storage warehouse business plan

Warehouse Business Plan Template

Written by Dave Lavinsky

Warehouse Business Plan

Over the past 20+ years, we have helped over 500 entrepreneurs and business owners create business plans to start and grow their warehouse companies.

If you’re unfamiliar with creating a warehouse business plan, you may think creating one will be a time-consuming and frustrating process. For most entrepreneurs it is, but for you, it won’t be since we’re here to help. We have the experience, resources, and knowledge to help you create a great business plan.

In this article, you will learn some background information on why business planning is important. Then, you will learn how to write a warehouse business plan step-by-step so you can create your plan today.

Download our Ultimate Business Plan Template here >

What is a Warehouse Business Plan?

A business plan provides a snapshot of your warehouse business as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategies for reaching them. It also includes market research to support your plans.

Why You Need a Business Plan for a Warehouse Business

If you’re looking to start a warehouse business or grow your existing warehouse company, you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your warehouse business to improve your chances of success. Your warehouse business plan is a living document that should be updated annually as your company grows and changes.

Sources of Funding for Warehouse Businesses

With regards to funding, the main sources of funding for a warehouse business are personal savings, credit cards, bank loans, and angel investors. When it comes to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to ensure that your financials are reasonable, but they will also want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business. Personal savings and bank loans are the most common funding paths for warehouse companies.

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How to write a business plan for a warehouse business.

If you want to start a warehouse business or expand your current one, you need a business plan. The guide below details the necessary information for how to write each essential component of your warehouse business plan.

Executive Summary

Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.

The goal of your executive summary is to quickly engage the reader. Explain to them the kind of warehouse business you are running and the status. For example, are you a startup, do you have a warehouse business that you would like to grow, or are you operating a chain of warehouse businesses?

Next, provide an overview of each of the subsequent sections of your plan.

• Give a brief overview of the warehouse industry.
• Discuss the type of warehouse business you are operating.
• Detail your direct competitors. Give an overview of your target customers.
• Provide a snapshot of your marketing strategy. Identify the key members of your team.
• Offer an overview of your financial plan.

Company Overview

In your company overview, you will detail the type of warehouse business you are operating.

For example, you might specialize in one of the following types of warehouse businesses:

• Distribution centers: These types of warehouse businesses are usually large facilities that hold high quantities of goods for short periods of time from multiple suppliers to be transported to customers quickly.
• Climate-controlled warehouses: These types of warehouse businesses specialize in storing temperature-sensitive products such as frozen foods, fruits and vegetables, and other perishable goods.
• Smart warehouses: These types of warehouse businesses run on artificial intelligence to automate the process of storing, organizing, and transporting products.
• Bonded warehouses: These types of warehouses specialize in storing imported goods.
• Consolidated warehouses: These types of warehouses specialize in the intake of small shipments from various suppliers and grouping them together into a larger shipment to be distributed to buyers.

In addition to explaining the type of warehouse business you will operate, the company overview needs to provide background on the business.

Include answers to questions such as:

• When and why did you start the business?
• What milestones have you achieved to date? Milestones could include the number of customers served, the number of shipments processed, and reaching $X amount in revenue, etc.
• Your legal business Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.

Industry Analysis

In your industry or market analysis, you need to provide an overview of the warehouse industry.

While this may seem unnecessary, it serves multiple purposes.

First, researching the warehouse industry educates you. It helps you understand the market in which you are operating.

Secondly, market research can improve your marketing strategy, particularly if your analysis identifies market trends.

The third reason is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.

The following questions should be answered in the industry analysis section of your warehouse business plan:

• How big is the warehouse industry (in dollars)?
• Is the market declining or increasing?
• Who are the key competitors in the market?
• Who are the key suppliers in the market?
• What trends are affecting the industry?
• What is the industry’s growth forecast over the next 5 – 10 years?
• What is the relevant market size? That is, how big is the potential target market for your warehouse business? You can extrapolate such a figure by assessing the size of the market in the entire country and then applying that figure to your local population.

Customer Analysis

The customer analysis section of your warehouse business plan must detail the customers you serve and/or expect to serve.

The following are examples of customer segments: individuals, schools, families, and corporations.

As you can imagine, the customer segment(s) you choose will have a great impact on the type of warehouse business you operate. Clearly, individuals would respond to different marketing promotions than corporations, for example.

Try to break out your target customers in terms of their demographic and psychographic profiles. With regards to demographics, including a discussion of the ages, genders, locations, and income levels of the potential customers you seek to serve.

Psychographic profiles explain the wants and needs of your target customers. The more you can recognize and define these needs, the better you will do in attracting and retaining your customers.

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Competitive Analysis

Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.

Direct competitors are other warehouse businesses.

Indirect competitors are other options that customers have to purchase from that aren’t directly competing with your product or service. This includes other types of warehouses, order fulfillment service providers, or inhouse storage and distribution operations. You need to mention such competition as well.

For each such competitor, provide an overview of their business and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as

• What types of customers do they serve?
• What type of warehouse business are they?
• What is their pricing (premium, low, etc.)?
• What are they good at?
• What are their weaknesses?

With regards to the last two questions, think about your answers from the customers’ perspective. And don’t be afraid to ask your competitors’ customers what they like most and least about them.

The final part of your competitive analysis section is to document your areas of competitive advantage. For example:

• Will you make it easier for customers to acquire your product or service?
• Will you offer products or services that your competition doesn’t?
• Will you provide better customer service?
• Will you offer better pricing?

Think about ways you will outperform your competition and document them in this section of your plan.  

Marketing Plan

Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For a warehouse business plan, your marketing strategy should include the following:

Product : In the product section, you should reiterate the type of warehouse company that you documented in your company overview. Then, detail the specific products or services you will be offering. For example, will you provide long-term storage, temperature control, third-party logistics, or order fulfillment services?

Price : Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of your plan, you are presenting the products and/or services you offer and their prices.

Place : Place refers to the site of your warehouse company. Document where your company is situated and mention how the site will impact your success. For example, is your warehouse business located in a busy retail district, a business district, or a standalone warehouse? Discuss how your site might be the ideal location for your customers.

Promotions : The final part of your warehouse marketing plan is where you will document how you will drive potential customers to your location(s). The following are some promotional methods you might consider:

• Advertise in local papers, radio stations and/or magazines
• Reach out to websites
• Distribute flyers
• Engage in email marketing
• Advertise on social media platforms
• Improve the SEO (search engine optimization) on your website for targeted keywords

Operations Plan

While the earlier sections of your business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.

Everyday short-term processes include all of the tasks involved in running your warehouse business, including answering calls, scheduling shipments, billing and collecting payments, etc.

Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to acquire your Xth cusotmer, or when you hope to reach $X in revenue. It could also be when you expect to expand your warehouse business to a new city.  

Management Team

To demonstrate your warehouse business’ potential to succeed, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company.

Ideally, you and/or your team members have direct experience in managing warehouse businesses. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.

If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act as mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in managing a warehouse business or a small order fulfillment operation.  

Financial Plan

Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance sheet, and cash flow statements.

Income Statement

An income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenue and then subtracts your costs to show whether you turned a profit or not.

In developing your income statement, you need to devise assumptions. For example, will you make 20 sales per day, and will your average inventory be 500 units? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.

Balance Sheets

Balance sheets show your assets and liabilities. While balance sheets can include much information, try to simplify them to the key items you need to know about. For instance, if you spend $50,000 on building out your warehouse business, this will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a lender writes you a check for $50,000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.

Cash Flow Statement

Your cash flow statement will help determine how much money you need to start or grow your business, and ensure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt.

When creating your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a warehouse business:

• Cost of equipment and office supplies
• Payroll or salaries paid to staff
• Business insurance
• Other start-up expenses (if you’re a new business) like legal expenses, permits, computer software, and equipment

Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your warehouse lease or a list of key performance indicators (KPIs) you track.  

Writing a business plan for your warehouse business is a worthwhile endeavor. If you follow the template above, by the time you are done, you will truly be an expert. You will understand the warehouse industry, your competition, and your customers. You will develop a marketing strategy and will understand what it takes to launch and grow a successful warehouse business.  

Warehouse Business Plan Template FAQs

What is the easiest way to complete my warehouse business plan.

Growthink's Ultimate Business Plan Template allows you to quickly and easily write your warehouse business plan.

How Do You Start a Warehouse Business?

Starting a warehouse business is easy with these 14 steps:

• Choose the Name for Your Warehouse Business
• Create Your Warehouse Business Plan
• Choose the Legal Structure for Your Warehouse Business
• Secure Startup Funding for Warehouse Business (If Needed)
• Secure a Location for Your Business
• Register Your Warehouse Business with the IRS
• Open a Business Bank Account
• Get a Business Credit Card
• Get the Required Business Licenses and Permits
• Get Business Insurance for Your Warehouse Business
• Buy or Lease the Right Warehouse Business Equipment
• Develop Your Warehouse Business Marketing Materials
• Purchase and Setup the Software Needed to Run Your Warehouse Business
• Open for Business

Where Can I Download a Warehouse Business Plan PDF?

You can download our Warehouse business plan PDF  here. This is a business plan template you can use in PDF format.

Don’t you wish there was a faster, easier way to finish your Warehouse business plan?

OR, Let Us Develop Your Plan For You

Since 1999, Growthink has developed business plans for thousands of companies who have gone on to achieve tremendous success.   Click here to see how a Growthink business planning consultant can create your business plan for you.

Other Helpful Business Plan Articles & Templates

Warehouse Business Plan Template

Written by Dave Lavinsky

Warehouse Business Plan

You’ve come to the right place to create your Warehouse business plan.

We have helped over 1,000 entrepreneurs and business owners create business plans and many have used them to start or grow their Warehouse businesses.

Below is a template to help you create each section of your Warehouse business plan.

Executive Summary

Business overview.

FlexiStore Warehousing is a startup warehousing business located in Tulsa, Oklahoma. The company is founded by Martin Snow, a warehouse manager who has an extensive number of customers who have appreciated his service in the past ten years of his employment with a national chain warehouse company. Martin consistently went out of his way to accommodate the particular and sometimes, unique, needs of his customers in moving goods of all types into and out of the appropriate warehousing; the perfect sized facility, warehousing that was renovated to meet customer needs, and other specific solutions for customers. Whether large inventory or small, Martin Snow was known in the chain as the “Go To” solution-provider.

FlexiStore Warehousing will provide an advanced technology infrastructure, including barcode scanning, RFID tracking, and automated inventory management systems. These systems will ensure goods are brought in as properly tracked, sorted, managed and, finally, sent out without errors or issues involved.

Product Offering

The following are the services that FlexiStore Warehousing will provide:

• Logistics management
• State-of-the-art facility
• Advanced technology infrastructure
• Highly-skilled team
• Clear access to major transportation hubs
• Timely entry/exit management
• Fulfillment options
• Value-added options
• Technology-driven security system

Customer Focus

FlexiStore Warehousing will target e-commerce companies. They will also target medium-to-large manufacturers. They will target regional wholesale companies. They will also target medium-to-large retail outlets, chains and other stores needing warehousing for overstocks or ancillary goods.

Management Team

FlexiStore Warehousing will be owned and operated by Martin, “aka Marty,” Snow. He recruited his former warehouse associates, Roger Hartwell and Kenny Jones, to assist in the management of the startup business.

Marty Snow is a veteran of over fifteen years of warehousing experience, five of those years in management. His former employer was a national chain, which meant that Marty was limited in some areas where he could see that improvements to inventory, storage and processing could have been a factor in gaining or retaining customers. For these reasons, and with a large following of customers who’ve already agreed to move their warehousing to his startup, Marty has made the decision to form FlexiStore Warehousing.

Roger Hartwell, formerly a warehouse team member with Marty, will take on the role of Inventory Control Manager. In this role, he will exercise his depth of knowledge using the advanced technology tools installed to perfect the process of inventory control. Roger has a background in the U.S. Marines as a Staff Sergeant in the logistics department of a nearby station.

Kenny Jones, a former team warehouse member with Marty, will take on the role of Operations Manager, overseeing the movement of goods in, through, and out of the warehousing process. His keen eye for detail and depth of warehousing knowledge has earned him this role.

Success Factors

FlexiStore Warehousing will be able to achieve success by offering the following competitive advantages:

• Friendly, knowledgeable, and highly-qualified team of FlexiStore Warehousing

Financial Highlights

FlexiStore Warehousing is seeking $200,000 in debt financing to launch its FlexiStore Warehousing. The funding will be dedicated toward securing the office space and purchasing office equipment and supplies. Funding will also be dedicated toward three months of overhead costs to include payroll of the staff, rent, and marketing costs for the print ads and marketing costs. The breakout of the funding is below:

• Office space build-out: $20,000
• Office equipment, supplies, and materials: $10,000
• Three months of overhead expenses (payroll, rent, utilities): $150,000
• Marketing costs: $10,000
• Working capital: $10,000

The following graph outlines the financial projections for FlexiStore Warehousing.

Company Overview

Who is flexistore warehousing.

FlexiStore Warehousing is a newly established, full-service warehouse business in Tulsa, Oklahoma. FlexiStore Warehousing will be the most reliable, cost-effective, and efficient choice for commercial enterprises throughout Tulsa and the surrounding communities. FlexiStore Warehousing will provide a comprehensive menu of warehousing and inventory control services for any client to utilize. Their full-service approach includes a comprehensive array of technology-driven processes that guarantee inventory control, logistics movements, and security.

  FlexiStore Warehousing will be able to warehouse goods for any medium-to-large manufacturer or other entity. The team of professionals are highly qualified and experienced in logistics, inventory control and warehousing solutions. FlexiStore Warehousing removes all headaches and issues of common warehousing issues and ensures service and reliability are included in the best customer service.

FlexiStore Warehousing History

Since incorporation, FlexiStore Warehousing has achieved the following milestones:

• Registered FlexiStore Warehousing, LLC to transact business in the state of Oklahoma.
• Has a contract in place at one of the nearby buildings to set up its 10,000 square foot office space.
• Reached out to numerous contacts and former clients to refer FlexiStore Warehousing to associates in their industry.
• Began recruiting a staff of ten warehousing team members and office personnel to work at FlexiStore Warehousing.

FlexiStore Warehousing Services

The following will be the services FlexiStore Warehousing will provide:

Industry Analysis

The warehousing industry is expected to grow over the next five years to over $1,007 billion. The growth will be driven by the increased number of goods imported into the U.S. which require either distribution or warehousing until clients schedule shipments. The growth will also be driven by increasing demand for efficient logistics and supply chain management The growth will also be driven by an increasing need for advanced security systems as warehouse thefts continue to be problematic The growth will also be driven by e-commerce, which will call for more fulfillment capabilities, upsell options and other consumer offers that will necessitate warehousing special services. Costs will likely be reduced as shipments increase and supply chain issues are resolved from years past. Costs will likely be reduced as improved shipping times increase the regulation of delivery of goods, implementing a smoother process for inventory and logistics control.

Customer Analysis

Demographic profile of target market, customer segmentation.

FlexiStore Warehousing will primarily target the following customer profiles:

• Medium-to-large manufacturers
• Regional wholesale companies
• Medium-to-large retail outlets and chains
• Stores needing overstock facilities

Competitive Analysis

Direct and indirect competitors.

FlexiStore Warehousing will face competition from other companies with similar business profiles. A description of each competitor company is below.

Swift Logistics

Swift Logistics is a warehouse business located in Claremore, thirty miles from Tulsa, Oklahoma. The business is owned by Jack Parsons, an entrepreneur who has determined the warehousing market is a viable and profitable venture. Jack Parsons has instituted previously-unknown technology systems into the warehouse company, where the results have been mixed success throughout. The company owns five warehouses, soliciting small to medium-sized businesses as clients.

Jack Parsons has an extensive list of clients that has grown from the past ventures he has initiated. He has a mixed amount of success in these ventures, but has a dedicated following of supporters willing to continue investing in each venture. Former startups include Rent-a-Place LLC, a traveler’s rental business; HowsAboutThat, Inc., a company that sells unusual toys and novelties; and TeddyBear Wonders, Inc., a company that imports teddy bears of all kinds.

Exceptional Service Wearhouse Co.

Exceptional Service Warehouse Company has five warehouse units of 120,000 square feet each. It is located in Fort Worth, Texas, about 180 miles from Tulsa, Oklahoma. As a direct competitor, Exceptional Service Warehouse is a large-scale service with multiple options for customers who need a vast array of services. The organization has over 300 team members with multiple offices and functions within the general administration of the company.

Exceptional Service Warehouse has a strategic initiative to include the very largest inventory supplies in the nation within their warehousing facilities. Toward this end, the company does not solicit any business from medium or small-sized companies, nor does the company allow any exceptions to their stated policies. This somewhat limits the participation of smaller companies and does not offer solutions when potential clients present unusual circumstances or emergency requests.

Thomas & Harris Warehouse

The Thomas & Harris Warehouse company is located in Tulsa, Oklahoma in the southeastern portion of the city. The company targets small businesses specializing in grocery items, including refrigerated and frozen goods. This specialty ensures a steady stream of grocery store clients and other large chains who need emergency supplies for overstocks or other grocery items. Overall, the team of six people run the warehousing and operate the administrative side of the business. There is no technology for inventory control or distribution and there are no options for added value packaging or fulfillment of orders. The targeted customers are grocery stores or wholesalers to grocery stores or chains.

Competitive Advantage

FlexiStore Warehousing will be able to offer the following advantages over their competition:

Marketing Plan

Brand & value proposition.

