover startup costs and self-storage facility expenses. However, banks will ask for a professional self-storage business plan to make sure that you’ll be able to pay money back with interest.

Investors and partnerships

Bring in some external capital by seeking investors or partnering with individuals or businesses interested in your self-storage industry.

Apart from the above, you may explore other funding sources for your self-storage business:

  • Crowdfunding
  • Small Business Administration(SBA) loans
  • Private equity & venture capital
  • Grants and subsidies
  • Real Estate Investment Trusts(REITs)

Download a sample self-storage business plan

Are you ready to start writing your self-storage business plan? Here you go; download our free self-storage business plan pdf to get started.

It’s a modern business plan template specifically designed for your storage business. Use this sample business plan as a guide for creating your own plan.

Import data into your editor and start writing!

The Quickest Way to turn a Business Idea into a Business Plan

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Frequently asked questions, what are the key components of a self-storage business plan.

A successful self-storage unit business plan involves the following key components:

  • Executive summary
  • Company overview
  • Self-storage industry analysis
  • Customer analysis
  • Competitive analysis
  • Marketing plan
  • Operational plan
  • Management team
  • Financial plan

What is the average profit margin for self-storage?

Depending on the location, size of the self-storage units, and operational efficiency, the average profit margin for self-storage facilities may range from 30 to 50%.

What are the legal and regulatory considerations for a self-storage business?

A self-storage unit business should consider various legal and regulatory aspects:

  • Business legal structure
  • Licenses and permits
  • Lien rights & late fee policies
  • Tax regulations
  • Zoning laws
  • Vehicle towing

How much capital is needed to start a self-storage facility?

The capital required to start a self-storage business may differ widely. On average, the startup costs can range between $500,000 to $1 million for a small self-storage facility, while larger facilities need the initial capital of several million dollars.

What types of self-storage units should I offer?

There are various types of self-storage units, including:

  • Standard units
  • Climate-controlled storage
  • Drive-up units
  • Interior storage units
  • Exterior units
  • Vehicle storage

About the Author

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Vinay Kevadiya

Vinay Kevadiya is the founder and CEO of Upmetrics, the #1 business planning software. His ultimate goal with Upmetrics is to revolutionize how entrepreneurs create, manage, and execute their business plans. He enjoys sharing his insights on business planning and other relevant topics through his articles and blog posts. Read more

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Download Self Storage Business Plan

The new economics of energy storage

Energy storage is a favorite technology of the future—for good reasons.

What is energy storage?

Many people see affordable storage as the missing link between intermittent renewable power, such as solar and wind, and 24/7 reliability. Utilities are intrigued by the potential for storage to meet other needs such as relieving congestion and smoothing out the variations in power that occur independent of renewable-energy generation. Major industrial companies consider storage a technology that could transform cars, turbines, and consumer electronics (see sidebar, “What is energy storage?”).

Others, however, take a dimmer view, believing that storage will not be economical any time soon. That pessimism cannot be dismissed. The transformative future of energy storage has been just around the corner for some time, and at the moment, storage constitutes a very small drop in a very large ocean. 1 1. This article does not consider pumped storage, the most common type of storage. It is used for hydro projects. In 2015, a record 221 megawatts of storage capacity was installed in the United States, 2 2. Peter Maloney, “After record year, U.S. energy storage forecasted to break 1 GW capacity mark in 2019,” Utility Dive , March 7, 2016, utilitydive.com. more than three times as much as in 2014—65 megawatts, which was itself a big jump over the previous year. But more than 160 megawatts of the 2015 total was deployed by a single regional transmission organization, PJM Interconnection. 3 3. PJM serves all or part of Delaware; Illinois; Indiana; Kentucky; Maryland; Michigan; New Jersey; North Carolina; Ohio; Pennsylvania; Tennessee; Virginia; Washington, DC; and West Virginia. And 221 megawatts is not much in the context of a total US generation capacity of more than a million megawatts.

Our research shows considerable near-term potential for stationary energy storage. One reason for this is that costs are falling and could be $200 per kilowatt-hour in 2020, half today’s price, and $160 per kilowatt-hour or less in 2025. Another is that identifying the most economical projects and highest-potential customers for storage has become a priority for a diverse set of companies including power providers, grid operators, battery manufacturers, energy-storage integrators, and businesses with established relationships with prospective customers such as solar developers and energy-service companies.

Would you like to learn more about our Sustainability & Resource Productivity practice?

In this article, we describe how to find profitable possibilities for energy storage. We also highlight some policy limitations and how these might be addressed to accelerate market expansion. These insights could help forward-thinking companies win an early toehold in a market that in the United States could reach $2.5 billion by 2020—six times as much as in 2015. 4 4. “The 2015 year-in-review executive summary,” GTM Research, March 2016, greentechmedia.com. The ultimate prize, of course, is much bigger. As the technology matures, we estimate that the global opportunity for storage could reach 1,000 gigawatts in the next 20 years.

Where to compete: Model insights

Identifying and prioritizing projects and customers is complicated. It means looking at how electricity is used and how much it costs, as well as the price of storage.

Too often, though, entities that have access to data on electricity use have an incomplete understanding of how to evaluate the economics of storage; those that understand these economics have limited access to real-world data on electricity use. Moreover, there has been a tendency to average the data when doing analyses. Aggregating numbers, however, is not useful when evaluating prospects for energy storage because identical buildings next door to each other could have entirely different patterns of electricity use. Conclusions drawn based on averages therefore do not have the precision needed to identify which customers would be profitable to serve.

In our research, we were able to access data from both utility and battery companies. On this basis, we found that it is quarter-hour-by-quarter-hour or even minute-by-minute use that reveals where the opportunities are.

To identify today’s desirable customers, we built a proprietary energy-storage-dispatch model that considers three kinds of real-world data:

  • electricity production and consumption (“load profiles”), at intervals of seconds or minutes for at least a year
  • battery characteristics, including price and performance
  • electricity prices and tariffs

Using both public and private sources, we accessed data for more than a thousand different load profiles, dozens of batteries (including lithium ion, lead acid, sodium sulfur, and flow cell), and dozens of electricity tariff and pricing tables.

Our model, shown in the exhibit, identifies the size and type of energy storage needed to meet goals such as mitigating demand charges, providing frequency-regulation services, shifting or improving the control of renewable power at grid scale, and storing energy from residential solar installations.

The model shows that it is already profitable to provide energy-storage solutions to a subset of commercial customers in each of the four most important applications—demand-charge management, grid-scale renewable power, small-scale solar-plus storage, and frequency regulation.

Demand-charge management

Some customers are charged for using power during peak times (a practice known as a demand charge). Energy storage can be used to lower peak consumption (the highest amount of power a customer draws from the grid), thus reducing the amount customers pay for demand charges. Our model calculates that in North America, the break-even point for most customers paying a demand charge is about $9 per kilowatt. Based on our prior work looking at the reduction in costs of lithium-ion batteries, this could fall to $4 to $5 per kilowatt by 2020. Importantly, the profitability of serving prospective energy-storage customers even within the same geography and paying a similar tariff can vary by $90 per kilowatt of energy storage installed per year because of customer-specific behaviors. Another interesting insight from our model is that as storage costs fall, not only does it make economic sense to serve more customers, but the optimum size of energy storage increases for existing customers.

Grid-scale renewable power

Energy storage can smooth out or firm wind- and solar-farm output; that is, it can reduce the variability of power produced at a given moment. The incremental price for firming wind power can be as low as two to three cents per kilowatt-hour. Solar-power firming generally costs as much as ten cents per kilowatt-hour, because solar farms typically operate for fewer hours per day than wind farms.

Small-scale solar-plus storage

At a residential level, the combination of solar and storage is only worthwhile when specific market and regulatory conditions are in place to make the value of storage greater than the cost of installing it. This can happen, for example, when excess production can be stored for later consumption; in that case, consumers need to buy less power from the grid and thus cut their costs.

Frequency regulation

Electricity grids experience continuous imbalances between power generation and consumption because millions of devices are turned on and off in an uncorrelated way. These imbalances cause electricity frequencies to deviate, which can hurt sensitive equipment and, if left unchecked and allowed to become too large, even affect the stability of the grid. Storage systems are particularly well suited to frequency regulation because of their rapid response time and ability to charge and discharge efficiently.

Our model confirms that storage can be profitable in select frequency-regulation markets. The economics depend on the context. Ideally, batteries hover around a specific state of charge to minimize the amount of storage required.

How to compete: The state of batteries

Battery technology, particularly in the form of lithium ion, is getting the most attention and has progressed the furthest. Lithium-ion technologies accounted for more than 95 percent of new energy-storage deployments in 2015. 5 5. “The 2015 year-in-review executive summary,” GTM Research, March 2016, greentechmedia.com. They are also widely used in consumer electronics and have shown promise in automotive applications, such as plug-in hybrids and electric vehicles. Prices for lithium-ion batteries have been falling and safety has improved; moreover, they can work both in applications that require a lot of energy for a short period (known as power applications) and those requiring lower amounts of energy for longer periods (energy applications). Collectively, these characteristics make lithium-ion batteries suitable for stationary energy storage across the grid, from large utility-scale installations to transmission-and-distribution infrastructure, as well as to individual commercial, industrial, and residential systems.

Our model confirms the centrality of lithium-ion batteries to utility-scale energy storage, but with two important caveats. First, it is critical to match the performance characteristics of different types of lithium-ion batteries to the application. For example, we looked at two major lithium-ion-battery providers that were competing to serve a specific industrial application. The model found that one company’s products were more economic than the other’s in 86 percent of the sites because of the product’s ability to charge and discharge more quickly, with an average increased profitability of almost $25 per kilowatt-hour of energy storage installed per year.

bate12_frth

Battery technology charges ahead

Second, in some specific applications, nonlithium-ion technologies appear to work better. For demand-charge management and residential solar-plus storage, certain lead-acid products are more profitable than lithium-ion cells. For large-scale firming of wind power, our model shows that flow cells can be more economic than lithium-ion cells for all but the shortest periods (less than an hour) and are projected to continue to lead on cost through 2020.

Policy and market limits

Our model suggests that there is money to be made from energy storage even today; the introduction of supportive policies could make the market much bigger, faster. In markets that do provide regulatory support, such as the PJM and California markets in the United States, energy storage is more likely to be adopted than in those that do not. In most markets, policies and incentives fail to optimize energy-storage deployment. For example, the output from intermittent renewable-energy sources can change by megawatts per minute, but there are few significant incentives to pair renewable energy with storage to smooth power output.

Another issue is that tariffs are varied and not consistently applied in a way that encourages energy-storage deployment. Thus, customers with similar load profiles are often billed differently; some of these tariffs provide incentive for the adoption of storage to the benefit of the electrical-power system, while others do not. Pairing load profiles with appropriate tariffs and ensuring that tariffs are stable could help build the economic business case for energy storage.

Finally, the inability to bring together detailed modeling, customer data, and battery performance (due in part to policy choices and rules limiting data access) makes it difficult to identify and capture existing opportunities.

What the future may hold

Our work points to several important findings.

First, energy storage already makes economic sense for certain applications. This point is sometimes overlooked given the emphasis on mandates, subsidies for some storage projects, and noneconomic or tough-to-measure economic rationales for storage (such as resilience and insurance against power outages).

Second, market participants need to access the detailed data that could allow them to identify and prioritize those customers for whom storage is profitable. Given the complexity of energy storage, deployment is more likely to follow a push versus a pull sales model, favoring entrepreneurial companies that find creative ways to access and use these data.

Third, storage providers must be open-minded in their design of energy-storage systems, deciding whether lithium-ion, lead-acid, flow-cell, or some other technology will provide the best value. A strategy that employs multiple technologies may carry incremental costs, but it may also protect against sudden price rises.

Fourth, healthy margins are likely to accrue to companies that make use of battery and load-profile data. The unique characteristics of individual customers will favor tailored approaches, including the development of algorithms that find and extract the greatest value. Strong customer relationships are required to access relevant data and to deliver the most economical solution as regulations and technologies evolve.

Fifth, how to use storage to reduce system-wide costs will require some thought. Examples might include price signals that are correlated with significant deviations in power generation and consumption, rules that reward the provision of storage to serve multiple sites in close proximity, and tariffs that favor self consumption (or load shifting) of renewable electricity.

The most important implication is this: the large-scale deployment of energy storage could overturn business as usual for many electricity markets. In developed countries, for example, central or bulk generation traditionally has been used to satisfy instantaneous demand, with ancillary services helping to smooth out discrepancies between generation and load. Energy storage is well suited to provide such ancillary services. Eventually, as costs fall, it could move beyond that role, providing more and more power to the grid, displacing plants. That moment is not imminent. But it is important to recognize that energy storage has the potential to upend the industry structures, both physical and economic, that have defined power markets for the last century or more. And it is even more important to be ready.

Paolo D’Aprile is an associate partner in McKinsey’s Rome office; John Newman is an associate partner in the San Francisco office, where Dickon Pinner is a senior partner.

The authors wish to thank Hussein Abdelhalim and Benedikt Battke for their contributions to this article.

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Why pure storage's business model is so successful.

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Pure Storage business model canvas

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Pure Storage’s Company Overview

Pure Storage, Inc. engages in building a data platform that enables businesses to enhance performance and reduce complexity and costs worldwide. The company delivers its data platform through Purity Operating Environment, an optimized software for solid-state memory that offers enterprise-class storage and protocol services; FlashArray and FlashBlade optimized hardware products for solid-state memory to enhance the performance and density of flash, optimize its advanced software services, and reduce solution cost for customers; Pure1. a cloud-based management and support software; and FlashStack, a converged infrastructure solution.

