In the amount of time it takes to read this article, a number of things are in motion. As you contemplate that first sentence, you quickly notice that your computer just made a noise, “Oh look, a new email”. If you have focus you will ignore that email, but a majority of people will run to that email. The email is just a vendor asking you for a conference call to discuss a new product, “Great, now I can get back to that article I was reading”. You scroll your mouse, or finger for you tablet/smart phone users, and try to figure out where in this article you stopped reading. While you are doing that a text comes through, then a Facebook message, someone mentioned you on Twitter, your LinkedIn app just made a noise, oh my another phone call, then 5 more emails. This of course doesn’t count the items on your desk including a stack of papers, 2 month end reports you forgot to read, 3 trade magazines, some random mail, a Diet Coke from yesterday, and a book you may have purchased from Amazon. By the way, you need to pick up milk on your way home tonight. This represents a five minute sub section in the life of today’s self storage managers, investors, and owners.
I just want to start this blog by saying that the details matter in the operation of a self storage facility. They matter so much; your self-storage business depends on them to run smoothly on a day to day basis. Often in our insanely busy lives, a smart phone is beeping, the phone is ringing, or while a family member is talking in the back ground we just miss things. Unfortunately in the extremely litigious society we live in, these distractions can easily come back to haunt us. It’s very easy, while working on 10 things at once, to accidently over lock the wrong unit, miss something on a rental agreement, or send a lien notice to the wrong address. It’s easy to misplace a file, throw out an important paper, or forget to call back a customer. This is just the result of working within a distracting environment.
Back in the late 1970’s to the mid-1980’s Van Halen was one of the most popular rock bands in the world. Over their career they have sold over 86 million records worldwide and have had the most #1 hits in the history of Billboard’s Mainstream Rock Chart. Being a Van Halen fan for many years, I consistently heard of a stipulation they always placed in their concert agreements. The stipulation stated that there was to be a bowl of M&M’s in the dressing room of the concert venue. This bowl of M&M’s was to be free of any brown colored M&M’s. If any brown colored M&M’s were found in this bowl then the band did not have to play and, in addition, they would receive full compensation for the show. Most people, including myself, found this to be a laughable requirement. Everyone assumed that this was just another hilarious stipulation from a band didn’t really want to work. Actually the real reason this stipulation existed was genius.
As we close out the 3rd quarter of 2012, it’s time to start thinking about your self storage facility’s goals and projections for 2013. How close were your projections in 2012? Were you above or below your projections for income, expenses, and NOI? Was your facility’s move ins, move outs, and net units at an acceptable level? Do you believe your facility provides the best customer service and amenities in the area? Are your facility managers fully trained? All of these items can have a dramatic effect on the financial success of your self storage facility. In our never ending quest to increase NOI we must consistently review our facility’s expenses. Here are 6 expense areas you should review on a regular basis:
Below is a recent infographic from Sparefoot, one of the self storage industries largest aggregators. One of the more interesting items on this infographic is the section discussing REIT owned facilities vs. Mom & Pop owned facilities. Out of a total of 50,050 facilities, the five largest self storage companies only comprised about 1% of the total market. Our industry resembles the Pizza industry in many ways. Yes, Pizza Hut, Domino's, and Papa John's are huge companies with extensive marketing budgets, but they still have less market share then independent restaurants.
In addition the section on industry returns is great. Compared to other industries self storage had higher returns, in 2011, then the health care, retail, and even timber industries. It's fairly obvious why the self storage industry has received a flood of institutional money.
(To view the infographic click the READ MORE button)
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Are you an asset manager for a financial institution or investment group? Are you in the process of filing a receivership or have you just completed a foreclosure on a self-storage facility? Do you have FDIC filings and FDIC reimbursement requirements? We can help you. Cutting Edge Self Storage Management has extensive experience working with financial institutions and investors for the purpose of Receiverships and ORE Foreclosures, our company principals have worked with Citi Bank, First Union (Wells Fargo), T. D. Bank, and the RTC.