FlexiStore Warehousing will offer the unique value proposition to its clientele:

• Highly-qualified team of skilled employees who are able to provide a comprehensive array of services
• Technology-driven systems that manage inventory, logistics and cost controls throughout the warehousing system
• High-tech security systems that guarantee the safety of warehouse goods
• Fulfillment and upsell options; logistics RFID controls and other options
• Unbeatable pricing to its clients; they will offer the lowest pricing in Tulsa.

Promotions Strategy

The promotions strategy for FlexiStore Warehousing is as follows:

Word of Mouth/Referrals

FlexiStore Warehousing has built up an extensive list of contacts over the years by providing exceptional service and expertise to their former clients. Marty Snow has multiple former clients who have announced to him they are following him to the new company and will also help spread the word of FlexiStore Warehousing.

Professional Associations and Networking

Marty Snow will be involved in networking during industry associations and trade shows related to warehousing, technology solutions, and related subjects. He will also offer to speak or exhibit the successful processes of his new startup to others to help spread the word of efficiencies that can be offered to all new customers.

Website/SEO Marketing

FlexiStore Warehousing will extensively utilize their website. The website will be well organized, informative, and list all their services that FlexiStore Warehousing provides. The website will also list their contact information and list their available square footage for rent on any given day and date. The up-to-the-minute information will help clients immediately identify the capabilities they need for warehousing. The website presence will contain SEO marketing tactics so that anytime someone types in the Google or Bing search engine “warehouse company” or “warehouse near me”, FlexiStore Warehousing will be listed at the top of the search results.

The pricing of FlexiStore Warehousing will be moderate and on par with competitors so customers feel they receive excellent value when purchasing their services.

Operations Plan

The following will be the operations plan for FlexiStore Warehousing. Operation Functions:

• Martin Snow will be the Owner and President of the company. He will oversee all staff and manage client relations. Martin has spent the past year recruiting the following staff:
• Roger Hartwell, formerly a warehouse team member with Marty, will take on the role of Inventory Control Manager. In this role, he will exercise his depth of knowledge using the advanced technology tools installed to perfect the process of inventory control.
• Kenny Jones, a former team warehouse member with Marty, will take on the role of Operations Manager, overseeing the movement of goods in, through, and out of the warehousing process.

Milestones:

FlexiStore Warehousing will have the following milestones completed in the next six months.

• 5/1/202X – Finalize contract to lease office space
• 5/15/202X – Finalize personnel and staff employment contracts for the FlexiStore Warehousing
• 6/1/202X – Finalize contracts for FlexiStore Warehousing clients
• 6/15/202X – Begin networking at industry events
• 6/22/202X – Begin moving into FlexiStore Warehousing office
• 7/1/202X – FlexiStore Warehousing opens its office for business

Marty Snow will be the owner and operator of the FlexiStore Warehousing company. He has recruited his former warehouse associates, Roger Hartwell and Kenny Jones, to assist in the management of the startup business.

Financial Plan

Key revenue & costs.

The revenue drivers for FlexiStore Warehousing are the fees they will charge to clients for their services.

The cost drivers will be the overhead costs required in order to staff FlexiStore Warehousing. The expenses will be the payroll cost, rent, utilities, office supplies, and marketing materials.

Funding Requirements and Use of Funds

FlexiStore Warehousing is seeking $200,000 in debt financing to launch its warehousing business. The funding will be dedicated toward securing the office space and purchasing office equipment and supplies. Funding will also be dedicated toward three months of overhead costs to include payroll of the staff, rent, and marketing costs for the print ads and association memberships. The breakout of the funding is below:

Key Assumptions

The following outlines the key assumptions required in order to achieve the revenue and cost numbers in the financials and in order to pay off the startup business loan.

• Number of Clients Per Month: 26
• Average Revenue per Month: $78,000
• Office Lease per Year: $100,000

Financial Projections

Income statement, balance sheet, cash flow statement, warehouse business plan faqs, what is a warehouse business plan.

A warehouse business plan is a plan to start and/or grow your warehouse business. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections.

You can easily complete your Warehouse business plan using our Warehouse Business Plan Template here .

What are the Main Types of Warehouse Businesses? 

There are a number of different kinds of warehouse businesses , some examples include: Distribution centers, Climate-controlled warehouses, Smart warehouses, Bonded warehouses, and Consolidated warehouses.

How Do You Get Funding for Your Warehouse Business Plan?

Warehouse businesses are often funded through small business loans. Personal savings, credit card financing and angel investors are also popular forms of funding.

What are the Steps To Start a Warehouse Business?

Starting a warehouse business can be an exciting endeavor. Having a clear roadmap of the steps to start a business will help you stay focused on your goals and get started faster.

1. Develop A Warehouse Business Plan - The first step in starting a business is to create a detailed warehouse business plan that outlines all aspects of the venture. This should include potential market size and target customers, the services or products you will offer, pricing strategies and a detailed financial forecast. 

2. Choose Your Legal Structure - It's important to select an appropriate legal entity for your warehouse business. This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your warehouse business is in compliance with local laws.

3. Register Your Warehouse Business - Once you have chosen a legal structure, the next step is to register your warehouse business with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws.

4. Identify Financing Options - It’s likely that you’ll need some capital to start your warehouse business, so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms.

5. Choose a Location - Whether you plan on operating out of a physical location or not, you should always have an idea of where you’ll be based should it become necessary in the future as well as what kind of space would be suitable for your operations.

6. Hire Employees - There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events.

7. Acquire Necessary Warehouse Equipment & Supplies - In order to start your warehouse business, you'll need to purchase all of the necessary equipment and supplies to run a successful operation.

8. Market & Promote Your Business - Once you have all the necessary pieces in place, it’s time to start promoting and marketing your warehouse business. This includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective Search Engine Optimization (SEO) strategy. You should also consider traditional marketing techniques such as radio or print advertising. 

Learn more about how to start a successful warehouse business:

• How to Start a Warehouse Business

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How to Start a Warehouse Business

Back to All Business Ideas

Written by: Esther Strauss

Esther is a business strategist with over 20 years of experience as an entrepreneur, executive, educator, and management advisor.

Edited by: David Lepeska

David has been writing and learning about business, finance and globalization for a quarter-century, starting with a small New York consulting firm in the 1990s.

Published on July 22, 2021 Updated on May 8, 2024

Investment range

$12,500 - $62,500

Revenue potential

$1 million - $5 million p.a.

Time to build

3 - 6 months

Profit potential

$200,000 - $900,000 p.a.

Industry trend

As online retail continues to rapidly expand, you may have considered jumping on the Amazon bandwagon. But what if there was another way?

Starting your own warehouse or fulfillment business could be the solution for you. With demand outpacing industry supply and aging warehouses making up the majority of storage options, now could be the perfect time to start your own warehouse business.

Fortunately, you’ve come to the right place. This step-by-step guide will walk you through everything you need to know to develop and launch your warehouse business, all the way through to making your first dollar.

Let’s get started.

Looking to register your business? A limited liability company (LLC) is the best legal structure for new businesses because it is fast and simple.

Form your business immediately using ZenBusiness LLC formation service or hire one of the Best LLC Services .

Step 1: Decide if the Business Is Right for You

To gauge whether starting a warehouse business is right for you, it’s a good idea to learn about the industry. In this section, you’ll learn about where the industry is heading, what to expect, and potential costs and revenues.

Let’s get started with some pros and cons.

Pros and cons

Before diving into a business venture, it’s prudent to look at both the positives and the negatives of the opportunity. Viewing an opportunity this way will help you determine whether it’s viable.

• Growth potential thanks to startups
• Cut marketing by providing quality service, generating word-of-mouth
• Simple business model, no training needed
• Tedious and repetitive work
• Full-time commitment required
• Slow to reach profitability

Warehouse industry trends

Industry size and growth.

• Industry size and past growth – The US public storage and warehousing industry is valued at $34 billion, after growing 4% annually since 2017.(( https://www.ibisworld.com/industry-statistics/market-size/public-storage-warehousing-united-states/ )) 
• Growth forecast – Industry analyst Research and Markets expects US warehousing to see steady 3% annual growth through 2024,(( https://www.businesswire.com/news/home/20200121005492/en/North-America-Warehousing-and-Storage-Market-Expected-to-be-Valued-at-US-86.41-Billion-in-2024—ResearchAndMarkets.com%26sa%3DD%26source%3Deditors%26ust%3D1626942011878000%26usg%3DAOvVaw3LK5tthobCxNfPlwhkyX9y )) thanks in part to the 10% annual growth Grand View Research foresees for e-commerce in the years ahead.(( https://www.grandviewresearch.com/industry-analysis/b2c-e-commerce-market ))
• Number of businesses – More than 20,000 public storage and warehousing businesses are operating in the US.(( https://www.ibisworld.com/industry-statistics/number-of-businesses/public-storage-warehousing-united-states/ ))
• Number of people employed – The industry employs nearly 270,000 people.(( https://www.ibisworld.com/industry-statistics/employment/public-storage-warehousing-united-states/ ))

Trends and challenges

Trends in the warehousing industry include:

• Use of AI and robotics in smart warehouses
• Increase in dropshipping
• Steady growth of ecommerce sales

Challenges in the warehousing industry include:

• Lack of qualified workers
• Delayed shipments and failed deliveries

What kind of people work in warehouses?

• Gender – 90% of warehouse managers are male, while 10% are female.(( https://www.zippia.com/warehouse-manager-jobs/demographics/#gender-statistics ))
• Average level of education – 37% of warehouse managers hold a bachelor’s degree and 29% have a high school diploma.(( https://www.zippia.com/warehouse-manager-jobs/education/ ))
• Average age – The average age of a warehouse manager is 45 years old.(( https://www.zippia.com/warehouse-manager-jobs/demographics/#age-statistics ))

How much does it cost to start a warehouse business?

You could start a warehousing business for as little as $12,000, or lay out $60,000 or more for a more ambitious firm. The average startup cost for a warehouse business is around $37,000. On the lower end, you’d be looking at a smaller warehouse dedicated to serving a niche market, while the higher figure would cover a large warehouse meant for a variety of clients.

Across the board, though, your main startup costs will be the building, wages, and any necessary equipment such as storage shelves and machinery. 

The type of equipment you need depends on your warehouse and the type of stock you hold. Here is a list of general equipment that you may need:

• Storage Systems: Pallet racks, industrial shelving, refrigerators, cantilever racks, and flow racks.
• Lift Equipment: Forklifts, pallet jacks, hand trucks, and service carts.
• Dock Equipment: Dock boards and plates, dock seals and shelters, edge-of-dock levelers, integrated dock levelers, dump hoppers, yard ramps, truck restraints, dollies, and casters.
• Conveyors: Flexible conveyor, gravity conveyor, power conveyor, and lifts and carousels.
• Facility Equipment and Accessories: Rolling ladders, security cages, lights, wheel chocks, bumpers, large ceiling fans, workbenches, strip doors, and air curtains.
• Bins and Containers: Bins, bulk boxes, totes, and wire mesh baskets.
• Packaging Equipment: Industrial scales, strapping and banding equipment, stretch wrap machines, and packing tables.
• Safety and Security: CCTVs, fire extinguishers, and barriers.
• Transportation: Van/Truck
• Office Equipment: Furniture and fixtures, computers and IT equipment, and telephones.

How much can you earn from a warehouse business?

The average warehousing company generates $1-10 million in annual revenue and employs 12-22 people. With profit margins of 18-20%, you could expect to earn $180,000 to $2 million per year not long after launch.

The main way a warehousing firm generates revenue is by holding stock for businesses — shoes or dresses or electronic devices. Another way is by providing a long-term storage option for people with inadequate space for their belongings. Finally, there is the third-party logistics segment, in which the warehousing company’s revenue comes from storage and from the shipment of products.

The largest ongoing expenses for a warehouse business are rent and wages. Wages will typically make up the bulk of your expenses as operating a warehouse requires a lot of manual labor, but this could be lowered by investing in machinery. 

In your first year or two, you could simply provide storage services and make $1 million in annual revenue. This would mean $200,000 in profit, assuming a 20% margin. As your brand gains recognition, you could expand to third-party logistics and earn a total of $5 million in annual revenue. At this stage, you’d hire more staff, reducing your profit margin to 18%. You’d still make a tidy profit of $900,000.

What barriers to entry are there?

When it comes to the warehouse industry there are a couple of entry barriers to be aware of. The first barrier is high fixed operating expenses such as rent and wages. But these can be counteracted by having enough operating capital saved for at least the first six months in business.

Secondly, high levels of competition will make it more difficult to break into the industry. In the beginning, you’ll likely need to endure minimal profits to compete with bigger players.

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Step 2: hone your idea.

Now that you have an idea of the different segments of the industry and what to expect, it’s time to fine-tune your business idea. First, we’ll start with why you’re starting your business and identifying an opportunity.

Market research will give you the upper hand, even if you’re already positive that you have a perfect product or service. Conducting market research is important, because it can help you understand your customers better, who your competitors are, and your business landscape.

Why? Identify an opportunity

Before you start your business it’s important to understand why you’re starting it and the gap you’re going to fill in the marketplace. If you already know how you’re going to differentiate yourself from your competition and have a rock-solid value proposition, that’s great! If not, here are a few ways to identify market opportunities.

• Segment Potential Clients: By segmenting potential clients and customers you can analyze the needs, wants, and pain points to find an opportunity.
• Analyze Competitors: Analyzing competitors is a great way to find gaps in the market that they aren’t satisfying. Look at what their clients and customers say about their services. Is there a service that can be improved, streamlined, or made more valuable?
• Evaluate Market Storage Options: Evaluating storage options will give you a holistic view of potential opportunities. Delve into the why behind client choices. What are the differences between clients who self-manage inventory versus those who prefer to outsource?

Now let’s dive into a current real-world opportunity. Aging warehouses signal a potential market need.

E-commerce is booming and all those online retailers need somewhere to keep their goods. As a result, US warehouses are struggling to keep up with demand, but this isn’t the only problem the market faces. 

The average age of a warehouse is 34 years old, according to real estate firm CBRE. While that may not seem very old in human years, for a warehouse that’s elderly. Many US warehouses are dilapidated and aging fast, and many of these older warehouses are far from urban areas and more suited for industrial use. 

Now, with e-commerce on the rise, there is great demand for the development of new modern warehouse facilities. 

Leading the list of cities with the oldest warehouse space is Northern New Jersey, where warehouses average 57 years. It’s followed by Pittsburgh, Boston, Philadelphia, and Cleveland. The cities with the newest warehouse space, on the other hand, are Inland Empire, Las Vegas, Phoenix, Salt Lake City, and Nashville. 

What? Determine your services

In the modern age, warehouses are increasingly offering special facilities and services that are a world away from your grandfather’s warehouse. These services range from logistics to fulfillment and anything in between.

The most common services include:

• Inventory Storage and Handling: As per the client’s requirements.
• Supply Chain Management: Helping client create a fast, reliable, and cost-effective supply chain 
• Storage and Fulfillment: Product packaging, returns, stock management, and tracking deliveries
• End-to-End E-Commerce Solution: One-stop e-commerce solutions, from supply chain to fulfillment

There are various types of warehouses. The most common types are outlined below:

• Refrigerated storage/climate-controlled warehouse
• Public storage and warehousing
• Specialized warehousing (e.g. petroleum, whiskey, document storage, etc.)
• Farm/agriculture product warehousing
• Transportation and warehousing
• 3PL logistics and warehousing

Now that you know about potential solutions, it’s time to figure out which one will best fit your chosen market and how you can stand out. To start you might want to answer these questions:

• What are your competitors doing? What services do they provide in your area?
• Do your competitors target varied customers or do they prefer to focus on a niche?
• How can you make your services unique?
• What are warehousing companies doing in other cities? What do they offer? Is there any service or value that local competitors lack?
• Are there current services that I can improve to provide better value for my clients?
• What are my ideal clients’ needs and how can I best serve them?

While this isn’t an exhaustive list of questions, it’s a good place to start. Remember, you have to make your service fit your market, not the other way around. So make sure to put your effort into this step. 

How much should you charge for your warehouse service?

Your prices will vary greatly based on the services you provide and the storage space required. Some warehouses charge per cubic foot while others set monthly rates for a minimum amount of space. 

Once you know your costs, you can use this Step By Step profit margin calculator to determine your mark-up and final price points. Remember, the prices you use at launch should be subject to change if warranted by the market.

Who? Identify your target market

Now that you know what you want to provide to clients it’s time to get crystal clear about who those clients are. While there may be a range of clients that can benefit from your services, it’s a good idea to narrow your market to those who gain the most.

In the warehousing business, the principal target market usually consists of B2B clients. Some B2C clients may have small stores and need warehousing and fulfillment solutions but prefer not to work with big companies like Amazon.

Here’s a list of where you could find your potential target market:

• Startups and online retailers
• Brick-and-mortar shops with inadequate space
• Wholesalers and manufacturers 
• Etsy sellers looking to store and ship their goods 

Where? Choose your warehouse location

A crucial step is of course finding and renting, or buying, your first warehouse. It needs to be the right size for your needs, in good condition, and in a decent location. Find commercial space to rent in your area on Craigslist , Cre x i , and Commercial Cafe . When choosing a space, you may want to follow these rules of thumb:

• Central location accessible via public transport
• Ventilated and spacious, with good natural light
• Flexible lease that can be extended as your business grows
• Ready-to-use space with no major renovations or repairs needed

You may target a wide customer base or choose a niche, such as specialty e-commerce and Etsy sellers. 

