The Entrepreneurs Running Start-Ups from Storage Facilities
When we think of storage facilities, we think of long rows of metal containers, the old and the unloved hiding away behind their doors. What we don’t tend to think of is innovation, enterprise and thriving businesses, and yet, in a growing number, that’s exactly what you might find…
The Beauty of Self-Storage
So what is it that’s attracting a growing number of entrepreneurs to these self-storage spaces?
Rennie Schafer, a representative of Self Storage Association UK, believes that a major factor is the flexibility offered by storage solutions. “For businesses, it’s a flexible way they can store their goods and materials.”
For enterprises that are just starting out, this flexibility is key. It’s important not to be tied down so that they can readily respond to the changing needs of their business as it evolves.
According to Hiren Patel, the boss of an e-commerce gift company that runs out of a storage facility: “It’s convenient. It gives you choice. If the business isn’t performing you can give one month’s notice and move on, or you can reduce your space so it gives you nice flexibility.”
An added boon is the low overheads, which leave more money to invest in goods and services. The rising number of empty shops on city high streets is proof in itself of the unwillingness and inability of start-ups to meet the rental prices of commercial properties, making cheap storage units an obvious and attractive alternative.
The average price of a storage unit is around £20 per square foot, far below the cost of retail premises in most city centres. Businesses can also claim back the VAT they pay, and are not liable for business rates on any storage space they use.
As the Valuation Office Agency explains, the burden of business rates is absorbed by the self-storage company as opposed to the enterprises that operate out of it: “We normally assess self-storage facilities as a warehouse and the operator of the self-storage facility will generally be liable for the payment of rates.”
Many of these facilities are located on the outskirts of towns, making them easy to access for both staff and customers whilst keeping the prices down. Whilst their location may not be the most prestigious, this is of little import to many sectors, such as e-commerce, where space is important but appearance is not.
A further boon is that most storage facilities provide a front-of-house reception area that is able to receive deliveries. For smaller enterprises in particular, there’s not always the staff available to wait around for these to arrive.
As Mike McGuire, an employee of a self-storage company states: “Small firms especially store with us because we accept deliveries on their behalf. We sign for and take the goods into the store. They are out and about running their business and don’t waste time awaiting delivery of stock.”
The Turning Tide
The market for self-storage has boomed dramatically over the last two decades. Although it started its life as an Australian import, there are now an estimated 1,000 sites in the UK, offering approximately 30,000,0000 square foot of storage space.
Innovative businesses like Safestore have recognized the desire for economically priced retail space, and turned their attention to this lucrative pool of potential customers. Special targeting has seen the percentage of storage space used for commercial purposes rise from 39 per cent to 42 per cent in the course of a year.
According to Ollie Saunders, an expert in the field, “Today, in some stores, every other unit is a commercial customer.”
“Businesses no longer need to rent a dodgy lock-up garage down a side alley – instead they use a self-storage facility where they can also get a cappuccino in reception.”
Could a self-storage facility offer the perfect premises for your start-up?