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.
In the current market as a self storage owner, investor, or operations manager you are facing a number of obstacles: a battered economy, a weak real estate market, an increase in delinquencies, decreased occupancy, decreased NOI, and more competition than ever before. As in years past most of this is cyclical and the strength of our regional areas will recovery, in some areas this recovery has already begun. While the economy is in recovery, there is still need to set a positive and inviting tone with our customers as well as with our facility managers. One of the obstacles in dealing with lackluster economic conditions is keeping facility managers motivated without letting complacency take over. Motivation starts with hiring the right manager, setting the right goals, along with having positive leadership and rewarding your employees when they go above and beyond the scope of their position.
The easiest type of manager to motivate is a manager who is motivated intrinsically. The standard definition of intrinsic motivation is simply motivation that comes from inside a person rather than any outside reward such as a bonus. Typically, this type of facility manager is motivated by the satisfaction of completing a job well rather than a bonus on the amount of units rented or inventory sales. An intrinsically motivated storage manager will take “ownership” of their facility. For example you may have a facility manager that consistently creates and implements new marketing ideas without direct solicitation, keeps the grounds around the facility in impeccable condition, makes the rental office a calm and inviting place for customers, decorates the office for the holidays, always has a bright and positive attitude, and gives the facility their personal touch. The drive to succeed is not typically something that is trainable, a manager usually has this motivation or not. During interviews, look for managers that are motivated internally. Often potential managers will provide letters of recommendation along references. These should be used to gauge not only the qualifications of a potential candidate, but to find out what kind of facility manager they will be overall. Look for potential managers that have been in a position where intrinsic motivation is expected such as a former business owner, former military, or an apartment manager. Remember, an intrinsically motive manager is one of the best types of managers you can hire.
One of the easiest ways to motivate a facility manager is to provide goals that are clear, concise, and realistic. In my previous life in the corporate world, I would regularly get financial and customer oriented goals. Often times I would know right away whether a goal was attainable or a complete work of fiction. Nothing will demotivate a manager faster than looking at a set of goals, whether they are financial or customer oriented, and knowing they have no possible way to attain them. This does not mean to lower operating standards or allow a facility manager to talk you out of a goal that is attainable but difficult; it means to keep your perspective in the present economy. Each facility manager should be given a list of goals and an operating budget, which should be reviewed regularly. As an operations manager, work with your facility managers and discuss the goals of the facility. Allow your facility managers to work with you as 2010 operating budgets are completed. How much of an occupancy or NOI increase do you expect for 2010? How much do you expect in inventory sales? What kind of closing percentage for customer leads are you expecting? What percentage do you expect to decrease expenses? Is your payroll going to increase or decrease? How much will your marketing budget increase or decrease? Allowing facility managers to work with you in creating their goals will give them a sense of responsibility towards attaining those goals. This works especially well if a facility manager’s bonus structure is tied to the goals you have both agreed.
The current economic situation we face as operation managers is tough. Not only does it affect our facilities in terms of income, delinquencies, NOI, and other facility metrics, it affects the performance of our facility managers. We all know as the economy struggles, so do our customers and facility managers. Our facility managers are very much like “bartenders” without the alcohol. They hear every customer’s problems from the domestic disputes, to customers moving because of foreclosure, the family member that did something wrong, and the story of another customer being laid off. Mix these issues along with the fact that most facilities are not performing as many people had hoped; it can psychologically overwhelm a person quickly. As an operations manager your job is to keep moral and motivation high. Even with tight budgets you should be taking care of the managers that do a great job for you and treat them well. During one of your visits, take your manager to lunch, point out the items that your manager has excelled on, maybe cover the facility one day and give your manager a paid day off, or give them a gift card to a local restaurant or store. Different types of motivation work for different people. Small acknowledgements, whether monetary or not, will go a long way in keeping your managers spirits high during a difficult economic time.
As we move into 2010, none of us will soon forget the challenges of 2009. Motivating our facility managers will continue to be a challenge. If you are hiring a new facility manager this year, look for one that is intrinsically motivated to get things done around your facility. Work with your managers on realistic goals for the coming year; allow them to be a part of the budgeting process. Lastly, provide the moral support and leadership skills needed to keep your manager’s upbeat, their spirits high, and on track for a strong finish this year. Motivate your facility managers correctly and you might be surprised with the long term success of your facility.