Step 3: Brainstorm a Warehouse Company Name

Here are some ideas for brainstorming your business name:

• Short, unique, and catchy names tend to stand out
• Names that are easy to say and spell tend to do better 
• The name should be relevant to your product or service offerings
• Ask around — family, friends, colleagues, social media — for suggestions
• Including keywords, such as “storage” or “warehousing”, boosts SEO
• Choose a name that allows for expansion: “Universal Storage Solutions” over “Hazardous Materials Warehouse” or “Food & Beverage Warehouse”
• A location-based name can help establish a strong connection with your local community and help with the SEO but might hinder future expansion

Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these. 

Find a Domain

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Finally, make your choice among the names that pass this screening and go ahead with domain registration and social media account creation. Your business name is one of the key differentiators that set your business apart. Once you pick your company name, and start with the branding, it is hard to change the business name. Therefore, it’s important to carefully consider your choice before you start a business entity.

Step 4: Create a Warehouse Business Plan

Here are the key components of a business plan:

• Executive Summary: Summarize the main objectives and strategies of your warehouse business, emphasizing its role in providing storage and logistics solutions for various businesses.
• Business Overview: Describe your warehouse business’s focus on offering storage space and logistics services, including inventory management and distribution support.
• Product and Services: Detail the services offered, such as goods storage, inventory management, order fulfillment, and shipping services.
• Market Analysis: Assess the demand for warehousing services, considering factors like e-commerce growth, local business needs, and supply chain dynamics.
• Competitive Analysis: Compare your warehouse operations to other local providers, highlighting advantages like location, technology integration, or specialized services.
• Sales and Marketing: Outline your strategy to attract clients, using methods like digital marketing, industry networking, or partnerships with transportation companies.
• Management Team: Highlight the expertise and experience of your team, particularly in logistics, supply chain management, and business operations.
• Operations Plan: Describe the operational aspects of running the warehouse, including inventory control, safety procedures, and staffing.
• Financial Plan: Provide an overview of financial aspects, including startup costs, pricing strategy, and expected revenue.
• Appendix: Include supplementary documents such as floor plans, equipment lists, or detailed market research data to support your business plan.

If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist to create a top-notch business plan for you.

Step 5: Register Your Business

Registering your business is an absolutely crucial step — it’s the prerequisite to paying taxes, raising capital, opening a bank account, and other guideposts on the road to getting a business up and running.

Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business! 

Choose where to register your company

Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you are planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to warehousing. 

If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state. 

Choose your business structure

Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your warehouse business will shape your taxes, personal liability, and business registration requirements, so choose wisely. 

Here are the main options:

• Sole Proprietorship – The most common structure for small businesses makes no legal distinction between company and owner. All income goes to the owner, who’s also liable for any debts, losses, or liabilities incurred by the business. The owner pays taxes on business income on his or her personal tax return.
• General Partnership – Similar to a sole proprietorship, but for two or more people. Again, owners keep the profits and are liable for losses. The partners pay taxes on their share of business income on their personal tax returns.
• Limited Liability Company (LLC) – Combines the characteristics of corporations with those of sole proprietorships or partnerships. Again, the owners are not personally liable for debts.
• C Corp – Under this structure, the business is a distinct legal entity and the owner or owners are not personally liable for its debts. Owners take profits through shareholder dividends, rather than directly. The corporation pays taxes, and owners pay taxes on their dividends, which is sometimes referred to as double taxation.
• S Corp – An S-Corporation refers to the tax classification of the business but is not a business entity. An S-Corp can be either a corporation or an LLC , which just needs to elect to be an S-Corp for tax status. In an S-Corp, income is passed through directly to shareholders, who pay taxes on their share of business income on their personal tax returns.

We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using an online LLC formation service. They will check that your business name is available before filing, submit your articles of organization , and answer any questions you might have.

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Step 6: Register for Taxes

The final step before you’re able to pay taxes is getting an Employer Identification Number , or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN. 

Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.

The IRS website also offers a tax-payers checklist , and taxes can be filed online.

It is important to consult an accountant or other professional to help you with your taxes to ensure you are completing them correctly.

Step 7: Fund your Business

Securing financing is your next step and there are plenty of ways to raise capital:

• Bank loans : This is the most common method, but getting approved requires a rock-solid business plan and strong credit history.
• SBA-guaranteed loans : The Small Business Administration can act as guarantor, helping gain that elusive bank approval via an SBA-guaranteed loan .
• Government grants : A handful of financial assistance programs help fund entrepreneurs. Visit Grants.gov to learn which might work for you.
• Venture capital : Offer potential investors an ownership stake in exchange for funds, keeping in mind that you would be sacrificing some control over your business.
• Friends and Family: Reach out to friends and family to provide a business loan or investment in your concept. It’s a good idea to have legal advice when doing so because SEC regulations apply.
• Crowdfunding: Websites like Kickstarter and Indiegogo offer an increasingly popular low-risk option, in which donors fund your vision. Entrepreneurial crowdfunding sites like Fundable and WeFunder enable multiple investors to fund your business.
• Personal: Self-fund your business via your savings or the sale of property or other assets.

Bank and SBA loans are probably the best options, other than friends and family, for funding a warehouse business. You might also try crowdfunding if you have an innovative concept.

Step 8: Apply for Warehouse Business Licenses and Permits

Starting a warehouse business requires obtaining a number of licenses and permits from local, state, and federal governments.

Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), health licenses and permits from the Occupational Safety and Health Administration ( OSHA ), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits. 

You may also need state-level and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more. 

You could also check this SBA guide for your state’s requirements, but we recommend using MyCorporation’s Business License Compliance Package . They will research the exact forms you need for your business and state and provide them to ensure you’re fully compliant.

This is not a step to be taken lightly, as failing to comply with legal requirements can result in hefty penalties.

If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.

Step 9: Open a Business Bank Account

Before you start making money you’ll need a place to keep it, and that requires opening a bank account .

Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your warehouse business as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.

Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account. 

Step 10: Get Business Insurance

Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.

Here are some types of insurance to consider:

• General liability: The most comprehensive type of insurance, acting as a catch-all for many business elements that require coverage. If you get just one kind of insurance, this is it. It even protects against bodily injury and property damage.
• Business Property: Provides coverage for your equipment and supplies.
• Equipment Breakdown Insurance: Covers the cost of replacing or repairing equipment that has broken due to mechanical issues.
• Worker’s compensation: Provides compensation to employees injured on the job.
• Property: Covers your physical space, whether it is a cart, storefront, or office.
• Commercial auto: Protection for your company-owned vehicle.
• Professional liability: Protects against claims from a client who says they suffered a loss due to an error or omission in your work.
• Business owner’s policy (BOP): This is an insurance plan that acts as an all-in-one insurance policy, a combination of any of the above insurance types.

Step 11: Prepare to Launch

As opening day nears, prepare for launch by reviewing and improving some key elements of your business. 

Essential software and tools

Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks.  

Warehousing software such as 3PL Warehouse Manager , Deposco , and ShipHero will help boost your company’s efficiency, cutting shipping costs, sync distribution and help with forecasting, management and workflow.

• Popular web-based accounting programs for smaller businesses include Quickbooks , Freshbooks , and Xero . 
• If you’re unfamiliar with basic accounting, you may want to hire a professional, especially as you begin. The consequences for filing incorrect tax documents can be harsh, so accuracy is crucial.

Develop your website

Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism.

You can create your own website using services like WordPress, Wix, or Squarespace . This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech-savvy, you can hire a web designer or developer to create a custom website for your business.

They are unlikely to find your website, however, unless you follow Search Engine Optimization ( SEO ) practices. These are steps that help pages rank higher in the results of top search engines like Google.

Here are some powerful marketing strategies for your future business:

• Specialized Services Showcase: Highlight your warehouse’s specialized services, such as temperature-controlled storage or efficient order fulfillment, to set yourself apart from competitors and attract businesses with unique storage needs.
• Partnerships with E-commerce Platforms: Forge partnerships with e-commerce platforms to position your warehouse as a preferred storage and distribution partner for online retailers, leveraging the growing e-commerce trend.
• Local SEO Optimization: Optimize your online presence for local search engine optimization (SEO) to ensure that businesses in your vicinity looking for storage solutions find your warehouse easily.
• Educational Content on Industry Trends: Share informative content about the latest trends, technologies, and best practices in warehouse management through blogs, webinars, or workshops to position your business as an industry leader.
• Referral Programs for Clients: Implement a referral program that rewards existing clients for recommending your warehouse services, encouraging word-of-mouth marketing within the business community.
• Social Media Visibility: Utilize social media platforms to showcase your warehouse facilities, share success stories, and engage with potential clients, building a strong online presence that fosters trust and credibility.
• Attend Trade Shows and Conferences: Participate in relevant industry trade shows and conferences to network with potential clients, suppliers, and partners, gaining exposure and credibility within the warehouse and logistics sector.
• Customer Testimonials and Case Studies: Collect and showcase customer testimonials and case studies that highlight the efficiency, reliability, and cost-effectiveness of your warehouse services, providing social proof to potential clients.
• Flexible Pricing Structures: Offer flexible pricing structures to accommodate the diverse needs of businesses, allowing you to attract a wide range of clients, from startups to established enterprises.
• Invest in Sustainable Practices: Emphasize sustainable and eco-friendly warehouse practices, appealing to businesses that prioritize environmentally responsible partners, and differentiating your business in the market.

Focus on USPs

Unique selling propositions, or USPs, are the characteristics of a product or service that set it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your warehouse meets their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire. 

Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your warehousing business could be:

• Same day in-state delivery; 48 hours anywhere in US
• Complete order fulfillment and storage solution
• Flexible storage & good rates with full insurance & 24/7 service, security

You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running a warehouse business, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in warehouses for years and can offer invaluable insight and industry connections. 

The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in warehousing. You’ll probably generate new customers or find companies with which you could establish a partnership. Online businesses might also consider affiliate marketing as a way to build relationships with potential partners and boost business.

Step 12: Build Your Team

As your business grows, you will likely need workers to fill various roles. Potential positions for a warehouse business include:

• Marketing Lead – leads SEO, social media strategies
• Operations Manager – oversees warehouse operations.
• Supply and Logistics Manager – deliveries, procurement, logistics, and distribution services

At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need. 

Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed , Glassdoor , or ZipRecruiter . Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent.

Step 13: Run a Warehouse Business – Start Making Money!

It’s time to get the word out about your warehousing solutions. Combining your USPs with a solid marketing strategy will help you stand apart from the competition which is a must in the crowded warehousing industry.

Aside from implementing the marketing ideas listed above, it’s important that you become an International Warehouse Association member to get listed as a local warehouse. It’s also wise to build business-to-business relationships and advertise in leading industry magazines and journals .

You can also do affiliate marketing, in which you compensate third parties in order to generate traffic to your website. You’re now ready to open your warehouse and start making good money! 

• Warehouse Business FAQs

Owning a warehouse can be extremely profitable as e-commerce demand continues to rise. This demand is fueled by reduced physical shopping activities and the ease of online shopping.

If your warehouse is mostly empty, you may still be able to utilize the space to generate revenues. You may consider letting it to other warehousing companies, event organizers, entertainment businesses, art galleries, gaming organizations, or you could even convert it into a parking space.

You can start a small warehouse by focusing on a niche segment and handling products that don’t require racks, shelves, or a controlled environment (e.g., refrigerated storage). If possible, the stock should be stored in easy-to-move boxes that can be transported with minimal equipment. You should also focus on reducing equipment costs as it can take a while to generate a return on investment when operating on a small scale.

To make your warehouse profitable, you’ll need to choose the right location and market niche. You should also work on automating warehousing tasks that reduce labor needs and increases efficiency. Besides these, you will simply need to ensure that you’re providing value to your clients.

To find an available-for-rent warehouse in your target area, you may look into various commercial property rental platforms such as Warehouse Space , LoopNet , and Showcase .

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• Decide if the Business Is Right for You
• Hone Your Idea
• Brainstorm a Warehouse Company Name
• Create a Warehouse Business Plan
• Register Your Business
• Register for Taxes
• Fund your Business
• Apply for Warehouse Business Licenses and Permits
• Open a Business Bank Account
• Get Business Insurance
• Prepare to Launch
• Build Your Team
• Run a Warehouse Business - Start Making Money!

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Warehouse Business Plan

High demand and a recurring revenue model make starting a warehouse business a lucrative and rewarding profession.

Anyone can start a new business, but you need a detailed business plan when it comes to raising funding, applying for loans, and scaling it like a pro!

Need help writing a business plan for your warehouse business? You’re at the right place. Our warehouse business plan template will help you get started.

Free Business Plan Template

Download our free business plan template now and pave the way to success. Let’s turn your vision into an actionable strategy!

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• Financial Tables

How to Write A Warehouse Business Plan?

Writing a warehouse business plan is a crucial step toward the success of your business. Here are the key steps to consider when writing a business plan:

1. Executive Summary

An executive summary is the first section planned to offer an overview of the entire business plan. However, it is written after the entire business plan is ready and summarizes each section of your plan.

Here are a few key components to include in your executive summary:

Introduce your Business:

Start your executive summary by briefly introducing your business to your readers.

Market Opportunity:

Products and services:.

Highlight the warehouse services you offer your clients. The USPs and differentiators you offer are always a plus.

Marketing & Sales Strategies:

Financial highlights:, call to action:.

Ensure your executive summary is clear, concise, easy to understand, and jargon-free.

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2. Business Overview

The business overview section of your business plan offers detailed information about your company. The details you add will depend on how important they are to your business. Yet, business name, location, business history, and future goals are some of the foundational elements you must consider adding to this section:

Business Description:

Describe your business in this section by providing all the basic information:

Describe what kind of warehouse company you run and the name of it. You may specialize in one of the following warehouse businesses:

• General Warehouse
• Cold storage warehouse
• Distribution centers
• Bonded warehousing
• Specialized warehousing
• Public warehousing
• Private warehousing
• Describe the legal structure of your warehouse company, whether it is a sole proprietorship, LLC, partnership, or others.
• Explain where your business is located and why you selected the place.

Mission Statement:

Business history:.

If you’re an established warehouse service provider, briefly describe your business history, like—when it was founded, how it evolved over time, etc.

Additionally, If you have received any awards or recognition for excellent work, describe them.

Future Goals

This section should provide a thorough understanding of your business, its history, and its future plans. Keep this section engaging, precise, and to the point.

3. Market Analysis

The market analysis section of your business plan should offer a thorough understanding of the industry with the target market, competitors, and growth opportunities. You should include the following components in this section.

Target market:

Start this section by describing your target market. Define your ideal customer and explain what types of services they prefer. Creating a buyer persona will help you easily define your target market to your readers.

Market size and growth potential:

Describe your market size and growth potential and whether you will target a niche or a much broader market.

Competitive Analysis:

Market trends:.

Analyze emerging trends in the industry, such as technology disruptions, changes in customer behavior or preferences, etc. Explain how your business will cope with all the trends.

Regulatory Environment:

Here are a few tips for writing the market analysis section of your warehouse business plan:

• Conduct market research, industry reports, and surveys to gather data.
• Provide specific and detailed information whenever possible.
• Illustrate your points with charts and graphs.
• Write your business plan keeping your target audience in mind.

4. Warehouse Services

The product and services section should describe the specific services and products that will be offered to customers. To write this section should include the following:

Describe your warehouse services:

Mention the warehouse services your business will offer. This list may include services like,

• Inventory management
• Order fulfillment
• Distribution & shipping
• Cross-docking services
• Customs and compliance

Describe specialized storage:

Additional services:.

In short, this section of your warehouse plan must be informative, precise, and client-focused. By providing a clear and compelling description of your offerings, you can help potential investors and readers understand the value of your business.

5. Sales And Marketing Strategies

Writing the sales and marketing strategies section means a list of strategies you will use to attract and retain your clients. Here are some key elements to include in your sales & marketing plan:

Unique Selling Proposition (USP):

Define your business’s USPs depending on the market you serve, the equipment you use, and the unique services you provide. Identifying USPs will help you plan your marketing strategies.

Pricing Strategy:

Marketing strategies:, sales strategies:, customer retention:.

Overall, this section of your warehousing business plan should focus on customer acquisition and retention.

Have a specific, realistic, and data-driven approach while planning sales and marketing strategies for your warehouse business, and be prepared to adapt or make strategic changes in your strategies based on feedback and results.

6. Operations Plan

The operations plan section of your business plan should outline the processes and procedures involved in your business operations, such as staffing requirements and operational processes. Here are a few components to add to your operations plan:

Staffing & Training:

Operational process:, equipment & machinery:.

Include the list of equipment and machinery required for the warehouse, such as forklifts & material handling equipment, racking & shelving systems, warehouse management system, etc.

Adding these components to your operations plan will help you lay out your business operations, which will eventually help you manage your business effectively.

7. Management Team

The management team section overviews your warehouse business’s management team. This section should provide a detailed description of each manager’s experience and qualifications, as well as their responsibilities and roles.

Founders/CEO:

Key managers:.

Introduce your management and key members of your team, and explain their roles and responsibilities.

Organizational structure:

Compensation plan:, advisors/consultants:.

Mentioning advisors or consultants in your business plans adds credibility to your business idea.

This section should describe the key personnel for your warehouse services, highlighting how you have the perfect team to succeed.

8. Financial Plan

Your financial plan section should provide a summary of your business’s financial projections for the first few years. Here are some key elements to include in your financial plan:

Profit & loss statement:

Cash flow statement:, balance sheet:, break-even point:.

Determine and mention your business’s break-even point—the point at which your business costs and revenue will be equal.

