Lakewood Storage Facility Business Plan

1.0. Executive Summary

This Storage Facility Business Plan describes a proposed storage business facility namely Lakewood Storage Center. Lakewood Storage Center will be set up for specialized public storage that will be within Lakewood Ranch area in between Bradenton and Sarasota, Southern Florida. The environment is serene and conducive for the business. The place is also accessible to many people who would be potential clients, thus rendering it a growing community. The aim of establishing the company is to rent a storage facility to both private and business people for household stowing accommodation and business commercials such as containers and industrial machinery on long term or short term basis subject to rent regeneration (United Nations Conference on Trade and Development, 2012).

The enterprise will be a partnership business. The involved parties in the proposed storage facility will capitalize on the high demand in storage business to attain a significant presence in its location. Taking such an advantage will be achievable after a considerable success and experience in existing storage establishment. The market link between the ownership of the storage facility and the neighboring storage establishments can boost the rate of occupancy. There is a set target for renting more than 50% out of the proposed 190 storage spaces within the first accounting period of the year. Additionally, more than 10% of the remaining is set to be rented in the second accounting period of the year, and the rest to be filled at the beginning of the first year.

The storage facility aims to provide the community and its environs it serves with the outstanding storage experience. The measure of success will depend on our customers choosing to store in clean, secure, well lit and well-maintained establishment with dedicated and dynamic staff who are ever ready to go out of their way to provide our esteemed customer storage spaces that are well sized, and the right price.

2.0. Company Description

2.1. Business Location

Lakewood Storage Center will be within the Lakewood Ranch area in between Bradenton and Sarasota, Southern Florida. The environment is serene and conducive for the business. The place is also accessible to many people who would be potential clients.

2.2. Ownership

Lakewood Storage Center shall take a partnership form of the business ownership. The choice of partnership as a form of business possession for the storage facility is because it can quickly dissolve in the case of any difficulties. Raising the capital is also easy as the storage facility doesn't require publicity by law. The partnership will enable the management to make timely decisions for the business as opposed to other forms of ownership.

2.3. Legal Form

Lakewood Storage Center shall be organized as partnership. The business shall be fully owned by __________________ and ___________________. The business shall be registered with the state of Southern Florida.

2.4. Start-Up Summary

The storage facility shall require an investment capital of $ 500,000 as there will need to rent many spaces. The storage shall rent 190 spaces which will take $115 for each of the warehouses per month. Annually, the business shall spend $ 1380 summing up to a total of $262, 200 annually for all the warehouses. Other expenses will involve the acquisition of permits for doing the business.

2.5. Location and Facilities

The organization will be within Lakewood Ranch area in between Bradenton and Sarasota, southern Florida. The business requires storage facilities with gate code for proper security. The facilities are in Bradenton. They include:

Ø Extra space storage located on 4010 E. State Rd 64., Bradenton, FL 34208

Ø Xpress storage

Ø Hide-Away Storage

Ø Public Storage (7000 Professional Pkwy E., Lakewood Ranch, FL)

3.0. MISSION, VISION, AND CULTURE

3.1. Mission

The storage facility will be providing the community and its environs it serves with the outstanding storage experience. The measure of success will depend on our customers choosing to store in clean, secure, well lit and well-maintained establishment with dedicated and dynamic staff who are ever ready to go out of their way to provide our esteemed customer storage spaces that are well sized, and the right price.

3.2. Vision

The storage facility will be the leading storage service provider in the market and the best choice for storage, price, and innovation compared to other storage groups in the community it operates.

3.3. Culture

Our values sustain our business in every aspect- its relationship with customers; how the staff conducts themselves; the process of making the decision, and the prices it charge. The business is customer oriented and bears every personal responsibility besides working as a team. The culture of the company will give the customers the liberty to create the lifestyle they love.

3.4. Corporate Social Responsibility

The storage facility is aiming for setting a high standard in every undertaking and achieving sustainable growth that benefits its customers, shareholders, workers, and the community around. The establishment along with the others will initiate apprenticeship and skill development program within the local community that is elaborate regarding supply and management of commodities wherein the successful candidates will absorb the successful candidates. Before the operation of the facility, licensing requirements such as sales tax on the storage services offered, certificate of occupancy and the earning potential are essential in meeting the legal needs. Service contracts forms and labor safety requirements will have to be in place.

4.0. MARKET ANALYSIS

4.1. Market Trends

The business’s storage facility is projected to enjoy high patronage depending on its location; if its location is easily accessible, it is likely to perform in the market. As the company grows, the management will invent new methods of service and establish other storage facilities to lure customers for higher profitability. Market search within the facility’s setting shows that residential clients take up 80% of the market share while small business customers take 20% of the market share. The estimated market segmentation for the residential customers is 90, 000, while that of the little business people are 15, 000.

