Thinking about building a boat storage business? Now’s the time to invest, with boat storage shortages sweeping the nation in 2023.
Before making the leap and investing any of your hard-earned capital, there are a few things to figure out. Skip any of these steps and you’re likely to make a wrong move, negatively affecting the success of your business in a big way.
In the guide below, we’ll cover everything you need to know to get your boat storage business off of dry land– and do it right.
How to Build a Boat Storage Business: Step-By-Step
If you’re looking to invest in the storage industry, boat storage is one of the more unique angles to take.
To ensure your boat storage business is profitable, you’ll need to define your target market and scope out lucrative locations for your boat storage business, (Note: boat storage requires considerably more space than other storage businesses). Finally, you’ll need to choose the right business structure for your boat storage setup.
Because most avid boating enthusiasts will need a place to store their boats while they’re not in use, there will be no shortage of potential customers.
Here’s what you need to know to get started:
1. Figure Out Your Market
Before officially starting your boat storage business, you’ll need to do market research.
Why is this so important? If you pick a bad market your business has little to no chance of success.
In the right market, you’ll be swimming in a steady stream of customers that sustains your business, provided you market properly.
In a bad market, you’ll be struggling just to find customers. And with no income streaming in, managing your boat storage facility will be nearly impossible. Without monthly rental payments to pay staff paychecks, you’ll need to dip into your own savings accounts just to keep your boat storage business afloat.
When researching your target market, here’s what to think about:
Location
Your new boat storage facility must be located between or near a densely populated area (usually a major metropolitan area) or a recreational lake or seaside dock where boating is common.
There’s wiggle room for how close your facility will need to be to these hubs. However, be aware that proximity to a body of water could be a deciding factor in a prospective renter’s mind. If your boat storage business is stationed 4 miles away from a popular lake or reservoir, you may lose out to the facility located 2 miles away from that same body of water.
Existing Boat Storage Businesses
Don’t make the mistake of thinking that if there are other boat storage buildings then it’s a bad market.
In fact, it’s generally the opposite. You want to see existing activity in the area. This allows you to prove there is real demand in the area.
Is There Potential for Success?
To answer this question, you’ll need to study how similar storage businesses in the area are performing.
How well are they serving their customers? Is there a need the local boat storage business isn’t meeting? Is there something they’re doing particularly well?
Figuring this out is a great way to enter a market and immediately carve out a healthy niche.
Demand
Lastly, consider demand.
Studying existing boat storage businesses gives you a good gauge for whether yours could be successful.
To incite confidence in your business idea, you’ll want to gather data that confirms the need for a new boat storage facility in that area.
Here are some more things to consider when researching your market and investing in a boat storage business:
2. Build Your Boat Storage Facility
There are a lot of different types of boats and they all need to be stored somewhere. While prospective renters in the area may be able to store their small boats (like their kayak or canoe) in their garage, medium to large-sized boats will likely require off-site storage in a storage facility.
The size of boats you’ll store is but one factor to consider. There are several other decisions you’ll need to make before building boat storage facilities of any kind (or purchasing a pre-existing property to develop).
Consider each of these when thinking about how to layout your storage facility:
What Types of Boat Storage Facilities Will You Offer?
Not every boat storage facility is created equal.
There are several different types of boat storage:
- Open: These are open yards typically fenced in. and are the cheapest facility type to set up and maintain.
- Canopy: Boats are stored in a boat storage shed or under a canopy, offering partial protection from the sun and the elements.
- Enclosed: Think of a modern facility inside of a warehouse with designated storage spaces or units. This storage type is most common in high-end markets such as Southern California.
- Valet: High-end dedicated storage for customers willing to spend a little more. Because this option is the highest-end version of boat storage, they’re rarer to find.
As a boat storage business owner, you can offer two or more of these facility types at one location. Today, more and more traditional self storage facility owners are offering mixed storage options to maximize revenue.
To further maximize revenue (and expand your target market), consider allowing customers to use your storage units for a combination of purposes outside of boating/boat storage.
How Many Boat Storage Units Will You Have?
Next, consider:
- How much space do I need per storage unit/boat? (by the square foot)
- How many units do I want? (This should taken into account when setting revenue goals and before purchasing your property)
It’s advised that spaces for a boat storage facility should be a minimum of 12 feet in width and 35 feet in length to accommodate the average-sized recreational boat. From there, you can calculate how many storage spaces you’ll be able to fit on your property.
At those average measurements, you should be able to fit around 60 units per acre of property.
Ideally, the average facility will be between 3-5 acres to serve a populated boating market.
However, there is no hard-and-fast rule here, so it can be smaller or even much bigger.
With that number in mind, you’ll also be able to start getting a rough idea of the potential revenue for your facility (barring other factors such as occupancy rate).
3.Establish Proper Security Measures
This point might seem less important compared to the rest.
However, when you’re dealing with such large and costly items– many of which their owners are quite attached to– you need to take security seriously.
When customers decide to use your facility, they’re placing a certain amount of trust in your ability to protect their boat not only from the elements but also from prying eyes.
If you plan to run an open-air boat storage lot, you’ll want to install a fence around the perimeter of the property. Whether you opt for the enclosed or open facility, an alarm and security system is recommended—which should consist of security cameras, automatic alarms, coded entry, and even 24-hour human surveillance in some cases.
Also consider camera placement, as ideally there should be a camera pointed at every boat at all times.
4. Calculate Costs and Project Revenue
Finally, let’s get into the numbers.
If you’ve done what we talked about in #1, 2, and 3, you’re already off to a great start here.
You should have a clear picture:
- Your potential revenue
- And costs such as facility, security, and personnel
Now, it’s time to put this together into a business plan that more accurately projects both revenue and costs.
You’ll want to list down each and every cost to accurately estimate your initial and ongoing investment. In addition to that, you’ll need to project revenue based on:
- How many units/boats your facility can house
- Average revenue per unit
- Average length of rental / churn
- And overall occupancy rate (i.e. how many of your units are rented at any given time)
If you need to obtain funding for construction costs, you’ll also want to factor in the initial down payment for a construction loan of some kind which is usually around 20-25%.
Also, factor in any special offers you may provide to new customers upon your grand opening in order to generate buzz and bring in your first batch of customers.
Lastly, consider revenue methods.
Don’t assume you’ll be able to keep all of your units occupied year-round. After all, you may have customers that take their boat out of storage for the entire summer season, leaving you with empty units that aren’t producing revenue for a period of several months
In this case, consider other methods for making use of the storage space.
Ready for Your Boat Storage Business to Set Sail?
Storage businesses have become increasingly popular due to their steady revenue streams and high margins.
Boat storage offers similarly consistent revenue in an entirely different niche, making it a worthwhile consideration for those looking to get into storage real estate in general.
Plus, with a peer-to-peer marketplace like Neighbor, it’s easier than ever to find new customers in your local area and keep your storage units full to capacity.
Even if you have a fresh new storage business, you can lean on Neighbor’s great reputation to build your local customer base.
If aren’t quite ready to own a full-scale storage facility, you become a host with Neighbor and rent out your garage, driveway, or unpaved lot to boat owners in need of storage.