Financing Needs:

Be realistic with your financial projections, and make sure you offer relevant information and evidence to support your estimates.

9. Appendix

The appendix section of your plan should include any additional information supporting your business plan’s main content, such as market research, legal documentation, financial statements, and other relevant information.

• Add a table of contents for the appendix section to help readers easily find specific information or sections.
• In addition to your financial statements, provide additional financial documents like tax returns, a list of assets within the business, credit history, and more. These statements must be the latest and offer financial projections for at least the first three or five years of business operations.
• Provide data derived from market research, including stats about the industry, user demographics, and industry trends.
• Include any legal documents such as permits, licenses, and contracts.
• Include any additional documentation related to your business plan, such as product brochures, marketing materials, operational procedures, etc.

Use clear headings and labels for each section of the appendix so that readers can easily find the necessary information.

Remember, the appendix section of your warehouse business plan should only include relevant and essential information supporting your plan’s main content.

The Quickest Way to turn a Business Idea into a Business Plan

Fill-in-the-blanks and automatic financials make it easy.

This sample warehouse business plan will provide an idea for writing a successful warehouse plan, including all the essential components of your business.

After this, if you still need clarification about writing an investment-ready business plan to impress your audience, download our warehouse business plan pdf .

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Frequently asked questions, why do you need a warehouse business plan.

A business plan is an essential tool for anyone looking to start or run a successful warehouse business. It helps to get clarity in your business, secures funding, and identifies potential challenges while starting and growing your business.

Overall, a well-written plan can help you make informed decisions, which can contribute to the long-term success of your warehouse company.

How to get funding for your warehouse business?

There are several ways to get funding for your warehouse business, but self-funding is one of the most efficient and speedy funding options. Other options for funding are:

• Bank loan – You may apply for a loan in government or private banks.
• Small Business Administration (SBA) loan – SBA loans and schemes are available at affordable interest rates, so check the eligibility criteria before applying for it.
• Crowdfunding – The process of supporting a project or business by getting a lot of people to invest in your business, usually online.
• Angel investors – Getting funds from angel investors is one of the most sought startup options.

Apart from all these options, there are small business grants available, check for the same in your location and you can apply for it.

Where to find business plan writers for your warehouse business?

There are many business plan writers available, but no one knows your business and ideas better than you, so we recommend you write your warehouse business plan and outline your vision as you have in your mind.

What is the easiest way to write your warehouse business plan?

A lot of research is necessary for writing a business plan, but you can write your plan most efficiently with the help of any warehouse business plan example and edit it as per your need. You can also quickly finish your plan in just a few hours or less with the help of our business plan software .

How detailed should the financial projections be in my warehouse business plan?

The level of detail of the financial projections of your warehouse business may vary considering various business aspects like direct and indirect competition, pricing, and operational efficiency. However, your financial projections must be comprehensive enough to demonstrate a comprehensive view of your financial performance.

Generally, the statements included in a business plan offer financial projections for at least the first three or five years of business operations.

What key components should a warehouse business plan include?

The following are the key components your warehouse business plan must include:

• Executive summary
• Business Overview
• Market Analysis
• Products and services
• Sales and marketing strategies
• Operations plan
• Management team
• Financial plan

Can a good warehouse business plan help me secure funding?

Indeed. A well-crafted warehouse business will help your investors better understand your business domain, market trends, strategies, business financials, and growth potential—helping them make better financial decisions.

So, if you have a profitable and investable business, a comprehensive business plan can help you secure your business funding.

About the Author

Upmetrics Team

Upmetrics is the #1 business planning software that helps entrepreneurs and business owners create investment-ready business plans using AI. We regularly share business planning insights on our blog. Check out the Upmetrics blog for such interesting reads. Read more

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Business Plan Template for Warehouse

• Great for beginners
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Running a successful warehouse business requires careful planning and strategic thinking. Whether you're starting from scratch or looking to revamp your existing warehouse, ClickUp's Business Plan Template for Warehouse has got you covered!

With this template, you can:

• Outline your warehouse operations, from inventory management to shipping and receiving
• Set clear objectives and goals, aligned with your business vision and mission
• Conduct a thorough market analysis to identify your target audience and competition
• Create detailed financial projections to ensure profitability and sustainability
• Develop effective strategies to optimize warehouse processes and maximize efficiency

Don't leave the success of your warehouse business to chance. Get started with ClickUp's Business Plan Template for Warehouse today and take your logistics game to the next level!

Business Plan Template for Warehouse Benefits

When it comes to opening or managing a warehouse, having a solid business plan is essential. With the Business Plan Template for Warehouse, you can:

• Clearly define your warehouse operations and objectives, ensuring everyone is on the same page
• Conduct a thorough market analysis to identify opportunities and potential challenges in the logistics industry
• Develop strategies to maximize efficiency, reduce costs, and increase profitability
• Create realistic financial projections to secure funding and make informed business decisions
• Set measurable goals and track progress to ensure the long-term success of your warehouse business.

Main Elements of Warehouse Business Plan Template

ClickUp's Business Plan Template for Warehouse is designed to help entrepreneurs and business owners in the logistics industry create a comprehensive plan for their warehouse operations. Here are the main elements of this template:

Custom Statuses: Track the progress of different sections of your business plan with statuses like Complete, In Progress, Needs Revision, and To Do, ensuring that all aspects of your plan are properly addressed and updated.

Custom Fields: Use custom fields like Reference, Approved, and Section to add important information and categorize each component of your business plan, making it easy to organize and reference specific sections.

Custom Views: Access different views to visualize and manage your business plan effectively. Choose from the Topics view to focus on specific areas, the Status view to track progress, the Timeline view to set deadlines and milestones, the Business Plan view to see the plan as a whole, and the Getting Started Guide view to quickly understand how to use the template.

Collaboration: Utilize ClickUp's collaboration features, such as task comments, attachments, and notifications, to ensure seamless communication and collaboration with your team while working on your business plan.

Integrations: Connect ClickUp with other tools you use for financial analysis, market research, and project management to streamline your business planning process.

With ClickUp's Business Plan Template for Warehouse, you can streamline and organize your warehouse operations, financial projections, market analysis, and strategies, ensuring the success and profitability of your warehouse business.

How To Use Business Plan Template for Warehouse

Follow these 6 steps to effectively use the Business Plan Template for Warehouse in ClickUp:

1. Define your vision and mission

Start by clearly defining your vision and mission for your warehouse business. What do you want to achieve? What is the purpose of your business? This will help set the direction and focus for your business plan.

Use a Doc in ClickUp to outline and articulate your vision and mission statement.

2. Analyze the market and competition

Conduct thorough research to understand the market and competition in the warehouse industry. Identify trends, target customers, and key competitors. This will help you identify opportunities and potential challenges.

Use custom fields in ClickUp to track market research data and competitor analysis.

3. Set your goals and objectives

Based on your analysis, set specific and measurable goals and objectives for your warehouse business. These goals should be aligned with your vision and mission statement. Whether it's increasing revenue, expanding your customer base, or improving operational efficiency, clearly define what you want to achieve.

Create Goals in ClickUp to track and measure your progress towards your business objectives.

4. Develop your operational plan

Outline the key operational aspects of your warehouse business. This includes your facility, equipment, staffing, inventory management, and logistics processes. Define how you will manage operations efficiently and effectively.

Use the Gantt chart in ClickUp to create a visual timeline and schedule for your operational plan.

5. Create a marketing strategy

Develop a comprehensive marketing strategy to promote your warehouse business and attract customers. Identify your target audience, determine the most effective marketing channels, and outline your promotional activities.

Use Board view in ClickUp to create a marketing board and track your marketing initiatives.

6. Financial planning and projections

Determine the financial aspects of your warehouse business. Develop a budget, forecast your revenue and expenses, and estimate your profitability. This will help you understand the financial feasibility of your business and secure funding if needed.

Use the Table view in ClickUp to create a financial spreadsheet and track your financial projections.

By following these 6 steps and utilizing the Business Plan Template for Warehouse in ClickUp, you can effectively plan and strategize for the success of your warehouse business.

Get Started with ClickUp’s Business Plan Template for Warehouse

Entrepreneurs or business owners in the logistics industry, specifically those planning to open or manage a warehouse, can use the ClickUp Business Plan Template for Warehouse to streamline and organize their business planning process.

To get started, hit “Add Template” to sign up for ClickUp and add the template to your Workspace. Make sure you designate which Space or location in your Workspace you’d like this template applied.

Next, invite relevant members or guests to your Workspace to start collaborating.

Now you can take advantage of the full potential of this template to create a comprehensive business plan for your warehouse:

• Use the Topics View to outline and categorize different sections of your business plan, such as operations, marketing, finance, and more.
• The Status View will help you track the progress of each section, with statuses like Complete, In Progress, Needs Revision, and To Do.
• The Timeline View will allow you to set deadlines and visualize the timeline of your business plan.
• Use the Business Plan View to have a comprehensive overview of your entire plan, including objectives, strategies, financial projections, and market analysis.
• The Getting Started Guide View will provide you with step-by-step instructions on how to use the template effectively.
• Customize the template by adding custom fields like Reference, Approved, and Section to track additional information and make it more tailored to your warehouse business needs.
• Update statuses and custom fields as you work through each section to keep team members informed of progress and approvals.
• Monitor and analyze your business plan to ensure it aligns with your goals and maximizes the potential success of your warehouse business.
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Starting a Warehouse Distribution Business: 7 Tips

Starting a warehouse distribution business is profitable, especially with the rise of online D2C eCommerce vendors and retailers and direct to consumer trends . For businesses that sell online high demand products , having a place to store products before shipping to consumers is crucial to the success of their operations.

Additionally, businesses that sell physical products or receive goods from a wholesale marketplace will need a warehouse to temporarily store their products. Warehousing is a critical process in supply chain management .

Key Takeaway - An eCommerce marketplace online needs physical storage space for all the stock-keeping units ( SKU number ) in their online inventory. You can capitalize on this need to store eCommerce products and start your own warehousing business. Consider white label vs. private label products.

There are various distribution warehouse business ideas to venture into. However, you need to begin with one, a warehouse, and two, a distribution business plan.

The warehousing industry is huge, and starting a warehouse distribution business can get confusing if you don’t have the right guidelines. Let’s discuss the distribution warehouse business to get you started.

What Is a Distribution Warehouse?

A distribution warehouse is an integral part of the supply chain. It describes the place a product is stored after it is received from manufacturers until it gets delivered to the retailer or customer.

There are different types of warehousing options designed for different purposes and for a range of business sizes. A distribution warehouse is a warehousing model designed to store goods close to the end of the supply chain.

To put it clearly, a distribution warehouse stores products that are ready to be delivered to retailers and customers. Distribution warehouses are designed for quick inbound and outbound product flows.

Besides streamlining its warehouse management process flow , a distribution warehouse makes use of its warehouse organization and storage system, which facilitates tracking, inventory tracking , and locating products within the warehouse.

Key Takeaway - A good distribution warehouse will incorporate a robust warehouse management system (WMS) to track warehouse inventory . The WMS must also be able to manage eCommerce packaging of goods, creating packing slip templates, customize warehouse labels , and product shipping and handling .

Consider using a business process flow chart template to map out your processes. Now that you know what a distribution warehouse is, let’s discuss the intricacies of starting a warehouse distribution business.

How to Start a Warehouse Distribution Business: 7 Tips

Every new business begins with a business plan as part of its efficient business systems . Before you start a warehouse distribution business, it is important to have a solid plan that includes market research, SWOT analysis , an eCommerce marketing plan , and financial projections.

Besides having a business plan, it is important to position your business in a way that wholesale distributors and retailers can trust you. Starting a warehouse distribution business implies that you’ll be entrusted with safely storing and securing a lot of products.

You must be able to offer the right warehousing solutions for your customers. Additionally, you’ll also need to decide on the best warehouse management tools to use for your warehousing operations.

Looking to optimize your warehouse operations for the best efficiency and profitability? Download our free Warehouse Management eBook to get on the right track.

Let’s look into some of the key steps to take when starting a warehouse distribution business.

1. Write Your Business Plan and Conduct Market Research

The need for writing an eCommerce business plan and conducting market research before starting your business cannot be overstated. Starting a warehouse distribution business costs a lot of money, hence it is important to have a plan before you get started.

Researching your niche market will also help you prepare your unique selling point (USP). In addition, it will make it easier to decide if you want to offer additional supply chain solutions based on your target audience's needs.

Here’s a list of what to include in your warehouse and distribution business plan:

• Executive summary
• Company overview
• Industry analysis
• Market analysis
• Competitive analysis
• Marketing plan
• Operations plan
• Financial analysis

2. Specify Your Market

There are millions of products that are stored in warehouses daily. Specifying the type of products or industry you want to venture into will help you prepare your facility to meet up with the storage requirements of such products.

For instance, if your market is clients in the restaurant industry , you will be dealing with a lot of food products. It is crucial to keep your warehouse facility at a certain storage temperature to keep the products fresh. 

Your customers may need help shipping frozen food or shipping frozen meat . Specifying your market will position your business to fulfill these needs.

Additionally, specifying your market will help you decide on many components of your business. These components include the size of the warehouse, storage equipment, utility costs, and the inventory management techniques to adopt.

3. Get Your Licenses

Like every other business, it is essential that you take care of your legal paperwork. Covering all your legal bases will save you a lot of stress in the long run. Do it early!

You need to complete the paperwork and forms required by your city or state to guarantee that the legal aspects of starting a warehouse distribution business are taken care of. Here are some typical wholesale license s you should get for your warehouse and distribution business:

• Employee identification number (EIN)
• Doing business as (DBA) registration
• Tax identification number (TIN)
• Tax permits based on your city or state

4. Purchase Necessary Equipment

Investing in high-performance warehousing equipment is key to the success of your distribution warehouse business. The right storage equipment will be the reason your customers keep using your facilities.

You should have the following equipment in your warehouse:

• Various storage options, such as carousels, racks, cabinets and shelving , and liquor storage
• Lifting equipment such as pallet jacks, forklifts, and service carts
• Conveyors such as belt conveyors and gravity roller conveyors
• Labeling options such as shipping label printer

5. Employ the Right People

The success of your warehouse business depends on the people who comprise your team. With the right eCommerce team structure , you can boost warehouse business efficiency and improve customer satisfaction.

Additionally, some warehouse equipment will require manual operation. So, it is important to employ skilled labor. Choosing the finest team is vital because employees will play a crucial role in your warehouse operations.

Here are some vital positions to hire as you start your warehouse operation:

• Inventory control manager
• Order management specialist
• Material handler
• Warehousemen
• Warehouse manager
• Shipping specialist
• Demand planning manager
• Distribution center manager
• Machine operator

6. Integrate Warehouse Management Systems

A warehouse management system is perfect for 3PL companies and businesses that offer warehousing services. Many of the problems that every warehousing and distribution company has on a daily basis can be solved with the help of a WMS and top ERP systems . 

Warehouse management solutions quickly and effectively evaluate warehouse data, pinpoint inventory shortfalls, and highlight urgent inventory needs. With the aim of enhancing your warehouse organization and productivity, this enables you to view crucial figures at a moment's notice. These systems should also help you calculate inventory turnover .

7. Market Your Warehouse

Marketing is a foundational part of starting a business. The warehousing industry uses the B2B business model and your target audience is mostly eCommerce businesses across various niche markets.

Implementing eCommerce marketing strategies that will reach your unique clientele is important. You can integrate eCommerce marketing automation tools into your business operations.

It may be a bit challenging at first, but implementing a clearly structured marketing strategy will help you get results. Besides digital and online marketing, you can also list your warehouse on a wholesale directory . This will help you get the attention of wholesalers that may require a warehouse to store their products.

Frequently Asked Questions About Starting a Warehouse Distribution Business

From writing your warehouse and distribution business plan to getting your facility ready for potential customers, a lot goes into running a distribution warehouse business. Let’s answer some common questions about starting a warehouse business.

How Do I Get Clients For My Warehouse?

Getting B2B clients for your warehouse business can be difficult if you do not have the right marketing plan in place. As with other eCommerce B2B businesses, you need to offer a value proposition and a USP before your target clients will see you as the market leader.

Here are some marketing ideas to get clients for your warehousing business:

• Make a c ompany website
• Use eCommerce search engine optimization
• Leverage eCommerce email marketing
• Social media marketing
• Create content friendly to eCommerce search engines
• Incentivize customer referrals
• Newspaper ads
• Print media
• Networking events
• Street signage

Which Product Is Best for Distribution?

There are numerous distribution warehouse business ideas and products to distribute. Here are some of the best products for distribution:

• Wholesale produce
• Wine and alcohol
• Bakery products
• Wholesale dairy products

How Much Does It Cost to Set Up a Warehouse?

Setting up a warehouse can be quite expensive. A 30x40’ - warehouse structure will cost about $25,000, while a 50,000- to 60,000-square-foot distribution center may cost between $750,000 and $1,000,000, depending on the amenities and building materials.

Storing Up for Later

Starting a warehouse distribution business is quite lucrative. Besides the amount of money that goes into setting it up, there is a lot to gain from the business.

However, it is crucial to use a warehouse management system to automate your business processes. Investing in the right equipment and skilled labor is also key to running a successful business .

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New Fulfilment Magazine

A complete guide to warehouse planning.

Table of Contents

Deciding to remodel or plan a new warehouse is no easy task and it requires planning that businesses are often not accustomed to. Yet, going through the planning process will result in an optimized warehouse with lean warehouse operations . It will help make better use of your resources in the long run and has a positive domino effect on your business.

