El INCREÍBLE Negocio de los TRASTEROS ¿SEGURO?

Introduction to Business Journey

Overview of the Series

• This series documents the process of starting a physical business by interviewing 10 business owners about their experiences.

• Key topics include daily operations, startup costs, motivations for starting, and whether they would do it again.

Highlighting an Unexpected Business Model

• The episode features a storage center that appears mundane but shows impressive financial returns.

• The operation relies on technology rather than traditional retail elements like stock or staff.

Insights from Vero's Storage Business

Business Details

• Vero operates a fully occupied storage facility with 97 units and minimal operational costs. She invested around €100,000 for 400 m² space.

• Despite challenges, she emphasizes that the most significant hurdles come from local government regulations rather than customer issues.

Initial Motivation and Market Research

• Vero started her journey in 2015 after recognizing the growing demand for storage solutions while running a retail business. She opened her first center in mid-2016.

• The decision was influenced by market research and conversations with friends already in the industry who provided guidance on suppliers and architects.

Daily Operations of the Storage Facility

Operational Workflow

• Initially, filling up the storage center required significant effort including advertising; however, once established, it runs smoothly with minimal daily oversight needed.

• Most customers are local residents; thus word-of-mouth marketing plays a crucial role in attracting new clients to fill vacancies quickly.

Customer Interaction Management

• Vero explains that day-to-day management involves responding to phone inquiries rather than being physically present at the site all day long due to remote access capabilities for client visits and inspections.

Business Model Insights

Adaptability and Customer Focus

• The business model emphasizes flexibility, allowing customers to access services at convenient times, such as after hours or on weekends.

• This approach contrasts with traditional businesses that require daily staff presence, showcasing a high level of self-management in operations.

Automation and Online Processes

• The service operates without the need for physical presence; contracts are signed online through a platform, streamlining customer interactions.

• Automation is key to minimizing operational involvement, allowing for efficient management without constant oversight.

Initial Investment Breakdown

• An initial investment of approximately €100,000 is required for setting up a storage facility of about 400 m².

• Costs can vary based on local regulations and unexpected changes during setup (e.g., fire safety requirements).

Construction and Design Considerations

• The construction involves specialized companies that design and build storage units according to specific needs rather than using standard materials like drywall.

• The layout of storage spaces is tailored based on customer demand; smaller units are prioritized due to the target demographic's needs.

Market Positioning and Competition

• Unlike larger competitors like Blue Space, this business targets a different clientele focused on long-term rentals rather than frequent turnover.

• The strategic location in urban centers allows the business to cater effectively to local residents needing additional space.

Storage Business Insights

Overview of Storage Units

• The speaker mentions having approximately 97 storage units with a high occupancy rate of 99%, indicating strong demand and effective management.

• There is low turnover among clients, primarily consisting of local residents and businesses needing daily access to their storage spaces.

Investment Recovery Timeline

• The investment in the storage facility typically takes about four to five years to recover, with earlier facilities already recouping costs since opening in late 2015.

• Current monthly revenue averages around €4,500 per center, with fixed expenses estimated at €2,000, mainly due to rent.

Operational Efficiency

• The business model requires minimal staffing; one person can manage multiple centers effectively due to low operational demands.

• The speaker notes that during peak times (end of the month), they may receive several inquiries but overall operations are quite calm.

Cost Structure and Expenses

• Fixed costs include rent, utilities (electricity and water), internet services, and alarm systems. Cleaning services are also factored into expenses.

• A notable expense is the rental cost; however, other operational costs remain relatively low compared to income generated.

Pricing Strategy and Insurance Coverage

• Standard pricing for a typical 2 m² unit is around €50 per month, which includes VAT and insurance against theft or damage up to €1,500–€2,000.

• Clients can opt for additional coverage if storing high-value items like bicycles or tools by paying an extra premium based on assessed value.

Demand Fluctuations Throughout the Year

• Despite seasonal trends where some clients may vacate during summer months, overall occupancy remains consistently high throughout the year.

• Increased demand is noted post-vacation periods as individuals often seek temporary storage solutions during transitions such as moving or separation.

Why is the Storage Business Thriving?

Location and Demand

• The success of the storage business is attributed to its strategic location, which creates a dependency for local residents who lack adequate space in their homes.

• Many nearby residences are older buildings (constructed in the 1800s or 1900s) that do not have storage options like basements or balconies, increasing demand for external storage solutions.