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 our main office at 866.970.EDGE or visit our website at www.cuttingedgeselfstorage.com. Follow us on Twitter at Cuttingedgemgt.
There was a time whensomeone could build a self-storage facility and watch it grow without much effort. Rent up would be swift, income would rise, expenses would level out, and in 24 months you could refinance your construction loan and make a nice return. There were no websites, no advanced marketing techniques, and Facebook was still a dorm room project at Harvard. Self-storage facility offices were the size of your first apartment, had no furniture, and if there was coffee it was brought down from the facility manager’s apartment, not brewed in a nice, single serve, Keurig Machine. Competition Studies were easy, because there were only 3 competitors in a 5-Mile radius, instead of 13 in a 3-Mile radius. Security was a scarce, driveways were gravel, and automatic gates were a luxury. You may be reading this, scratching your head,and thinking “I don’t remember it ever being like this”. Well like the time of the dinosaur’s and the British Empire, this era has long since passed. So, now that we are in the 21st century and part of Google’s new online world what do we need to know about our competition? Let’s focus on a few things, identifying your competition, management, amenities and curb appeal, and pricing.
So who are your competitors? How many facilities do you compete against? How far out does your facility reach? Start by identifying your competitors. Use Google, the yellow pages, or an online self-storage site and attain a list of the facilities in your area. Second, map them out. The easiest way to do this is to purchase mapping software. Two programs that have been successful for me in the past are Microsoft Map Point and Google Earth Pro. These programs allow you to “push pin” or identify on a map where each of your competitors are located. Once you have all of the facilities in your area mapped out, use the measurement functions in the software to create a radius around your facility. If you are in Manhattan, NY your market area will be blocks, if you’re in a more rural area it may be 5-10 miles. Most self-storage market areas settle in between 3 miles and 5 miles. Now you can accomplish this on a standard map if it makes you feel more comfortable, but I suggest the mapping software so you can manipulate the data in the future. Once you have this information, now you can identify your competition.
Now that you know who your competitors are, it’s time to make a few visits. First, the most important part of any self-storage operation is the management. If a self-storage facility has great management it can overcome a poor location, low budget, etc. and vice versa, poor management can destroy the best facility in a market. Walk into the facility and inquire about renting a unit. How did the managers treat you? Are they pleasant? Do they have a sense of humor? Were they in the office or did they come out of their onsite apartment? Try to be as objective as possible. Did they offer to show you a unit or did they give you a price and show you the exit? Did they give you gate hours, office hours, pricing, specials, a walk through, etc. Did they explain what makes their facility the best? Would you feel comfortable storing your most prized possessions there?
Next, while you are visiting with the managers, what kind of amenities does the facility offer? What type of access hours does the facility offer and does the access change based on unit type or location? Can you get 24 hour access? What kind of security does the facility have? Does the facility have cameras, door alarms, or a secured gate? Does the facility have an on-site manager? What kind of construction comprises the facility? Is the facility steel, concrete, or wood? Are the walls steel, drywall, wood, or chain link? Is the facility built to be fortress style or is there fencing around the property? If there is fencing, what kind of material was used? Does the facility have climate control, drive up access, large truck access, wine storage, or RV and Boat Storage. Does the facility have a loading area? Does the facility have more than one gate or access point? Does the facility offer moving carts, packing supplies, a coffee area, or bottled water? Curb appeal is equally important in the management of any self-storage facility. Is the facility clean? Do you see roaches or mice running across the hallways? Do the doors and hasps work correctly, or does the facility manager have to fight with each unit door? Are the units clean? These are just a few of the amenities that people want.
Pricing can be one of the most dynamic aspects of managing a self-storage facility. In any market in America your facility can be the highest priced facility in the marketing, or the lowest. You can raise rents on your existing tenants or not. You can offer the best move in special; include an administration fee, or adjust your late fees. A few things about pricing are certain. First, if you are 100% occupied you need to raise your facility’s prices because you are losing money. Yes, you may lose some occupancy in the short term, but the remaining units will rent up at a higher street rate and the increase on the remaining tenants will go right to your facility’s NOI. The idea is to maximize revenue above and beyond occupancy. Trust me, electricity isn’t getting any cheaper.Second, do not market or rely strictly on price. Stanford University did a study on what motivatessomeone to purchase a good or service. The results were the following, 17% of people will purchase a good or service at the highest price point, 13% of people will purchase a good or service at the lowest price point, and the remaining 70% of people will purchase a good or service for a reason other than price. Learn to sell your store on VALUE, not price. Last, check prices in your market at least monthly. There is nothing wrong with being the highest priced facility in your market, but be aware of what your competitors are doing. Remember, good management and competitive advantages are two things that will help you control your market. The self-storage facilities that provide the best value for their customers are the ones that will win in any market, regardless of price.
