Investing in Facility Management: What You Get
|Copyright 2014 by Virgo Publishing.|
|By: Sarah Little|
|Posted on: 04/05/2008|
Choosing the right third-party property-management company doesn’t have to be the daunting task it sometimes seems to be. There are several things that you, as a self-storage owner, can do to prepare yourself and guarantee the right fit for your business.
Making the decision to contract a third-party management company should be considered an investment. After all, a property-management service should take all the dirty details of owning a business off your shoulders and allow you the opportunity to focus on expansion.
If you have just one facility, think of how much more efficient that property could be managed with the constant care of a property-management company. Business owners with multiple facilities can certainly appreciate the time and effort it takes to keep all the wheels turning. The right property-management firm will consider your personal business needs and customize services to meet them.
Property-management companies are also ideal for newcomers to the self-storage industry. Owning and operating any business can be overwhelming; self-storage is, by far, no exception. Property-management firms help business owners avoid some of the pitfalls and mistakes that could be costly to the bottom line. Hiring a property-management company is like buying years of experience in the self-storage industry.
Beginning Your Search
The best place to begin your search for the most effective and affordable property-management service is at your own desk with a pencil and a paper. I’ve always heard that the most successful people write down their goals. This should also be true for making an important decision such as choosing the right management company.
To begin, close the door to your office, turn off the cell phone and don’t check your e-mail for a few minutes as you take the time to think about what services you really need from a property-management facility. Here are some services you might consider:
You may find yourself thinking, "Gee, I don’t need a management company to do all that." On the other hand, you may be relieved because these services are exactly what you need. Chances are you do need some combination of any or all of the above.
Before you begin to look at the cost of a property-management company, take the list you’ve made, and prioritize it. This will allow you to keep a realistic view of what’s most important and what points can be compromised. For example, if employee placement is very low on your list, you’ll most likely be happy to find a management company that offers the other services of major importance. This will also keep you from kicking yourself later wishing you had found a company willing to take on specific responsibilities.
It may be that you weigh the pros and cons of hiring a property-management service and decide it is more beneficial to hire your own staff to handle these details or perhaps even create your own in-house property-management department.
Some self-storage owners do exactly that when they realize they have too many facilities to contract third-party management services that usually charge a percentage of rentals or revenue. Internal property management may also be more reasonable if you only need one or two of these services that could easily become the responsibility of one more employee on your office staff.
Services You Can Trust
Property-management firms can offer a sense of security to a business owner. A reputable management company should be familiar with all landlord-tenant laws, zoning codes, permit requirements, etc., that affect your facility. The knowledge of these details will keep your business from incurring unnecessary fines and legal fees.
In addition, finding a property-management company that offers an errors and omissions policy will protect your business if the management company fails to perform contracted services. For example, if a property-management firm fails to pay your facility’s personal property tax as outlined in its contract with you, then you have grounds to enforce upon them any fees you incur because of their error.
In addition to handling the daily operations of your facilities, many property-management companies also offer consulting services such as:
Consulting services are usually contracted on a one-time basis, whereas property management entails continuing responsibilities. If you find that you need a combination of property-management and consulting services, you may be able to create a customized package with your provider to accommodate all your needs.
The key to choosing and maintaining a profitable and effective property-management program is to stay in communication with your provider. The clearer your goals and expectations are to your provider, the easier it will be to meet them. Be clear from the beginning and look for the company that is interested in customizing services to keep you happy.
The Training Component
Self-storage is not a cookie-cutter business where one company’s methodologies work for all. The competitive market demands that we strive to stand above the store down the street. Because of this importance and the risk of blending into the crowd, your property-management company should commit to your success by customizing services such as manager training and sales training. As important as your property-management company is to the success of your business, your managers that run each property are just as important, if not more.
Overlooking the management of your property managers is a common mistake in the self-storage industry. Business owners focus on reports and analysis so often they sometimes neglect the needs of the individuals in contact with their tenants every day. Self-storage facility managers may not view their position as a sales job; however, every self-storage owner knows it takes marketing and advertising to get customers through the door.
Perhaps the smartest marketing and ad campaign a self-storage owner could use is to invest in the sales skills of his or her employees. After all, they are the ones in contact with customers who respond to Yellow Pages ads, Internet ads, fliers, coupons, billboards, etc.
Sales training is also an intricate part of property management. Whether you deliver the training yourself or your property-management company does it, it should rank highly on your list.
Two May Be Better Than One
When looking for a third-party property-management service, don’t settle for less than what is comfortable for your business. You may even find the best option is to use two companies instead of just one. Maybe you’ll hire one for accounting services and market studies and another for call center and sales training. Choosing two separate vendors does have its advantages and disadvantages.
The cons may be that you’ll have two points of contact and two monthly bills. The pro: You get the best of both worlds. One company devoted to accounting and market study, and another separately devoted to sales training might make better sense if they have a forte in their respective niche. Moreover, one company that does it all just may be spreading itself too thin and not handling all responsibilities optimally. In fact, isn’t that why you’re hiring a property management company in the first place—because no one person/company can do it all?
A good property-management firm will build a program that suits your business and promotes growth. Research prospective management companies and get references for those you’re seriously considering. Ask if they have experience in the self-storage industry. Request examples of how they’ve increased efficiencies or created a sales increase for current clients. If they’ve done it before, they can likely do it again. Find the property-management company that meets all your needs and your self-storage business will be geared for success, getting the best deal for dollars spent.
Sarah Little is a total quality assurance account executive at PhoneSmart, an offsite sales force that helps storage owners rent to more people through its call center, secret-shopping service, sales-training and Internet-lead-generation services. For more information, e-mail email@example.com.