Is RV Storage Business Profitable

Find Out- Is RV Storage Business Profitable?

The profitability of your RV Storage business depends on 4 important factors: Industry Prospects, Investments, Revenue Sources, Cost and Profitability. We have taken a deep dive to find out potential profitability from the RV Storage business. 

RV Storage Industry Prospects

Investments

• Land Acquisition: Purchasing land suitable for RV storage. The size and location will significantly affect the cost and potential profitability of your business.

• Paving and Site Preparation: Costs associated with clearing the land, grading, paving areas for RV parking and any necessary landscaping. This also includes the installation of drainage systems to prevent water accumulation in storage areas.

• Fencing and Security: Investments in perimeter fencing to secure the facility and advanced security systems, including surveillance cameras, lighting and possibly access control systems like electronic gates with keycard or keypad entry.

• Office Building Construction: If you plan to have an on-site office for customer service, sales and administration, the construction costs for this building, including any prefabricated structures.

• Utility Installation: Costs for bringing essential utilities to the site, including electricity, water and possibly internet service, for office operations and security systems.

• RV Canopies or Covered Storage: If offering covered storage options, the cost of constructing canopies or covered areas to protect RVs from the elements.

• Signage: Investment in signage at the entrance and throughout the facility for directions, branding and promotional purposes.

• Computer and Software: Purchase of computers, printers and specialized software for managing the storage facility, customer billing and security system monitoring.

• Initial Marketing and Advertising: Costs associated with promoting the opening of your RV storage facility, including online advertising, print materials and signage.

• Insurance Premiums: Initial premiums for liability and property insurance specific to the operations of an RV storage facility.

• Professional Fees: Fees for legal, architectural and consulting services required for planning, zoning compliance and setting up the business.

• Permits and Licenses: Costs for obtaining necessary permits and licenses to operate an RV storage facility in Omaha.

• Equipment and Tools: Purchase of maintenance equipment, tools for minor repairs and cleaning supplies for the facility’s upkeep.

Investing wisely in these areas can set a strong foundation for your RV storage business, ensuring it is well-equipped, secure and appealing to potential customers. Proper planning and budgeting for these CapEx items will be crucial for launching successfully and positioning your business for growth.

Revenue

• Monthly Storage Fees: This is the core revenue source for your business. You can charge customers a monthly fee for storing their RVs. Rates can vary based on the type of storage offered (e.g., uncovered, covered, or indoor climate-controlled spaces).

• Long-term Storage Plans: Offering discounts for customers who commit to longer-term storage contracts (e.g., annual contracts) can secure revenue upfront and ensure customer retention.

• Premium Storage Options: Charging higher rates for premium storage options such as climate-controlled units, indoor storage, or covered spaces that offer better protection for the RVs.

• Valet Parking Service: Offering a valet service to park and retrieve RVs from their storage spots can be a premium service, especially for larger facilities where maneuvering large vehicles can be challenging.

• Cleaning and Maintenance Services: Providing RV cleaning, detailing and basic maintenance services can generate additional revenue. This can include exterior washes, interior cleaning and minor repairs.

• Supply Sales: Selling RV-related supplies such as covers, tire chocks, moisture absorbers and cleaning products on-site can cater to the needs of your customers conveniently.

• Vehicle Preparation Services: Offering services to prepare RVs for use, such as tire inflation, battery checks and system inspections before the customer picks up their vehicle for a trip.

• Security and Monitoring Services: For added security, offering individual alarm systems or GPS tracking for the RVs stored at your facility can be an additional revenue source.

• Electricity and Dump Station Access: Charging a fee for access to electricity for trickle charging RV batteries and a dump station for waste disposal can be attractive services for RV owners.

• Consignment Sales: If space and regulations allow, you can offer to sell RVs on consignment, taking a percentage of the sales price as your fee.

• Event Hosting: Utilizing your space for RV shows, swap meets, or instructional classes related to RV maintenance and travel can generate additional income and attract potential storage customers.

By offering a mix of these services, you can not only increase your revenue but also enhance the attractiveness of your RV storage facility, making it a one-stop solution for RV owners’ needs. Tailoring your services to the specific demands of your market and maintaining high levels of customer service can help you build a loyal customer base and a strong reputation in the Omaha area.