Remember, the self storage industry is an industry unto itself. The self storage industry is not the hospitality industry, office space industry, medical supply industry, or the restaurant industry. The self storage industry has its own laws, verbiage, nuances, and operational standards. The importance of hiring a management company that specializes in the self storage industry cannot be overstated. Do not try to “go at it alone” or “learn on the fly”. We are here to help you. Contact us at 801.273.1267 for a free consultation. Download our Corporate Resume/Statement of Qualifications.
As a manager, business owner, and entrepreneur I am constantly looking for interesting things to read and new ways to motivate my team. I really enjoy fiction, Game of Thrones at the moment, but some of the most interesting and motivating things you can read are often biographies. The other day I was reading a story about Bruce Lee. For those of you who don’t know, Bruce Lee was an actor, martial arts instructor, philosopher, film director, screenwriter, and founder of the Jeet Kune Do Martial Arts Movement. He was widely considered to be the most influential marital artist of the 20th century. Suffice to say, Lee was obsessed with pushing himself both physically and mentally.
Over the last 30 years technology has infiltrated every aspect of our lives. This major change started for consumers in the mid-1980s with the adoption of the personal computer. Fast forward 30 years and now technology is the epicenter of our daily lives. No longer are people forced to carry a cell phone that is the size of a brick or use a computer the size of a file cabinet. Consumers can now buy a refrigerator with internet access and HI FI speakers or control their home’s thermostat with a smart phone. In addition, communication is now almost instantaneous and that new smart phone in the store has more processing power then a personal computer had just 10 years ago. This new technology will open more doors for the self-storage industry than ever before. The ability to be in constant contact with customers, existing or potential, is an almost overwhelming wave of potential. The changes in customer service will revolve around three items, product quality, communication, and information storage.
I began myself storage career, 12 years ago, at a smallself storage facility in Salt Lake City, UT. This facility was about 25 years old at that time. My facility had no climate controlled units, an office the size of a 5x10, and my onsite apartment was two converted 10x40’s. I used a DOS based self storage management software, dot matrix printer, and an electronic gate system (that I had to manually update each morning). Every month I would put together a “Monthly Package” of reports that were sent to my home office. By the time I finished printing and copying all of the information, the report was 1”-2” inches think and took me about 2-3 hours to complete. We didn’t have a website or an email address and the yellow pages were still our best marketing tool. What’s not so nostalgic about this story is that some self storage facilities still rely on the same procedures and technology I mentioned above to complete their day to day operations.
The internet has changed everything. The idea that you can have the world’s knowledge at your fingertips in an instant is overwhelming to say the least. With all of this technology available how do we hope to integrate it into our day to day self storage operations? The answer is that we pick and choose the technological options that work best for us. With that being said, you don’t need to become an Apple Genius or understand the algorithm that powers Google’s search engine. What you do need to understand are the basic frameworks of technology, how to implement it, and what you want to accomplish with this new technology.
First, let’s start with basic hardware. Everyone needs a computer, printer, scanner, and a high speed internet connection. There is no getting around this, you need the basics first. Once you have this you are a ready to begin setting up your system.
One of the most effective ideas/tools available in the market place right now is the idea of cloud computing. I am sure you have heard about cloud computing from a television advertisement, college/high school student, or a computer magazine. So what is it? Cloud computing is using a device (i.e. computer, smart phone, or tablet) to access information stored in an online database...that’s it, pure and simple. For example, I personally use Gmail for all of my email correspondence. Gmail is Google’s email product. You can sign up for an account at www.gmail.com. I can access my Gmail account through my computer in my office, my smart phone, or my Samsung Android tablet. If I send an email through my Gmail account I have access to that email on any of my devices. If I delete an email through one of my devices, it will remove it from all of the devices because every device pulls the information from the same email database. I also have a calendar application through Gmail that works in the same fashion so I can keep my schedule straight across multiple devices. No more telling clients “let me check my schedule when I get back to my office”. I always have an updated schedule with my cloud based Google Calendar.