Matthew Van Horn is Vice President of Cutting Edge Self Storage Management and is 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 Cuttingedgemgt and on Facebook at Cutting Edge Self Storage Management.
You can convey it over the phone, in person, by a facial expression, or by the tone of your voice. It can turn people off, turn them on, or send them running for the hills. It can be the difference between someone renting a unit at your facility or renting a unit at your competitor’s facility. It can be the difference between getting a positive review or having someone bash your facility on Facebook and Twitter. It can be the deciding factor in a promotion or other life changing event. Your happiness matters. It matters to your family, your customers, your coworkers, and even your dog.
Scientists have been researching everything from how to power our cars and homes to what makes us truly happy and productive. Recently scientists have confirmed what most hiring managers have known for a long time, that if you are happy and have a great attitude, you will be more successful at work and life. How many times have you shopped a competitor? Which competitor’s stick out the most in your mind? Yes, there are always the “super self-storage facilities” in every market. The stores with all of the bells and whistles, look like 5 start hotels, and give you a Ferrari when you rent a unit…but which ones do you truly remember? For me, it’s always the facilities that have the best managers. I can’t even count how many facilities I have visited in my career, but I do remember which ones made me feel at home, secure, and comfortable. I remember which managers smiled, treated me with respect, were polite, smiled, and took the time to understand my situation. I remember the managers that were happy and looked like they loved what they do, versus the one that couldn’t wait for me to leave so they could go back into their apartment.
I love to read, it’s a personal passion of mine, especially when it involves the discipline of Psychology. I am currently reading the book “The Happiness Advantage”, by Shawn Archor. Now this is not Pseudo Science, this was an actual study conducted at Harvard University in regards to our happiness. So what makes us happy? According to Mr. Archor, we have had the following statement hammered into us since elementary school “If you work hard, you will become successful, and once you become successful, THEN you’ll be happy”. The argument against this line of thinking comes in the very next paragraph of Mr. Archor’s book “If success causes happiness, then every employee who gets a promotion, every student who receives an acceptance letter, everyone who has ever accomplished a goal of any kind should be happy. But with each victory, our goalposts of success keep getting pushed further and further out, so that happiness gets pushed over the horizon”. In a nut shell this entire process is backwards. The book goes on to state “we now know that happiness is a precursor to success, not merely the result. And that happiness and optimism actually fuel performance and achievement-giving us a competitive edge”.
The research has shown that when you hire someone, only 25% of their job success will be educationally/technically related. So, for example if you hire an accountant only 25% of their job success will come from knowing how to complete an income statement or a balance sheet. The other 75% comes from their attitude, personality, and overall happiness. Just a little food for thought when you are looking to fill a position at one of your self-storage facilities. Even more food for thought when you are reviewing your facility’s overall performance. Unfortunately I don’t have enough space in this blog to review the book fully, but if you take one thing away for this discussion understand that happiness and attitude is a bigger precursor to success then knowing how to run your facility’s management software or cleaning a unit. Remember the manager of a facility is the single most important part of the operational success of your facility. He or she is not a robot. If you haven’t taken the time, sit down and get to know them, take them to lunch or a ball game. In the end it could pay more dividends then a bonus check.
As we move from the 4th quarter of 2010 and into 1st quarter of 2011 there are many challenges that we can analyze for the future. A generally slow economy, increased expenses, stressed out customers, increased competition, and an overall negative feeling are just a few of the issues that the self storage industry has had to weather over the past three years. Along with developers oversupplying certain areas of the country, the State of Florida as one example, the pressures on our industry are at an all time high. All of these issues affect your self storage facility in one way or another. With all of these factors working against the self storage industry, we must ask ourselves, how do we combat these issues? One of the most important tasks as an owner, investor, management company, regional manager/director, or facility trainer is to make sure that your most important asset, your employees, are up to date on all aspects of their job. This includes areas such as legislation, technology, management techniques, and operational methods.