4.2. Market Analysis

Potential clients

Growth

The first year

The second year

The third year

The fourth year

The fifth-year

Residential customers

7%

90,000

96,300

103,000

110, 200

117,900

Small-scale business customers

7%

15,000

16,100

17,200

18,400

19,661

Total

105,000

112,350

120,200

128,600

137,600

4.3. Target Market

The definition of the market is the core for the survival of any business to stay afloat in the market. Since the industry of storage facility cut across different people, the security of such facilities makes it attractive for customers to store their items which makes this kind of business lucrative. Storage facility should focus on marketing itself to small-scale business and residential customers.

4.4. Competitive Advantage

Market competition makes business enterprises deliver the best service in the storage facility industry (Teece, 2010). Therefore, potential customers will rent such facilities if they are guaranteed enough space for their items and the security of the establishment. The major strength of storage facility venture is its location in a dense area with a high level of protection. The business’ competitive staffs are well versed in the industry of storage in the sense that they will deliver services based on the preference of the customers. Finally, the welfare of the facility’s workers would be top notch; with motivation and enough compensation, will ensure the dedication of employees and help the business in achieving its set objectives.

4.5. Industry Analyses

Before venturing in the storage facility business, it is proper to engage the services of a professional in the niche of business structuring and consulting. The engagement is meant to assess the business venture in coming up with a properly structured storage business that can sustain with stiff competition in the corporate market of the storage service industry. The consultant team in collaboration with the proposed management conducts a strength, weakness, opportunity, and threat (SWOT) analysis for the proposed company. By doing this, the business has little chances of struggling to attract and retain customers and building the enterprise to a higher level.

4.5.1. SWOT Analysis

Strengths

Weaknesses

Location with dense population and top-notch security

having a team of well-trained staff that exhibit professionalism

the rental charges for the storage facilities should be affordable and cheap

the inadequacy of financial muscle required to establish other storage facilities in other choice areas

being new in the market presents some challenges such as securing market share

Opportunities

Threats

busy and dense with population gives the business with the opportunities the community offers

The facility will leverage on the chance of operating time

The unfavorable policies of the government

social factors, dynamics of the economy, and the emergence of other storage facilities within the same locality

5.0. Strategy and Implementation Summary

The firm will employ the 4Ps of marketing to promote the storage business considering that the industry already has significant completion from the established warehouse ventures.

5.1. The 4Ps of Marketing

5.1.1. Product

The company will ensure that the design of the store is not only attractive to the customers, but also spacious enough to adequately accommodate the goods to be kept (Mind Tools, 2018). Moreover, it will have individual machines for handling the commodities brought by the customers these minimizing damages (Ryan, 2017). To improve on the efficiency to increase the revenue, the store will have two separate sections in the same building for handling different types of goods. The commodities that require special handling such as perishable goods will have their parts fitted with the refrigeration facilities to ensure the quality of service and hence customer satisfaction. Finally, the store will offer other services to the customers including packaging, sorting and blending facilities at minimal costs (Wani, 2013).

5.1.2. Place

Most warehouses are located next to the markets and main producers’ plants thus leaving the small-scale manufacturers unnerved. Therefore, the firm will take this as a competitive advantage and establish its stores next to the small producers and capitalize on their large numbers to promote the business and increase sales revenue (Cain, 2014). Moreover, the company will locate some of the warehouses near the consumers to target the large-scale traders such as wholesalers without private storage facilities.

The services will be present along the transport routes, and the company will use agents to direct the customers who need to inquire about our product or to book a space (Mind Tools, 2018). Moreover, the organization will make the work of its clients easier by providing online booking services where the interested customers can access the prices and prepare an order for a space in their preferred location (Wani, 2013). All the details concerning the warehouses will be made available on the website stating their place, costs, and services offered. Finally, the company will have a 24-hour telephone helpline and a customer service department to ensure that all the queries from the clients have solutions throughout the day. Such initiatives will promote customer engagement and satisfaction thus creating loyalty to the business.

5.1.3. Pricing

Setting prices are one of the most significant aspects of marketing as the amount charged on the product will speak much about its quality and also dictate its competitiveness in the industry. Therefore, before deciding on the amount of levy on a product, the firm will have to conduct thorough research and compare the prevailing warehouse hiring costs across the country and particularly the areas where the stores will be located (Mind Tools, 2018). Based on the results obtained, the business will adopt a pricing policy that will reflect the quality of services offered and also take into account the industry’s average.