Country: California

Foundations date: 2009

Type: Public

Sector: Technology

Categories: Platform

Pure Storage’s Customer Needs

Social impact:

Life changing: affiliation/belonging, self-actualization

Emotional: badge value, provides access, attractiveness

Functional: integrates, organizes, reduces effort, avoids hassles, reduces risk, informs, variety, saves time, simplifies, reduces cost

Pure Storage’s Related Competitors

Pure storage’s business operations.

An additional item offered to a customer of a primary product or service is referred to as an add-on sale. Depending on the industry, add-on sales may generate substantial income and profits for a firm. For example, when a customer has decided to purchase the core product or service, the salesman at an automotive dealership will usually offer an add-on sale. The pattern is used in the price of new software programs based on access to new features, number of users, and so forth.

Data warehouses:

A data warehouse (DW or DWH), sometimes referred to as an enterprise data warehouse (EDW), is a computer term that refers to a system used for reporting and data analysis. It is a critical component of business intelligence. DWs are the centralized repository for data that has been integrated from one or more separate sources. They keep track of both data and information and generate analytical reports for skilled professionals throughout the business.

Archetypes of business model design:

The business model archetypes include many business personalities and more than one business model linked to various goods or services. There is a common foundation behind the scenes of each unit, but from a management standpoint, each group may operate independently.

Benchmarking services:

Benchmarking is a technique for evaluating performance and gaining insights via data analytics. It may be used to conduct internal research on your firm or compare it to other businesses to enhance business processes and performance indicators following best practices. Typically, three dimensions are measured: quality, time, and cost. In this manner, they may ascertain the targets' performance and, more significantly, the business processes that contribute to these companies' success. The digital transformation era has spawned a slew of data analysis-focused software businesses.

Access over ownership:

The accessibility over ownership model is a business concept that allows consumers to utilize a product without owning it. Everything serves a purpose. As a result, consumers all across the Western world are demanding more value from their goods and services, and they are rethinking their relationship with stuff.' Furthermore, with thriving online communities embracing the idea of access above ownership, the internet is developing as a robust platform for sharing models to expand and prosper.

Digital transformation:

Digitalization is the systematic and accelerated transformation of company operations, processes, skills, and models to fully exploit the changes and possibilities brought about by digital technology and its effect on society. Digital transformation is a journey with many interconnected intermediate objectives, with the ultimate aim of continuous enhancement of processes, divisions, and the business ecosystem in a hyperconnected age. Therefore, establishing the appropriate bridges for the trip is critical to success.

Corporate innovation:

Innovation is the outcome of collaborative creativity in turning an idea into a feasible concept, accompanied by a collaborative effort to bring that concept to life as a product, service, or process improvement. The digital era has created an environment conducive to business model innovation since technology has transformed how businesses operate and provide services to consumers.

Codifying a distinctive service capability:

Since their inception, information technology systems have aided in automating corporate operations, increasing productivity, and maximizing efficiency. Now, businesses can take their perfected processes, standardize them, and sell them to other parties. In today's corporate environment, innovation is critical for survival.

A business ecosystem is a collection of related entities ? suppliers, distributors, customers, rivals, and government agencies ? collaborating and providing a particular product or service. The concept is that each entity in the ecosystem influences and is impacted by the others, resulting in an ever-changing connection. Therefore, each entity must be adaptive and flexible to live, much like a biological ecosystem. These connections are often backed by a shared technical platform and are based on the flow of information, resources, and artifacts in the software ecosystem.

Open business:

Businesses use the open business approach to incorporate goods and services ecosystems from third parties that operate inside the same market framework. Collaboration between companies has the potential to increase the value delivered to the end customer or user. Software developers and platform integrators often use this business model.

Infrastructure as a Service (IaaS):

Infrastructure as a Service (IaaS) is a subset of cloud computing that offers on-demand access to shared computing resources and data to PCs and other devices. It is a paradigm for ubiquitous, on-demand access to a pool of customizable computing resources (e.g., computer networks, servers, storage, applications, and services) that can be quickly provided and released with little administrative effort.

Platform as a Service (PaaS):

Platform as a Service (PaaS) is a class of cloud computing services that enable users to create, operate, and manage apps without the burden of establishing and maintaining the infrastructure usually involved with designing and developing an app.

Software as a Service (SaaS):

Software as a Service (SaaS) is a paradigm for licensing and delivering subscription-based and centrally hosted software. Occasionally, the term on-demand software is used. SaaS is usually accessible through a web browser via a thin client. SaaS has established itself as the de facto delivery mechanism for a large number of commercial apps. SaaS has been integrated into virtually every major enterprise Software company's strategy.

Self-service:

A retail business model in which consumers self-serve the goods they want to buy. Self-service business concepts include self-service food buffets, self-service petrol stations, and self-service markets. Self-service is available through phone, online, and email to automate customer support interactions. Self-service Software and self-service applications (for example, online banking apps, shopping portals, and self-service check-in at airports) are becoming more prevalent.

Resellers are businesses or individuals (merchants) that acquire products or services to resell them instead of consuming or utilizing them. This is often done for financial gain (but could be resold at a loss). Resellers are well-known for doing business on the internet through websites. One instance is the telecommunications sector, in which corporations purchase surplus transmission capacity or take the call from other providers and resell it to regional carriers.

Technology trends:

New technologies that are now being created or produced in the next five to ten years will significantly change the economic and social landscape. These include but are not limited to information technology, wireless data transmission, human-machine connection, on-demand printing, biotechnology, and sophisticated robotics.

Disruptive trends:

A disruptive technology supplants an existing technology and fundamentally alters an industry or a game-changing innovation that establishes an altogether new industry. Disruptive innovation is defined as an invention that shows a new market and value network and ultimately disrupts an established market and value network, replacing incumbent market-leading companies, products, and alliances.

Subscription:

Subscription business models are built on the concept of providing a product or service in exchange for recurring subscription income on a monthly or annual basis. As a result, they place a higher premium on client retention than on customer acquisition. Subscription business models, in essence, concentrate on revenue generation in such a manner that a single client makes repeated payments for extended access to a product or service. Cable television, internet providers, software suppliers, websites (e.g., blogs), business solutions providers, and financial services companies utilize this approach, as do conventional newspapers, periodicals, and academic publications.

Knowledge and time:

It performs qualitative and quantitative analysis to determine the effectiveness of management choices in the public and private sectors. Widely regarded as the world's most renowned management consulting firm. Descriptive knowledge, also called declarative knowledge or propositional knowledge, is a subset of information represented in declarative sentences or indicative propositions by definition. This differentiates specific knowledge from what is usually referred to as know-how or procedural knowledge, as well as knowledge of or acquaintance knowledge.

Product innovation:

Product innovation is the process of developing and introducing a new or better version of an existing product or service. This is a broader definition of innovation than the generally recognized definition, which includes creating new goods that are considered innovative in this context. For example, Apple launched a succession of successful new products and services in 2001?the iPod, the iTunes online music service, and the iPhone?which catapulted the firm to the top of its industry.

Solution provider:

A solution provider consolidates all goods and services in a particular domain into a single point of contact. As a result, the client is supplied with a unique know-how to improve efficiency and performance. As a Solution Provider, a business may avoid revenue loss by broadening the scope of the service it offers, which adds value to the product. Additionally, close client interaction enables a better understanding of the customer's habits and requirements, enhancing goods and services.

Historically, developing a standard touch sales model for business sales required recruiting and training a Salesforce user who was tasked with the responsibility of generating quality leads, arranging face-to-face meetings, giving presentations, and eventually closing transactions. However, the idea of a low-touch sales strategy is not new; it dates all the way back to the 1980s.

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Self-storage Business Plan: All You Need To Know

What is a self-storage business plan, why do you need a business plan for your self-storage business, components of a self-storage business plan, do you need a professional to write your self-storage business plan, difference between a self-storage business plan and a self-storage business model, challenges of writing a self-storage business plan, self storage business plan examples.

Free Self-storage Business Plan Template

A business plan is necessary if you intend to open a new self-storage facility or develop an existing one. The major things that need to be mentioned in each component of your business plan for a storage facility are discussed below.

A self-storage business plan outlines your growth strategy for the coming five years and gives a full overview of the operation of your self-storage business. It outlines your company's objectives and your plan for achieving them. Market research is also included to help you with your ideas.

You need a business plan if you want to launch a self-storage or storage unit company or expand an already successful one.

A business plan will increase your chances of success by assisting you in obtaining capital, if necessary, and planning the expansion of your self-storage company. As your firm develops and evolves, you should regularly update your self-storage business strategy.

Be sure to take into account the operational requirements needed to run this business in addition to the original planning process. Fortunately, self-storage facility investments are usually appealing since operational costs are often inexpensive.

Make sure the following elements are included in your business plan:

Executive Summary

An executive summary is a condensed description of your company. Imagine it as the very first subject you would mention in a discussion about your company. An executive summary for a self-storage enterprise, for instance, would begin as follows:

This business's goal is to build and run a 100-unit complex on a piece of property outside.

Or you can try this:

This business endeavor sorts for and purchases quality self-storage properties in minor markets. To boost revenue within the next two years, the company will remodel and upgrade its facilities with the newest technology.

An executive summary should continue by summarizing and highlighting important sections of your company's plan, such as predicted revenue and total costs.

Business Description

This section should contain our company structure: sole proprietorship, LLC, C- or S-corporation.

You may outline the specifics of how your self-storage company will function here. Include operational information about your company, such as branding, services that you intend to provide, and anticipated costs, in addition to your legal status.

Today, more than ever before, businesses have been equipped with cutting-edge phone systems, user-friendly applications, and online payment options. Although these features aren't always required for success, having a small number of tech-powered solutions will give you an advantage. Think about the adoption of these devices as soon as possible.

Think about your employment strategies, insurance requirements, and upkeep practices, among other things. Besides self-storage rents, take into account other revenue streams like the sale of renter's insurance or moving materials.

Market Research and Strategy

In this section of your business plan, summarize your most important results from the market analysis you previously conducted and explain how they influence your concept for a self-storage business.

Analyze the supply and demand dynamics and demography of your target market. For instance, you may think about providing RV storage if people ask for it. Make a plan for how you'll generate income and acquire new tenants through techniques like billboard marketing, and digital marketing.

The self-storage market has its own dynamics, just like any other industry. You may carry out a self-storage project more successfully if you are aware of these tendencies.

Management and Personnel Structure

The key players in your self-storage industry are discussed in this section. Explain the executive team's background, credentials, and responsibilities as well as any extra staff you may have on hand or may need to employ in order to carry out your strategy.

Financial Reporting Documents

Is your business concept for a self-storage facility financially/commercially sustainable? You can now prove it by outlining the specifics of your financial condition. What are your possessions and obligations? Will you have to pay back your debt?

The predicted cash flow, balance sheet, and profit and loss for your company for the coming two to three years should all be included in this area.

Developing your self-storage business plan all by yourself may not be a smart move. It is too vital to create on your own. Would you appear in court unrepresented by a lawyer? Would you release an app without a software developer?

However, even if it is recommended to collaborate with a professional, you might want to explore working on your initial draft by yourself.

The effort behind the initial draft should come from you and you alone. You may contact a business consultant for guidance on the right approach for your specific business plan or have one edit it later.

A self-storage business’s backbone is its business model, while its structure is its business plan. Therefore, a business model is the basic idea of the company, strategies for generating revenue, as well as an explanation of how it works. The business plan goes into great depth to demonstrate how this concept may operate.

Actually Starting

Be rest assured that we can all relate to how challenging this is. As a first step, it is recommended that you keep your plan to one page.

You may think that this is impossible, but it is not. Though it is not going to be the finished body of work, it serves as a canvas to plot the structure of the potential result of the main self-storage business plan.

It is a visual tool, a means to brainstorm your ideas into something more organized, built on the basic elements of your plan.

Once you've assembled the building blocks, you've already laid the groundwork for a solid business plan. It makes a lot more sense to do this than to isolate yourself in a space and try to produce a 20-page document in one go.

Budgeting and Financing Estimates

Budgeting and financing for self-storage businesses can feel overwhelming, and because the statistics appear more restrictive, the financial aspect of a business plan does seem to stimulate the most concern.

On the other hand, your business plan is meant to assist you with preparing for the future and scaling your business. Also, note that they are estimations, not forecasts, and there are no wrong or right figures. When you approach them in this manner, they become significantly less intimidating.

Make sure that you're systematic about it. One smart way to do it would be to begin from the bottom and work your way back up. You know how much money you want your company to generate, so figure out how much each part of our self-storage products and services should bring in.

Also, find out what your expenditures may possibly be in order to meet that goal. It sounds simple, yet it is so quickly forgotten. Remember, these are YOURyour figures. Don't be compelled to just select a template and fill it out yourself. Begin with the fundamentals and then link the dots.

Knowing Your Demographics

The most difficult challenge for a growing self-storage business is resisting the temptation to let the perceived momentum of their performance be the basis for broadening their opportunities.

Also, you want to be approachable. However, resist the urge to say yes to everyone and everything. Reacting to who you work with and saying yes to everybody rather than going after specific people that you know you want to work with will simply spread the value you provide clients too thinly and dilute what you do best.

It is critical to understand your target audience. You may utilize a categorization tool like 6SenseRevenueAI, which uses a scoring system to meticulously identify distinct tiers of consumers.

Not only does it keep you informed about your present customer base, but it also serves as a superb screening tool to determine whether new client leads are strong or just something put in to expand your net and weaken your value to your important clients.

Making It Interesting

Anything "interesting" is always conveyed with enthusiasm. Imagine you're chatting to a stranger, you've told them about your self-storage company, and they ask you a question—a passionate tale about how you are of service, the kind of people you help, as well as who you might be able to help in the future, should most likely follow.

That's significantly more intriguing than a scripted sales speech peppered with figures and statistics.