Another example would be online self storage management software. As an operations manager my job is made much easier with online access to each of my self storage facilities. I no longer have to wait for my facility’smanager to fax or send me reports. I just launch the internet browser on my computer, smart phone, or tablet and review the reports I need instantly. If I need to make a price adjustment, update a special, or change access I can accomplish this from anywhere. The costs associated with online management software will be between $45 to $200 per month, but well worth the cost if you have multiple locations or just like to look at the progress of your self storage from home.
Do you need to make daily notes or keep a journal of your daily activities? Try using Evernote, www.evernote.com. Evernote allows you to access your notes no matter your location or device. Evernote will also allow you to share your notes with other Evernote users. Let’s say you are working on a project and one of the participants in the project is located in Seattle and another is in New York. How do you keep everyone on the same schedule and keep all of the information flowing between each of the participants? Create a notebook in Evernoteand share it amongst the group of people working on the project. Any note input from New York will instantly be available in Seattle and vice versa. If you are looking for something even simpler, how about creating a grocery list. Why carry paper anymore, when you can just carry your smart phone or table to the grocery store and have instant access to your list?
How about file sharing or accounting? Do you need to share that excel file, power point presentation, or have access to yourself storage facility’s P&L? Consider file sharing services such as Jungledisk (www.jungledisk.com) ,Dropbox (www.dropbox.com) , or Sugarsync (www.sugarsync.com) . Consider online accounting software such as Quickbooks online (www.quickbooks) or Peachtree (www.peachtree.com). Most of these programs are also available as apps for smart phone and tablet operating systems such as Apple’s IOS, Android, Blackberry, or Windows Mobile
The beauty of cloud computing is that you can now share items with your family, conduct business, or review your self storage facility’s reports and financials from anywhere. The self storage industry is extremely slow in adopting technology and we need to change this. You can install most of these technologies for under $1000.00, including hardware. Include a smart phone and a tablet; the cost will be about $3000.00, including hardware and service contracts. There are so many “cost effective” technological tools in the market place today, that there is no excuse not to upgrade your existing self storageoperations.
Matthew Van Horn is Vice President of Cutting Edge Self Storage Management and well known for finding hidden profit centers in self storage operations. For a complimentary “Hidden Profit Discovery Session” please send an email to firstname.lastname@example.org . Cutting Edge Self Storage Management is a full service management company specializing in Management, Feasibility Studies, Consulting, and Joint Ventures within the self storage industry. For more information, contact our main office at 866.970.EDGE or visit our website at www.cuttingedgeselfstorage.com. Follow us on Twitter at CuttingEdgeMgtand on Facebook at Cutting Edge Self Storage Management.
As a self storage facility manager or owner, you are consistently evaluating your strengths and weaknesses in a given market. Over the last few years self storage markets have become more competitive than ever before. Conditions such as weak real estate market, an excessive supply of self storage in many areas, and a less than predictable economy have left many managers and owners scratching their heads. With these conditions hanging over the head of a number of self storage facilities, the efficient management of your facility has never been more important. Most facility managers and owners have already taken the steps to cut back on unnecessary items that weigh on expenses. As a manager or owner you may make one less trip to the office supply store, maybe you are taking your employees out to lunch less, and maybe you are even cutting your facility’s lawn yourself. Once you have trimmed down most of the items you deem to be an excess, what’s left? Now is the time to creatively manage your facility. In order to become more creative in managing and selling your facility consider focusing on the following items: Have I hired the right staff for my facility? Have I created a marketing plan that is not only creative but economically feasible? What if I have multiple facilities in a given area?
