When your business is storage, every day brings a new challenge. Someone lost their key, didn't pay their bill or is worried about their ex getting into their storage unit. But beyond these daily matters, have you ever given serious thought to the value of your storage company and how that value is calculated? You might be surprised at some of the many steps and aspects that take place when a professional storage facility business appraisal takes place. Here's a quick look inside the process to help you get started.
How Does Storage Facility Business Appraisal Work?
The first thing that most business valuation specialists will do when you request an appraisal of your storage company is to determine a number of factors that will help them to calculate the value of your company. They will start by looking at your company's overall finances, making adjustments if necessary for large transactions that may skew the end results. They'll take a look at your competitors in the area and market, looking at what they're doing well and what they're doing poorly. They'll take an overall view of your business to determine how different factors will influence that value.
They'll also consider a number of other outside factors. What condition are your industry and market in? Are there a lot of companies trying to get out of the business before they lose their investment? Are there entrepreneurs trying to buy in before the price goes up? That may not be the time to sell. Is it just a regional issue? If so, excess materials or equipment can be listed online and sold to businesses outside of your regional slump. Is the storage facility down the road getting more business because it's closer to the interstate or less because it's in a high-crime area. All of these factors must be carefully considered before your business' overall value can be calculated accurately.
After this, there may be some additional fact-gathering. Are your doors 20 gauge or heavier 26 gauge metal to prevent theft? What level of capacity do you typically see rented out to your customers and which portion remains empty, costing you potential income? Are you charging high enough rents to keep the place secure but not so high that you're driving customers away? Do you have a solid reputation in the community and do you volunteer time, resources or materials to local organizations? All of these aspects can impact the overall value of your storage business beyond the simple value of the land, buildings and security structures.
If you're wondering where you can use a business valuation, the simple fact is that they are very useful documents with a range of possible applications. They can be used in court, with your insurance company, to settle a question of appraisal for a tax bill or help you secure financing for your business' next big expansion.
Storage facility business appraisal can be much more challenging and involved than you may have initially guessed. However, when you're working with an independent, third-party business valuation specialist who has experience in your industry, you can get a lot more than you may have expected from the process. Make sure that the valuation specialist you work with is certified to ensure that they are qualified to offer you a solid calculation of your storage company's business.