Warehouse services are necessary to help firms store their products. Because of the coronavirus pandemic, there has been an increase in home-based businesses. As people who own them do not have enough space at their homes to store all the things they sell, the current situation allows warehouse companies to thrive. Warehouses are fairly cheap to buy and maintain. If you’re thinking about starting your own warehouse storage company, from this guide you can find out how to do it.
Things to consider when opening a warehouse storage company
- What is the demand
The first thing you need to do is determine who can benefit from your services and whether you will have enough clients to support your business. The demand for a warehouse is different in each area so you will need to do some research.
To determine the demand you can look up how many companies there are in the area, what products they sell and whether they need a warehouse.
- What is the competition
By analysing what your competitors in the area do, you can realise what are the needs of the customers and how much they are willing to pay for storage services. If you want to be successful, you have to think of a way to stand out and beat the competition. You might want to, for example, offer lower prices than anyone else to encourage more people to choose you.
- What is your target market
You can set up a warehouse that will serve many different companies or pick one market that you will specialise in. If you choose the second option you will have a smaller number of potential companies to work with but you can easily dominate the market.
- How will your business operate
Once you know that there will be people interested in your services you can move on to thinking about other things. That includes:
- Location – to open a warehouse you will need to either buy or lease a big building with multiple shelves. It is important that there are big doors and a shipping dock so that products can be transported easily.
- Employees – it is important that you can trust the people that you hire as they will be responsible for handling valuable storage items. Moreover, moving all the products might require a great deal of physical strength so make sure you hire people who will handle that.
- Procedures manual – writing the manual is very important as it will outline what tasks need to be done and how to carry them out.
- How will you fund the business
Starting a warehouse company requires a lot of upfront investment. If you don’t have enough savings you can try to obtain financing. Getting a loan is a popular way of getting money to fund your business. If you decide to do it, make sure you choose a loan with a low interest rate.
- What permits are required
Obtaining licences and permits to open a warehouse is not difficult, but it’s absolutely necessary. Without them, your business won’t be allowed to operate legally. These documents can be different for each warehouse, depending on its type so you will need to check what licences are required for your business.
Types of warehouses
There are three main types of storage companies that you can start.
| Warehouse storage | big building splits into multiple individual units can be temperature controlled often accessible 24/7 one of the most popular storage options |
| Metal shipping container | vary in sizes the biggest container is around 160 square feet can be divided into smaller spaces sometimes there are hundreds of containers on one large site cheaper than warehouse storage options |
| Lock-up garage | purpose-built smaller than other storage options have around 124 square feet do not vary in size found in residential areas cheaper than other storage options but not as secure |
Should you buy or rent a warehouse?
If you want to start a warehouse business, you will need to either buy or rent space for it. Renting can be a better option if you are unsure as to how long the business will run for and what will be your situation in a few months or years. For sure, renting gives you more flexibility than buying a property. In addition to that, deposits if you’re renting space are much lower than if you’re looking to buy it.
Buying requires a large deposit and is a serious commitment so you have to be sure that’s what you want to be doing. Nevertheless, if you’re the owner of the property you can modify it as you want. Moreover, if you ever want to sell it in the future, its value is likely to be higher so you can make a profit.
The decision of whether to rent or buy space for your warehouse business comes down to deciding how much money you’re willing to invest into it upfront.
The importance of delivery systems
Delivering goods you store quickly and safely is crucial to having a successful warehouse company. You can use other businesses to assist you with deliveries but if you do it yourself you can quickly expand your business and get more money.
It is important that your warehouse is located in an area that’s well connected to the city so you can reach the clients easily. It’s also important that you have the right vehicles like trucks that can be used for deliveries.
Reasons to start a warehouse
There are several reasons why starting your own warehouse company is a great idea. The main ones are:
- The demand for warehouses is growing each year – nowadays apartments tend to be small and do not have much storage space. Hence, more and more people are looking for alternative ways to store their things.
- There isn’t much stress associated with running a warehouse – opening and then operating a warehouse company is less stressful than having a different business such as a restaurant.
- You can have several streams of revenue – if you have a lot of space in your warehouse you can, for example, rent out some of it and generate additional profit.