Starting your own business as an entrepreneur doesn’t always mean seeking VC funding for an app idea. Sometimes, the simplest and cheapest ideas are the most profitable.
In this article, we’ll explain how to start and grow a luggage storage business.
Do Market Research
Supply and demand determine how much money you can make with a luggage storage business.
If you offer to store luggage for travelers, but there is no demand for this service, your business will sink quickly. You need to find a market where there is a huge demand for your services with little or no competition.
Start with hubs for travelers, and imagine yourself as a customer.
If you’re planning a business trip, what will you do with your luggage? Are there services that could hold your luggage for you? If you have a hotel room or a rental car, could you use those options instead of paying for a luggage storage service?
You need to know approximately how travelers move through an area regularly, and how many of these travelers might be interested in paying to store their luggage.
Don’t get discouraged right away. You don’t need that many customers to build a successful business. If you start a luggage storage business in a major city like New York or Los Angeles, you will find that there is a steady stream of travelers for business and pleasure.
Vertoe is a company that offers luggage storage in Manhattan and more than 65 other US cities. They were able to grow a profitable business by identifying areas where travelers need luggage storage and then serving those markets.
If there are millions of travelers visiting an area every year, you only need to convince a tiny fraction of them to use your services to grow a healthy luggage storage business.
Create a Business Plan
Now that you’ve identified a gap in the market where you can meet demand with supply, you need to make decisions about how you will run your business and formalize that into a business plan.
It’s time to find out how much it will cost you to provide luggage storage services, and what you will charge your customers.
You don’t need a lot of starting capital for a business like this, but you do need:
- A location – you need a place to keep people’s luggage that is convenient and accessible for customers.
- Staff, or a lock system – If you’re not actively monitoring the luggage, you need a way for customers to pay and receive a temporary lock for a locker.
Find out how much it will cost you to rent a location and run your business. These are your overhead costs.
In deciding how much to charge for luggage storage, think about what it is worth to your customers. You need to charge enough to cover your overhead costs and make a profit.
Ideally, your price will be low enough that it is easy for most travelers to afford, but high enough that your profit margins allow you to grow.
Finding Legal and Accounting Support
You might not need to file paperwork for your business or hire an accountant right away. Since the laws that govern businesses are different everywhere in the world, you’ll have to research what the legal requirements are in your area.
Even if you’re bootstrapping, you might still want to purchase business insurance.
What happens if you lose someone’s luggage, or it is stolen? Even if you do everything correctly, accidents and crimes do happen.
As a business owner, you could be liable for the value of the possessions that were lost in your care. Business insurance protects you from this kind of liability.
Starting a Luggage Storage Business
The overhead costs for a luggage storage business are lower than some other comparable businesses, but the principles of success are the same.
You need to offer a valuable service that there is a demand for, and charge more than it costs you to provide the service.
If you do your market research, draft a solid business plan, and follow up with real action, you will be on your way to starting and growing a successful luggage storage business.