How to Start a Warehousing Business

There are a few challenges in the warehouse business. You need to secure a good location, build or lease property.

You need adequate funding, knowledge of storage industry and equipment. The building should be easily accessible and have adequate utilities such as electrical power, waste disposal unit, standby generator and water supply.

Other requirements are providing adequate security, hiring trustworthy staff, and insurance. The products you store would determine the type of warehouse you own.

The business is highly lucrative because it caters to a large customer base. There are a few things to consider before starting the business.

Things Stored in a Warehouse

The items stored in warehouses are to numerous to mention. They Store electronic products, machinery, fertilizer, farm produce and stationeries. Others are consumables, building equipment, vehicles, artifacts and paintings.

• Electronic products
• Machinery
• Fertilizer
• Farm produce
• Stationeries
• Consumables
• Building equipment
• Vehicles
• Artifacts
• Paintings

Customer Demography

Many companies and individuals require large storage space for their goods, equipment and products. The impracticability of building a warehouse especially on temporary bases is why the business thrives.

Major customers include independent contractors, builders, beverage companies and farmers. Others are government agencies, fabricators and small business owners.

• Independent contractors
• Builders
• Beverage companies
• Farmers
• Government agencies
• Fabricators
• Small business owners.

Study the Competition

It is important studying the competition to gain knowledge of the workings of such organizations. You should understand their business structure, storage products and pricing.

This will afford better competitiveness and a blueprint towards establishing your own company. A good strategy is to contact establishments outside your jurisdiction.

Find out as much information on storage space, prices and products they store. Find such establishment through online resources such as directories, google search and yellow pages.
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Write a Business Plan

Once you have gained valuable insight to the running of a storage facility. The next step is to write a business plan and carry out a feasibility study.

The plan should have a mission statement, goal, management team, products of choice and ideal location. Others include maintenance, unique service, staffing, profit/loss accounting.

Startup Costs

The startup cost depends on many factors. Some include the demography, location, type of building and size.

Others are securing building permit, equipment, incorporation, security, insurance, transportation and staff wages. That said startup costs for a basic warehouse should not exceed $45,000.

There are many ways to attract funding for the business. You could use angel investors, venture capitalist, sell startup equity and target savings. You could borrow from a bank or thrift society in your locality.

Determine the Size

You need to determine the size of the storage facility. This is based on size of lot and product of choice. You could consider a niche market or target independent contractors.

Write down a cost analysis to guide the amount invested in the business. Add in your estimate the heating/cooling system, refrigeration, generation, and fixtures.

Licensing

Register the business as a LLC and obtain liability insurance. You need to conform to zoning requirements, state and federal tax laws.

Equipment

The equipment you need depends on the types of products. You could operate a warehouse to cater for perishables or frozen foods.

However storing non perishable would reduce the risk factor associated to this kind of business. Common equipment’s include crates, cranes, forklift and pallets. Others are freezers, refrigerators, shelves, boxes and crates.
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Hire Staff

The business does not require huge number of staff. Because heavy lifting could be achieve though the aid of forklift equipment.

You need a forklift operator, driver, storekeeper, security personnel, accountant and receptionist. Hire only employee that are important to the smooth running of the company.

Marketing

You need to build a client list to succeed. You could advertise in local publications and offer discounts.

Use print media such as handbills, posters, complimentary cards, signboards and billboards. Join associations in your industry for valuable networking and Intel.

Build a website and include location, services and units available. Add contact information, email, and a dedicate phone line. Promote the site through social media engagements and online advertisement.