Travelers often find themselves without an easy way to tote around the luggage that they need on a trip. While luggage can be left in a hotel room, this frequently isn’t an option before check-in or after check-out -- especially as more and more people opt for non-traditional accommodations that don’t always provide the amenities hotels do. Additionally, luggage can be safely left in a locked car, but many travelers in major cities don’t rent cars.
Luggage storage businesses give travelers who don’t have alternative options a way to safely stow their luggage so that they don’t have to carry it with them.
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Learn how to start your own Luggage Storage Business and whether it is the right fit for you.
Start a luggage storage business by following these 10 steps:
- Plan your Luggage Storage Business
- Form your Luggage Storage Business into a Legal Entity
- Register your Luggage Storage Business for Taxes
- Open a Business Bank Account & Credit Card
- Set up Accounting for your Luggage Storage Business
- Get the Necessary Permits & Licenses for your Luggage Storage Business
- Get Luggage Storage Business Insurance
- Define your Luggage Storage Business Brand
- Create your Luggage Storage Business Website
- Set up your Business Phone System
There is more to starting a business than just registering it with the state. We have put together this simple guide to starting your luggage storage business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
Exploring your options? Check out other small business ideas.
STEP 1: Plan your business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
- What are the startup and ongoing costs?
- Who is your target market?
- How much can you charge customers?
- What will you name your business?
Luckily we have done a lot of this research for you.
What are the costs involved in opening a luggage storage business?
The startup costs involved with opening a luggage storage business are minimal. The biggest upfront expenses include:
- Leasing a commercial space
- Purchasing racks for storing luggage
- Procuring insurance for stored luggage
Business owners who want to keep their startup expenses llow may be tempted to skimp on these expenses, but doing so can be detrimental:
- Leasing an out-of-the way space to save on rent makes it harder for customers to bring their luggage to the location -- and toting luggage around is precisely what business owners are trying to avoid.
- Forgoing racks limits how much luggage a business can accept without stacking luggage on top of itself, which can lead to damage
- Not having insurance may deter customers from leaving their luggage with a business
Instead, business owners who have limited capital should start by leasing a small space in a high-traffic area. This will help them attract customers while keeping their lease payments as low as possible. With a little creativity, a lot of luggage can be housed in even a small space.
What are the ongoing expenses for a luggage storage business?
The ongoing expenses for a luggage storage business are manageable. They include rent, utility payments, insurance premiums and employees’ salaries.
Who is the target market?
The target market for a luggage storage business are travelers who don’t have a place to stow their luggage. These travelers may be:
- People who are touring a city for one day
- Job applicants who fly into a city for an interview
- Travelers who are staying at an Airbnb or similar setup
- Researchers who are in a city for a short amount of time
- Consultants who are in a city to meet a client for a few hours
How does a luggage storage business make money?
A luggage storage business makes money by charging customers for storing their luggage. Fees are usually based on how many pieces of luggage are being stored and how long they’re stored.
How much can you charge customers?
Luggage storage businesses generally charge around $10.00 per day for each piece of luggage stowed. City Copilot charges $10.00 per day, Free Your Arms charges $11.99 per day, and Vertoe charges $6.95 per day. Some businesses offer discounts for long-term storage or storing several items with them.
Fees for picking up and dropping off luggage may run anywhere from $34.99 to $79, with some prices even higher.
How much profit can a luggage storage business make?
A busy luggage storage business can earn a significant profit. At $10 per item per day, a business that stores about 27 items per day can bring in six figures per year. This doesn’t include additional payments for pick-up or drop-off services.
How can you make your business more profitable?
A luggage storage business can increase its revenue by offering additional services that travelers may need. These services may include package acceptance, key exchanges, copy, print and fax options, and concierge services.
What will you name your business?
Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Luggage Storage Business Name Generator
When registering a business name, we recommend researching your business name by checking:
- Your state's business records
- Federal and state trademark records
- Social media platforms
- Web domain availability.
It's very important to secure your domain name before someone else does.
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your luggage storage business is sued.
Form Your LLC
Read our Guide to Form Your Own LLC
Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services. You can choose to hire a registered agent or act as your own.
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It's really easy and free!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
Small Business Taxes
Depending on which business structure you choose, you might have different options for how your business will be taxed. For example, some LLCs could benefit from being taxed as an S corporation (S corp).
You can learn more about small business taxes in these guides:
- LLC Taxes
- Sole Proprietorship vs LLC
- LLC vs Corporation
- LLC vs S Corp
- How to Start an S Corp
- S Corp vs C Corp
There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.
STEP 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Additionally, learning how to build business credit can help you get credit cards and other financing in your business's name (instead of yours), better interest rates, higher lines of credit, and more.
Open a business bank account
Besides being a requirement when applying for business loans, opening a business bank account:
- Separates your personal assets from your company's assets, which is necessary for personal asset protection.
- Makes accounting and tax filing easier.
Recommended: Read our Best Banks for Small Business review to find the best national bank or credit union.
Open net 30 accounts
Net 30 accounts are used to establish and build business credit as well as increase business cash flow. With a net 30 account, businesses buy goods and repay the full balance within a 30-day term.