Below, we have included various business plan samples for your self-storage company launch to assist you in developing your own business plan:

  • OGS Capital self-storage business plan samples
  • Sample.net self-storage business plan samples (PDF)
  • SampleTemplates self-storage business plan samples (MS word, google docs, PDF.)
  • Examples.com self-storage business plan samples
  • ExpertHub self-storage business plan sample

Below is a self-storage business plan template that outlines the important components of a successful self-storage business plan for your guidance.

Above all, in the marketing/management section of your business plan, you should indicate the need for an authentic self-storage property management system. The PMS should feature a sophisticated client management system, single app control, and a richer experience for all.

Your self-storage facilities can be maintained efficiently and optimized using the Booking Ninjas self-storage property management system , enabling you to better manage your clients. With our one-stop system, you may benefit from remote access, ticketing and POS systems, online customer acquisition, and much more. It is time to improve your storage.

We are glad to share our knowledge by giving this preparation guide and application to assist you in getting started in the profitable self-storage industry.

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Home » General » The Self Storage Business Model Explained

The Self Storage Business Model Explained

Self-storage is one of the most basic of all businesses. When people have extra items that they want to keep, but no room to store them, they’ll look to a commercial solution. A self-storage facility offers locked spaces that can protect personal effects until they are needed, can be sold, or can be used. In many communities, the need for storage units outweighs the amount of units that are available for rent. This means the self-storage business model is operating quite successfully.

There are certain lessons that every organization can learn from using this particular business model. In doing so, a more effective individualized business model can be developed.

1. Scarcity Will Always Be a Driving Factor.

Without scarcity, nothing happens. If someone feels like they can pick up the same product tomorrow that they could pick up today, then they’ll typically procrastinate on the purchase. In the self-storage industry, there is a clear shortage of availability in most communities. This means that when a storage unit becomes available, a customer is going to snatch it up as soon as they possibly can. The same principle works for products and services as well.

2. Market Segmentation Matters.

Self-storage facilities really aren’t useful for those households that are attempting to live on a minimized footprint. They are useful for people who have a large amount of personal possessions which are important to them in some way. Instead of marketing to the first customer segment, self-storage facilities target the second segment because it has the greatest chances for profit. Every business needs to do this with their business model because without segmentation, it is impossible to send out a relationship-building targeted message.

3. Separate Residential and Commercial Customers.

Residential customers have different needs than commercial customers. This is why there is a B2B and a B2C market. Although there are some similarities, the differences are so great that a generic focus can put a business on a course towards bankruptcy. In the self-storage business model, it is estimated that just 5% of the revenues in any given community will come from B2B opportunities. By determining the percentage of B2B and B2C revenues, the right amount of time to market to those consumers can also be developed.

For self-storage, this would mean 95% of the average time spend on marketing would be directed toward residential customers. For other businesses, maybe a 70/30 residential split happens. This would mean 30% of that marketing time should be spent toward commercial customers.

4. You’ve Got to Know What the Market Needs.

In order for a business to show that it has value, there must first be an evaluation into what the targeted customer segments in any given community actually need. If those needs are not being effectively met, then there won’t be a maximized level of profitability.

Knowing needs is just one step in this process. For the self-storage business model, there is an emphasis on simplifying those needs down into their basic components. Think about it: there are two points of emphasis in self-storage – security and extra space. These two basic components have created a stable business model. What are the two basic components of your business and how are they included in your business model?

5. Habits Are Important to Know.

In the last 50 years, the self-storage business model has double its presence every decade. This has happened because the business model looks at the core habits of the targeted customer segments involved. When households are required to be mobile and fast-moving, they are more likely to need a self-storage facility.

Every business can look at the lifestyle habits of their core customers to accomplish the same levels of growth. Just look at McDonald’s for the QSR industry. They are struggling right now, but they grew into a global business because they provided affordable food to people who are in a hurry.

6. Know the Competition.

What makes the self-storage business model rather unique is the fact that there are only a handful of companies that have a nation-wide footprint. Most companies are small businesses that are locally owned in this industry. This makes it critically important to know what the competition is doing.

If a competitor has better features than your business offers, then it is time to upgrade the product. If the competition can sell for a lower price, then it is important to find out way. Customers will gravitate toward the best value combination. By knowing what the competition is doing, it becomes easier to stay competitive.

The lessons learned from the self-storage business model can put any company back onto the right track. Incorporate them today and watch your business take off.

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  • v.23(10); 2020 Oct 23

Business Models and Profitability of Energy Storage

Felix baumgarte.

1 FIM Research Center, University of Bayreuth, Project Group Business & Information Systems Engineering, Fraunhofer FIT, Bayreuth 95444, Germany

Gunther Glenk

2 Business School, University of Mannheim, MIT CEEPR, Massachusetts Institute of Technology, Mannheim 68131, Germany

Alexander Rieger

3 Interdisciplinary Centre for Security, Reliability and Trust, University of Luxembourg, Luxembourg 1855, Luxembourg

Associated Data

Rapid growth of intermittent renewable power generation makes the identification of investment opportunities in energy storage and the establishment of their profitability indispensable. Here we first present a conceptual framework to characterize business models of energy storage and systematically differentiate investment opportunities. We then use the framework to examine which storage technologies can perform the identified business models and review the recent literature regarding the profitability of individual combinations of business models and technologies. Our analysis shows that a set of commercially available technologies can serve all identified business models. We also find that certain combinations appear to have approached a tipping point toward profitability. Yet, this conclusion only holds for combinations examined most recently or stacking several business models. Many technologically feasible combinations have been neglected, indicating a need for further research to provide a detailed and conclusive understanding about the profitability of energy storage.

Graphical Abstract

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Energy Management; Energy Storage; Energy Systems

Introduction

As the reliance on renewable energy sources rises, intermittency and limited dispatchability of wind and solar power generation evolve as crucial challenges in the transition toward sustainable energy systems ( Olauson et al., 2016 ; Davis et al., 2018 ; Ferrara et al., 2019 ). Since electricity storage is widely recognized as a potential buffer to these challenges ( Fares and Webber, 2017 ; Kittner et al., 2017 ; Davies et al., 2019 ), the number of advancements in energy storage technology and the amount of deployed capacity have rapidly grown in recent years ( Schmidt et al., 2017 ; Comello et al., 2018 ; Sutherland, 2019 ; Blanc et al., 2020 ). The profitability of investment opportunities for storage overall, however, has remained ambiguous, partially due to an incomplete identification of such opportunities in modern power systems ( Argyrou et al., 2018 ; Albertus et al., 2020 ) and contradicting conclusions about the profitability of individual opportunities ( Braff et al., 2016 ; Kaschub et al., 2016 ; Fares and Webber, 2017 ; Metz and Saraiva, 2018 ; Comello and Reichelstein, 2019 ).

Numerous recent studies in the energy literature have explored the applicability and economic viability of storage technologies. Many have studied the profitability of specific investment opportunities, such as the use of lithium-ion batteries for residential consumers to increase the utilization of electricity generated by their rooftop solar panels ( Hoppmann et al., 2014 ; Stephan et al., 2016 ; van der Stelt et al., 2018 ). Others have reviewed the range of potential applications of storage technologies, that is, the services that storage facilities can perform in power systems ( Koohi-Kamali et al., 2013 ; Kousksou et al., 2014 ; Palizban and Kauhaniemi, 2016 ). Building upon both strands of work, we propose to characterize business models of energy storage as the combination of an application of storage with the revenue stream earned from the operation and the market role of the investor. Such business models can then be used to systematically differentiate investment opportunities, to assess which storage technologies are capable of serving a business model, and to review the profitability of individual combinations of business models and technologies.

This paper presents a conceptual framework to describe business models of energy storage. Using the framework, we identify 28 distinct business models applicable to modern power systems. We match the identified business models with storage technologies via overlaps in operational requirements of a business model and operational capabilities of a technology. The matching shows that all business models can be served by a set of commercially available technologies. Reviewing the results of previous studies on the profitability of individual matches, we find that they are largely found to be unprofitable. Yet, matches assessed since 2017 or comprising multiple business models served by one storage facility appear to have approached a tipping point toward profitability. Overall, our review reveals many technologically feasible matches that have been neglected so far. Their examination over the coming years will be essential to reach a detailed and conclusive evaluation of the profitability of energy storage. To conclude, we summarize the main research directions recommended in the reviewed literature to foster widespread profitability of storage.

Business Models

We propose to characterize a “business model” for storage by three parameters: the application of a storage facility, the market role of a potential investor, and the revenue stream obtained from its operation ( Massa et al., 2017 ). An application represents the activity that an energy storage facility would perform to address a particular need for storing electricity over time in modern power systems. A market role of potential investors refers to their assumed position in the electricity value chain. The revenue stream describes the type of income a storage facility can generate from its operation.

Table 1 provides a list and description of eight distinct applications derived from previous reviews on potential applications for energy storage ( Castillo and Gayme, 2014 ; Kousksou et al., 2014 ; Palizban and Kauhaniemi, 2016 ). In the first three applications (i.e., provide frequency containment, short-/long-term frequency restoration, and voltage control), a storage facility would provide either power supply or power demand for certain periods of time to support the stable operation of the power grid. The following two applications in Table 1 (i.e., provide black start energy and backup energy) would support the availability of electricity at all times through the provision of power supply during blackouts either to reboot grid operations or to bridge the power outage for an electricity consumer. These five applications are frequently referred to as applications for ancillary services ( Fuchs et al., 2012 ; Richter, 2013 ).

Applications for Energy Storage

The remaining three applications in Table 1 can be referred to as applications for load shifting as they focus on shifting electricity across time. In application (6) of Table 1 , an energy storage facility would help meeting a committed selling/buying forecast, for instance, by compensating unforeseen changes in a demand or generation profile. In application (7), energy storage would shave supply/demand peaks and, for instance, avoid the expansion of transmission lines by reducing the peak of supply/demand in a particular geographic area. In application (8), the owner of a storage facility would seize the opportunity to exploit differences in power prices by selling electricity when prices are high and buying energy when prices are low.

As for the market role, we differentiate between the four main roles in the electricity value chain: trading, production, transmission and distribution (T&D), and consumption ( Zucker et al., 2013 ). In trading, the investor would buy electricity from producers or the market and sell it to consumers or the market. In production, the investor would generate and sell electricity. In T&D, the investor is responsible for the transportation of electricity and the stable operation of the power grid. We aggregate the roles of a transmission and a distribution grid operator, because they appear compatible for the purpose of our study. Finally, an investor in consumption would purchase and consume electricity. We note that our concept of market roles is not equivalent to common descriptions of individual persons or organizations participating in the electricity market, even though they may coincide. An investor, that is, a person or an organization, can obtain multiple different roles or assume one role several times, for instance, by bundling consumers or producers, similar to how utilities and aggregators operate today. The decision to invest in a storage facility remains specific to each market role. Regulation is also often tied to market roles, potentially prohibiting the pursuit of distinct business models, as we review in the Discussion . T&D operators, for instance, are in many jurisdictions not allowed to provide frequency containment or restoration services.

For revenue streams, we delineate three different types, each comprising a range of distinct revenue streams. With “price arbitrage,” we refer to the utilization of differentials in electricity prices across markets at one time or across time within one market. The former can result from transaction costs, such as taxes and fees, which add to the market price when electricity is purchased rather than sold. For instance, residential consumers are typically paid less for electricity they produce with their solar panels and feed into the grid than they pay for sourcing electricity from the grid. The latter price differential results from fluctuations in electricity prices over time. “Cost avoidance” describes savings in operating costs, such as the ramping of power generation capacity, or penalties for, say, deviations in electricity production. Cost avoidance also includes savings in operating costs for electricity consumers, such as the ramping of a production facility for an industrial consumer or simply the inconvenience of changing behavior for a residential consumer. Finally, “investment deferral” refers to savings resulting from not investing in alternative generation or grid capacity.

Figure 1 depicts 28 distinct business models for energy storage technologies that we identify based on the combination of the three parameters described above. Each business model, represented by a box in Figure 1 , applies storage to solve a particular problem and to generate a distinct revenue stream for a specific market role. We determine the business models to be both mutually exclusive and collectively exhaustive. The former means that the business models are distinct from each other. The latter describes that we seek to record all observable and conceivable business models for a modern power system, recognizing that the identified set may change in the future.

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Business Models for Energy Storage

Rows display market roles, columns reflect types of revenue streams, and boxes specify the business model around an application.

Each of the three parameters is useful to systematically differentiate investment opportunities for energy storage in terms of applicable business models. The application as the central element defines what a storage facility would do in a business model. The application parameter is especially relevant if separate business models exhibit the same market role and the same revenue stream, such as for the business models we named (in bold letters in Figure 1 ) Frequency containment, Short-term frequency restoration, and Long-term frequency restoration .

Market roles are crucial for business models where the same application applies to several roles and generates the same revenue stream. All three frequency-related applications help the four market roles avoid costs. Market participants in trading, production, or consumption avoid the respective costs of ramping their portfolio, production, or consumption. Operators of a T&D grid would avoid costs of the control/restoration services offered by other market participants, provided they are allowed to do so by regulation. If an investor, that is a person or an organization, wants to provide one or more frequency-related applications simply for the price paid for this service, the investor would effectively pursue the business model Trading arbitrage . As the names suggest, Trading/Consumption arbitrage apply to trading and consumption, where energy storage enables the respective investor to sell at high prices and/or buy at low prices to take advantage of temporal fluctuations in electricity market prices. A version of price arbitrage may intuitively be assumed to also apply to producers, but they would then effectively act as traders and pursue the business model Trading arbitrage .

