Strengths
Self-storage facilities are fantastic businesses given that they have relatively easy operations to manage. The number of staff that is required for a self-storage facility is relatively low and most facilities either have one full-time employee or a manager that lives on the premises. Outside of the large cost of the acquiring or developing a self-storage facility, these businesses have relatively straightforward, day-to-day expenses. The largest expenses typically property taxes as well as utilities. One of the most important strengths of operating a self-storage facility is that they produce highly recurring streams of revenue from their operation. In most instances, a credit or debit card is billed on a monthly basis for access to the facilities.
Weaknesses
As it relates to weaknesses, this is a commoditized industry, and there are always a number of competitors in any regional market that offer the exact same type of services. As such, storage facilities must continually find ways in order to differentiate themselves within the market. This is principally achieved through competitive pricing, as well as having a number of security amenities at set these businesses apart.
Opportunities
For opportunities, the principal opportunity is to develop additional self-storage facilities. Once any specific campus reaches its maximum capacity, it is extremely difficult to expand any further. However, these businesses are highly scalable given that there are recurring shootings of revenue produced from their operations. Financial institutions are always willing to provide a substantial degree of capital support given this highly recurring revenue streams.
Threats
For threats, there’s really nothing outside of a major economic recession that would impact the operations of a self-storage facility. These businesses are able to achieve substantial economic stability through the ongoing billing that occurs on a monthly basis. Only in a severe and sustained economic recession with an individual typically cancel their lease for their self-storage unit.