By Garrett Byrd
Revenue Comparison for a 60,000 Square Foot Facility using $1.50 a sq ft manned VS $1.20 a sq ft unmanned.
There is a significant difference in revenue between manned and unmanned self-storage facilities:
- Manned facility monthly revenue: $90,000
- Unmanned facility monthly revenue: $72,000
This represents a substantial revenue difference of $18,000 per month in favor of the manned facility.
Percentage Increase
The manned facility generates 25% more revenue compared to the unmanned facility. This is a considerable increase that can have a significant impact on the overall profitability and cap rate of the business.
Annual Revenue Projection
To put these numbers into perspective, let's look at the annual revenue projections:
- Manned facility annual revenue: $1,080,000
- Unmanned facility annual revenue: $864,000
The annual revenue difference amounts to $216,000, which is a substantial sum that could easily cover the costs of on-site management and still leave a significant profit margin.
Additional Considerations
While the 25% revenue increase is impressive, it's important to remember that this figure represents only the base rental income. Manned facilities can generate additional revenue through:
1. Administration fees
2. Reduced discounts
3. Higher occupancy rates
4. Merchandise Sales
5. Higher Insurance Penetration
These factors could push the actual revenue difference even higher than the 25% calculated from base rental rates alone.
Cost-Benefit Analysis
When considering whether to operate a manned or unmanned facility, owners should weigh the additional revenue against the costs of staffing:
- Additional annual revenue: $216,000
- Staffing costs: Variable, but significantly less than $216,000 for on-site management
Even after accounting for staffing costs, the manned facility is more profitable, especially when factoring in the potential for higher occupancy rates and additional revenue streams.
While each facility's situation is unique, these numbers strongly suggest that the investment in on-site management can pay off significantly in terms of increased revenue and improved overall performance.
That is why at Storage Authority we deploy the High Tech/ High Touch philosophy and serve the customer on the platform they want to do business. Whether in person, over the phone, at kiosks, or rent from the comfort of their home, we keep it convenient for our customers.
*Above are examples of figures, with the right team, system, and Ritz standards in place manned facility can charge higher than $1.50+ a sq ft.
Storage Authority Franchising is all about owning your own local self-storage business, supported by professional systems and expertise. We like to say, "You're in business for yourself but not by yourself." If self-storage is on your mind, don't hesitate to reach out to me, Garrett Byrd at Direct: 941-928-1354 or Garrett@StorageAuthority.com to learn more about the Storage Authority Franchise opportunity.
If you would like to learn more and start your journey to self-storage ownership click the link here: http://www.storageauthorityfranchise.com/opportunity2
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