The business model Voltage control can apply to production, T&D, or consumption ( Akhil et al., 2013 ), where the investment in energy storage would save the investment in a voltage regulator. Need for Backup energy typically arises at either the level of production or the level of consumption, where an energy storage facility would replace a conventional backup generator commonly based on diesel fuel. The meeting of forecasts applies to traders, who are obliged to purchase or sell a forecasted and contracted amount of electricity (i.e., Trading forecast) , as well as to producers, who have to deliver a contracted amount of power (i.e., Production forecast ). Investment in energy storage can enable them to meet the contracted amount of electricity more accurately and avoid penalties charged for deviations.

Revenue streams are decisive to distinguish business models when one application applies to the same market role multiple times. Schedule flexibility and Production forecast both help an investor in production to meet a selling forecast. Yet, the former avoids the cost of ramping the production capacity, whereas the latter avoids penalties charged for deviations from the forecast. Similarly, Consumption arbitrage and Self-sufficiency allow an investor in consumption to buy more electricity during periods of low prices. The former takes advantage of fluctuations in power prices over time, whereas the latter exploits that selling prices for electricity generated with own renewable sources are at times below the buying prices for electricity sourced from the grid.

Market roles and revenue streams may also jointly differentiate business models. Black start energy can be pursued by an investor in production, who seeks to defer the investment in a black start generator with an investment in energy storage. Alternatively, the business model can be pursued by an investor in T&D, who seeks to avoid or lower costs of sourcing black start services through a competitive tender if market regulation permits ( Denholm et al., 2010 ). The business model Peak shaving can be pursued by an investor in production, T&D, or consumption. For the former two energy storage can defer the investment in production or transmission capacity, whereas for the latter storage lowers charges by utilities for periodical demand peaks.

The literature on energy storage frequently includes “renewable integration” or “generation firming” as applications for storage ( Eyer and Corey, 2010 ; Zafirakis et al., 2013 ; Pellow et al., 2020 ). Yet, for storage combined with a dispatchable power generator, such as a gas turbine, the terms describe Schedule flexibility to avoid the cost of ramping the generator up and down. For storage combined with renewables, the terms may describe the meeting of Production forecasts to avoid penalties for underproduction. Alternatively, the terms may describe Trading arbitrage if storage is installed to take advantage of excess production from wind and solar power sources, which can without storage be shut down at negligible cost. Similarly, the term “long-term storage” is reflected in the business models Trading arbitrage , Black start energy , Backup energy , or Self-sufficiency , depending on the actual implementation of the storage facility.

Investors can pursue multiple business models with a single storage capacity if market regulation permits. Applicable examples for business models that are frequently combined include the combination of Frequency containment with Frequency restoration , the combination of Consumption arbitrage with Self-sufficiency , or the combination of Frequency containment with Trading arbitrage ( Stephan et al., 2016 ; Berrada et al., 2017 ; Yu and Foggo, 2017 ).

Profitability

We now use the preceding framework to systematically review recent studies on energy storage regarding their findings on the profitability of potential investments. Our goal is to give an overview of the profitability of business models for energy storage, showing which business model performed by a certain technology has been examined and identified as rather profitable or unprofitable. We refrain from attempting to compare specific investments, which depend on regionally distinct economic, operational, and regulatory parameters.

Before providing the profitability overview, we first examine whether a technology has the capability to serve a business model. Each business model entails specific operational requirements through its application, but each technology can only operate within distinct ranges. We match the business models identified above to a set of technologies via overlaps in operational parameters that we extracted from technical reports as well as previous reviews and technology-specific articles in peer-reviewed journals ( Schoenung, 2001 ; EPRI, 2003 , 2010 ; Barton and Infield, 2004 ; Eyer et al., 2004 ; McDowall, 2006 ; Sayer et al., 2007 ; Chen et al., 2009 ; Eyer and Corey, 2010 ; Beaudin et al., 2010 ; Connolly, 2010 ; Denholm et al., 2010 ; Akhil et al., 2013 ; Koohi-Kamali et al., 2013 ; Del Rosso and Eckroad, 2014 ; Palizban and Kauhaniemi, 2016 ; Eid et al., 2016 ). We examine the parameters power capacity, discharge duration, and response time. These reflect non-negotiable requirements for business models. Details on the matching and the used parameters are provided in the Supplemental Information .

We focus on a set of common and commercially available technologies for energy storage (see Table S1 for details). These technologies convert electrical energy to various forms of storable energy. For mechanical storage, we focus on flywheels, pumped hydro, and compressed air energy storage (CAES). Thermal storage refers to molten salt technology. Chemical storage technologies include supercapacitors, batteries, and hydrogen. Of the various battery technologies available, we focus on lithium-ion batteries, which have recently exhibited the most rapid cost declines and technological advances ( Schmidt et al., 2017 ).

In comparison, flywheels have a medium power capacity and can respond spontaneously but commonly discharge in less than an hour. Pumped hydro and CAES currently offer the largest power capacity and a sustained discharge duration but require several minutes to respond as well as appropriate geographic formations. Thermal storage responds within minutes and exhibits a medium power capacity with discharge durations of several hours. Supercapacitors can respond instantly but frequently display the smallest power capacity and discharge duration. Batteries show a medium power capacity range and discharge duration and a short response time. Finally, hydrogen storage can have a relatively large power capacity with a long discharge duration but requires several minutes to respond from a cold start (see Tables S2 and S3 for details).

To depict the quality of a match, we employ a simple traffic light scheme. We consider a match as “green” if the capabilities of a technology overlap with the requirements of a business model in all three characteristics. Alternatively, a match is “yellow” if the parameters overlap in only two characteristics and “red” if they overlap in one or none. This simple scheme only provides a snapshot of the current development but is helpful to quickly grasp the quality of a match.

Figure 2 shows for each technology in the first column the result of this matching. We find that every business model can be served (i.e., green match) by at least one of the commercially available storage technologies and that most business models can even rely on multiple technologies. The matching confirms the widespread preference of batteries and hydrogen in the sense that these technologies can serve almost all business models. Yet, the matching also highlights many green matches for other technologies, such as flywheels and thermal storage. CAES is green for only a few matches, such as Self-sufficiency and Consumption arbitrage , noting that the market role also includes large industrial consumers. Pumped hydro is often either too slow to respond (e.g., for frequency containment and short-term restoration) or too large in its minimal power capacity (e.g., for consumption). Supercapacitors often fall below the required power capacity and discharge duration. The matching assumes that business models in Figure 2 , which entail the same application, have the same range of operational requirements.

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Technology Match and Profitability of Business Models for Energy Storage

The first column (∞) indicates the matching of business models with storage technologies, the second column ($) the profitability, and the third column (#) the number of studies that examine the profitability of a match.

For economic opportunities, we aim at extracting a similar map. Our review is based on 143 profitability estimates for individual business model and technology combinations. The estimates result from a systematic literature review of articles in peer-reviewed journals from 2013 to 2019 with selected keywords. Since our objective is to identify general opportunities for storage rather than evaluating distinct investment cases, we aggregate estimates across valuation methodologies and geographical parameters. To ensure quality, applicability, and comparability, we narrowed down the set of 489 articles initially retrieved from the review to 47 focus papers with several criteria, including the ranking of the journal, the rigor of the analysis, as well as the comparability of the research setting (see the Supplemental Information for details).

We again use the traffic light scheme to illustrate profitability estimates of each match. We consider a match as green if the share of estimates that finds the match to be profitable is above 75%. Similarly, a match is yellow if the share of profitable estimates is between 50% and 75% and red if the share is below 50%. In addition, we label a match as “gray” if our review returned no estimate for the match. More optimistic color thresholds would not change the overall conclusion. A figure with numerical results is provided in Figure S1 in the Supplemental Information . For a sense of confidence in our findings, we also report the number of profitability estimates for the respective finding. Across all matches, the number of estimates also indicates the distribution of research effort.

Figure 2 shows the result of the profitability review in the second and third column of each technology. The main finding is that examined business models for energy storage given in the set of technologies are largely found to be unprofitable or ambiguous. Our finding is corroborated by both the distribution of profitability labels in Figure 2 (31 red, 8 yellow, and 18 green) and the average number of estimates per profitability label (2.7 for red, 4.9 for yellow, and 1.2 for green). This conclusion applies in particular to batteries (13 of 17 examined business models are red), which opposes the image of a promising complement to intermittent renewable power sources. The technology with the highest number of green profitability labels (i.e., 8) is pumped hydro. New installations of pumped hydro, however, are often limited by either the availability of caverns and mountains or public resistance to environmental changes.

Figure 2 also delineates that research on the profitability of energy storage is distributed unevenly across technologies, business models, and matches. The by far most examined technologies are batteries (68 profitability estimates), CAES (37), and pumped hydro (26). The most prominent business models are frequency containment (44 profitability estimates for Frequency containment and Short- and Long-term frequency restoration combined), Trading arbitrage (36), and Self-sufficiency (22). The most examined matches also result from this pool and comprise batteries for Self-sufficiency (20 profitability estimates), and pumped hydro and CAES for Trading arbitrage (9 and 12 estimates). This distribution unveils a considerable potential for future research (71 of 139 gray labels have a green label for the technology match), in particular, for flywheels used for ancillary services and thermal and hydrogen storage in general.

Although academic analysis finds that business models for energy storage are largely unprofitable, annual deployment of storage capacity is globally on the rise ( IEA, 2020 ). One reason may be generous subsidy support and non-financial drivers like a first-mover advantage ( Wood Mackenzie, 2019 ). Another reason may be the time lag between the publication of academic articles and the market development. Some storage technologies have exhibited a substantial cost decline in recent years ( Kittner et al., 2017 ; Schmidt et al., 2017 ; Glenk and Reichelstein, 2019 ). The cost of battery cells, for instance, decreased from above US$1,100/kWh in 2010 to less than US$156/kWh in 2019 ( BNEF, 2019 ). Repeating our review with papers from 2017 to 2019 only, we find the conclusion to improve markedly, as shown in Figure S2 in the Supplemental Information . Of the 19 examined business models 14 are now green. Batteries contribute 6 green business models, of which 5 have flipped from red to green in comparison with Figure 2 . These green business models include Trading arbitrage, Production forecast, as well as Frequency containment/restoration on a trading and T&D level . The residual green matches comprise pumped hydro and CAES for Trading Arbitrage, Self-sufficiency, and Consumption arbitrage , as well as pumped hydro for Short-term restoration and Peak shaving for the production level. Most of the green labels, however, rely on only few studies.

A third reason may be the stacking of business models. Stacking describes the simultaneous serving of two or more business models with the same storage unit ( Schmidt et al., 2017 ). This can allow a storage facility to both diversify its revenue streams and to increase its utilization by bridging idle time in one business model with operation in another. To assess the effect of stacking on profitability, we reviewed the focus papers again and collected the profitability estimates of matches with stacked business models. Figure 3 shows that the stacking of two business models can already improve profitability considerably. Of 39 stacks analyzed in the literature, 23 profitability labels are green, 8 are yellow, and 8 are red. The most frequent stacks are combinations of consumption business models, such as Self-sufficiency with Consumption peak shaving , combinations of frequency containment/restoration business models with Trading arbitrage , or aggregations of multiple frequency containment/restoration business models. The most examined technologies are again CAES (27 profitability estimates), batteries (25), and pumped hydro (10).

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Technology Match and Profitability of Stacked Business Models

Recent deployments of storage capacity confirm the trend for improved investment conditions ( U.S. Department of Energy, 2020 ). For instance, the Imperial Irrigation District in El Centro, California, installed 30 MW of battery storage for Frequency containment , Schedule flexibility , and Black start energy in 2017. The Deepwater Wind in Montauk, New York, built 15 MW of battery storage for Production forecast in 2018. The Hornsdale Power Reserve in Jamestown, South Australia, has been using grid-scale battery storage with a capacity of 100 MW for Frequency containment and Peak shaving since 2017. Nant de Drance in Martigny, Switzerland, is constructing 900 MW of pumped hydro storage for Peak shaving and Production forecast with a planned start of operations in 2021. A study by RWTH Aaachen has reported more than 120,000 residential PV battery systems in Germany by the end of 2018 with a cumulative capacity of 400 MW used for Self-sufficiency and Consumption arbitrage . Finally, the HyBalance project located in Hobro, Denmark, installed 2 MW of hydrogen storage for Frequency restoration and Peak shaving in 2017.

Although electricity storage technologies could provide useful flexibility to modern power systems with substantial shares of power generation from intermittent renewables, investment opportunities and their profitability have remained ambiguous. Here we first present a conceptual framework to characterize business models of energy storage and, thereby, systematically differentiate investment opportunities. Our framework identifies 28 distinct business models based on the integrated assessment of an application for storage with the market role of the potential investor and the achievable revenue stream from the storage operation. We then use our framework to match storage technologies with the identified business models and to review findings of previous studies on the profitability of individual matches. Our review shows that a set of commercially available technologies is sufficient to perform all identified business models. We also find that matches appear to have approached a tipping point toward profitability. Yet, this conclusion only holds for matches that either have been examined since 2017 or entail multiple business models. Overall, many feasible matches have been ignored, indicating research gaps that need to be filled for a detailed and conclusive understanding of the profitability of energy storage.

Widespread profitability of storage will also require continued work on incremental improvements in both technological and regulatory parameters of storage. Our focus papers highlight, in particular, the need for a reduction of the overall costs of storage technologies and the removal of revenue barriers in a business model. Since the overall costs of storage installations are largely upfront investment, continued declines in the acquisition cost of storage technology are of paramount importance ( Madlener and Latz, 2013 ; Dufo-López and Bernal-Agustín, 2015 ; de Sisternes et al., 2016 ; Kaschub et al., 2016 ; Yu and Foggo, 2017 ; Hartmann et al., 2018 ). Reductions may primarily come from technological advancements, such as the use of cheaper materials, improved component architectures, or economies of scale in manufacturing ( Comello and Reichelstein, 2019 ). An improved round-trip efficiency, cycle capacity, and lifetime can further reduce the overall costs ( Madlener and Latz, 2013 ; Dufo-López and Bernal-Agustín, 2015 ; Lai and McCulloch, 2017 ; Yu and Foggo, 2017 ; Chazarra et al., 2018 ). These characteristics increase the degree of utilization and reduce the amount of costly capacity required for a storage project.