Remember, effective fulfillment warehouse planning requires careful consideration of your inventory, space, equipment, and processes, as well as an understanding of your operational goals and priorities.

How Do I Start Warehouse Planning?

Warehouse design projects can be split into initiation phase, followed by planning, implementation and closing. Taking a project management approach to your warehouse planning and redesign by breaking it down into smaller task can make the job less intimidating

In case you’re starting this project on your own, consider project management solutions like Trello, Monday, or Microsoft Project.

At high level planning for a fulfillment warehouse requires the following steps:

• Define your inventory: Determine the types and quantities of products you will store in the warehouse.
• Determine your storage needs: Decide on the types of storage solutions you will use for your products, such as pallet racking, shelving, or mezzanine flooring.
• Assess your space: Measure the physical space available in your warehouse and decide how much of it will be dedicated to storage, receiving, and shipping areas.
• Evaluate your equipment needs: Decide what material handling equipment, such as forklifts or conveyor systems, you will need to efficiently store and retrieve your products.
• Plan your layout: Develop a layout of the warehouse that maximizes storage space and allows for efficient product flow.
• Establish processes and procedures: Decide on the processes and procedures for receiving, storing, and shipping products, and train your staff on these procedures.
• Implement technology: Consider using warehouse management software or barcoding systems to improve accuracy and efficiency in your fulfillment operations.

Order- & stock management for sellers and fulfillment centers

Automate your inventory and order process with Waredock

Initiation Phase: Identify the Problems You Want to Solve

First step: identify the problem you’re trying to solve. If you simply rearrange a few shelves and clean up some work areas without a clearly defined objective, you’ll be disappointed with the results.

Think about the major problems within your warehouse. For instance, is your facility struggling with:

• Inefficient placement of equipment?  If you consistently use one piece of equipment after another, but the two are located incredibly far away from each other, you’re wasting your workers’ time and your company’s resources. Inefficiencies are frustrating and tedious for workers who have to take twenty steps to handle a task that could be completed in four.
• Poor placement of products?  If you follow the  Pareto Principle , 80% of your warehouse movements come from 20% of your products. If this 20% of products is located in a hard-to-reach area of your warehouse or behind other goods, it’ll take your workers longer to store, pick, and pack fast-moving products.
• Disorganized flow of people and equipment?  People and equipment are constantly moving through your warehouse, and bottlenecks or traffic jams can lead to missed deadlines, decreased productivity, injuries, and even deaths. A warehouse layout designed with a traffic management plan helps mitigate these risks.

Want to quickly understand where your warehouse’s challenges lie? You’ve got two main options.

Option 1: Hold Consultations

Consult with your warehouse workers to identify inefficiencies. There may be elements of your warehouse operations that you’d never considered a problem before, but that are actually causing undue stress for your workers. Addressing these concerns is important. One  study shows that useless or inefficient tasks have a negative effect on the mental health of workers . If your warehouse layout can eliminate some of these concerns, it’s worth incorporating them into your plans.  

Option 2: Use Technology to Assess Your Warehouse’s Current State

If your warehouse management system (WMS) uses mobile scanners or radio frequency identification (RFID) technology, you can readily assess your data to understand the flow of goods through your warehouse. This analysis  will identify your most frequently moved goods, the areas with the most traffic in your warehouse, and how long it takes to store, pick, pack, and ship goods.

More specifically, you can understand your warehouse’s operations (and plan your layout redesign accordingly) using  statistics from your WMS technology , like total landed cost.

Knowing the total landed cost of each item allows you to understand which particular items are driving your revenue. Conversely, you understand which items aren’t driving your revenue, allowing you to strategically reorganize your warehouse space so that fast-moving items are easily accessible and slow-moving items are placed in the less-convenient spots.

Planning Phase: Detail the Work to Be Done

In the planning phase, you outline the work to be done, the tasks and resources needed, and timeframes. By the end of this phase in your warehouse redesign project, you should have:

• Listed and described all the tasks to be completed
• Drafted the schedule
• Estimated the project costs

Create a Map of Your Warehouse

Once you’ve committed to specific areas of improvement, create a map of your warehouse. You can either use an existing map, manually draw a map, or use technology such as the warehouse layout and design software SmartDraw.

Whichever method you use, your map should clearly illustrate elements like:

• Docks doors
• Height restrictions
• Columns/supports
• Overhead doors
• Installed equipment
• Office areas (with indication of which direction the door opens to avoid blocking entrances/exits)

Furthermore, identify the operational locations of your warehouse on your map. Laying them out clearly will allow you to consider every movement and activity within your warehouse. Examples of operational activities include:

• Inbound staging area
• Back-to-back racks
• Packing desks
• Outbound shipment area
• Damaged product area

Consider The Unique Requirements of Your Warehouse

Your planning efforts will depend on your unique business. Generally, every warehouse layout redesign effort should consider the following elements:

• Equipment and Surrounding Workspace.  As a warehouse, your key units may consist of items like pallet racks, shelving, and equipment.
• Production Zones and Workflow Areas.  A warehouse manager needs to think about the space between shelves. Since your primary objective is receiving, stocking, and shipping, efficiently accessing goods is of the utmost importance. It should be easy for forklifts and people to navigate aisles. You’ll also want to plan a specific location for packing and receiving. Failing to allocate enough space for these essential, non-storage activities can lead to bottlenecks and damaged goods.
• Storage Areas.  The types of items you store impacts your warehouse layout planning. If you’re moving pallets with pallet jacks or a forklift, you’ll need wider aisles and shelving. If your goods are hand-picked, you won’t need as much space. The type of items you’re storing also impacts the type of shelving you purchase, so be mindful of any particular requirements related to safety (e.g. chemicals) or temperature (e.g. perishable goods) when deciding where to store certain goods.

Add Your Warehouse Flow to Your Map

Start by listing your key processes, and then draw the workflow directions of those operations. Use different colors – either on paper or in your software – to draw the secondary operations that follow these main processes.

Use your earlier conversations with warehouse workers or the information from your WMS to create an accurate representation of the different workflows.

Overall, your planning should account for these 6 basic warehouse workflows:

• The putaway flow from the inbound receiving area to back-to-back racks or free areas
• The walking paths and directions for the pickers
• The picking path or direction for the forklift drivers
• The outbound flow for picked orders
• The movement of returned products to the damaged area or inventory
• The flow of packed and labeled boxes to outbound shipment area

Analyze Your Warehouse Map and Consider Opportunities to Optimize

Carefully analyze the data on operational locations, shipping, receiving, assembly, special handling lines, and quality and inspection areas along with the warehouse flow you have drawn. Clear product and location identification are critical to receiving, picking, and putaway efficiency and accuracy.

Storage area and staging lane identification is another must. Go through your notes on inbound and outbound operations and value-added processes with your team and make sure nothing is missing. Keep in mind that even relatively minor activities can dramatically affect warehouse efficiency. So be sure you’ve covered all of the locations and operations in your warehouse.

While analyzing your data, or circling back to your team, use this general checklist to ensure you’ve covered all bases:

• Diagrammed every possible movement in your warehouse
• Highlighted the main paths (those with the most movements)
• Reserved enough space for forklift movements
• Partitioned off a multi-purpose free area for staging, moving, etc.
• Created separate locations for inbound shipments and outbound shipments (if possible)
• Reserved the first 2 levels of back-to-back racks for pickers
• Created a dedicated space for damaged items
• Considered smaller shelves for small items (if applicable)
• Considered drawers for smaller items which cannot be barcoded (unless implementing RFID technology)

Once you’ve identified priority areas for optimization, you can start making a shopping list and budget for your revamped warehouse.

Use Computer-Aided Design (CAD) to Visualize Your Ideal Warehouse Layout

Depending on your comfort level with technology and your budget, you can use computer-aided design (CAD) tools to design the optimal warehouse layout.

The use of CAD tools in warehouse applications—where designers could assess various layout options including  “building shape, equipment selection, and operational conditions” —is still emerging, and most commercially available tools are not specifically designed for warehouses.

As a result, warehouse designers who want to build photorealistic, 3D renderings of their warehouses need experience working in software like AutoCAD or the willingness to tackle the steep learning curve.

Alternatively, warehouse managers can use basic sketching tools, like SketchUp, to create 3D models of their dream warehouse and even realistic 3D renderings.

If you hire a warehouse design consultant, they will likely be able to create photorealistic 3D models for you.

Draft a List of Required Equipment and Associated Costs

Depending on the scope of your warehouse layout design, you may need to simply move a couple things around, add some new equipment, or buy everything new, including:

• Pallet racks
• Industrial shelving
• Cantilever racks
• Pallet jacks
• Hand trucks
• Service carts
• Dock plates/boards

Once you’ve made a list of desired equipment, assign prices and list them in order of importance so you can focus your budget on high-priority items.

Maybe your layout design project’s objective is to modernize and automate your current warehouse operations (Read about Amazon Robotic Fulfillment Center). In this case, make a list of warehouse technologies that can streamline and automate your operations, such as:

• Automated Picking Tools.  There are several automated picking tools on the market that can significantly boost the accuracy of a warehouse’s picking rates. Whether you choose robotic tools, voice-controlled order picking, or pick-to-light tools, you’ll need to consider how these tools navigate your warehouse and fit into your layout.
• Automated Guiding Vehicles (AGVs).  Automated guiding vehicles can transport heavy goods and streamline the flow of products through your warehouse. Since they typically travel along marked lines or wires on the floor, it’s important that they are incorporated into the overall warehouse layout design.
• Automated Inventory Management Systems.  Using RFID tags, an automated inventory management system makes it easy to quickly count and track items without manually moving or opening packages. If you plan on incorporating this technology into your operations, it’ll help you maximize the square footage of your warehouse by limiting the amount of free space you need to move and shift packages for counting.  
• Warehouse Management System.  If you don’t already have one, it’s essential that you incorporate a WMS into your warehouse. Today, a WMS is a critical component of an efficient warehouse. Data from all of your technology is gathered in one place, enabling you to visualize and understand how goods move through your warehouse space and how to most efficiently use your space. For example, you may design your warehouse layout one way now based on a fast-moving product. In a year’s time, that may change and your WMS will alert you to new trends in your inventory management, allowing you to adjust quickly and maximize efficiency.
• Collaborative Robots.  These robots work with human employees to complete tasks. If you aren’t starting from scratch in your warehouse design, using collaborative robots can help you avoid drastically changing your layout while still benefiting from increased automation and efficiency.
• Automated Storage and Retrieval Systems (AS/RS).  An AS/RS can fundamentally transform how your warehouse operates, effectively limiting the back and forth movement of workers. That said, they have a reputation for being clunky and are often recommended only for warehouses moving products with no interim activities that require manual intervention. If you intend to incorporate an AS/RS, remember that this will seriously impact your warehouse layout design planning.

Break up Your Project Tasks Into Key Milestones With Deadlines

Once you’ve identified the equipment you’ll need, your priority areas of improvement, and the project scope, create a detailed schedule that includes:

• A list of individual tasks (e.g., RFP for AGVs vendors written)
• A list of key milestones (e.g., AGV vendor selected)
• The estimated start date and end date of each task
• The estimated duration of each task
• Dependencies for each task (e.g., AGV can’t be implemented until RFP process for AGV vendor is complete)
• Accountable “owner” for each task, who is responsible for overseeing its completion
• Support team assigned to each task that is managed by an owner
• A project sponsor (e.g., an executive team member with authority) who is available for approvals and escalations

Even if you’re the one responsible for most of these tasks, document each activity. It’ll help keep you accountable and organized while you also tackle other day-to-day business activities.

While you could use a spreadsheet to create a GANTT chart and share it with project stakeholders, project management software provides an easy way to quickly create project schedules and assign tasks.

Execution Phase: Make Your Warehouse Plans a Reality

If you’re starting from scratch, executing on your warehouse plan is simply a matter of planning to work and then working to plan.

If you have day-to-day business activities to handle, you’ll have to choose between a “big bang” approach, where you implement all the changes at once, or a phased approach in which you implement changes bit by bit.

Factors ranging  from your vendor’s installation specifications (e.g., for an AGV)  and the size of your warehouse to the storage conditions of your goods (e.g., refrigerated) and even  the time of year (e.g., high demand) will impact the approach you take. While the specifics vary, best practices for any business change initiative include clearly communicating the reasons for and the benefits of change to your workers.

While your warehouse layout changes will likely result in an easier workload for employees, it’s still an infrastructure overhaul they must bear through, a new layout they’ll need to learn, and new equipment they’ll have to be educated on. Keeping your workers in the loop reduces employee dissatisfaction and turnover and can contribute to a smooth implementation process.

Closing Phase: Gather Feedback, Assess Lessons Learned, and Plan for Further Enhancements

At this point, your project is complete, but the work isn’t done.

First, consider what went well and what went wrong. Then document these lessons learned, share learnings with key stakeholders, and keep them accessible for future warehouse layout improvement projects.

At the beginning of the project you likely identified optimization activities that were out of scope for this project or unrealistic for your timeline. Perhaps at the budgeting stage you realized that it wasn’t feasible to purchase all of the desired technology. The closing stage is your opportunity to plan ahead and use lessons learned to augment your company’s organizational knowledge.

Optimizing and Redesigning Your Warehouse is Possible

Redesigning your warehouse layout may sound like an overwhelming task, but with a project management approach and a willingness to incorporate warehouse technology it can be a profitable—and thoroughly rewarding—endeavor. Every warehouse layout redesign project will differ based on the goods each warehouse holds, its size, its current technology suite, and more. Nevertheless, by defining your objectives, creating a project schedule, setting a budget, and following best practices, you can initiate and execute a successful warehouse layout design project.

How to Implement a Warehouse Management System?

Warehouse Management Systems (WMS) have been available since the earliest computer systems allowed simple storage location functionality. Today, WMS systems can be standalone or part of an Enterprise Resource Planning (ERP) system and can include complex technology such as Radio Frequency Identification (RFID) and voice recognition. However, the basic principle of the warehouse system has remained the same—to provide information to allow efficient control of the movement of materials within the warehouse.

Selecting Management System Vendors

When selecting a WMS, there are many vendors to choose from. If you currently operate an ERP system, then the WMS functionality may be part of that suite, or you can use a bolt-on WMS package. For companies that use best-of-breed solutions, the choice of WMS will reflect the requirements of your warehouse operations.

The implementation of a WMS is often complex. Project planning is critical to the success of any WMS implementation. The project requires warehouse resources to collect data on the physical warehouse, materials, and inventory, as well as defining the strategies required to operate the warehouse. There is the added challenge of implementing the system whilst still operating the warehouse. A major factor of all projects is to still ship product whilst the WMS is being implemented.

Implementation of WMS

The complexity of a WMS implementation varies with each business. The physical dimensions and characteristics of each item to be stored in the warehouse should be collected and entered into the new system. Capacity calculations require the physical size and weight of the stored item, as well as the dimensions of all the storage bins or racks in the warehouse. The storage options for each item are required, for example, if the item can be stored separately, in a box, pallet, or if it can be stacked. Each item must be reviewed to see if it has physical limitations on its storage, such as requiring refrigeration. Hazardous material information needs to be collected so that the item is not stored in certain areas. This information is only part of the requirements of the WMS implementation.

The system requires decisions on the configuration to be made on how items are to be placed or removed from the system, in what order, for what types of materials, and what methods of placement and removal should be used. The implementation requires significant input from the resources that operate the warehouse on a day-to-day basis and this can be a strain on warehouse operations. A successful project will recognize this fact and ensure that the key personnel required for the implementation are given adequate back up so that warehouse operations do not suffer.

After Warehouse Management System Launch

After the successful launch of the WMS system, many businesses will find that the resources required to operate the system are greater than prior to the implementation. This is primarily due to the data-intensive nature of the software and the fact that warehouses are in a state of flux; racks are moved, placement and removal strategies changed, new items added, new processes developed.

Warehouse accuracy is paramount for the software to operate and, to do this, data will need to be entered accurately and in a timely fashion. Although most WMS implementations will reduce labor costs in the placement and removal of materials, there is often an added warehouse management function required just to operate the software.

Despite the complexity, WMS systems do offer businesses considerable benefits. Not only will placement and removal cycle times be reduced, but inventory accuracy will be improved. This is in addition to increased storage capacity, increased organized storage of materials, and greater flexibility of warehouse operations.

How much does it cost to start a warehouse business?

You could start a warehousing business for as little as $12,000, or lay out $60,000 or more for a more ambitious firm. The average startup cost for a warehouse business is around $37,000. On the lower end, you’d be looking at a smaller warehouse dedicated to serving a niche market, while the higher figure would cover a large warehouse meant for a variety of clients.

Across the board, though, your main startup costs will be the building, wages, and any necessary equipment such as storage shelves and machinery. 

The type of equipment you need depends on your warehouse and the type of stock you hold. Here is a list of general equipment that you may need:

• Storage Systems:  Pallet racks, industrial shelving, refrigerators, cantilever racks, and flow racks.
• Lift Equipment:  Forklifts, pallet jacks, hand trucks, and service carts.
• Dock Equipment:  Dock boards and plates, dock seals and shelters, edge-of-dock levelers, integrated dock levelers, dump hoppers, yard ramps, truck restraints, dollies, and casters.
• Conveyors:  Flexible conveyor, gravity conveyor, power conveyor, and lifts and carousels.
• Facility Equipment and Accessories:  Rolling ladders, security cages, lights, wheel chocks, bumpers, large ceiling fans, workbenches, strip doors, and air curtains.
• Bins and Containers:  Bins, bulk boxes, totes, and wire mesh baskets.
• Packaging Equipment:  Industrial scales, strapping and banding equipment, stretch wrap machines, and packing tables.
• Safety and Security:  CCTVs, fire extinguishers, and barriers.
• Transportation:  Van/Truck
• Office Equipment:  Furniture and fixtures, computers and IT equipment, and telephones.