With the existing competition in the industry, the company will adopt more than one pricing strategy based on the nature of business environment especially the pricing plans by the rivals and the consumer sensitivity to price (Pulido Polo, 2018). Therefore, in areas with a significant level of competition, the organization will employ penetrating pricing model to enable it to take hold and maintain a market share. Later on, it will shift to value pricing as it is confident in the quality of service. In other stores, value pricing will dominate with an option of both cash and trade discounts to motivate the customer to pay promptly and store their goods in bulk (Ryan, 2017). However, the business will try to avoid beat-the-competitor pricing model to minimize circumstances of price wars which may unhealthy for a young enterprise trying to gain customers in a dynamic industry.

5.1.4. Promotion

The company will employ various forms of advertising such as using billboards, broadcasting services in significant media houses and featuring in daily newspapers. However, with the advancement in technology, the organization will also use the social media platform to expand its network (Ryan, 2017). Every company is racing to embrace the use of internet in marketing their products, and this business will also join the plan maximize on the social media, direct mails and website display of the stores (Wani, 2013). Moreover, the marketing team will also ensure that there are automatic messages on other popular websites used by a large number of people in the country. Such strategies will ensure that a considerable proportion of the population is reached and made aware of the existence and quality of the storage services by the company (Ryan, 2017).

In addition to the social and mainstream media, the firm will also contact sales personnel to visit various seminars and workshops with the producers and make them aware of our services (Ryan, 2017). At the warehouse, the will be high-quality customer services to increase their satisfaction and follow-up communication to ensure that the clients once contacted does not leave without commitment (Cain, 2014). Additionally, the firm will establish a dedicated department for marketing and customer engagement to make sure that all our clients are involved in improving the services offered.

5.2. Marketing Strategy and Positioning

Weinstein (2013) says that a target market segment strategy is an integral part of the business plan. His suggestion indicates the organization's plans for reaching its target customers factors in the consumers’ demands and the firm’s response to the demand. It also examines the firm’s plan of action to deliver high-quality products in addition to the satisfactory client services.

Gunter (2014) states that consumer demand analysis is essential alongside the identification of psychographics and demographics of the market. Occasionally, the majority of the potential customers may have similar product needs. Recognizing common attributes among clients before offering services is essential. The strategy is called market segmentation. The company should research to know the potential clients' tastes and preferences and categorize them before the delivery of services. The company needs to predict the size of each segment as well as their profit potential. The prediction will enable the firm to identify and exploit competitive advantages.

Gartner (2011) points out that business has failed to meet the clients' expectations which is the primary goal in business activity. Customer service requirements keep on changing from time to time, so it is important for the company to embrace this dynamism. The following are customer service processes according to Gartner's findings:

v Collaboration and community management

v Call center inbuilt intelligent dialogue systems

v Reliable analytical processes across client service channels and functions

v Optimization of agent workforce processes

v Enterprise feedback management

v Consistent, multi-channel customer service based on integrated communications

According to Maoz (2013), collaboration and community management are essential for firms that aim at improving customer service. Community management involves some components which include discussion boards, the creation of content, use of blogs and instant feedback. The company's success revolves around these essential processes.

Product innovation is essential in business, and it takes different forms. Improving the quality of products and services forms part of product innovation. Creating new unique service packages for clients will attract more clients to the company. Creativity and innovation increase the demand for services leading to high-profit margins. Innovation requires a blend of facilities, skills as well as technical know-how to create, deliver, and provide a service. The process calls for changes in the way of handling clients, supply chain, delivery system and improvement in the customer services.

The federal government has formulated regulations to safeguard the rights of employees, manage the environment and ensure that the corporations are responsible for their actions in the society (Kaufmann, 2017). Some of these policies are outstanding than others due to their importance to the employees and consumers in the country. The laws guiding marketing and advertising come from the Federal Tax Commission and are meant to protect consumers and ensure that firms give accurate information about their products. There are also privacy protection, health, and safety laws which are essential during the operations of the company.

6.0. Management and Operations

6.1. Organizational Structure & Management Team

Based on the research topic, at the top of the table will be the Chief Executive Officer followed by HR representatives, Warehouse Manager, a supervisor and customer service representatives.

The Company’s Organization Chart

6.2. A Plan for Hiring Employees

6.2.1. Recruitment Strategies

The company should focus on hiring a dedicated and straightforward team to ensure the success of the firm. A good team will effectively reach the target audience and help in creating a great amount of customers. The team would focus on achieving the company's goals. People with suitable skills are supposed to get the job. The Chief Executive Officer would also serve as a Human Resource Manager to the firm. The company would hire two Human Resource Representatives, a warehouse manager, a supervisor, and two customer service representatives to form part of the team.