Revenue gains can result from the creation of innovative support schemes and the removal of regulatory barriers. Such support schemes could ensure effectiveness by using our conceptual framework and its parameters. With the market role as one crucial parameter, multiple vested interests could be addressed. One example of how this could be achieved is the public tender for the later Hornsdale Power Reserve. The tender combined interests of the T&D operator by including a certain capacity that was to be contracted to save investments in capacity expansion and interests of an investor by embracing a trading role to use the remaining capacity for exploitation of volatility of market prices ( Australian Energy Market Operator, 2018 ). The revenue stream parameter allows one to differentiate the type of support mechanisms. Where a profitable application of energy storage requires saving of costs or deferral of investments, direct mechanisms, such as subsidies and rebates, will be effective. For applications dependent on price arbitrage, the existence and access to variable market prices are essential.

Prominent regulatory barriers include limited market access for energy storage ( Castagneto Gissey, Dodds and Radcliffe, 2018 ), bans on stacking business models ( Stephan et al., 2016 ), and regulatory markups on electricity prices ( Reuter et al., 2012 ; Mulder et al., 2013 ; Bradbury et al., 2014 ; Khalilpour and Vassallo, 2016 ; Shafiee et al., 2016 ; Berrada et al., 2017 ; Lin and Wu, 2017 ). The recent FERC Order 841 in the Unites States, for instance, reflects one of the first regulatory changes that entitle storage solutions to participate in wholesale power markets, which they are able to serve from a technical point of view ( FERC, 2018 ). The order opens wholesale markets to smaller actors, compelling system operators to modify access requirements where possible and to include energy storage, for instance, through a smaller minimum capacity size.

Another area for policy reform is the stacking of business models, which is still banned in many jurisdictions ( Stephan et al., 2016 ). The California Public Utilities Commission (CPUC) took a first step and published a framework of eleven rules prescribing when energy storage is allowed to provide multiple services. The framework delineates which combinations are permitted and how business models should be prioritized ( American Public Power Association, 2018 ). Bolder approaches could include the design of special electricity tariffs for investors in a consumer role that unlock the ability of energy storage to mitigate unexpected demand peaks ( Peak Shaving ) and balance conventional demand patterns ( Consumption Arbitrage ) ( Fridgen et al., 2018 ).

Moreover, regulators could revisit markups on wholesale electricity prices, such as taxes and fees, that may impede storage investments through the curtailment of available revenue streams in a jurisdiction. For instance, before the modification of the Renewable Energy Act in 2017, storage facilities in Germany were considered as final consumers and, consequently, paid all regulatory price markups for the electricity used for charging ( EEG, 2017 ; Glenk and Reichelstein, 2020 ).

Limitations of the Study

The identified business models are a snapshot of present economic opportunities in the energy sector and could change over the years coming. Especially with regard to future changes within modern power systems, the identified business models may no longer be mutually exclusive and collectively exhaustive. Moreover, we reviewed only a representative sample of the available literature to extract the profitability of business models applicable to modern power systems. Thus, some matches may not have received a profitability validation that reflects their present profitability. We hope, nevertheless, that our approach may be a foundation for future economic analyses and fosters comparability for future findings about economic opportunities of energy storage.

All methods can be found in the accompanying Transparent Methods supplemental file .

Acknowledgments

We gratefully acknowledge financial support through the Deutsche Forschungsgemeinschaft (DFG, German Research Foundation)—Project-ID 403041268—TRR 266. This research was also supported by the Joachim Herz Stiftung and the Hanns-Seidel-Stiftung with funds from the Federal Ministry of Education and Research of Germany. Helpful comments were provided by Stefanie Burgahn, Céleste Chevalier, Stefan Reichelstein, Christian Stoll, and two anonymous reviewers. We also thank Henri Humpert for substantial assistance with the data collection and the initial review.

Author Contributions

The authors jointly developed the business model framework. F.B. and A.R. led the literature review and data collection. G.G. proposed the research question and led the empirical analysis. All authors contributed substantially to the writing of the paper.

Declaration of Interests

The authors declare no competing interests.

Supplemental Information can be found online at https://doi.org/10.1016/j.isci.2020.101554 .

Supplemental Information

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What is Cloud Storage?

Cloud Storage is a mode of computer data storage in which digital data is stored on servers in off-site locations. The servers are maintained by a third-party provider who is responsible for hosting, managing, and securing data stored on its infrastructure. The provider ensures that data on its servers is always accessible via public or private internet connections.

Cloud Storage enables organizations to store, access, and maintain data so that they do not need to own and operate their own data centers, moving expenses from a capital expenditure model to operational. Cloud Storage is scalable, allowing organizations to expand or reduce their data footprint depending on need. 

Google Cloud provides a variety of scalable options for organizations to store their data in the cloud. Learn more about Cloud Storage at Google Cloud .

image for cloud storage

How does Cloud Storage work?

Cloud Storage uses remote servers to save data, such as files, business data, videos, or images. Users upload data to servers via an internet connection, where it is saved on a virtual machine on a physical server. To maintain availability and provide redundancy, cloud providers will often spread data to multiple virtual machines in data centers located across the world. If storage needs increase, the cloud provider will spin up more virtual machines to handle the load. Users can access data in Cloud Storage through an internet connection and software such as web portal, browser, or mobile app via an application programming interface (API).

Cloud Storage is available in four different models:

Public Cloud Storage is a model where an organization stores data in a service provider’s data centers that are also utilized by other companies. Data in public Cloud Storage is spread across multiple regions and is often offered on a subscription or pay-as-you-go basis. Public Cloud Storage is considered to be “elastic” which means that the data stored can be scaled up or down depending on the needs of the organization. Public cloud providers typically make data available from any device such as a smartphone or web portal.

Private Cloud Storage is a model where an organization utilizes its own servers and data centers to store data within their own network. Alternatively, organizations can deal with cloud service providers to provide dedicated servers and private connections that are not shared by any other organization. Private clouds are typically utilized by organizations that require more control over their data and have stringent compliance and security requirements.

A hybrid cloud model is a mix of private and public cloud storage models. A hybrid cloud storage model allows organizations to decide which data it wants to store in which cloud. Sensitive data and data that must meet strict compliance requirements may be stored in a private cloud while less sensitive data is stored in the public cloud. A hybrid cloud storage model typically has a layer of orchestration to integrate between the two clouds. A hybrid cloud offers flexibility and allows organizations to still scale up with the public cloud if need arises. 

A multicloud storage model is when an organization sets up more than one cloud model from more than one cloud service provider (public or private). Organizations might choose a multicloud model if one cloud vendor offers certain proprietary apps, an organization requires data to be stored in a specific country, various teams are trained on different clouds, or the organization needs to serve different requirements that are not stated in the servicers’ Service Level Agreements. A multicloud model offers organizations flexibility and redundancy.

Advantages of Cloud Storage

Total cost of ownership.

Cloud Storage enables organizations to move from a capital expenditure to an operational expenditure model, allowing them to adjust budgets and resources quickly.

Cloud Storage is elastic and scalable, meaning that it can be scaled up (more storage added) or down (less storage needed) depending on the organization’s needs. 

Flexibility

Cloud Storage offers organizations flexibility on how to store and access data, deploy and budget resources, and architect their IT infrastructure.  

Most cloud providers offer robust security, including physical security at data centers and cutting edge security at the software and application levels. The best cloud providers offer zero trust architecture , identity and access management , and encryption .

Sustainability

One of the greatest costs when operating on-premises data centers is the overhead of energy consumption. The best cloud providers operate on sustainable energy through renewable resources.

Redundancy (replicating data on multiple servers in different locations) is an inherent trait in public clouds, allowing organizations to recover from disasters while maintaining business continuity.

Disadvantages of Cloud Storage

Certain industries such as finance and healthcare have stringent requirements about how data is stored and accessed. Some public cloud providers offer tools to maintain compliance with applicable rules and regulations.

Traffic to and from the cloud can be delayed because of network traffic congestion or slow internet connections.

Storing data in public clouds relinquishes some control over access and management of that data, entrusting that the cloud service provider will always be able to make that data available and maintain its systems and security.

While public cloud providers aim to ensure continuous availability, outages sometimes do occur, making stored data unavailable. 

How to use Cloud Storage

Cloud Storage provides several use cases that can benefit individuals and organizations. Whether a person is storing their family budget on a spreadsheet, or a massive organization is saving years of financial data in a highly secure database, Cloud Storage can be used for saving digital data of all kinds for as long as needed.

Data backup is one of the simplest and most prominent uses of Cloud Storage. Production data can be separated from backup data, creating a gap between the two that protects organizations in the case of a cyber threat such as ransomware. Data backup through Cloud Storage can be as simple as saving files to a digital folder such as Google Drive or using block storage to maintain gigabytes or more of important business data.

The ability to archive old data has become an important aspect of Cloud Storage, as organizations move to digitize decades of old records, as well as hold on to records for governance and compliance purposes. Google Cloud offers several tiers of storage for archiving data, including coldline storage and archival storage , that can be accessed whenever an organization needs them.

Disaster recovery

A disaster—natural or otherwise— that wipes out a data center or old physical records needs not be the business-crippling event that it was in the past. Cloud Storage allows for disaster recovery so that organizations can continue with their business, even when times are tough.

Data processing

As Cloud Storage makes digital data immediately available, data becomes much more useful on an ongoing basis. Data processing, such as analyzing data for business intelligence or applying machine learning and artificial intelligence to large datasets, is possible because of Cloud Storage.

Content delivery

With the ability to save copies of media data, such as large audio and video files, on servers dispersed across the globe, media and entertainment companies can serve their audience low-latency, always available content from wherever they reside.

Types of Cloud Storage

Cloud Storage comes in three different types: object , file , and block .

Object storage is a data storage architecture for large stores of unstructured data. It designates each piece of data as an object, keeps it in a separate storehouse, and bundles it with metadata and a unique identifier for easy access and retrieval.

File storage organizes data in a hierarchical format of files and folders. File storage is common in personal computing where data is saved as files and those files are organized in folders. File storage makes it easy to locate and retrieve individual data items when they are needed. File storage is most often used in directories and data repositories.

Block storage breaks data into blocks, each with an unique identifier, and then stores those blocks as separate pieces on the server. The cloud network stores those blocks wherever it is most efficient for the system. Block storage is best used for large volumes of data that require low latency such as workloads that require high performance or databases.

Related products and services

Google Cloud offers a variety of products and services to help organizations make the most of cloud storage. 

By using Google Cloud, organizations are using the most sustainable cloud in the business, with the most robust artificial intelligence and machine learning solutions. 

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Introducing the Business Storage Model

The Business Storage model gives a business control over assets their employees create, by assigning them cloud storage that is specifically owned by the business. Business Storage enables all kinds of new features for controlled sharing and collaboration. The new model provides significant business value, allowing companies to exert control over cloud data, mitigate IP risks, and reclaim assets when an employee leaves the company.​

To achieve this, we created a new user account model that separates  authentication  from  authorization .

  • Authentication  proves that you are who you say you are. When you log in with a username and password, you are authenticating.
  • Authorization  proves that you have the right to use the product or service you are trying to access. After authentication, the system checks a user's entitlement profile to determine whether that user is authorized.

An admin delegates access to a specific offering by adding users and groups to a product profile. Those users are authorized to use that product.

Previously, all authorization details for a user (including access to cloud storage) were kept with the user's authentication account. In the new model, the user's authentication information is kept in the user's account as before, but for business users, authorizations are kept in a separate  business  profile. This profile-only account associates an authentication account with an entitlement profile for a specific organization. For more details, see  Understanding Profiles .

About Authentication Accounts

Authentication accounts associate an email address with login credentials (usually a password) that are stored at Adobe. They contain user-specific information such as the user's name and group memberships.

Anyone can have a personal  Adobe ID  account, whether or not they use it for business. The username is an email address in any unclaimed or public domain, and the credentials are controlled by the user, at  account.adobe.com .

In the previous model, when Adobe teams and enterprise customers added  Adobe ID  users to their directories, entitlements delegated by the business were added directly to a profile in the user's account. In the new model, the business entitlements need to be kept separate, so that assets can be stored properly in the business-owned cloud storage.

When you are updated to the new model, existing Adobe ID users are moved to Enterprise storage, and their business authorizations are moved into the new account. They still own their Adobe ID account, and authenticate with their Adobe ID credentials.

Managed authentication accounts for enterprises

Enterprise customers can manage their users' authentication credentials using one of Adobe's  Managed account  types:

  • Enterprise ID : If your organization has a claimed or trusted domain, you can use that domain to give users an Enterprise ID. These users will sign in using their organization email in your claimed domain.  
  • Federated ID:  If your organization has also set up and integrated SSO with the Admin Console, your users can sign in using single sign-on with an email in a federated domain.   

In Enterprise storage model, each of these managed ID users also has a  Business  account, which links their User Profile with their managed authentication account. 

When you add managed users to a Console that has been updated, the system automatically assigns the correct type of authentication account (Enterprise or Federated) based on the user email domain--regardless of any Identity Type value you specify in a CSV file or UMAPI call.

Choosing Adobe Profiles

Cloud storage authorization can come from different sources. A user can have personal access; in fact, all Adobe IDs come with some personal cloud storage, and storage can be part of  products and services that individuals purchase on their own. A business user can have authorization for both personal and business storage, and can even have authorization for business storage from different organizations.

In the previous model, there was no way to distinguish assets created with different authorization sources. Separating authentication accounts from authorization information allows the sign-in process to identify which profile is in use, and therefore whose cloud storage is used for work done in a particular session.