How much can you earn from a warehouse business?

The average warehousing company generates $1-10 million in annual revenue and employs 12-22 people. With profit margins of 18-20%, you could expect to earn $180,000 to $2 million per year not long after launch.

The main way a warehousing firm generates revenue is by holding stock for businesses — shoes or dresses or electronic devices. Another way is by providing a long-term storage option for people with inadequate space for their belongings. Finally, there is the third-party logistics segment, in which the warehousing company’s revenue comes from storage and from the shipment of products.

The largest ongoing expenses for a warehouse business are rent and wages. Wages will typically make up the bulk of your expenses as operating a warehouse requires a lot of manual labor, but this could be lowered by investing in machinery. 

In your first year or two, you could simply provide storage services and make $1 million in annual revenue. This would mean $200,000 in profit, assuming a 20% margin. As your brand gains recognition, you could expand to third-party logistics and earn a total of $5 million in annual revenue. At this stage, you’d hire more staff, reducing your profit margin to 18%. You’d still make a tidy profit of $900,000.

What barriers to entry are there?

When it comes to the warehouse industry there are a couple of entry barriers to be aware of. The first barrier is high fixed operating expenses such as rent and wages. But these can be counteracted by having enough operating capital saved for at least the first six months in business.

Secondly, high levels of competition will make it more difficult to break into the industry. In the beginning, you’ll likely need to endure minimal profits to compete with bigger players.

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Retail | How To

Warehouse Layout Design Planning: Steps + Examples

Published March 3, 2023

Published Mar 3, 2023

REVIEWED BY: Meaghan Brophy

WRITTEN BY: Agatha Aviso

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This article is part of a larger series on Retail Management .

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Step 1: Create a Warehouse Diagram

Step 2: optimize your warehouse space, step 3: choose your warehouse equipment, step 4: use efficient traffic flow strategies, step 5: test your warehouse traffic flow plan, common warehouse layout designs, bottom line.

The efficiency of any warehouse operation highly depends on its floor plan’s layout and design. Key steps to an efficient warehouse layout design include schematic creation, space optimization, equipment selection, implementation of sound workflow strategies, and traffic flow testing.

Before starting the layout planning process for your warehouse floor plan, consider your needs—from space utilization, storage options, and productivity equipment to aisle layout and production area workflows. Also, keep your business inventory management systems in mind, as your layout will impact your ability to manage inventory effectively.

Follow the steps below in planning your warehouse layout:

An effective warehouse layout starts with an accurate 2D visualization, which you can plan for using physical paper schematics or design software.

• Physical Schematics
• Design Software

The easiest way to create a physical design is with a copy of your warehouse blueprint. If you’re renting, your landlord might be able to provide a blueprint you can use. If you can’t get your hands on a blueprint, drawing up your warehouse schematic on grid paper is easy.

When drawing your layout, plan as though one square on the grid paper equals one square foot in your warehouse. That way, the spatial relationships on your project will match your actual space.

An example of a completed warehouse design layout created using Inkscape, a free graphic design program with an optional grid background.

Layout software is a digital option to develop and experiment with your warehouse floor plan schematic quickly.

Some specialized online layout tools offer specific features for warehouse design—such as SmartDraw . Plans start at $5.95 per month, and the program allows you to experiment easily with different layout approaches by dragging and dropping elements around your map.

SmartDraw is a powerful warehouse design program.

Whether you use a physical diagram or design software, remember to:

• Take the most accurate measurements to prevent errors during shelving and equiment installation.
• Label fixed areas such as doors, stairways, sloping floors, beams, outposts, offices , and restrooms. Identifying where they are positioned helps you decide on the next steps, such as spatial planning.

You need to determine the amount of space your warehouse can hold to plan your warehouse floor better. First, you should calculate your storage area. Then, you can plan for equipment, create production and workflow zones, and establish storage areas.

Know Your Warehouse Space Utilization

To know your current space utilization, you need to calculate your total warehouse size and potential storage area size. Using these metrics helps establish limits on how you store products and lets you know when your warehouse is at full capacity.

Total Warehouse Size

To calculate total warehouse size:

• Identify the total square footage of your facility.
• Subtract office space, restrooms, and any other space that isn’t used for storage.
• Multiply the remaining square footage by the clear height of your warehouse (distance from the floor to any overhead object).

Potential Storage Area Size

To calculate your potential storage area size:

• Multiply the length and width of the outside dimensions of your racking by the height of the highest load in that area. This results in the cubic volume for your storage area size. Your potential storage space or maximum storage space is based on your current setup .

There will be instances when the highest load height isn’t uniform throughout the warehouse area. If this is the case, calculate them separately and add them all after.

Space Utilization

If you are using a warehouse management system (WMS): Get the total volume of all products stored in your warehouse, as this is reflected in your WMS already. Divide the total volume of all products by the storage area size and multiply by 100.

If you are not using a WMS: Divide your storage area into possible sections (like stacking rows). Estimate the percent utilization of each row. Next, add the results and divide by the number of each section or row.

Designate Essential Warehouse Setup Areas

Here are some essential areas your warehouse should have. They are present in the warehouse layout designs we feature below.

• Storage and inventory areas: These are critical as they can either make or break your warehouse traffic flow and employee workflow.
• Inbound receiving dock: This area is for receiving products and pallets from delivery trucks. Incoming products arrive with detailed documentation and are unloaded from the receiving dock, counted, and prepared for shelving.
• Picking and packing areas: Used to prepare incoming customer orders, these areas are where the entire order picking process takes place. When an order is received, the warehouse pickers retrieve the products and packs them.
• Outbound shipping dock: This area is where the packed orders are placed onto pallet racks and loaded onto trucks for delivery. Forklifts are usually used to transport them into trucks.
• Employee space: Designate ample space for warehouse staff to take breaks, eat, and rest which are separate from work areas. Also consider offices for on-site warehouse management teams.

Plan for Equipment & Surrounding Workspace

Once you have calculated your storage space, the next step would be to plot your workspace and plan for equipment.

• Identify your key units . These things take up most of your space and/or are the center of your production zones. A business’s key warehouse units, such as manufacturing equipment or workstations, will vary based on the facility’s primary goals. While equally important, storage spaces are secondary in your plan—their locations depend on where you position your equipment.
• Allow sufficient space so that any equipment used—from hand trucks to forklifts—can navigate the warehouse aisles easily. Again, this will vary greatly depending on the products you sell, as different types of products require handling equipment—which, in turn, affects your aisle spacing. For example, a forklift will need more space than a pallet jack.

Create Production Zones & Workflow Areas

After addressing primary units like equipment, stock shelving, and assembly stations, the next step is thinking about how workers, materials, and goods move in and around your key elements.

Consider the space necessary for safe production work. Safety should be a prime consideration in all warehouses—though it may be more complex in manufacturing, where movement occurs around equipment. The Occupational Safety and Health Administration (OSHA) offers detailed publications to review in planning your warehouse safety initiatives .

Organize Storage Areas & Aisle Spacing

Storage is another key factor to consider in your layout. In fact, for pack and ship (and some assembly operations), efficient arrangement of storage areas is likely your prime concern.

Storage Area

What you’re storing dictates the type of storage you need to plan for in your layout, along with the space you need to reserve in and around storage areas—like aisle widths between shelving and clearance areas for moving goods in and out of storage.

Your warehouse storage needs may take many forms, including:

• Small assembly items housed in bins on light-duty shelving
• Pallets with machinery parts
• Boxed goods for pick, pack, and ship
• Overstock items
• Raw materials for manufacturing

You can organize these in different ways, namely:

• Vertical storage: There are many methods of doing vertical storage. Stacking is commonly used only on solid loads, like bags of soil, and for rigid packages like cardboard or plastic boxes.
• Dynamic vs static storage: Another way is to separate popular products and products that tend to sit on shelves for longer periods. Popular products go into the dynamic storage area, while the less popular ones are assigned to the static area.

Aisle Spacing

If your warehouse plans involve hand-stocking small boxes for assembly or pack-and-ship, hand-held bins or rolling carts are all you need to stock and pull stored goods. In these cases, your shelving aisles will likely need to range between 3.6’ to 4’ wide .

If you use a pallet jack or forklift to move pallets or equipment in your storage areas, you’ll need generous space between shelves or around other units. For example:

• Pallet jacks need a minimum aisle width of 4’ to 5’ to navigate between shelving.
• Forklifts require aisle widths between 11’ to 13’ , depending on the type of forklift you plan to use.

Before using forklifts in your warehouse operation, thoroughly review all manufacturer recommendations for the machinery you procure. Additionally, before operating a forklift, familiarize yourself with OSHA’s rules regarding forklift use and follow all mandated forklift training requirements .

Don’t forget overhead spaces. Most small warehouses easily accommodate 8’-tall shelving, while larger facilities can house shelving that is 12’ and taller.

If you need overstock areas for large stock purchases or materials storage, high shelves are a great way to preserve your warehouse floor space for production activities.

When planning your warehouse layout, the size and type of storage, shelving, and workspace equipment all come into play. Common warehouse solutions include pallet racks, heavy- and light-duty shelving, cantilever racks, and bins.

Warehouse Storage & Shelving Options

You can buy storage and shelving options from a dealer or from Alibaba —which offers steep discounts. Amazon , Home Depot , and Lowe’s are great options for small quantities. Pre-owned equipment is also an option.

Here’s an explanation of when to use each of these popular equipment options:

Pallet Racks

Best for: Midweight to heavyweight storage needs like boxed stock, work materials, and finished goods Pricing: Expect to pay between $120–$350 per set for new, heavy-duty warehouse racking

Pallet racks are assembled using end units called uprights , adjustable crossbars called rails , and heavy-duty particleboard or metal wire grid shelves called decks . You can assemble many shelves or just a few on each unit.

Pallet racks can be freestanding, though they’re designed to interconnect for long shelving runs. When used this way, it’s the most cost-effective shelving solution for large warehouse storage areas.

HD Shelving

Best for: Light to midweight storage in smaller warehouses, storage units, and garages Pricing: Expect to pay $75–$200 for a new HD shelving unit

Heavy-duty (HD) shelving is the pallet rack’s baby brother. The name is a bit deceiving, as pallet racks generally hold more weight than HD shelving. Pay attention to the weight ratings on the shelves you purchase; for safety reasons, it’s important to adhere to weight stipulations assigned by the shelving unit’s manufacturer.

LD Shelving

Best for: Garages, small retail storerooms, and residential storage areas like utility or craft rooms (small businesses or one-man businesses, hobby or side hustle) Pricing: Expect to pay between $40–$100 per shelving unit

A notable advantage of light-duty (LD) shelving is that most units come with five or six adjustable shelves, which gives you helpful versatility if you’re storing various items of different dimensions. Light-duty shelving works well with stacked parts bins (discussed below) for stocking small items and assembly parts.

Take note, though, that if you want to maximize the height of your warehouse for extra storage space, you won’t be able to do that with LD shelving, as these units are usually only 6’ to 7’ high.

Best for: Specific storage for oversized items

Pricing: Custom quote

Cantilever racks can handle your pipe, lumber, panels, and oversize material storage needs. Sizes and costs vary by need and type of material stored, so you’ll need to contact a used warehouse dealer or online vendors—like Alibaba or Shelving.com—to get a quote for your warehouse.

Best for: Storing and transporting loose materials, often involved in assembly operations

Pricing: Expect to pay $100–$200 for the caliber of box

Warehouse-caliber (metal and heavy-weight plastic) boxes, hoppers & barrels are common in manufacturing and assembly operations. They are receptacles used to store, transport, and dump materials. Most businesses move these on pallets using pallet jacks, but some bins and hoppers are wheeled. You can purchase these in various sizes and materials that are capable of holding even heavy items.

Best for: Small, loose assembly parts for packing

Pricing: Small parts and assembly bins usually cost $1–$10 each

Small parts and assembly bins are usually handy and stackable, making it ideal for storing small items for all sorts of needs—including materials for manufacturing, parts for assembly, and small goods for pack and ship. Plus, their easy-access design makes them an efficient alternative to stocking small goods in closed boxes, and they can be easily color-coded.

Workspace Equipment Options

In addition to storage units, your warehouse might need work-area equipment. Here are a variety of options:

A warehouse packing station, commonly used in ecommerce operations (Source: Cisco-Eagle)

You may not need all of the equipment listed in the above chart, but be sure to give careful consideration to the various work stations you need in your warehouse and what types of tables or equipment will be required for those stations to operate effectively.

Material Handling Equipment Options

You also must think through how you’ll move stock and materials around in your warehouse and secure the appropriate equipment necessary for transport.

Popular options include:

Now that you have an idea of the types of equipment and storage solutions you will use for your warehouse and a sense of where everything will fit into your layout, it’s time to zero in on your detailed schematic. The goal of a warehouse schematic is to arrange every element to create an efficient, productivity-boosting traffic flow.

Think about your operation by exploring the following warehouse usage needs:

• Consider how much time you and your employees will spend in various locations in your warehouse.
• Determine around which elements—manufacturing equipment, storage areas, or work tables—most work will center.
• Explore different needs you and your employees will have regarding movement within the warehouse, how items will be gathered from various warehouse locations, and what items need to be kept close at hand to complete daily tasks.

Warehouse Setup Project Plan Examples

Here are some warehouse setups that consider the functional elements of a well-designed floor plan:

Aisle Pattern

• The busiest production zone—the packing area—is centrally located between stock shelves, with two aisles directly feeding into it.
• This warehouse layout allows staff to quickly access or “pick” the product on either side of the packing tables. Each employee is assigned a specific section to pick and maintain, which keeps them from bumping into each other.
• Stock storage areas are maximized by using a 12’-tall pallet rack that allows ample overstock space on upper shelves—out of daily workflows.
• Hand-carried bins and small carts are used for restocking and order picking among the shelves.
• Shelving is not used against the end walls. Instead, this warehouse runs 2’-deep shelving along the perimeter for smaller items, allowing pickers to move from aisle to aisle without backtracking and pick small items along the way as needed.

Packing & Shipping Workspace

• In the central packing area (B), the warehouse layout includes 8’ and 6’ utility tables that can be moved and rearranged as packing needs dictate.
• This warehouse layout pattern has shipping boxes and packing materials in easy reach of the packing tables. Once packed, parcels are quickly moved to the nearby shipping station table for weighing, sealing, and labeling. If you plan on shipping daily, allocating space for a dedicated shipping station is a real time-saver.

Generous Receiving & Shipping Areas

• Ample room is available in this model for shipping and receiving, thanks to the large overhead doors (C).
• Allowing room to store received stock before unpacking is essential. Plus, it’s helpful to keep receivables separate from daily outbound parcels to prevent confusion and carrier pick-up mistakes.

Warehouse Equipment Storage

• This warehouse setup uses two rolling staircases to safely store and retrieve large numbers of lightweight overstock boxes from its 12’ shelves.
• Since the rolling staircases take up warehouse floor space, their storage must be considered in the warehouse layout. The spaces marked (D) near the receiving and shipping areas store the rolling staircases.
• If you plan to use high shelves in your warehouse, be sure to develop a way to access items that are overhead securely. In this example, rolling staircases work just fine. In other warehouses, heavier equipment, such as forklifts, are needed to transport and access items stored overhead.

The last step before installing equipment, shelves, and tables is to test your warehouse traffic flow plan. To do this, measure off the space and apply masking tape on the floor to mark the positioning of your main units—whether they’re equipment, tables, or shelves. You don’t need to do this for every piece, but it’s important to mock up key workflow and production zone areas.

Then, walk the space as though you’re conducting key tasks that will be performed in the warehouse:

• Practice performing work functions: Carry boxes, tools, or materials while you test your warehouse design. Make sure you have plenty of clearance in all directions. Roll carts or pallet jacks through the warehouse layout to ensure items navigate easily along the planned paths—even when heavily loaded down.
• Get employees to test your floor plan: If you have employees, get them involved in acting out work processes. If you don’t have employees, enlist some family or friends to help roleplay key warehouse actions. Make sure your staff has ample room to conduct the tasks they will be required to perform.
• Check hard-to-change layout areas multiple times: If you have large spaces within your warehouse layout that will house heavy equipment or large shelving units, test these areas multiple times. It’s far better to make traffic flow corrections at this stage (while changes can be easily made) than to move heavy fixtures and equipment once installed.

There are a few basic and standard warehouse floor plans—U-shaped, I-shaped, and L-shaped.

1. U-shaped Design

Best for: Any warehouse size

Shaped like a semi-circle, the U-shaped design idea usually has the loading and shipping areas next to each other. The reception area is usually behind the loading and picking area (behind shipping).

The storage area fills out the back of the warehouse. The most popular products are placed between the less popular ones (at the center of the U-shape).

2. I-shaped Design

Best for: High-volume warehouses

This type of warehouse floor plan has the loading and unloading area and shipping area at both ends, with storage space designated in the middle.

3. L-shaped Design

Best for: Small to midsize warehouses

Traffic flow is shaped like the letter “L” for this design layout. Loading and reception areas are positioned on one side, while shipping and picking areas are on the adjacent side. The other areas are filled with product storage.

From manufacturing and assembly to order fulfillment and shipping , an efficient warehouse layout design will help you minimize costs and maximize productivity.

