Opening up a warehouse can be a major boost to a local economy, especially in more rural areas. Operating in a smaller town or city where you can still deal with big-spending clients brings in tax dollars for the area as well as a bunch of new jobs. If this is something you’re looking to do, here’s what to know when starting a warehouse business.
Pick Your Location
With the ever-increasing cost of rent and fluctuating commercial real estate prices, you’ll need to consider exactly where you want to start your business. As is the case with most things, the more rural you go, it’s likely that your rent or mortgage will be lower. You can also save on labor in most of these places where the cost of living is significantly lower. If you do decide to open up in a bigger city, though, you’ll need to factor that into your budget.
Set Your Budget
You need to set a budget for yourself in order to ensure you’re maximizing your profit. Create a budget for your first six months to a year. Set realistic expectations of how much money will be coming in and use that to determine how much you’re willing to spend per month. Anything you make that exceeds the cost of running your operation is profit, and you want your profit to be as high as possible. This may be the most important thing to know when starting a warehouse business.
Hiring and Training
For your first batch of hires, you’ll want people who already have experience handling the types of equipment you’ll be using. This allows for a much quicker training period, which saves money by cutting down on the mistakes that newbies tend to make. Once you have your more seasoned employees settled, you can have one of them handle training for new hires.
Know Your Space
You must know exactly much storage space your warehouse has. Calculating your storage space is important because you need to know how much stuff you can actually keep in your racks. You want your business to make as much money as it can, but you don’t want to take on more than you can handle.
When you’re looking to open up a warehouse, or even most other businesses, you must know some important things first—such as your location, budget, hiring schedule, and space. Keeping all of this in mind as you start will set you up for success later on down the line.
