Westbury Storage, Inc.
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.
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.
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.
- Water and sewer assumed at historical levels of $262 per year.
- Westbury Municipal Light’s bills totalled $13,714 last year when the present tenant was operating production with full staffing. As a self-storage facility electricity is needed only to power the rows of low-draw tube lighting. We estimate electricity to run about $250/month.
- Fuel oil for heating ran $13,881 last year. Since as a self-storage facility the level of heating does not need to be nearly as high, we estimate an annual bill of half this amount, or $7,000.
- Trash removal is projected at historical levels of $536 per year.
- The total for utilities is estimated to be $900 monthly.
Property and Liability Insurance amounted to $15,000 annually for the present tenant. We’ll assume the same annual cost.
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 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.
|Total Start-up Expenses||$49,739|
|Other Current Assets||$0|
|Start-up Expenses to Fund||$49,739|
|Start-up Assets to Fund||$1,004,748|
|Total Funding Required||$1,054,487|
|Non-cash Assets from Start-up||$986,748|
|Cash Requirements from Start-up||$18,000|
|Additional Cash Raised||$0|
|Cash Balance on Starting Date||$18,000|
|Liabilities and Capital|
|Accounts Payable (Outstanding Bills)||$0|
|Other Current Liabilities (interest-free)||$0|
|Additional Investment Requirement||$0|
|Total Planned Investment||$363,000|
|Loss at Start-up (Start-up Expenses)||($49,739)|
|Total Capital and Liabilities||$1,004,748|