In order to creatively manage your facility you must have a staff willing and able to do this. One of the most important aspects of running any business, but storage in particular is hiring the right manager to manage your facility. When you start the search for someone to handle your facility, start by doing some investigative work. Visit the competition in your market and make notes of the things you liked and disliked about the managers operating these stores. Once you have some candidates review their resumes and invite them for an interview. Does the candidate give off a good feeling? Are they pleasant? Do they have a sense of humor? Do they know the market area? Would you personally rent a unit from this person? All of these are intangibles that raise a consumer’s comfort level, and if the consumer is comfortable, they will be more likely to rent from your facility. Along with intangibles, does the candidate have any skills? As the storage industry evolves, technology becomes a greater part of day-to-day operations. Does the candidate understand how to use a computer? Do they have any problems answering the phone or making delinquency calls? Are they able to handle minor accounting? All of these items are part of the makings of a successful manager and can affect the potential of your investment. You can train someone how to run a computer or clean a vacant unit, what you cannot train is intangibles such as personality, sense of humor, and attitude. Remember you are hiring this person to SELL your facility, not just to sit back and collect payments.
Once you have hired the manager for your facility you can now focus on putting marketing dollars to good use. Creative management is not putting a circus in the front of your facility or always “thinking outside of the box”. The idea is to create and implement creative marketing ideas that not only differentiate you from your competition but which are economically feasible as well. One of the most important marketing tools you have is the people that already rent from you. Now most mangers or owners will say “Well we already have a referral program”. That may be true but how well are you cultivating it. Explaining to your customers about a referral program won’t necessarily have them running into the streets to tell their friends or family. Referrals come down to how well you take care of your customers. Consider handing out bottles of water during the summer months and offering coffee and hot chocolate during the winter months to your customers. This accomplishes two distinct goals. One, it allows you to help keep customers hydrated during the summer or warm during the winter, something they won’t soon forget. Second, it gives you an idea of what the tenant may be storing. Consider sending out welcome and thank you letters to your tenants. How often can you remember getting a welcome or thank you letter from anyone you have done business with? During the holidays consider using a special for people who need to store Christmas gifts. Along with the holiday special designate one storage unit as a “Santa’s Helper Unit”, complete with a table, wrapping paper, scissor’s, and tape. Another idea is to print $5.00 coupons to hand out to your customers during times you deem necessary. If you are on the phone with a potential customer and a current customer walks in to make a payment, instead of putting on hold a potential customer, just hand your current customer a $5.00 coupon. The current customer will be happy you didn’t let them slip into oblivion and hopefully your facility gained a new customer from the time on the phone. In addition, if your facility does not already have a web presence, get one. There are a number of internet companies that will reserve a domain name and give you access to a website builder for under $200.00 per year. Also, consider using a web based self storage lead generator. With a little research you can have your facility listed on a number of different self storage lead websites with a minimal cost to your facility.
A number of self storage facility owners have more than one location in a given area. One way to creatively manage these facilities would be to use smaller facilities as satellite locations. If you have a smaller facility in a given area which is within an acceptable distance to a larger, better staffed facility, consider using the smaller facility as a satellite location. The managers of the larger location should be able to integrate the operations of the smaller location into the operations of the larger location. While the integration of two facilities sounds difficult, most self storage management software has options to run multiple facility databases. If you have more than one large location, cross train your assistant managers so that they can manage multiple facilities. This handles two distinct issues, one it is usually easier to higher people for more hours and your assistants are already trained in the company’s policy and procedures.
Creative management is about being efficient and effective with a facility’s resources. Often trying a few new ideas may be more useful then waiving an administration fee or giving away a free lock to a new customer. Consider focusing on items which can make a direct impact on your facility’s profitability such as hiring, marketing, and logistics. Remember it only takes one good idea to make a campaign successful. Don’t be afraid to try different things and to make adjustments along the way. Sometimes focusing on a few items can make the difference between an average year and a blatantly successful one.
Matthew Van Horn is Vice President of Cutting Edge Self Storage Management. Cutting Edge Self Storage Management is a full service management company specializing in Management, Feasibility Studies, Consulting, and Joint Ventures within the self storage industry. For more information, contact Stephan Ross or Tammy Ross at 866.970.EDGE or visit our website at www.cuttingedgeselfstorage.com