In the new model, all users still authenticate using their personal or managed credentials. If they potentially have multiple sources of authorization, they might also have to choose an entitlement profile for the specific organization they are working for at the time.

Multiple authorization sources

A user can have profiles in more than one organization, just as they can have authentication accounts in more than one organization. This means they might have more than one source of authorization for business storage. If so, they can choose the appropriate entitlement profile as part of the login workflow. 

If an employee uses  Adobe ID  credentials to authenticate, they have a mix of personal and business authorizations. To make sure the business owns assets their employees create with the business license, the update process creates profile-only accounts for these users. 

  • As part of the update process, all assets that were previously associated with the personal account might be moved into business storage. To prepare for update, a user might have to download any personal assets and store them locally.
  • The user will still use the Adobe ID credentials to authenticate, but they will then have to choose either their Personal Profile or the Organization Profile to complete the sign-in process.

Multiple authentication accounts

An email address in a federated domain (such as  adobe.com ) can be used for both an Adobe ID and a Federated ID in the same organization. When this happens, the user sees an  account picker  to choose which account to sign in with. Once they have chosen the account, they could see the  profile picker  to choose from profiles associated with that account.

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Hydrogen Storage Business Model: market engagement on the first allocation round

We are analysing your feedback.

Visit this page again soon to download the outcome to this public feedback.

We're seeking feedback on our proposals for the first Hydrogen Storage Business Model allocation round.

This consultation ran from 7am on 14 December 2023 to 11:59pm on 1 February 2024

Consultation description

As set out in our August 2023 minded to position , this Market Engagement document provides an update on the Hydrogen Storage Business Model ( HSBM ).

It outlines work to date, specifically on our proposed timings and process for the first HSBM allocation round, including:  

  • eligibility and assessment criteria
  • coordinated allocation between the HSBM and the Hydrogen Transport Business Model ( HTBM )
  • development funding for the first allocation round

The purpose of the Market Engagement document is to:

  • provide industry with an insight into our current thinking on the first HSBM allocation round
  • reassure projects developing hydrogen storage infrastructure that the HSBM design is progressing
  • give projects seeking support in the first allocation round an early sight of when they need to be ready to apply, and what evidence they may need to provide
  • seek your feedback

Read our consultation privacy notice .

Related documents:

  • Hydrogen transport and storage networks pathway
  • Hydrogen transport business model: market engagement on the first Allocation Round

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Hydrogen Storage Business Model: market engagement on the first Allocation Round

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Google’s Gemini is now in everything. Here’s how you can try it out.

Gmail, Docs, and more will now come with Gemini baked in. But Europeans will have to wait before they can download the app.

  • Will Douglas Heaven archive page

In the biggest mass-market AI launch yet, Google is rolling out Gemini , its family of large language models, across almost all its products, from Android to the iOS Google app to Gmail to Docs and more. You can also now get your hands on Gemini Ultra, the most powerful version of the model, for the first time.  

With this launch, Google is sunsetting Bard , the company's answer to ChatGPT. Bard, which has been powered by a version of Gemini since December, will now be known as Gemini too.  

ChatGPT , released by Microsoft-backed OpenAI just 14 months ago, changed people’s expectations of what computers could do. Google, which has been racing to catch up ever since, unveiled its Gemini family of models in December. They are multimodal large language models that can interact with you via voice, image, and text. Google claimed that its own benchmarking showed that Gemini could outperform OpenAI's multimodal model, GPT-4, on a range of standard tests. But the margins were slim. 

By baking Gemini into its ubiquitous products, Google is hoping to make up lost ground. “Every launch is big, but this one is the biggest yet,” Sissie Hsiao, Google vice president and general manager of Google Assistant and Bard (now Gemini), said in a press conference yesterday. “We think this is one of the most profound ways that we’re going to advance our company’s mission.”

But some will have to wait longer than others to play with Google’s new toys. The company has announced rollouts in the US and East Asia but said nothing about when the Android and iOS apps will come to the UK or the rest of Europe. This may be because the company is waiting for the EU’s new AI Act to be set in stone, says Dragoș Tudorache, a Romanian politician and member of the European Parliament, who was a key negotiator on the law.

“We’re working with local regulators to make sure that we’re abiding by local regime requirements before we can expand,” Hsiao said. “Rest assured, we are absolutely working on it and I hope we’ll be able to announce expansion very, very soon.”

How can you get it? Gemini Pro, Google’s middle-tier model that has been available via Bard since December, will continue to be available for free on the web at gemini.google.com (rather than bard.google.com). But now there is a mobile app as well.

If you have an Android device, you can either download the Gemini app or opt in to an upgrade in Google Assistant. This will let you call up Gemini in the same way that you use Google Assistant: by pressing the power button, swiping from the corner of the screen, or saying “Hey, Google!” iOS users can download the Google app, which will now include Gemini.

Gemini will pop up as an overlay on your screen, where you can ask it questions or give it instructions about whatever’s on your phone at the time, such as summarizing an article or generating a caption for a photo.  

Finally, Google is launching a paid-for service called Gemini Advanced. This comes bundled in a subscription costing $19.99 a month that the company is calling the Google One Premium AI Plan. It combines the perks of the existing Google One Premium Plan, such as 2TB of extra storage, with access to Google's most powerful model, Gemini Ultra, for the first time. This will compete with OpenAI’s paid-for service, ChatGPT Plus, which buys you access to the more powerful GPT-4 (rather than the default GPT-3.5) for $20 a month.

At some point soon (Google didn't say exactly when) this subscription will also unlock Gemini across Google’s Workspace apps like Docs, Sheets, and Slides, where it works as a smart assistant similar to the GPT-4-powered Copilot that Microsoft is trialing in Office 365.

When can you get it? The free Gemini app (powered by Gemini Pro) is available from today in English in the US. Starting next week, you’ll be able to access it across the Asia Pacific region in English and in Japanese and Korean. But there is no word on when the app will come to the UK, countries in the EU, or Switzerland.

Gemini Advanced (the paid-for service that gives access to Gemini Ultra) is available in English in more than 150 countries, including the UK and EU (but not France). Google says it is analyzing local requirements and fine-tuning Gemini for cultural nuance in different countries. But the company promises that more languages and regions are coming.

What can you do with it? Google says it has developed its Gemini products with the help of more than 100 testers and power users. At the press conference yesterday, Google execs outlined a handful of use cases, such as getting Gemini to help write a cover letter for a job application. “This can help you come across as more professional and increase your relevance to recruiters,” said Google’s vice president for product management, Kristina Behr.

Or you could take a picture of your flat tire and ask Gemini how to fix it. A more elaborate example involved Gemini managing a snack rota for the parents of kids on a soccer team. Gemini would come up with a schedule for who should bring snacks and when, help you email other parents, and then field their replies. In future versions, Gemini will be able to draw on data in your Google Drive that could help manage carpooling around game schedules, Behr said.   

But we should expect people to come up with a lot more uses themselves. “I’m really excited to see how people around the world are going to push the envelope on this AI,” Hsaio said.

Is it safe? Google has been working hard to make sure its products are safe to use. But no amount of testing can anticipate all the ways that tech will get used and misused once it is released. In the last few months, Meta saw people use its image-making app to produce pictures of Mickey Mouse with guns and SpongeBob SquarePants flying a jet into two towers. Others used Microsoft’s image-making software to create fake pornographic images of Taylor Swift .

The AI Act aims to mitigate some—but not all—of these problems. For example, it requires the makers of powerful AI like Gemini to build in safeguards, such as watermarking for generated images and steps to avoid reproducing copyrighted material. Google says that all images generated by its products will include its SynthID watermarks. 

Like most companies, Google was knocked onto the back foot when ChatGPT arrived. Microsoft’s partnership with OpenAI has given it a boost over its old rival. But with Gemini, Google has come back strong: this is the slickest packaging of this generation’s tech yet. 

Artificial intelligence

Ai for everything: 10 breakthrough technologies 2024.

Generative AI tools like ChatGPT reached mass adoption in record time, and reset the course of an entire industry.

What’s next for AI in 2024

Our writers look at the four hot trends to watch out for this year

  • Melissa Heikkilä archive page

OpenAI teases an amazing new generative video model called Sora

The firm is sharing Sora with a small group of safety testers but the rest of us will have to wait to learn more.

Deploying high-performance, energy-efficient AI

Investments into downsized infrastructure can help enterprises reap the benefits of AI while mitigating energy consumption, says corporate VP and GM of data center platform engineering and architecture at Intel, Zane Ball.

  • MIT Technology Review Insights archive page

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MarketBeat

7 growth stocks that will prove growth is back in 2024

Posted: February 15, 2024 | Last updated: February 15, 2024

<p><span>If you've been investing for any length of time, you've probably heard a lot of time-honored investment maxims. Things like "time in the market beats timing the market." One that I like to keep in mind is to "skate where the puck is moving."</span> </p> <p><span>There's a reason for that. Investors frequently believe they need special knowledge to be successful at investing. Let's be clear: you do have to put in the work. But the information you need to be a successful investor is not unknowable, even without a background in finance or accounting. </span> </p> <p><span>However, investors can choose from thousands of stocks, ETFs, and mutual funds. And that's just equities. There are also bonds, precious metals, real estate, and – for those so inclined – cryptocurrency to consider. It's impossible to stay on top of every emerging story. </span> </p> <p><span>Sometimes you need a little nudge. </span> </p> <p><span>This special presentation focuses on growth stocks that may be flying under investor's radars. Some of these stocks are already growing – and have room to grow some more. Others haven't participated in the rally but have strong growth potential in 2024 and beyond.</span> </p> <br> <br>

If you've been investing for any length of time, you've probably heard a lot of time-honored investment maxims. Things like "time in the market beats timing the market." One that I like to keep in mind is to "skate where the puck is moving."  

There's a reason for that. Investors frequently believe they need special knowledge to be successful at investing. Let's be clear: you do have to put in the work. But the information you need to be a successful investor is not unknowable, even without a background in finance or accounting.  

However, investors can choose from thousands of stocks, ETFs, and mutual funds. And that's just equities. There are also bonds, precious metals, real estate, and – for those so inclined – cryptocurrency to consider. It's impossible to stay on top of every emerging story.  

Sometimes you need a little nudge.  

This special presentation focuses on growth stocks that may be flying under investor's radars. Some of these stocks are already growing – and have room to grow some more. Others haven't participated in the rally but have strong growth potential in 2024 and beyond.  

<p>The first company on this list is from the fintech sector. But <a href="https://www.marketbeat.com/stocks/NYSE/NU/"><strong>Nu Holdings Ltd. (NYSE: NU)</strong></a> may not be well-known to investors. That's because it's not a U.S. company. However, Nu is the largest fintech bank in North America.  </p> <p>The digital-first bank was founded in 2013 as a way to disrupt the Latin American banking system, which is dominated by a small number of large banks. Among other things, this trapped customers in an ecosystem of high fees for limited services. </p> <p>The company has already signed up five million customers and has a total addressable market that can potentially bring in millions more. Revenue is growing year-over-year, and the bank is solidly profitable. Nu Holdings is also projecting earnings growth of 75% in the next 12 months.  </p> <p>The concern is how much of that growth is priced into a stock up 97% in the last 12 months. The <a href="https://www.marketbeat.com/stocks/NYSE/NU/price-target/">Nu Holdings analyst ratings on MarketBeat</a> show that analysts are beginning to bid NU stock higher, with <a href="https://www.marketbeat.com/stocks/NYSE/UBS/"><strong>UBS Group AG (NYSE: UBS)</strong></a> reiterating its Buy rating with a price target of $11.50.  </p>

#1 - Nu Holdings (NYSE:NU)

The first company on this list is from the fintech sector. But Nu Holdings Ltd. (NYSE: NU) may not be well-known to investors. That's because it's not a U.S. company. However, Nu is the largest fintech bank in North America.  

The digital-first bank was founded in 2013 as a way to disrupt the Latin American banking system, which is dominated by a small number of large banks. Among other things, this trapped customers in an ecosystem of high fees for limited services. 

The company has already signed up five million customers and has a total addressable market that can potentially bring in millions more. Revenue is growing year-over-year, and the bank is solidly profitable. Nu Holdings is also projecting earnings growth of 75% in the next 12 months.  

The concern is how much of that growth is priced into a stock up 97% in the last 12 months. The Nu Holdings analyst ratings on MarketBeat show that analysts are beginning to bid NU stock higher, with UBS Group AG (NYSE: UBS) reiterating its Buy rating with a price target of $11.50.  

<p>Artificial intelligence is driving a super cycle in the chip sector. <a href="https://www.marketbeat.com/stocks/NASDAQ/QUIK/"><strong>QuickLogic Corporation (NASDAQ: QUIK)</strong></a> is a fabless chipmaker. That means the company designs and markets semiconductors and owns its intellectual property. But since it's a fabless company, it doesn't fabricate (i.e., fab) them.  </p> <p>QuickLogic has seen a sharp spike in revenue largely fueled by unprecedented demand for chips to handle AI applications. In its most recent quarter, the company posted positive earnings. And the company is projecting a full year of positive earnings.  </p> <p>QUIK stock up 116% in the last 12 months. So, it's logical to wonder if it can move any higher. And the company is not widely covered by analysts. However, here's something to consider. QuickLogic is mainly known for designing chips for industrial and defense applications. That niche is likely to grow due to demand from aerospace and defense contractors. The company also has a history of beating analysts' expectations.  </p>

#2 - QuickLogic (NASDAQ:QUIK)

Artificial intelligence is driving a super cycle in the chip sector. QuickLogic Corporation (NASDAQ: QUIK) is a fabless chipmaker. That means the company designs and markets semiconductors and owns its intellectual property. But since it's a fabless company, it doesn't fabricate (i.e., fab) them.  