Effective warehouse design starts with identifying your needs—including the tasks to be performed within your warehouse and the equipment that will best support them. When you take the time and effort to create an efficient warehouse layout, you pave the way for saving time, money, and hassle for years to come.

If running your own facility is cost-prohibitive, you can outsource your warehousing to a third-party fulfillment provider with specialized infrastructure. This option is more economical for many startups, small businesses, and growing ecommerce operations.

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About the Author

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Agatha Aviso

Agatha Aviso is a retail software expert writer at Fit Small Business. She specializes in evaluating ecommerce and retail software features that help small businesses grow. She has evaluated dozens of the top software for retail SMBs. Agatha has more than 10 years of experience writing online content for both small business owners as well as the marketing industry. She also served as a content strategist and digital marketing manager for many entrepreneurs.

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Self-Storage Business Plan

Start your own self-storage business plan

Westbury Storage, Inc.

Executive summary executive summary is a brief introduction to your business plan. it describes your business, the problem that it solves, your target market, and financial highlights.">.

This storage business plan describes a proposed self-storage facility to be established in Westbury, New York involving the conversion of an existing building. Total project costs are estimated at $1,054,487 including purchase price, conversion costs, and pre-opening expenses (see section on Start-up Summary). Based on current and projected strong demand for self-storage units, rental revenue is projected to grow rapidly as units fill up from the first year’s target of $320,000 to $684,000 by year three.

After achieving experience and success in their present self-storage facility in Plainview, New York the principals of this proposed project plan to take advantage of the strong demand in the self-storage industry to achieve a major presence in Westbury. The ownership connection with Stote Moving will assist in gaining full occupancy quickly. Goals have been set to rent 50% of the proposed 300 unit spaces within the first six months of Year 1. An additional 25% will be rented in the second half of Year 1, with the remainder to be filled in Year 2.

The mission of the principals is to serve the Long Island community’s local residential and commercial storage and moving needs.

Keys to Success

The keys to success in the self-storage business are:

• To be able to adapt as storage and market needs change.

Company Summary company overview ) is an overview of the most important points about your company—your history, management team, location, mission statement and legal structure.">

Westbury Storage is a start-up project to be located in Westbury. The owners are experienced in the moving and storage field, owning a well-established moving company (Stote Movers) and a successful self-storage facility in nearby Plainview (Plainview Storage). The building to be purchased for this project is a large brick building originally constructed as a bleachers around 1910. This building as well as surrounding buildings, were connected with the now dying leather industry which flourished a few decades ago. A large building of similar size located next door and connected by a walk bridge has already been converted successfully and is operating well. The Westbury Storage building contains three floors of heavy-duty wood and steel beam construction ideally suited to the planned purpose of self-storage units. The building is heated by oil. One of the two elevator shafts will be the home for a new over-sized passenger elevator suitable for transporting storage contents from the ground level to the units on the second and third floors. A large separate parking lot area comes with the building but will not be needed for this project. This lot could be sold or could be the site of additional future storage units to be set up using one of several one-story steel storage systems.

It is estimated that, with purchase of the building taking place in June of this year, the conversion into storage units could be completed and ready for occupancy by the end of the year. Demand for the units is strong, as evidenced by the market survey of existing self-storage facilities. Bank financing for 70% of the project costs is expected with the remainder supplied by shareholder equity.

Company Ownership

The company will be incorporated as an S Corporation, and will be owned by three individuals: Roger Black, Sebastian Stote and Daley Thompson. Each will own 1/3 of the stock. Roger Black and Sebastian Stote are 50-50 owners of Plainview Storage which is a 110 unit self-storage facility converted in 1993 from a former piano factory. All units are fully rented. Sebastian Stote is owner of Stote Movers, which is a family business providing residential and commercial moving since 1917. In addition to being the source of many of the rentals at Plainview Storage, Stote Movers has 52 filled 45-foot trailers located in Roslyn-by-the-Sea. These trailers contain customers’ stored goods pending delivery at a new location.

Company Locations and Facilities

Westbury Storage will be located in Westbury, in a central location about 1/2 mile from the monument in the center of Westbury. The owners’ present self-storage facilities are located at in Plainview with further storage capacity in 52 trailers in Roslyn.

Start-up Summary

Advertising and promotion will rely heavily ads in the Yellow Pages, as well as initial local newspaper ads at the time of opening. We are assuming three directories for Yellow Pages ads with 1/8th page ads costing $165/month each. The ads in the local papers ( Springfield News and community newspapers) are estimated to cost $300 monthly for the first year only. They will be reduced in the second year to half this amount and eliminated in the third year.

Property taxes ($11,946) are projected at the actual rate of the last tax year. Significant increases are not expected.

Building maintenance is normally a very substantial item on a building of this size built in 1910. However, the roof has been completely redone fairly recently and the basic structure of the building is very robust. The start-up costs reflect adequate amounts to ready the building for opening in good order. Also, it should be noted that expenditures for building maintenance would need to be larger if the building were being used for offices rather than storage. We assume an annual amount for maintenance equal to 5% of the purchase price which works out to $27,500.

• The total for utilities is estimated to be $900 monthly.

Insurance: Property and Liability Insurance amounted to $15,000 annually for the present tenant. We’ll assume the same annual cost.

Telephone: Most of the telephone bill will be the charges for the Yellow Pages ads. These costs are already included in advertising and promotion. We assume the telephone bill to amount to $150/month.

Bookkeeping/auditors/legal: Bookkeeping and billing will be handled by the same system used at Plainview Storage and charged at a rate of $300 per month. Auditor charges will run about $4,000 annually.

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Competitive Comparison

All self-storage facilities that could be found in Westbury or the area bordering Westbury were surveyed with the following results:

Prices average at $1.20 per sq. ft. per month. Mean price is closer to $1.40.

Market Analysis Summary how to do a market analysis for your business plan.">

In a similar split experienced by management’s existing storage facilities, Westbury Storage is expecting to rent 70% of its available units to non-commercial renters and the remaining 30% to the commercial sector of the market. A total of 300 self-storage units of various sizes will be created and offered for rent by Westbury Storage in a central location in downtown Westbury. The present supply of these units is insufficient to meet the demand as evidenced by a survey of all self-storage facilities within easy reach of Westbury residents. The price realized by these existing units is more than double the national average.

Market Segmentation

Self-storage units are needed by residential customers for storage of personal items as well as by commercial customers for storage of stock. It is envisaged that 70% of the planned self-storage units will be taken up by the residential segment of the market and the remaining 30% will be directed toward the commercial segment. This split is expected based on the existing customers of management’s present self-storage facilities in Plainview. The commercial segment are small businesses, many of which are run out of people’s homes such as an interior designer who needs space to store hundreds of expensive sample fabric books, or a retail shop with inadequate on premises storage.

The market research shows that the annual market potential for the commercial self-storage service in the Westbury area is about 10,000 customers. As stated above, these are mostly small businesses. The residential segment potential is substantially higher at 150,000 customers per year and is based on the Self Storage Association’s assumption that 40% to 55% of population has used self-storage facilities.  This estimate includes individuals who need storage facilities due to moving arrangements or to store excess household property. Both of the market segments are expected to grow at a 5% annual rate. The table and chart below outline the market potential for the both customer segments.

Target Market Segment Strategy

Since the demand for local self-storage services substantially exceeds the local supply, Westbury Storage will simultaneously market its services to the two major customer segments–residential customers and small business customers. The company will not pursue large business segment due to the limited service scope it can provide to such customers at the existing facilities.

The market analysis shows that local self-storage rates are substantially higher than the national averages. Westbury Storage will position itself to the both customer segments as a conveniently located and affordable quality self-storage facility. Both customer segments will be effectively reached via the local Yellow Pages ads and through the referrals of Stote Movers owned by one of the Westbury Storage’s co-owners.

Market Needs

Customer needs in the self-storage industry have certain similarity across different market segments. The underlying need is for a reliable, safe, dry and accessible self-storage facility. Due to the overwhelming demand, customers are less price sensitive and consider convenient location as the major buying decision criterion.

Residential customers use self-storage facilities to temporarily store their property while moving to a new location. This need originates in the mobility of the American population and the affordability of rental accommodations. Such customers usually rent 25 to 100 square feet depending on the size of their household and they rent on a weekly or monthly basis. The other cluster of residential customers rents self-storage facilities for longer periods to keep their oversize property like boats or other equipment that either does not fit in their garages or is not used on a constant basis.

Small business customer segment requires self-storage facilities to temporarily store their stock or merchandise. These customers may use the storage facilities more often than residential customers and they benefit from convenient loading areas, extended operating hours and better equiped storage units of bigger size.

Service Business Analysis

According to an article in the November 15th issue of Inside Self-storage the national industry average rental income generated by self-storage units is $6.00 per square foot per year, or $.50/sq. ft. per month. In the market to be served by Westbury Storage the average storage rate (see section on Competitive Comparison) is more than double this amount. Washington Storage in Westbury is a typical example. They charge $50/month for an 8X6 ft unit which works out to $12.50 per sq. ft. per year. A 9X9 unit on the second floor also rents for this same amount only because there is no elevator. All of their units are fully rented! All units within the area were surveyed. The average rate is $1.20/sq. ft. per month ($14.40 per year) and the mean was closer to $1.40/sq. ft. per month ($16.80 per year). The story concerning availability was uniform. Either the facility was full or only had one or two available units to chose from. E-Z Mini Storage in S. Centreport said, “There’s some turn-over at the end of every month. Leave your name and we will call you when one becomes vacant.” Extra Space Storage in Springfield said, “We need one week advanced notice.” North Shore Self-Storage said, “We have nothing available on the ground floor.” U-Haul reported, “We have one small unit available, otherwise we are all full.”

The self-storage industry really only started in the late 1960’s when a few far-sighted people recognized the growing need for residential and commercial storage. The industry has doubled in size each decade. Returns on investment have been very impressive–often twice that of other forms of real estate investment. The reasons for this have been the mobile society, the tendency to live in rental apartments, and the general increase in the accumulation of property, especially leisure articles such as skis, wind-surfers, exercise equipment, etc.

It could be argued that the higher than national average rates enjoyed by local self-storage facilities may not continue indefinitely, but there is no indication of any downward pressure at this time. It should also be pointed out that during an economic down-turn the self-storage industry does not suffer to the extent that other industries suffer.

Should the supply of self-storage units begin to outstrip demand, Westbury Storage should be well positioned to deal with the competition due to its ability to offer heated units (nearly all competing units are unheated) and its ability to supply electric outlets to individual units (for hobby/workshop purposes).

Business Participants

Although there are a few nation-wide players in the self-storage market, the industry is still fairly dispersed in which many small companies take part. (See the section on Competitive Analysis for a complete listing.)

Competition and Buying Patterns

Convenience is probably the single most import factor in the decision of where to rent a self-storage unit. For example, Hicksville and Huntington have no self-storage facilities. Residents choose to rent one in a nearby town probably based on proximity to the route taken by the renter to and from work. If no units are available nearby, then renters will travel further afield. Units on the ground floor are favored, especially if no elevator is available.

Main Competitors

See the section on Competitive Comparison for names of competitors. In the present market situation, competition plays a very weak role.

Strategy and Implementation Summary

The sales and marketing strategy is fairly simple by virtue of the fact that self-storage facilities are in short supply. Westbury Storage will simply have to inform the public of its existence by advertising in local newspapers, and by placing Yellow Pages ads.

Competitive Edge

Although the current local demand exceeds the supply and Westbury Storage will have no problems fully utilizing its capacity, the market situation may change in the future. The company will fully utilize its management’s seasoned experience in the storage business in order to establish a strong foothold in the local community. This will be reached by providing excellent service and offering extra service features like the heated and well-lit rental units, which will supplement the great location of the storage facility.

Sales Strategy

Most inquiries will come through the Yellow Pages ads. Proper telephone manners and professional handling of on-site inquiries are essential. Even though there is an excess of demand over supply, an unfriendly manager or clumsiness over the telephone will cause needless lost sales.

As is the case with the owners’ present self-storage facility in Plainview, many sales are directed through Stote Movers, who are in constant contact with people on the move and, therefore are most likely to require temporary storage.

Sales Forecast

Due to the fact that demand has been outstripping supply in this market, Westbury Storage may well be able to rent out all of its new units within the first year of operation. Prices paid for self-storage units reflect this strong market demand. The ground floor units will rent at $1.40 per sq. ft. per month and the upper floors, served by an over-sized elevator will rent for $1.20/sq. ft. per month. It is assumed that half of the units will rent in the first six months of operation. The second half of 1999 will see a further 25% of the total space rented, leaving the final 25% to be reached in the year 2000. Within these time spans, the growth, for projection purposes, will be assumed to be straight line, i.e. the first 50% of the total space will be reached in equal monthly increments during the first six months, and so forth.

The building measures 240 ft. X 80 ft. A section at one end (40′ X 80′ =3,200 sq. ft. per floor) will be reserved for future offices. This leaves total space dedicated to self-storage units of 48,000 sq. ft. (16,000 per floor). Some space is lost when the partitioning is done. Floor plan “D” suggests a way to partition an area 200 ft. X 40 ft. Doubled, this is exactly the space available in the Westbury building after deducting the office area. This 16,000 sq. ft. (200′ X 40′ X 2′) would be reduced somewhat to allow walkway/passages on the sides. So instead of 16,000 sq. ft. of rental space per floor, we would end up with about 15,000 sq. ft. Total self-storage net rentable space would be 45,000 sq. ft. The 15,000 sq. ft. on the ground floor would rent for $21,000 monthly and each of the other floors would rent for $18,000 each on a monthly basis.

Sales for the first month would be $4,750 (50% of total $57,000 divided by 6). The second month would have $9,500 in sales, etc.

Many self-storage companies charge administration fees to first-time customers. Deposits are also not uncommon. In addition to these sources of income, the sale of certain related items such as cardboard boxes, tape, packing materials, storage containers, plastic mattress covers, etc. can be substantial. However, for projection purposes, it is assumed that income from these sources will wash out any credit losses.

Strategic Alliances

An important strategic alliance is the common ownership connection to Stote Movers. By virtue of its contact with people changing addresses, Stote Movers is in a position to direct a lot of storage business to Westbury Storage.

The following table shows the milestones that Westbury Storage has established.

Management Summary management summary will include information about who's on your team and why they're the right people for the job, as well as your future hiring plans.">

The management of Westbury Storage will rest with Roger Black and Sebastian Stote, both of whom are successful in the moving and self-storage industries.

Personnel Plan

Operating hours are planned to be 7 a.m. to 7 p.m. Monday through Friday and 9 a.m. to 5 p.m. on Saturdays. Westbury Storage will be closed on Sundays.

The manager will work a normal 40 hour week at an annual salary of $35,000. A maintenance man will be employed at a salary of $24,000. A night watchman will be employed at a salary of $24,000.

Financial Plan investor-ready personnel plan .">

A commercial loan needs to be negotiated to finance approximately 70% of the total project costs. A 15-year mortgage will be applied for with an 8.5% interest rate. First drawdown upon agreement of the seller and buyer concerning the terms of sale of the building. Last drawdown around the end of the year when all conversion to self-storage units should be completed. First repayment of principle is planned in April of 1999 with monthly installments of interest and principle to continue until the loan is fully repaid in 2013.

Important Assumptions

Key financial indicators.

The following chart shows the benchmarks for Westbury.

Break-even Analysis

The following table and chart show our Break-even Analysis.

Projected Profit and Loss

Property taxes ($11,946) are projected at the actual rate of the tax year 7/1/96-6/30/97. Significant increases are not expected.

Projected Cash Flow

The following chart and table represent the cash flow for Westbury Storage.

Projected Balance Sheet

The following table presents the balance sheet for Westbury Storage.

Business Ratios

Business ratios for Westbury for the years of this plan are shown below. Industry profile ratios based on the Standard Industrial Classification (SIC) code 4225, General Warehousing and Storage, are shown for comparison.

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How to Start a Warehouse Business

Cost, set up and business ideas.

Starting Out

When you decide to open your warehouse business, the first step is to determine exactly what services you should offer. There is more to a warehouse business than shelving and equipment, you can cater to specific areas of expertise. You can offer storage services or distribution and shipping, or a combination of the two, just keep in mind what your targeted clientele will need. You will need a business plan for your warehouse, but that comes after you determine your niche and look into your competition.

Types of Warehouses

Catering to specific types of businesses that cannot use all-purpose warehouses is a good way to find a niche. For example, art dealers and food companies have specific requirements for their storage needs, and they need warehouses that meet those needs. When you are working on finding your niche, you will need to take into account what type of warehouse you need. While on the outside many warehouses look like a “one size fits all” type structure, they have quite a few differences.

• Distribution Centers
• Public Warehouse
• Climate Controlled Warehouse

There are one of the most lucrative forms of warehouse businesses. A distribution center generally stocks things for a short period of time before shipping them out to companies or customers.

A public warehouse usually is rented out to companies for short-term distribution. Sometimes retailers need to rent space in a public warehouse to store their overstock of products because there is not room in the warehouse they normally use.

These are also important to the agricultural industry, which has led to the government trying to encourage the opening of more public warehouses. Public warehouses usually rent out smaller sections of their building to different smaller businesses that do not have the need to buy a warehouse all for themselves.

These warehouses are for things that need specific conditions. Sometimes the temperatures can be freezing in these if frozen goods are what is stored in them, other times it can be adjusted to store art or furniture that has special atmosphere needs.