Cost of Goods Sold

• Utility Costs for Services Provided: This includes the cost of electricity for lighting, security systems and any climate-controlled storage areas. If you offer charging stations or RV preparation services that require electricity, the costs would also vary based on usage.

• Maintenance and Repair Costs: Regular maintenance of the storage facility, including upkeep of paved areas, roofing (for covered or indoor storage), security equipment and climate control systems. Repair costs can also fluctuate, depending on the wear and tear of the facility and equipment.

• Cleaning and Sanitation: Costs associated with keeping the storage facility clean, including the costs of cleaning supplies and any specialized waste disposal services for RV dump stations, if provided.

• Supplies for Additional Services: If you offer RV cleaning, detailing, or maintenance services, the cost of supplies needed for these services (e.g., cleaning products, tools and parts) would be considered a variable cost.

• Labor Costs for Variable Services: Wages paid to employees for services that are directly tied to the volume of business, such as part-time workers hired for cleaning, maintenance, or customer service roles that fluctuate with demand.

• Security Monitoring: If you use a third-party service for security monitoring or GPS tracking services offered to customers, any fees that vary with the number of units being monitored would fall under CoS.

• Insurance Costs Directly Tied to Services: While general business insurance is an operating expense, any insurance costs that vary with the number of RVs stored (such as additional liability insurance per unit or insurance for offering consignment sales) would be included in the Cost of Services.

• Payment Processing Fees: Fees associated with processing customer payments, which can vary with the number of transactions. This includes credit card processing fees and any fees for online payment platforms if you offer online booking and payment.

• Marketing Costs Directly Tied to Revenue Generation: While general marketing is an operating expense, specific marketing campaigns aimed at filling up vacant storage spots or promoting additional services can be considered a cost of service if directly tied to revenue generation.

• Depreciation of Direct Service Equipment: For specialized equipment used in providing additional services (such as cleaning or maintenance equipment), the portion of depreciation attributable to the use of this equipment in generating revenue might also be considered.

Managing these variable costs efficiently is crucial for maintaining the profitability of your RV storage business. It involves monitoring usage and demand for your services, optimizing staffing levels and controlling the purchase and use of supplies and utilities.

Operating Expenses

• Rent or Lease Payments: If you don’t own the land outright, payments for leasing the land or facilities used for RV storage represent a significant fixed cost.

• Utilities: Basic utilities expenses such as electricity (for office and general facility lighting), water and internet services for the business operations. This is separate from the utility costs directly attributed to providing service to customers.

• Salaries and Wages: Payments to permanent staff, including facility managers, security personnel and administrative staff. This category also includes payroll taxes, health insurance and any other benefits provided to employees.

• Insurance: Premiums for insurance policies required to protect the business, including general liability insurance, property insurance and workers’ compensation insurance. This coverage is essential for mitigating risks associated with property damage, theft and employee injuries.

• Marketing and Advertising: Costs associated with promoting the RV storage facility, such as website maintenance, online advertising, print ads and promotional materials designed to attract new customers.

• Professional Services: Fees for services provided by accountants, lawyers and consultants. These services might include tax preparation, legal advice on contracts and liability and business consulting.

• Office Supplies and Equipment: Expenses for office supplies (paper, ink, pens) and office equipment (computers, printers, phones) necessary for the administration of your business.

• Repairs and Maintenance: Regular maintenance and any necessary repairs of non-service-specific equipment and the overall facility, excluding costs directly related to providing customer services.

• Property Taxes: Taxes assessed on the property where the RV storage facility is located. This cost can vary depending on the local tax rate and the assessed value of the property.

• Software Subscriptions: Ongoing costs for software used in managing the business, including customer relationship management (CRM) systems, financial accounting software and any other operational management tools.

• Security System Monitoring: Fixed monthly or annual fees for monitoring security cameras and alarm systems that protect the property as a whole.

• Utilities for Common Areas: Costs for lighting, water and other utilities for the common areas of the facility that are not directly billed to or used by customers.

• Depreciation: Although not a cash outlay, accounting for the depreciation of capital assets (buildings, improvements, equipment used in business operations) over their useful life is an operating expense. This reflects the cost of wear and tear on these assets over time.

Efficient management of these operating expenses is crucial for ensuring the profitability of your RV storage business. Regularly reviewing and optimizing these costs, where possible, can help maintain financial health and support the sustainability of your operation.