QuickLogic has seen a sharp spike in revenue largely fueled by unprecedented demand for chips to handle AI applications. In its most recent quarter, the company posted positive earnings. And the company is projecting a full year of positive earnings.  

QUIK stock up 116% in the last 12 months. So, it's logical to wonder if it can move any higher. And the company is not widely covered by analysts. However, here's something to consider. QuickLogic is mainly known for designing chips for industrial and defense applications. That niche is likely to grow due to demand from aerospace and defense contractors. The company also has a history of beating analysts' expectations.  

<p>Chinese stocks took a beating in 2023. <a href="https://www.marketbeat.com/stocks/NASDAQ/LI/"><strong>Li Auto Inc. (NASDAQ: LI)</strong></a> was a notable exception. The stock is up 18% in the last 12 months despite being down 25% in the last three months. Li Auto is the leading manufacturer of electric vehicles (EVs) within the People's Republic of China.  </p> <p>However, this appears to be a case of a rose getting buried among the thorns. A lack of demand in the United States has beaten down the EV sector. The same can't be said of China. In the company's third quarter 2023 earnings report, Li Auto reported a <a href="https://www.marketbeat.com/originals/li-auto-smashes-estimates-proving-evs-can-be-profitable/">271% year-over-year increase in revenue</a>. And the bottom line grew at a similar year-over-year pace.  </p> <p>Elon Musk has already sounded the alarm about the <a href="https://www.axios.com/2024/02/14/chinese-ev-electric-vehicles-sold-america">potential dominance of Chinese EV makers</a>. In fact, Li Auto outsold <a href="https://www.marketbeat.com/stocks/NASDAQ/TSLA/"><strong>Tesla Inc. (NASDAQ: TSLA)</strong></a> in October 2023 and now leads China in EV sales.  </p> <p>The <a href="https://www.marketbeat.com/stocks/NASDAQ/LI/price-target/">Li Auto analyst ratings on MarketBeat</a> project a stock price gain of 164% in that same time. That's likely due to the company's expectation that it will increase earnings by more than 83.5% in the next 12 months. </p>

#3 - Li Auto (NASDAQ:LI)

Chinese stocks took a beating in 2023. Li Auto Inc. (NASDAQ: LI) was a notable exception. The stock is up 18% in the last 12 months despite being down 25% in the last three months. Li Auto is the leading manufacturer of electric vehicles (EVs) within the People's Republic of China.  

However, this appears to be a case of a rose getting buried among the thorns. A lack of demand in the United States has beaten down the EV sector. The same can't be said of China. In the company's third quarter 2023 earnings report, Li Auto reported a 271% year-over-year increase in revenue . And the bottom line grew at a similar year-over-year pace.  

Elon Musk has already sounded the alarm about the potential dominance of Chinese EV makers . In fact, Li Auto outsold Tesla Inc. (NASDAQ: TSLA) in October 2023 and now leads China in EV sales.  

The Li Auto analyst ratings on MarketBeat project a stock price gain of 164% in that same time. That's likely due to the company's expectation that it will increase earnings by more than 83.5% in the next 12 months. 

<p>No matter how you feel about <a href="https://www.marketbeat.com/cryptocurrencies/bitcoin/"><strong>Bitcoin (BTC)</strong></a> as an asset class, you must acknowledge that it's been one of the best-performing assets in 2024. <a href="https://www.marketbeat.com/stocks/NASDAQ/RIOT/"><strong>Riot Platforms Inc. (NASDAQ: RIOT)</strong></a> gives you a way to invest in a blockchain future without owning the digital currency.  </p> <p>Here's why. Bitcoin is "mined" via specialized, high-speed computers that compete to solve complex cryptographic problems. Riot operates one of the largest blockchain mining networks in the world. As a result, it has the lowest mining costs, which means it's a very efficient company. That's not the case with many Bitcoin miners. </p> <p>The company's low mining costs will stand out as the next Bitcoin halving occurs in April 2024. This means miners' profits will be cut in half (as Bitcoin nears its maximum supply of 21 million). This will benefit efficient operators like Riot even as RIOT stock is up 161% in the last 12 months.  </p>

#4 - Riot Platforms (NASDAQ:RIOT)

No matter how you feel about Bitcoin (BTC) as an asset class, you must acknowledge that it's been one of the best-performing assets in 2024. Riot Platforms Inc. (NASDAQ: RIOT) gives you a way to invest in a blockchain future without owning the digital currency.  

Here's why. Bitcoin is "mined" via specialized, high-speed computers that compete to solve complex cryptographic problems. Riot operates one of the largest blockchain mining networks in the world. As a result, it has the lowest mining costs, which means it's a very efficient company. That's not the case with many Bitcoin miners. 

The company's low mining costs will stand out as the next Bitcoin halving occurs in April 2024. This means miners' profits will be cut in half (as Bitcoin nears its maximum supply of 21 million). This will benefit efficient operators like Riot even as RIOT stock is up 161% in the last 12 months.  

stock chart graphic

#5 - Enphase Energy (NASDAQ:ENPH)

Solar stocks zigged when they were supposed to zag last year. And if you were an investor in Enphase Energy Inc. (NASDAQ: ENPH) , you know how painful it's been. ENPH stock is down 39.5% in the last 12 months, and that's after a 41% increase in the stock price in the last three months.  

The issue was the company's guidance, which became prescient in its most recent quarter as revenue and earnings fell sharply year-over-year. However, the maker of solar-focused semiconductor-based home energy solutions continues to have a strong long-term story as the United States continues its transition to renewable energy.  

Enphase is forecasting 87% earnings growth in the next 12 months. A reason to believe in that forecast is that the company has the highest margins in the industry. Lower interest rates could also be a potential catalyst. And the E nphase Energy analyst ratings on MarketBeat show a 16% upside for ENPH stock.  

<p>Lithium stocks were expected to be attractive investments in 2023. But as supply outpaced demand on declining EV demand, many of these investments dragged down portfolios. <a href="https://www.marketbeat.com/stocks/NYSE/SQM/"><strong>Sociedad Quimica y Minera de Chile (NYSE: SQM)</strong></a> was no different. SQM stock is down over 55% in the last 12 months.  </p> <p>The Chilean-based company has a diversified portfolio, but about 75% of its revenue comes from lithium. That could hold the stock price down as lithium prices are expected to be down through at least the first half of 2024. </p> <p>However, the opportunity for the company comes in its brine asset, the Salar de Atacama, which has the highest lithium concentration in the world. The company is also taking steps to secure more lithium production in Australia and China. </p> <p>As the lithium supply-demand dynamic flips in its favor, SQM stock is an attractive long-term investment, trading at just 5.4x forward earnings.  </p>

#6 - Sociedad Quimica y Minera de Chile (NYSE:SQM)

Lithium stocks were expected to be attractive investments in 2023. But as supply outpaced demand on declining EV demand, many of these investments dragged down portfolios. Sociedad Quimica y Minera de Chile (NYSE: SQM) was no different. SQM stock is down over 55% in the last 12 months.  

The Chilean-based company has a diversified portfolio, but about 75% of its revenue comes from lithium. That could hold the stock price down as lithium prices are expected to be down through at least the first half of 2024. 

However, the opportunity for the company comes in its brine asset, the Salar de Atacama, which has the highest lithium concentration in the world. The company is also taking steps to secure more lithium production in Australia and China. 

As the lithium supply-demand dynamic flips in its favor, SQM stock is an attractive long-term investment, trading at just 5.4x forward earnings.  

<p><a href="https://www.marketbeat.com/stocks/NYSE/HD/"><strong>Home Depot (NYSE: HD)</strong></a> is one part of a virtual duopoly with <a href="https://www.marketbeat.com/stocks/NYSE/LOW/"><strong>Lowe's Companies Inc. (NYSE: LOW)</strong></a> in the United States. HD stock presents an anomaly for investors. The stock is up 11% in the last 12 months, even though revenue and earnings have fallen year-over-year.  </p> <p>But a closer look at the HD chart shows that much of the growth has come in the last three months. That might suggest that investors are becoming bullish on interest rate cuts that could boost the housing market.  </p> <p>However, with the amount and timing of those rate cuts in question, Home Depot still appears to be a buy because the company has successfully integrated e-commerce and omnichannel services into its business model. That's important because home improvement is a niche market that even <a href="https://www.marketbeat.com/stocks/NASDAQ/AMZN/"><strong>Amazon.com Inc. (NASDAQ: AMZN)</strong></a> has been unable to successfully crack. </p> <p>The <a href="https://www.marketbeat.com/stocks/NYSE/HD/price-target/">Home Depot analyst ratings on MarketBeat</a> show that analysts are moving their price targets for the stock higher, and Home Depot offers a <a href="https://www.marketbeat.com/stocks/NYSE/HD/dividend/">solid dividend</a> that has increased for the last 14 years, has a 2.33% yield and an annual payout of $8.36 per share.   </p>

#7 - Home Depot (NYSE:HD)

Home Depot (NYSE: HD) is one part of a virtual duopoly with Lowe's Companies Inc. (NYSE: LOW) in the United States. HD stock presents an anomaly for investors. The stock is up 11% in the last 12 months, even though revenue and earnings have fallen year-over-year.  

But a closer look at the HD chart shows that much of the growth has come in the last three months. That might suggest that investors are becoming bullish on interest rate cuts that could boost the housing market.  

However, with the amount and timing of those rate cuts in question, Home Depot still appears to be a buy because the company has successfully integrated e-commerce and omnichannel services into its business model. That's important because home improvement is a niche market that even Amazon.com Inc. (NASDAQ: AMZN) has been unable to successfully crack. 

The Home Depot analyst ratings on MarketBeat show that analysts are moving their price targets for the stock higher, and Home Depot offers a solid dividend that has increased for the last 14 years, has a 2.33% yield and an annual payout of $8.36 per share.   

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Tesla announces a new temporary discount on Model Y

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Tesla has announced a new temporary price cut on Model Y in the US – a new strategy for the automaker.

Over the last few months, Tesla has had many price changes in several different markets, but not in the US.

Prices had finally stabilized in Tesla’s home market.

But now the automaker is discounting Model Y, its most popular vehicle, but only temporarily.

Tesla added this new note on its website:

“New Model Y RWD and Long Range AWD prices reduced for deliveries now through February 29. Prices will increase by $1,000 or more on March 1.”

The Model Y RWD now starts at $43,000 and the popular Model Y Dual Motor Long Range starts at $48,000:

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The Model Y is now available for lease starting at just $379 per month and Tesla has reduced the down payment to just $2,500, which is now the cheapest way to get into the best-selling vehicle in the world.

Electrek’s Take

Top comment by tom d.

It's just another price change, which is something that Tesla has done multiple times. The only difference is that this time they're claiming that it is temporary -- a claim that means little, since it doesn't commit them to any particular course of action when March 1 rolls around.

In a way, it isn't much different than the incentives that Hyundai is offering on its EVs until the end of February, when most of us know that when March comes those incentives will most likely be extended until the end of March. And it's the same thing with Tesla -- they'll do whatever they think they need to do to get the sales volume they want

This is one respect in which Tesla is just like any other car company.

Tesla hadn’t changed pricing in the US since late last year and it was a welcomed stability.

In this case, the fact that Tesla is introducing this as a temporary discount that finishes at the end of the month rather than the end of the quarter would point to me that Tesla is more trying to take advantage of the inevitable surge in interest that will come from the Super Bowl.

Even though Tesla itself doesn’t pay for a Super Bowl ad, many other automakers do run ads about electric vehicles, and they always result in a surge of interest in Tesla .

These automakers also run discounts to take advantage of the new eyes on them and now Tesla has its own initiative to counter that.

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Best Lenovo ThinkPad laptops in 2024

We checked out the best Lenovo ThinkPad laptops

The quick list

  • 1. Best overall
  • 2. Best on a budget
  • 3. Best all-rounder
  • 4. Best 2-in-1
  • 6. Best mobile workstation
  • 6. Best portable
  • 7. Best AMD
  • How to choose
  • How we test

The quick list 1. Best overall 2. Best budget 3. Best all-rounder 4. Best 2-in-1 5. Best workstation 6. Best portable 7. Best AMD FAQs How to choose How we test

The best Lenovo ThinkPad laptops offer powerful performance, ergonomic keyboards, and some of the longest battery life you will ever see in a laptop,

With smart designs, rugged durability, and arguably the best keyboards on any laptop, ThinkPads have remained a popular choice for professionals since the IBM days. That the laptops are deployed by military institutions and NASA is proof enough of their reliability. Add in additional enterprise-level security features and that signature red trackpoint in the middle of the keyboard for productive cursor control, and it's not difficult to see why ThinkPads are some of the best business laptops we've ever tested. 

But which is best? Our team of reviewers have gone hands-on with hundreds of the best laptops , comparing specs, benchmarking performances, and assessing build quality and design to find the best Lenovo ThinkPad laptops for powering through every task. 

The Lenovo ThinkPad X1 Carbon Gen 11 is undoubtedly a top business laptop of the modern era, thanks to a compact 14-inch screen, solid 32 GB RAM, a whopping 12 hours and 50 minutes battery life, and a super lightweight build of just 2.48 pounds.   

Read more  

The ThinkPad X13 is tailor-made for those pinching for pennies, and with a sleek 13.3-inch Full HD screen, 256GB SSD, and a weight of less than 3 pounds, there's plenty on offer as well. Its design screams practicality, thanks to a fingerprint sensor, a 180-degree folding hinge, and a webcam cover.   

If you want to go all-out on a one-stop solution, there's none better than the Lenovo ThinkPad X1 Extreme Gen 5. Whether you're a video editor, an architect, an engineer, or want to go about 3D modeling with a minimum of fuss, its 12th Gen Intel i7 processor in tandem with an above-par GeForce RTX 3050 Ti is going to do the job for you.  