Legislation is an extremely important topic that all self storage employees should be vigilant in researching. Have the laws regarding late fees or lien sales in your state changed in the last year? Has the sales tax rate changed? Are you required to collect sales tax this year? Most states have unique laws that regulate late fees, customer access, sales taxes, and most importantly, lien sales. Since each state has their own unique self storage statutes, the best and most efficient way to keep up with changing legislation is to become a member of your individual state’s self storage association. The state associations will most likely have the most direct link to an individual state’s legislature and will be able to distribute any changes in your state’s laws to you quickly. If your state does not have a local association, consider working with the national self storage association. Another way for you to keep up on legislative changes is to attend local workshops or seminars. Almost every trade show or seminar has at least one session dedicated to changes in legislation. These sessions are invaluable in keeping up to date with the changes in legislation that affect our industry. Last, consider having an attorney review your rental agreement and procedures on a regular basis.
Another important topic is technology. Over the last five years technology in the self storage industry has moved ahead at the speed of light. The internet has changed how we operate overall as a society. Gone are the days of looking at a yellow page advertisement and then finding that particular self storage facility on a map, now you just Google the information, as if Google was a verb in our vocabulary all along. Online management software, Electronic Kiosks, SEO websites, online self storage referral services, Twitter, Facebook, Linked In, and Google based bar codes are just some of the items that are being implemented at self storage facilities around the country. So, how do you keep up with all of these changes? As with legislation, self storage trade shows are one of the best ways to keep up with technology that is self storage specific. Attend any self storage trade show and you will come out with a technological idea or item that you didn’t know even existed. Another way to keep up with technology is do some research on the internet. There is an endless amount of blogs and websites that review everything from software to hardware, in addition read self storage trade magazines monthly. Each month you will pick up an idea that you can integrate into your operations, often for little or no investment. One of the best ways to learn about technology is to experiment with it yourself. If you see an item that interests you, then rent or purchase the item and learn how to use it. Consider buying a smart phone, laptop, Ipod or Ipad. Download a demonstration copy of a piece of software that interests you. If this research is overwhelming, consider hiring a consultant to review your operations. Most self storage management companies and industry consultants are extremely familiar with the technology, whether software or hardware, that is necessary in the day to day operations of a successful self storage facility.
Self storage management techniques and operational methods are two other areas that should be consistently reviewed. The great thing about both of these items is that they are not always industry specific. You can pick up many ideas reading small business magazines such INC, Entrepreneur, and Success. These magazines will cover everything from the newest management techniques, operational methods, employee motivation, small business finance, and technology. Don’t be afraid to browse your local book store such as Barnes and Noble or online at Amazon.com for the newest management books. Often great ideas are picked up from somewhere unexpected. For industry specific ideas, read self storage trade magazines, browse self storage related websites, and attend self storage themed events and trade shows. These events and tradeshows have an invaluable amount of information in relation to the self storage industry. Consider joining online groups through Facebook, Linked In, or follow self storage themed groups on twitter. As with technology, never be afraid to search out an experienced self storage management company or industry consultant. Most self storage management companies or industry consultants have people on staff that will gladly answer any operational question you may have.
As the self storage industry changes, we must change with it. Legislation, technology, facility management, and operational methods are extremely important to the day to day operations of a self storage facility. The most important thing as an owner, investor, management company, regional manager/director, or facility trainer is that this operational information is given to your employees in a complete and timely manner. Consider subscribing each of your facilities to industry trade magazines, so information is provided to them automatically. Join your state’s self storage association. Send out weekly emails containing relevant articles, operational discussions, motivational pieces, and links to relevant websites. Consider having regularly scheduled conference calls to discuss operational and management issues. Send your employees to self storage related trade shows and events when they are available in your area. Most importantly, implement regularly scheduled live training sessions. Nothing can replace working with your employee’s one on one in a self storage related environment. Remember the most important asset of any self storage facility is the men and women that manage the facility on a daily basis. Self Storage managers are some of the hardest working men and women in any industry. The things that come up on a day to day basis at some facilities would make a reality TV show blush. Keep your employees up to date and trained with relevant material and it will make a huge impact on the operational harmony of your facility
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 email@example.com. 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 Cuttingedgemgt and on Facebook at Cutting Edge Self Storage Management.