Client Relationships

The warehouse industry is all about having good relationships with your clients, but when you are first starting out, you need to build those clients. Attending trade shows and conferences about your industry will allow you to network and meet potential clients. Social media is another key way to help you connect with clients, as is having a website. Another way to help you gain clients is to join the International Warehouse Logistics Association , which provides many different resources for people in the warehouse industry.

Warehouse Businesses Who Chose General Steel

MAS Cabinetry and Countertops

MAS Supply created a mixed use warehouse and manufacturing facility when it was time to expand their business.

Master Electrical Contractors

MEC bought their building over 20 years ago. MEC owner Dan says the space has totally changed how he does business.

Northern Logistics

Northern Logistic's warehouse demonstrates how important a column free building is to a warehousing operation.

Steel Building Kits

A building kit from General Steel can be customized to fit whatever your warehouse will store. Our prefab warehouses offer open spaces for up to 300 feet, giving you plenty of open spaces for your goods. General Steel will research the location of your warehouse to determine what kit is best for you. When your building arrives, it can be put together easily, with significantly less time than a building constructed from traditional materials. Steel is also more durable than traditional construction materials, so it is more likely to stand up against bad weather events. You can save up to 50% in construction costs with a steel building kit.

• Cost Considerations

The start-up costs for starting a warehouse business are generally between $10,000 and $50,000 . Create a list of everything you will need to start your business, from equipment to employees to the warehouse itself. This will help you estimate your startup costs a little more accurately, and help you determine what your ongoing costs will be.

One of the most important decisions you will make about your business is where your location should be. You need to find a location that works for whatever you will be selling, but not too close to your competition. Most importantly, if you are building a new warehouse, be sure to measure your land to determine if it would accommodate the building size you intend to develop.

The equipment your warehouse needs can be expensive, so this is something you definitely need to factor into your startup costs. Most warehouses need pallet trucks, forklifts, and electric stackers to run efficiently. You may need other equipment too, depending on what your niche is.

Resources for Warehouse Projects

Building costs per square foot.

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Recommended Warehouse Building Sizes

Having a good idea of what size your building needs to be will help you find the perfect location. Make sure you find an area where you have room to grow as your business does. With a steel building you can easily expand your warehouse as it grows, so you do not have to get a huge warehouse before your business is ready for one.

30x40 Warehouse

A 30x40 prefab warehouse package is equipped to house a variety of businesses, including fitness...

40x80 Warehouse

A 40x80 steel warehouse package is a popular choice for businesses in need of storage or operational...

100x100 Warehouse

The 100x100 metal warehouse package is one of the most popular choices for a warehouse business...

200x400 Warehouse

The 200x400 metal building package is one of the most popular choices for businesses in need of a...

Need help? We're listening. Let us guide you through your decision.

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How to Create a Self-Storage Business Plan [Plus a Free Template!]

By the end of 2020, roughly 4.35 million hopeful individuals had filed new business applications . 

Perhaps the motivation was the loss of jobs or that people were fed up with the traditional 9-5 gig. Whatever the case, entrepreneurship has been a popular theme lately. 

Many new business owners opted to pursue a real estate investment, specifically a self-storage business. For those of you on this path, let’s discuss creating a self-storage business plan and how a few purposeful decisions can catapult your business to the forefront. 

It starts with a solid self-storage business plan.

Developing a business plan

Before you can start creating your business plan, you need to do some market research first. Start by relying on others’ history and experience. Do lots of market research. Network and learn from other marketing strategies. Attend an industry trade show. Diligently learn the ins and outs of running a small business. 

Start to hone in on the details as you begin to formulate your plan. For example, , are you building or renovating your own potential storage space? You’ll need to consider the zoning in your chosen area, and contemplate the land cost and interest rate from a lender or two. In terms of marketing strategies, will construction costs or developmental costs be worth the initial investment? Thinking through these aspects with some “back of the napkin” math early on will help you as you start to formalize your business plan

Self-storage business plan template

Putting the vision for your self-storage business to paper is important. Not only will it help you develop a roadmap for all the things you need to do to make your business dreams a reality, but it will allow you to easily share your vision with others. This is necessary if you want to bring in funding partners or borrow money for a lender.

Download a business plan template and start drafting your own self-storage business plan. Dive deep into a recent market analysis to determine any possible cash flow outcomes. Understand that your first year as a startup might be your most challenging. Read various feasibility studies, and talk to your peers in the industry. 

Your business plan should look at least two years out into the future. Plan for different scenarios in regards to your return on investment projections. Consider your returns under a best case scenario and a worst case scenario, as well as a conservative median projection.

Components of a self-storage business plan

Aside from the initial planning phase, remember to consider the operational logistics it will take to run this business. Fortunately, self-storage business investments are desirable because of the traditionally low operating expenses. 

Make sure your business plan includes these components:

Executive summary

Business description, market research and strategy, management and personnel, financial reporting documents.

An executive summary is a brief overview of your business. Think of it as the first thing you would tell someone about your business in a conversation. For example, an executive summary for a self-storage business might start something like this:

“The purpose of this business is to develop and operate a 100-unit facility on a parcel of land outside of Colorado Springs, Colorado.”

Or, like this:

“This venture seeks to find and acquire value-add self-storage facilities in secondary markets in the Southeast. The business will modernize and update the facilities with the latest technologies to increase their profitability over the next two years.”

An executive summary should go on to summarize and highlight key elements from your business plan, such as total costs and projected revenue.

Everything You Need to Know About How to Start a Self-Storage Business

What kind of business will you be: sole proprietor, LLC, C- or S-corporation?

Here, you can describe the details of how your self-storage business will operate. Beyond your legal status, cover the operational details of your business such as branding, services offered and projected expenses.

Businesses are more tech-enabled than ever before, with easy-to-navigate websites , advanced phone systems, user-friendly apps and online payment services . Of course, these things aren’t always necessary to achieve success; however, having a few tech-powered options will put you ahead of the game. Consider how you will use these technologies sooner, rather than later.

Also consider things like your hiring plans, insurance needs , and maintenance procedures. Include additional revenue sources besides self-storage rents, such as sales of tenant insurance or moving supplies. 

Remember all that market research you did on the self-storage industry? Lay out your most relevant findings and how they support your self-storage business idea in this part of your business plan. Examine the demographics and supply and demand story of your target market. For example, if individuals need RV storage, consider offering that option. Decide how you will make money and attract new renters (i.e., social media , content marketing, etc.).

Like any industry, the self-storage industry has a unique ebb and flow to it. Knowing these trends will help you execute a more successful self-storage project.

This is the who’s who of your self-storage business. Discuss the experience, qualifications and duties of the executive team, as well as additional employees that you have or need to hire to execute your plan.

Is your self-storage business plan financially feasible? Here is where you demonstrate that it is, by laying out details of your financial situation. What are your assets and liabilities? Will you have debt service?

This section should include the projected profit and loss, balance sheet and cash flow for your business for the next two to three years.

Expect the unexpected

Once your business is up and running, you will no doubt encounter challenges and situations that your plan did not anticipate. However, a strong business plan will greatly increase your chances that your business will succeed. If you are looking to do more with your business, Storable offers a host of technology solutions to help your self-storage operation thrive in a competitive environment.

Financing Options for Self-Storage Businesses

Resolve your questions about how to get financing for your self storage business. Keep Reading

Is a Self-Storage Business Profitable?

Is owning a self-storage business profitable? Find out how an investment in a self storage facility can turn into a lucrative business for you. Keep Reading

How to Buy a Self-Storage Facility

Thinking about buying a self-storage facility? Here is what you need to know before starting your search. Keep Reading

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Warehousing Business Plan

Warehousing business plan presentation, free google slides theme and powerpoint template.

You have a business idea in mind, you've thought about it, developed and perfected it, and now you just need to translate all that valuable information into a presentation that will capture the interest of investors. Here's the solution! This template is perfect for developing your storage company's business plan. It has a sober style, with gray and black tones, which give it a professional and serious look. Edit the resources with your data and get the support you need.

Features of this template

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• Includes information about fonts, colors, and credits of the resources used

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How to Improve the Warehouse Operations of Your Organization

The better a business’ warehouse operations, the more successful the business is. Warehouse management ensures that stock matches customer demand. Warehouse operations take into account the supply chain and work towards being cost-effective and efficient.

To understand effective warehouse operations, you must first be clear on the warehouse operations process and how it plays into the larger warehouse operations management. Read about that and how to improve the efficiency of warehouse operations.

What Are Warehouse Operations?

Warehouse operations consist of the processes used when managing the activities associated with receiving, storing, packing and distributing goods in a company’s stockroom. This includes warehouse management systems (WMS), workflow processes, human and nonhuman resource management and more.

Warehouse operations aim to satisfy customer needs and requirements while optimizing space, equipment and labor as effectively as possible. That means that stored goods must be accessible and protected from damage. Achieving these goals requires ongoing planning and being able to quickly adapt to change.

Project management software can help manage the warehouse operations process to reach its objectives. ProjectManager is award-winning project and portfolio management software with powerful kanban boards that help control the inventory life cycle. Kanban boards can be set up to reflect the warehouse operations process, while kanban cards can capture data from individual orders. Each card can track planned versus actual progress, schedule resources and more to keep warehouse operations running smoothly. Get started with ProjectManager today for free.

The Warehouse Operations Process

Project management software will help control the warehouse operations process. However, this requires an intimate understanding of the warehouse operations process. There are six fundamental processes to warehouse operations: receiving, storing, picking, packing, shipping and returning. Being able to optimize these seven processes streamlines warehouse operations and reduces costs and errors, which leads to a higher perfect order rate.

This is the first warehouse operations process, also one of the most important to perform properly. It starts by verifying that the right product in the right quantity and without damage was delivered. The responsibility of the goods is then transferred to the responsibility of the warehouse, which is now tasked with maintaining the condition of the goods as received until shipped. Doing this allows warehouses to filter out damaged goods and avoid liability.

Once received, the goods must be taken from the receiving dock to their warehouse storage location. Not putting goods in their proper place interferes with warehouse operations and reduces productivity. Putting away goods also allows them to be stored more efficiently, reduces travel time, ensures safety for goods and employees, utilizes space better and makes it easier to find, track and retrieve when needed.

This leads to the next warehouse operations process, storing the goods. Put-away moves the goods from where they’re received to the warehouse. Storing is finding the opportune site to store each of the goods that are received. As noted, this helps optimize space and increase labor efficiency.

When a customer order comes in , goods must be retrieved, which is the picking process in warehouse operations. This is the most expensive process in warehouse operations and can be over half of the total operating expense for the warehouse. Therefore, being as efficient as possible with the picking process can save money and increase warehouse efficiency. Another advantage of streamlining the picking process is it increases accuracy as errors negatively impact customer satisfaction.

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Once picked, the goods must be packaged. Packing is the consolidation of picked goods from the customer’s sales order that’s then prepared for shipment, such as putting them in boxes and adding address labels. It’s important to avoid damages during this process and when packing use lightweight materials that protect the goods but don’t add undue costs to shipping.

The final step in the warehouse operations process is shipping (unless goods are returned, but we’ll get to that in a moment). If all the other processes have been done correctly, all that’s needed is to ensure that the package is delivered to the right address and customer when it’s expected and without damage. Also, shipping should be as economical as possible for the shipper without impacting the delivery for the customer.

Occasionally, goods will be returned due to damage or an error. This process begins with the prior process. When shipping, a return label should be included in the packaging. Once the return is delivered to the warehouse, staff should inspect it for damage, review the reasons for its return and scan it back into the tracking system. If the item isn’t damaged or expired, it can be returned to its place in the warehouse, otherwise, it should be discarded or salvaged. Detailed records of this process should be kept.

What Is Warehouse Operations Management?

Warehouse operations management is simply the principles and processes involved in running the day-to-day operations of a warehouse. This includes all processes defined above, but also the scheduling of labor and the management of inventory and order fulfillment. Warehouse operations management seeks to have all these aspects of running a warehouse’s operations work together as efficiently as possible to increase productivity and reduce costs.

How to Improve the Efficiency of Warehouse Operations

It’s clear that improving the efficiency of warehouse operations is key to running a successful business, but what are some practical things that can be done to increase efficiency? Below are some of the things that warehouse operations will benefit from employing.

Use a Warehouse Management System

A warehouse management system is made to increase efficiency and accuracy in the warehouse operations processes. The software can be found in businesses working in retail space, distribution and manufacturing. That’s because the WMS improves the flow of goods through automation, which eliminates human error, reduces labor costs and can track orders.

Automate or Outsource Warehouse Operations

Automated workflows will help streamline warehouse operations processes, but businesses can also remove the entire process by partnering with a third-party vendor. This provides companies with a more experienced and likely better service at a lower risk to them. It can also reduce costs, help with compliance with current guidelines and keep organizations focused on their core strengths.

Use Kanban Pull System for Inventory Management

Kanban pull system is ideally suited for warehouse operations because of its lean approach similar to just-in-time stock control. It means that work starts only when the customer submits a purchase order . This is a visual workflow tool designed to reduce waste, minimize inventory levels to just what’s needed at the moment and improve inventory control. This leads to cost savings and greater efficiency and the dividends are more customer satisfaction.

Optimize the Warehouse Layout

The better a warehouse is laid out, the more streamlined its processes. The benefits include less time wasted having to retrieve or pick goods, quicker turnaround times and it gives a warehouse capacity to handle a larger volume of orders. All this leads to greater customer satisfaction as well as loyalty, as they appreciate getting orders on time and in good condition.

Implement Lean Manufacturing Principles and Techniques

Lean manufacturing is all about reducing waste and increasing productivity and customer satisfaction. Running a lead warehouse does all that by taking advantage of opportunities for improvement and focusing on value creation for customers. It streamlines warehouse operations processes. It’s based on the lean manufacturing principles of eliminating waste, reducing inventory levels and improving operational efficiency.

Warehouse Operations Roles and Responsibilities

Many warehouse professionals manage and run the warehouse operations processes. Each has a distinct role and responsibility, which together keeps the warehouse operating efficiently. The following are the three basic categories of people who ensure the warehouse is working as it should.

• Warehouse Operations Manager: Oversees all daily activities of the warehouse. As part of the supply chain , they must be adaptable, open-minded, have strong communication skills and build and manage a self-sufficient team.
• Warehouse Supervisor: Also oversees the general operations of the warehouse and its staff, including recording and maintaining inventory, advising receiving and shipping as well providing training. They work under the warehouse operations manager.
• Warehouse Workers: The team responsible for managing customer orders , overseeing and processing incoming stock, picking, packing and shipping orders as well as dealing with returns.

Why Are Warehouse Operations Important for Businesses?

As stated at the start, a company involved in selling goods lives and dies by the success or failure of its warehouse operations. It’s that important for business. It satisfies customer demand and builds customer loyalty. Effective warehouse operations will increase productivity and much more. Here’s a short list.

Order Fulfillment Process

The order fulfillment process starts with receiving a customer’s order and ends with delivering the goods to that customer. Along the way, goods are stored and managed to avoid overstocking and shortages. Warehouse operations play a critical role in this process, ensuring that orders are accurately picked, packed and prepared for shipping.

Supply Chain and Logistics Management

The warehouse is a bridge between production and distribution in the supply chain. Warehouses store goods after they’re produced or procured until they’re shipped to the customer. That shipping is where logistics management comes into play. It ensures that goods are delivered to the right place, on time and in proper condition, while keeping costs low and maximizing efficiency.

Inventory Management

A warehouse serves to store inventory, which is why inventory management is forever tied to warehouse operations. That’s because inventory management controls the warehouse operations process from order to storing and selling of goods. It manages supplies and the floor of raw materials from procurement to finished products in production .

Operational and Production Costs

Without managing warehouse operations, costs are likely to get out of control. Operation costs include the cost of the goods being made and stored, but also all operating expenses, called selling, general and administrative (SG&A) expenses. Production costs are direct and indirect costs from manufacturing a product, such as labor, raw materials, etc.

How ProjectManager Helps With Warehouse Operations Management

Considering the importance of warehouse operations, businesses seek the best software to help them manage the warehouse operations process. ProjectManager is award-winning project and portfolio management software with the features to plan, schedule and track warehouse operations activities in real time. Resource management tools and cost-tracking features ensure that warehouse operations stay within budget and customers receive their orders on time.

Plan, Schedule and Track Warehouse Operations Activities

Warehouse operations include activities such as receiving, storing, packing and shipping, to name only a few. Planning out those activities on a robust Gantt chart makes sure that all those tasks are organized and assigned. Managers can see the whole plan in one place but also link all four types of task dependencies to avoid delays. When the schedule is complete, set a baseline to capture it and associated costs. This allows managers to track the planned effort against the actual effort in real time to stay on schedule.

Manage Resources and Monitor the Costs of Warehouse Operations

To keep to that schedule requires constant monitoring. Human resources are responsible for the day-to-day warehouse operations and their tasks can be viewed in one place on the team page or color-coded workload chart. If someone is over- or underallocated, balance their workload to keep everyone working at capacity. For a high-level overview, toggle to the real-time dashboard , with easy-to-read graphs and charts showing time, costs, workload and more.

When more detail is called for, use the customizable reporting features . Reports on timesheets, project or portfolio status, variance, workload and more can be generated with a keystroke. All reports can be filtered to show only what’s important and then shared in a variety of formats with stakeholders to keep them updated.

ProjectManager is online project and portfolio management software that connects teams whether they’re in the office, in the factory or warehouse floor. They can share files, comment at the task level and stay up to date with email and in-app notifications. Join teams at Avis, Nestle and Siemens who use our software to deliver success. Get started with ProjectManager today for free.

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