Somethin’ on the Side
|Copyright 2014 by Virgo Publishing.|
|By: Rob Perry|
|Posted on: 10/01/2004|
Somethin’ on the SideRecords storage as a part-time business
By Rob Perry
Would you like to have a side business you can run in just a few 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 you want it to be. If you live in a large enough market and have the resources, you can grow the business to 50-plus clients, hire a staff and purchase a fleet of vehicles. Or you can limit yourself to 10 clients who can be successfully serviced by part-time personnel.
The key to successful records storage is service. You have to deliver what clients request within a reasonable time frame. The good news is you get to set the schedule. For a part-time business, it might be next-day delivery. For example, any requests received by 3 p.m. get delivered by noon the following business day. Every day at 3 p.m., you know exactly what your workload is for the following morning. Typically, you will average one request per day for every 10 clients.
Processing Service Requests
When a service call is received, you locate the records requested and prepare a delivery document for the customer to sign. If you use a records-storage software program, this whole process can take five to 15 minutes depending on where the records are stored. The system tells you the exact location of the box—which spot on which shelf in which unit. A good tracking system will also print a delivery receipt and keep a history of all activity for items going in or out.
The next step is delivery, which can be handled in several ways. One is to deliver the items personally. Another is to hire a courier service to make deliveries for you. A third option is to hire someone to make deliveries on a part-time basis. Retirees, college students and nonworking parents whose children are in school all day are great candidates. On rare occasion, a client will need a rush delivery, which is typically made in less than two hours. With 10 clients, this will probably occur once every couple of months. Have a contingency plan in place for these instances.
Picking up boxes is another step to consider. This can be addressed with the same solutions as delivery, except for the initial box pick-up for each of your clients, which is likely to be intense. Consider hiring a couple of temps and renting a truck for this first phase. Depending on the level of service each client requires, the temps may be able to handle the trip alone or you may have to supervise. Couriers don’t generally like to move large numbers of boxes, but a moving company can be of assistance. Finally, the client may be willing to bring his boxes to you, particularly if you charge for pick-up.
After the first drop, clients will only send boxes to storage a couple of times per year and in much smaller quantities. These subsequent pickups 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 $200 a month. Of course, this can vary widely depending on the client. A business with 5,000 boxes could have a monthly invoice of $2,000, while a small brokerage firm might only have 50 boxes and a $40 monthly bill.
For the part-time records center, the best clients are small to medium-size law firms and medical practices. A typical law firm with five attorneys might have 400-plus boxes and two or three service requests per month, while a doctor’s office might have 200 boxes and two or three requests per week. A good mix of clients will result in service revenue equal to about 50 percent of storage revenue. If you have $1,300 in monthly storage revenue, you would have an average of $650 in service revenue and about $50 in box sales for a 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 750 letter/ legal boxes. At typical storage rates (which vary by market), it would take 3,750 boxes or five units to earn $1,300 in monthly storage revenue. Considering the service ratio cited above. If you have more space and less time, target less active clients. If you have less space and more time, go after clients that require more service.
A benefit to records storage is it allows you to make use of the units that are least attractive to customers. Every operator seems to have a few units that are dif- fi cult to rent because of their location or size. As long as you can install racks to store boxes, you can use these units for records storage.
So the next time a small-business client calls and asks if you have space for records storage, don’t just rent him an empty unit—offer enhanced service. If he declines, you can still sell him space; but if he accepts, you are on the way to a successful, part-time records-storage business.
Rob Perry is a certified records manager who has helped numerous companies start part- and full-time records-storage businesses. He created The Records Center Manager, a software package for records centers, and wrote a manual titled “How to Start and Operate a Records Center.” He recently launched The File Depot, a chain with available licensing opportunities nationwide. For more information, visit www.tigrs.com or www.thefiledepot.com.