Somethin on the Side

Records storage as a part-time business

By Rob Perry

Would you like to have a side business you can run in just afew hours per week and will bring in a couple thousand dollars per month?Records storage is that kind of enterprise. It can be as big or as small as youwant it to be. If you live in a large enough market and have the resources, youcan grow the business to 50-plus clients, hire a staff and purchase a fleet ofvehicles. Or you can limit yourself to 10 clients who can be successfullyserviced by part-time personnel.

The key to successful records storage is service. You have todeliver what clients request within a reasonable time frame. The good news isyou get to set the schedule. For a part-time business, it might be next-daydelivery. For example, any requests received by 3 p.m. get delivered by noon thefollowing business day. Every day at 3 p.m., you know exactly what your workloadis for the following morning. Typically, you will average one request per dayfor every 10 clients.

Processing Service Requests

When a service call is received, you locate the recordsrequested and prepare a delivery document for the customer to sign. If you use arecords-storage software program, this whole process can take five to 15 minutesdepending on where the records are stored. The system tells you the exactlocation of the boxwhich spot on which shelf in which unit. A good trackingsystem will also print a delivery receipt and keep a history of all activity foritems going in or out.

The next step is delivery, which can be handled in severalways. One is to deliver the items personally. Another is to hire a courierservice to make deliveries for you. A third option is to hire someone to makedeliveries on a part-time basis. Retirees, college students and nonworkingparents whose children are in school all day are great candidates. On rare occasion, a client will need a rush delivery, which istypically made in less than two hours. With 10 clients, this will probably occuronce every couple of months. Have a contingency plan in place for theseinstances.

Picking up boxes is another step to consider. This can beaddressed with the same solutions as delivery, except for the initial boxpick-up for each of your clients, which is likely to be intense. Consider hiringa couple of temps and renting a truck for this first phase. Depending on thelevel of service each client requires, the temps may be able to handle the tripalone or you may have to supervise. Couriers dont generally like to movelarge numbers of boxes, but a moving company can be of assistance. Finally, theclient may be willing to bring his boxes to you, particularly if you charge forpick-up.

After the first drop, clients will only send boxes to storagea couple of times per year and in much smaller quantities. These subsequentpickups can be scheduled to fit your time and vehicle availability.

Doing the Math

So how do 10 clients earn you thousands of dollars each month? An average records-storage customer will be charged about $200a month. Of course, this can vary widely depending on the client. A businesswith 5,000 boxes could have a monthly invoice of $2,000, while a small brokeragefirm might only have 50 boxes and a $40 monthly bill.

For the part-time records center, the best clients are smallto medium-size law firms and medical practices. A typical law firm with fiveattorneys might have 400-plus boxes and two or three service requests per month,while a doctors office might have 200 boxes and two or three requests perweek. A good mix of clients will result in service revenue equal to about 50percent of storage revenue. If you have $1,300 in monthly storage revenue, youwould have an average of $650 in service revenue and about $50 in box sales fora total of $2,000. More active clients drive your service percentage higher.

Determining Space Requirements

How much space do you need? One 10-by-20 unit can hold 750letter/ legal boxes. At typical storage rates (which vary by market), it wouldtake 3,750 boxes or five units to earn $1,300 in monthly storage revenue. Considering the service ratio cited above. If you have morespace and less time, target less active clients. If you have less space and moretime, go after clients that require more service.

A benefit to records storage is it allows you to make use ofthe units that are least attractive to customers. Every operator seems to have a few units that are dif- fi cultto rent because of their location or size. As long as you can install racks tostore boxes, you can use these units for records storage.

So the next time a small-business client calls and asks if youhave space for records storage, dont just rent him an empty unitofferenhanced service. If he declines, you can still sell him space; but if heaccepts, you are on the way to a successful, part-time records-storage business.

Rob Perry is a certified records manager who has helpednumerous companies start part- and full-time records-storage businesses. He created The Records Center Manager, a software package forrecords centers, and wrote a manual titled How to Start and Operate a RecordsCenter. He recently launched The File Depot, a chain with available licensingopportunities nationwide. For more information, visit www.tigrs.com or www.thefiledepot.com.