Marketing Strategies

• Initial marketing efforts included hiring a company for flyer distribution and conducting two campaigns to raise awareness about the new storage facility.

• Word-of-mouth has proven to be an effective marketing tool, significantly contributing to customer acquisition despite initial reliance on flyers.

Customer Management

• Initially, a waiting list was maintained due to high demand; however, it became unmanageable as customers frequently referred friends needing storage.

• Customers often share their units with family members, indicating a strong community reliance on the service.

Business Operations and Delegation

• The business model is considered easily delegable; owners can manage operations with minimal direct involvement once established.

• Unlike businesses requiring hands-on management of perishable goods, this model allows for more automated oversight.

Communication and Availability

• Although official hours are set from 9:30 AM to 7:30 PM, flexibility in responding to customer inquiries outside these hours enhances service quality.

• Owners remain vigilant about phone calls even during off-hours since potential clients may reach out unexpectedly.

Security Measures

• A comprehensive security system with cameras and alarms ensures safety when owners are not present at the facility.

• Access control through unique codes for each user helps track entries and maintain security within the premises.

Future Prospects of Storage Business

• There is still perceived potential for growth in the storage sector; owners plan to expand by opening additional facilities once current locations stabilize financially.

• Strategic decisions regarding new locations consider factors such as population density and existing housing conditions that necessitate more storage options.

What Are the Main Challenges in Starting a Business?

Bureaucratic Hurdles

• The primary challenge faced in starting a business is the extensive bureaucracy involved in obtaining necessary permits and licenses. This process can be time-consuming and complex, often taking several months to complete.

• For instance, opening a center requires various approvals, including construction permits and activity licenses, which can delay operations significantly. The speaker mentions an 8-month wait from acquiring the location to opening.

Specific Requirements for Licensing

• Each locality has its own regulations that must be adhered to; for example, fire department approval is mandatory before proceeding with any business setup. This includes submitting plans for review and ensuring compliance with safety standards.

• The necessity of having specific fire safety measures varies by location; some areas may require additional systems like sprinklers if residential units are nearby. Understanding these local requirements is crucial for timely approval.

Complications During Approval Process

• The approval process can feel overwhelming as multiple requirements are presented sequentially rather than all at once, leading to frustration among entrepreneurs who must repeatedly adjust their plans based on feedback from authorities.

• Issues such as needing ventilation or hydrants can arise unexpectedly during inspections, adding further delays and complications to the project timeline. These bureaucratic challenges are cited as one of the most frustrating aspects of starting a business.

Lessons Learned from Experience

• Reflecting on past experiences, the speaker suggests that if they were to start another storage facility, they would consider choosing a larger space initially to enhance profitability and avoid constraints faced in previous locations due to size limitations.

• They emphasize learning from earlier ventures where smaller spaces led to operational challenges; thus future projects would aim for more spacious facilities right from the start.

Financial Insights

• When asked about profitability metrics, it was revealed that their current return on investment ranges between 15% and 20%, indicating a healthy financial outlook despite initial hurdles encountered during setup processes.

• Ultimately, when posed with whether they would embark on this venture again given the chance to start over, there was an affirmative response highlighting enthusiasm for the business model despite its challenges.

Business Insights on Storage Solutions

The Value of Affordable Storage

• The discussion highlights the importance of providing additional storage space (2 m²) at an economical price, emphasizing that €45 per month is a manageable cost for most people.

• The convenience of having storage units located within the community allows residents from nearby buildings to access them easily, enhancing customer satisfaction.

Initial Concerns and Market Perception

• One speaker expresses initial apprehension about entering the personal storage market due to past negative experiences, indicating that many potential customers are wary.

• Despite these concerns, the conversation shifts to a positive outlook on their business model, which features autonomous entry and high customer satisfaction.

Business Success and Future Prospects

• The participants reflect on their successful business venture in storage solutions, expressing contentment with their progress and future opportunities.

• There is optimism about future growth; they anticipate discussing further developments in their storage offerings in subsequent meetings.

Closing Thoughts and Key Takeaways

• The speaker thanks everyone for participating in the discussion, hoping that viewers have gained valuable insights from the conversation.

• A comparative table will be provided later to summarize key data points discussed during this session, aiding viewers in making informed decisions based on both data and personal impressions.