The following criteria will be appropriate in the hiring of employees for the business organization:

One with a solid track record of success based on specific achievements

A highly dedicated individual who can perform with minimum supervision

High-performance skills

An individual who is capable of guiding and motivating colleagues to strive for excellence in business operations

Graduates from colleges and technical programs

The candidate should have not less than one-year experience in a busy business organization as some human resource personnel

6.3. Key Employee Policies and Code of Ethics

Ø Dealing fairly with others. One must maintain a proper and conducive working environment by treating clients, colleagues, and stakeholders with respect and dignity.

Ø Maintaining professional relationships at work

Ø Maintaining high standards of integrity

Ø Upholding honesty in company’s transactions

Ø Ensuring confidentiality and privacy of clients

Ø Proper maintenance of the company’s information and records, prompt correction of an error detected.

7.0. Financial Plan and Analysis

7.1. Start-Up Costs

The storage facility shall require an investment capital of $ 500,000 as there will need to rent many spaces. The storage shall rent 190 spaces which will take $115 for each of the warehouses per month. Annually, the business shall spend $ 1380 summing up to a total of $262, 200 annually for all the warehouses. Other expenses will involve the acquisition of permits for doing the business. At the start-up point, the company will spend on the following areas:

Continuous stock-taking and record keeping

Investment in storage facilities for perishable goods

Salaries for employees

Insurance cover

Cargo handling machine

Other miscellaneous

7.2. Source and Use of Funds

The business will source its capital majorly by borrowing from financial institutions and donations from family and friends. The firm will then be able to expand from the proceeds realized each year. The business is expected to return through cash flows periodically calculated as follows:

Payback period = Cost of the investment

Annual Net Cash flow

The initial cost of the investment is $500,000, and it is expected the cash flow in the first year is $159,404.

Payback period = 500,000

159,404

= 3 years, 1 month.

The business is therefore expected to return its initial investment in 3 years, one month if the management rents all the 190 warehouses in the first year.

7.3. Break-Even Analysis

Break-even point is the point where the total costs incurred will be equal to the total revenue. It is used to determine the revenue units that will be needed to cover the full costs (Harding, 2017). The calculation of the break-even point is given by;

Break-even point = Fixed Costs

(Sales price per unit- Variable cost per unit)

Fixed costs do not change as the value of the output changes such as rent and salaries.

The sales price per unit is the selling price of each group.

Variable cost per unit is the variable cost per unit used in creating a group.

The fixed costs in this case will be salaries and rent (262,200 + 55,000) = 317,000

Assume the selling price per unit to be $500 and the variable cost per unit to be $327. The break-even point in units will, therefore, be;

= 317,000 (500-327) = 1832 units

7.4. Projections

7.4.1. Cash flow Projections

Statement of Projected Balance Sheet at the End of the First Year

Assets

Year 1

$

Current Assets

Cash

34,805

Accounts Receivable

7,505

Inventory

78,720

Total Current Assets

121,030

Plant & Equipment

Cargo Handling Machine

80,000

Office Equipment

60,250

Motor Vehicles

350,000

Accumulated Depreciation

(95,030)

Total Net Plant & Equipment

395,220

Total Assets

516,250

Liabilities & Owners' Equity

Current Liabilities

Accounts Payable

16,250

Total Current Liabilities

16,250

Long Term Debt

425,000

Total Liabilities

441,250

Owner Equity

Family and friends Contribution

25,000

Input by the Owner

50,000

Total Owners' Equity

75,000

Total Liabilities & Equity

516,250

Statement of Projected Income at the End of the First Year

Sales

Year 1

$

Distribution

600,000

Warehousing (Storage)

1,070,000

Total Sales

1,670,000

Cost of sales

936,500

Gross Profit

733,500

Income from other operations

121,320

Gross Income

854,820

Operating Expenses

G & A

20,300

Rent

262,200

Electricity

98,000

Salaries

55,000

Machine maintenance

41,500

Depreciation

85,030

Interest Expense

65,070

Total Operating Expenses

627,100

Income before Taxes

227,720

Taxes on Income

(68,316)

Net Income After Taxes

159,404

7.4.2. Ratio Analysis

Financial Ratios

Return on Investment (ROI)

31.88%

Quick Ratio

2.6037

Debt ratio

0.85

Collection period ratio

140 days

Receivable turnover ratio

12.0465

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