Profit margin measures business profitability by comparing business profit to business revenues. The higher the profit margin, the more profit the business keeps relative to revenues. Since storage facilities can be maintained by a small staff with little upkeep, the profit margin of storage facilities is relatively high.
Calculating Profit Margin
Net profit represents the amount of revenue left over after paying necessary expenses. Net profit is total revenue less total operating expenses. Net profit margin is net profit divided by total revenue. For example, say that a storage facility brings in rent revenues of $500,000 and has $400,000 in expenses. Net profit is $500,000 less $400,000, or $100,000. Net profit margin is $100,000 divided by $500,000, or 20 percent.
Average Storage Facility Profit Margin
Since upkeep and staffing for self-storage facilities is relatively minimal, owners of such storage facilities can enjoy a relatively high profit margin. According to the "Forbes" website, the average profit margin for self-storage units and mini-warehouses is 11 percent, making these among the most profitable types of small businesses. The main source of revenue is from storage unit rentals, and typical operating expenses include ground maintenance, plumbing, fixtures and appliances.
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