The L13 Yoga 2-in-1 laptop is great for working professionals and students who'd like a super portable and compact laptop that doubles up as a tablet with a simple maneuver. Plus, it comes with a rechargeable pen, too, so you can take notes and unleash your creativity on a digital canvas with utmost smoothness.  

The P16 Gen1 is an incredibly powerful machine, capable of ripping through tests and tasks like Machine Learning, AI, and digital content creation. It comes loaded with 32GB RAM and NVIDIA RTX A1000, which is one of the better graphics cards for mobile workstations.   Read more

The X1 Nano lives up to its name, and with a weight of less than 2 pounds, it's the lightest ThinkPad ever. Combined with a compact 13-inch screen, a staggering 18 hours and 37 minutes of battery life, and comfortable pricing, it's surely one of the very best productivity laptops for on-the-go usage.  

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If you’re in the market for battery life and portability and fancy an AMD-powered ThinkPad, the Z13 is, quite frankly, a no-brainer. On a single charge, it contains more juice than the majority of laptops and can easily power your work, multimedia, or casual browsing for more than a couple of days. Read more

What is the best Lenovo ThinkPad laptop in 2024?

Why you can trust TechRadar We spend hours testing every product or service we review, so you can be sure you’re buying the best. Find out more about how we test.

Best Lenovo ThinkPad laptop overall

1. lenovo thinkpad x1 carbon gen 11.

Our expert review:

Specifications

Reasons to buy, reasons to avoid.

The Lenovo ThinkPad X1 Carbon Gen 11 is undoubtedly the best business laptop of the modern era, thanks to a compact 14-inch screen, solid 32 GB RAM, a whopping 12 hours and 50 minutes battery life, and a super lightweight build of just 2.48 pounds. 

While it's marketed as a business laptop, upon trying it first-hand, I found it up-to-mark for other tasks as well, like photo editing, streaming movies, and even some light gaming—although it's nowhere close to what a Legion 5 Pro can give you. 

In addition to being on par in battery efficiency (if not better) and lighter than the Apple MacBook Air and Dell XPS 13, it now boasts the latest 13th Generation Intel processor—a slight yet significant improvement from X1 Carbon Gen 10's 12th Generation Intel processor. 

The 16:10 ratio is, again, a marginal improvement over traditional 16:9 laptops, while the build quality and the intuitiveness of the touchscreen are in line with what you'd expect from a top-of-the-line ThinkPad.

However, there has been one noteworthy downgrade, too. Lenovo has decided to do away with the much-revered 4K screen of the Gen 10 laptop and now offers a 1,920 x 1,200p display, a 2,240 x 1,400 IPS panel, and an OLED screen with a 2,880 x 1,800 resolution. That said, given that 4K on a 14-inch screen is nothing short of overkill, the change is understandable. 

Read our full Lenovo ThinkPad X1 Carbon Gen 11 review  

Best budget Lenovo ThinkPad laptop

2. lenovo thinkpad x13.

The ThinkPad X13 is tailor-made for those pinching for pennies, and with a sleek 13.3-inch Full HD screen, 256GB SSD, and a weight of less than 3 pounds, there's plenty on offer as well. Its design screams practicality, thanks to a fingerprint sensor, a 180-degree folding hinge, and a webcam cover. 

The good news kept coming as the ThinkPad X13 was able to pass multiple military-grade durability tests to prove its ability to withstand the toughest of conditions, including freezing temperatures, high altitudes, and dust storms. This is in line with other ThinkPads, and it’s good to know that build quality isn’t something Lenovo has compromised to reduce price. 

X13's battery life of around 8 hours on moderate usage is acceptable, especially for the price. The best part is that its rapid-charging technology will charge your laptop up to 80% in just an hour—combine this with its super sturdy build, and it's easy to see why it's one of the most travel-friendly laptops out there. 

The screen, as I've mentioned, is more than decent, but what makes it even better is the anti-reflective finish, meaning the laptop is going to pull through nicely for multimedia consumption and productivity work.

Best Lenovo ThinkPad laptop for all-round use

3. lenovo thinkpad x1 extreme gen 5.

If you want to go all-out on a one-stop solution, there's none better than the Lenovo ThinkPad X1 Extreme Gen 5. Whether you're a video editor, an architect, an engineer, or want to go about 3D modeling with a minimum of fuss, its 12th Gen Intel i7 processor in tandem with an above-par GeForce RTX 3050 Ti is going to do the job for you. 

The GPU here also makes it a very capable gaming laptop, and you’ll easily be able to run 1080p games on high settings. 

The 4K touchscreen is mighty impressive, and although there's no OLED screen option (like in the X1 Carbon Gen 11), you won't be left longing for it, as the 16-inch screen is bound to take your breath away. It's everything you want a potential desktop replacement to be—big, exotic, and practical. 

As you'd expect from an out-and-out powerhouse, it's not very lightweight, nor does it lead the way in battery life. That said, at 8 hours and 37 minutes, its battery life is still better than most. For the price, though, it would be fair to expect 10+ hours of battery life. 

Best 2-in-1 Lenovo ThinkPad laptop

4. lenovo thinkpad l13 yoga.

The L13 Yoga 2-in-1 laptop is great for working professionals and students who'd like a super portable and compact laptop that doubles up as a tablet with a simple maneuver. Plus, it comes with a rechargeable pen, too, so you can take notes and unleash your creativity on a digital canvas with utmost smoothness. 

As with any 2-in-1 laptop, the touchscreen is an important element, and a Full HD (1,920 x 1,080) IPS display does not disappoint. Although its Type-C ports don't support Thunderbolt 3, that's passable given that it's a sub-$800 machine. 

The 11th Gen i7 processor isn't class-leading, but with 16GB RAM, it's ideal for coders, especially those programming for mobile devices and for long hours (impressive battery life of over 12 hours—with rapid-charging available), as they will be able to swiftly transform it from a laptop to a tablet.  

Best mobile workstation Lenovo ThinkPad laptop

5. lenovo thinkpad p16 g1.

The P16 Gen1 is an incredibly powerful machine, capable of ripping through tests and tasks like Machine Learning, AI, and digital content creation. It comes loaded with 32GB RAM and NVIDIA RTX A1000, which is one of the better graphics cards for mobile workstations. 

Besides being one of the top choices for photo editing and video editing, thanks to class-leading raw power under its hood, the P16 sets itself apart from other ThinkPads by offering a full-fledged numeric keypad on the right, which, once again, echoes how carefully crafted it is for productivity.

Yes, the pricing is steep, and the battery life is not as good as the other products on my list, but a 4K 16-inch screen sweeps all of that under the carpet, and serious professionals will find it tough not to be blown away by it. 

Read our full Lenovo ThinkPad P16 Mobile Workstation review  

Best portable Lenovo ThinkPad laptop

6. lenovo thinkpad x1 nano.

The X1 Nano lives up to its name, and with a weight of less than 2 pounds, it's the lightest ThinkPad ever. Combined with a compact 13-inch screen, a staggering 18 hours and 37 minutes of battery life, and comfortable pricing, it's surely one of the very best productivity laptops for on-the-go usage. 

The screen ratio at 16:10 is exactly what you get with an X1 Carbon, only this one will come in a much smaller package. What's more, you will certainly appreciate the 2K display, which easily eclipses peers like the X13 and the L13 Yoga. However, the X13 is much cheaper, so I wouldn't hold the 1080p screen against it. 

A slight downside—if I were to be extremely nitpicky—could be its smaller number of ports. However, for its compact design and excellent power under the hood, that's hardly going to be a deal breaker. 

Read our full Lenovo ThinkPad X1 Nano review  

Best AMD Lenovo ThinkPad laptop

7. lenovo thinkpad z13.

If you’re in the market for battery life and portability and fancy an AMD -powered ThinkPad, the Z13 is, quite frankly, a no-brainer. On a single charge, it contains more juice than the majority of laptops and can easily power your work, multimedia, or casual browsing for more than a couple of days. 

Weight-wise, it's not quite as lightweight as the X1 Nano, but put it beside the X13, and you'll hardly notice a difference. The screen size of 13.3 inches is a compromise between the two models and looks nice and elegant. 

The lack of USB-A ports means that it'll be an added expense to connect an external mouse or keyboard, which is admittedly disappointing since it's already one of the more premium ThinkPads you can get.

However, if you can spare the extra dollars, you'll be treated with performance levels that are on par, if not better, than the X1 Carbon, which is, on paper, more powerful. 

Read our full Lenovo ThinkPad Z13 review  

Best Lenovo ThinkPad laptops: Frequently asked questions

Is a lenovo thinkpad a good laptop.

Lenovo ThinkPads are some of the best laptops you can buy. Given their diversity, you'll surely find one suitable for your specific use case within the spectrum of ThinkPad laptops, whether you're a coder, an architect, a businessman, a student, or even a gamer. 

Thanks to their excellent and ergonomic keyboards and above-par battery life, they are particularly favored by business professionals and students. They balance performance and portability, and their renowned build quality ensures longevity. 

While they might not always be the flashiest or most affordable laptops, their reputation for stability and functionality – plus their 5-year-long spare part availability guarantee – makes them a solid choice for many users. 

Is a ThinkPad better than a Mac?

Lenovo ThinkPads are renowned for their durability, exceptional keyboards, and extensive port options, making them popular among business peeps and those who prioritize practicality. On the other hand, the best MacBooks and Macs are celebrated for their sleek design, high-resolution Retina displays, battery life, and the macOS ecosystem. 

Generally, a Mac will serve you better if your memo is content creation or audio quality. However, if you're someone on a budget looking for decent power under the hood, a ThinkPad, such as the X13 or the X1 Nano, can be a superb choice. 

It's also worth noting that should you wish to buy a 2-in-1 laptop or an all-out gaming laptop, you won't find one in the Apple Store, whereas there are quite a few options for those in the ThinkPad marketplace. 

Why does NASA use ThinkPad?

Lenovo ThinkPads are built to withstand the challenging conditions that space missions may throw up, including extreme temperatures and dust storms, offering robust build quality, extensive battery life, and exceptional keyboard and trackpad functionality. 

They have proven their worth and reliability by passing 12 military-grade tests and over 200 quality checks, falling perfectly in line with NASA's rigorous demands for its missions. Also, their compatibility with NASA's specialized software is what makes them a dependable choice for critical tasks in space exploration. 

How to choose the best Lenovo ThinkPad laptop for you

So you're out in the market with a specific purse size, looking for either a business laptop, a travel companion, a powerhouse for heavy tasks, or maybe something that does it all. Identifying your primary use case is usually the first step to masterfully zeroing in on the best Lenovo ThinkPad. 

Here are some more factors to consider:

Screen size and panel type will quickly help you narrow down your options. Do you want a 4K screen or a 2K panel, or is an FHD screen going to do the job for you? 

As for screen size, that's going to be entirely up to your preference and needs. If your primary use case is going to be spreadsheets and streaming, a large 16-inch screen will speak to you more. 

On the other hand, if you want one you can throw in a backpack and carry around without flabbergasting your shoulders, smaller 13 or 14-inch screens, which are usually the lightest, will be better. 

Consider the tasks you'll perform. Look for ThinkPads with high-end processors and ample RAM if you need substantial computing power for video editing, photo editing, 3D modeling, or running heavy software such as those in architecture. We've reviewed an extensive range of the best laptops for photo editing and the best laptops for video editing , for when you need professional media load-out.

Models like the X1 Carbon Gen 11 and the X1 Extreme Gen 5 are excellent choices for performance. For everyday tasks, 6 to 8 GB of RAM is going to be ample, and if you're someone like a professional photographer for whom storage is likely to be a concern, external SSDs can provide extra room. 

Consider the weight, size, and battery life if you need a laptop for on-the-go usage. Like all the best UltraBooks . we've tested, ThinkPads like the X1 Nano and Z13 are renowned for their portability and long battery life. For extra power, the best mobile workstations are ideal, but they are a lot heavier. 

Also, don't forget to check the available ports, especially if you require advanced connections like USB-C and Thunderbolt 3, which are crucial for compatibility with modern devices and accessories. It may also be a good idea to look for models that come with USB-A ports, especially if you plan on using a typical external mouse or keyboard. 

ThinkPads are known for their comfortable keyboards and robust build quality. If typing experience and durability matter the most to you, focus on models like the T-Series or X-Series. Almost every ThinkPad comes with advanced security features like fingerprint sensors and IR cameras. If data security is crucial, these models should be at the top of your priority list. 

Your budget is going to have a rather significant say in the ThinkPad you ultimately end up with, particularly because of the huge budget range of these laptops. Look for one that adequately balances affordability while offering features important to yo

How we test the best Lenovo ThinkPad laptops

Our team of reviewers have tested hundreds of laptops and PCs, from the best laptops for programming to the best business computers .

But whatever the brand - from Dell to HP - our reviewing process to test laptops and desktops is meticulously designed to deliver in-depth insights for potential users. In our evaluation, we combine a variety of benchmark tests and hands-on assessments to gauge every aspect of these laptops. 

We put each Lenovo ThinkPad through real-world tests to check whether its performance, battery life, display quality, audio output, and heat management, among others, are in line with what's written on the tin. 

These comprehensive tests are complemented by hands-on assessments from our reviewers, who provide critical insights into various aspects, from build quality to the comfort and responsiveness of the touchpad. We don’t ignore the abstract elements, either. These include the design and aesthetics of a laptop and how futuristic or archaic it is.

We understand that comparisons are equally important, which is why we put two or more ThinkPads side by side and compare the specs they offer and at what price. 

Does the difference in specs between the two laptops justify the difference in price? Is there a better option available for $100-150 less? Does a specific use case demand splurging on a high-end model of a series? These are some questions we answer before ranking the products and crafting our reviews. 

You can find out more in our guide  How we test laptops and desktops on TechRadar

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