NetMany net 30 credit vendors report to the major business credit bureaus (Dun & Bradstreet, Experian Business, and Equifax Business Credit). This is how businesses build business credit so they can qualify for credit cards and other lines of credit.
Recommended: Read our best net 30 vendors, guide and start building business credit.
Get a business credit card
Getting a business credit card helps you:
- Separate personal and business expenses by putting your business' expenses all in one place.
- Build your company's credit history, which can be useful to raise money later on.
Recommended: Apply for an easy approval business credit card from Divvy and build your business credit quickly.
STEP 5: Set up business accounting
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
Make LLC accounting easy with our LLC Expenses Cheat Sheet.
STEP 6: Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate a luggage storage business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
For information about local licenses and permits:
- Check with your town, city or county clerk’s office
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.
Certificate of Occupancy
Businesses operating out of a physical location typically require a Certificate of Occupancy (CO). A CO confirms that all building codes, zoning laws and government regulations have been met.
- If you plan to lease a luggage storage location:
- It is generally the landlord’s responsibility to obtain a CO.
- Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to a luggage storage business.
- After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommended to include language in your lease agreement stating that lease payments will not commence until a valid CO is issued.
- If you plan to purchase or build a luggage storage location:
- You will be responsible for obtaining a valid CO from a local government authority.
- Review all building codes and zoning requirements for your business’ location to ensure your luggage storage business will be in compliance and able to obtain a CO.
STEP 7: Get business insurance
Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.
There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.
Learn more about General Liability Insurance.
Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners, we'll give you helpful tips and advice for creating the best unique logo for your business.
If you already have a logo, you can also add it to a QR code with our Free QR Code Generator. Choose from 13 QR code types to create a code for your business cards and publications, or to help spread awareness for your new website.
How to promote & market a luggage storage business
Since a luggage storage business’ target market is travelers, all advertising efforts should be directed at travelers. Online ad campaigns can be targeted toward people who are researching ticket prices to or hotel accommodations in a city. Signs posted in airports, on shuttles and in buses can also be effective.
How to keep customers coming back
A luggage storage business can keep customers returning each time they’re in town by providing a convenient and professional service. Customers often have many other stresses while they’re traveling, and they’ll be happy if a business takes care of their luggage without any complications or hassles.
Still unsure about what kind of business you want to start? Check out the latest Small Business Trends to help inspire you.
STEP 9: Create your business website
After defining your brand and creating your logo the next step is to create a website for your business.
While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.
Here are the main reasons why you shouldn’t delay building your website:
- All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
- Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
- Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.
Using our website building guides, the process will be simple and painless and shouldn’t take you any longer than 2-3 hours to complete.
STEP 10: Set up your business phone system
Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.
There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use. Check out our review of the Best Business Phone Systems 2023 to find the best phone service for your small business.
Recommended Business Phone Service: Phone.com
Phone.com is our top choice for small business phone numbers because of all the features it offers for small businesses and it's fair pricing.
Start a Luggage Storage Business in your State
- District of Columbia
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Rhode Island
- South Carolina
- South Dakota
- West Virginia
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Is this Business Right For You?
Anyone who is reasonably fit and enjoys interacting with people may enjoy running a luggage storage business. Business owners occasionally need to lift heavy pieces of luggage, so it helps to be in good physical shape. Some of the customers business owners meet will have questions about the area (e.g. where to get lunch or where the nearest public transit stop is). Thus, a natural ability to converse with different people is helpful.
Want to know if you are cut out to be an entrepreneur?
Take our Entrepreneurship Quiz to find out!
What happens during a typical day at a luggage storage business?
A typical day at a luggage storage business involves:
- Accepting luggage from customers
- Storing customers’ luggage
- Handing luggage back to customers
A tag or identification system is normally used to track which luggage belongs to which customer. Identifying information is taken when luggage is dropped off and confirmed when customers pick up their luggage.
What are some skills and experiences that will help you build a successful luggage storage business?
Successfully running a luggage storage business requires a good understanding of basic business principles. Business owners who don’t have prior experience owning a business may want to take one or more business courses from a local community college. Alternatively, there are many online business courses offered on platforms like Coursera and Open Culture.
What is the growth potential for a luggage storage business?
Most luggage storage businesses have a few locations throughout a city. For example, Vertoe has 10 locations in New York City. It’s possible, however, for a successful business to expand into other cities. City Copilot, another business that’s based in New York City, is planning on expanding to other cities throughout the world.
Take the Next Step
Find a business mentor
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
Learn from other business owners
Want to learn more about starting a business from entrepreneurs themselves? Visit Startup Savant’s startup founder series to gain entrepreneurial insights, lessons, and advice from founders themselves.
Resources to Help Women in Business
There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:
If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.
What are some insider tips for jump starting a luggage storage business?
Offering to pick-up and drop-off customers’ luggage at their location can greatly increase a business’ potential customer base. Customers who have lots of luggage or are on tight schedules may specifically look for a business that will come to their location. As an added bonus, businesses are usually able to charge an additional fee for these services.
How and when to build a team
Many luggage storage businesses hire a small team of employees as soon as they open. Customers may need to drop off or pick up their luggage at any time of the day or night. Having a team of employees makes it possible to extend the hours when a business is open.