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 Self-storage on steroids a boost for entrepreneurship

 

 Self-storage

That some great businesses and bands have started in a garage is by now an entrenched part of entrepreneurship lore, but is it possible that the garage itself, rather than something emerging from it, can also turn into a great business?

Bobby Forssman, a 52-year-old property developer from Johannesburg, certainly believes it is possible, and has invested millions in his idea to create a safe and cheap base for hundreds of entrepreneurs to tinker, experiment and scale up in.

If the first month since the launch of his Storehouse in Midrand is anything to go by, he is well on his way to proving his hunch right. With the barest minimum of marketing campaigns, two dozen business owners have already signed up as tenants because the flexible offering of Storehouse is just what they need as a first base away from their garages and kitchens for their emerging businesses.

Forssman’s idea has its roots firmly in the self-storage industry, but unlike the bog standard self-storage offering of dead, dark warehouse space, Storehouse encourages its tenants to use their rental units for the full range of everything that people do in their garages: storage, certainly, but also hobbies, businesses and even that classic garage activity: band practice.

The result is self-storage on steroids.

At its very basic, a tenant of Storehouse can rent a small no-frills storage unit like they can at any other self-storage facility, but that is just about where the similarity ends. For one thing, Storehouse is accessible around the clock. Furthermore, tenants can add more space or optional extras off a set menu of items: electricity, insulation, air conditioning, different types of flooring, a mezzanine level and even a shopfront. There are six different sizes of units.

The complex boasts bathrooms for the tenants, a washbay for their vehicles, wi-fi and, at its heart, a vibrant coffee shop called the Hub where tenants as diverse as a guitar maker, graphic designer, printer, jeweller and, yes, even a band or two, can meet their clients and socialise with each other.

The bustle generated by the first 26 tenants who have already moved in since Storehouse’s launch last month is the perfect antidote to the current gloom about economic downgrades and slowdowns. There will be no signs of stagnation at the Storehouse as the tenant population rises to over 200 in the next six months.

Forssman says although Storehouse is largely an original concept, it is based on an overseas trend where self-storage facilities had come under increasing pressure from their users to open up as usable space. In the US, it has developed into thriving “man-cave” facilities, with clients using their storage units mainly to pursue hobbies.

Forssman noticed the consolidation of self-storage businesses in South Africa over the last few years into the hands of a few large groups. Facilities have been upgrading and had become standardised, but the offering remained the same old staid concept: units exclusively used for storage, and the facility shuts down at night.

Meanwhile, the information from overseas was that the new full-use units were generating much higher income for self-storage companies.

Forssman, seeing that the local industry was ripe for a change, initially wanted to copy the trend by aiming a self-storage centre at hobbyists. But exhaustive market research over more than two years showed that the man-cave idea would not work locally. South Africans are much more likely to hire a garage away from home if they can use it productively.

Given Forssman’s background, it is not surprising that he has been able to come up with a concept ideally suited for growing entrepreneurs. He studied engineering, but never worked as one – or for anyone. Shortly after his studies and a subsequent stint as a conscript in the air force, he agreed to manage a property development project in KwaZulu Natal for a few months as a favour to a friend, and he never left the property industry.

That first project happened to be one that pioneered mini-storage units in South Africa. Today, Forssman regards Storehouse as the culmination of his ideas and investments that he had developed over thirty years.

For Business Partners Limited (BUSINESS/PARTNERS), one of Forssman’s finance partners in the development, the Storehouse concept is also close to its roots. BUSINESS/PARTNERS started thirty five years ago, and for a long time ran small-business hubs all over South Africa where entrepreneurs could rent affordable space. These complexes were incrementally sold off as BUSINESS/PARTNERS focused on its core business of SME financing and letting out larger spaces to SMEs and retailers, leaving the role of landlord to South Africa’s smaller businesses to other property entrepreneurs.

It is therefore apt that BUSINESS/PARTNERS financed the property on which Forssmann’s first Storehouse is built, especially if he carries out his plan to open a Storehouse in every South African centre in the years ahead.

And wouldn’t it be great if the humble garage, birth place of so many great businesses, can itself turn into a success story?

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