Inside Self-Storage 07/2004: Records Storage ‘Lite’
|Copyright 2014 by Virgo Publishing.|
|By: Cary F. McGovern|
|Posted on: 07/01/2004|
Records Storage ‘Lite’
By Cary F. McGovern
Can a modest self-storage facility successfully offer records-storage services? Is it possible to provide a set of services that requires little or no additional labor? What is the value to clients and the self-storage operator when minimal services are available? Here are the facts on how “records storage lite” can be simple and profitable in a small or moderate-size storage facility.
Self-storage operators are faced with several dilemmas. Among them are market saturation, growing competition, product diversification and attracting long-term customers. In an industry with an average customer-turnover rate of less than a year, how does a local operator stabilize his cash flow and revenue base? Let’s take a look at one possible strategy. First, let me make a couple of suppositions:
1. Business customers are good for a self-storage business.
2. Operators want to differentiate themselves from competitors without too much investment.
3. A facility’s turnover rate can be used as an advantage.
4. Most operators desire permanent contracts with long-term revenue growth.
If you want to be in the records-storage industry, you should recognize the value of the business customer. Businesses regularly rent space in self-storage facilities to keep their extra supplies and equipment. But in addition to mundane inventory, all companies have to store their business records somewhere. Generally, they keep them in a closet or attic until they run out of space. Records have no intrinsic value until they are needed. The problem business owners often have is not where to store their records but how to find them.
So, how can you take advantage of the self-storage turnover rate to launch a records-storage service? One of the differences between a commercial records center and a self-storage facility is customers regularly come to the storage site. Every year, hundreds of prospects walk into a self-storage facility to rent space. Many of them represent businesses. Offering them a way to store records can be valuable to the owner and customer. It can be offered in addition to commodity storage needs or as an alternative. To shift a prospect’s interest to a records-storage product, you need a method that makes sense and works.
The Lite Model
There is a difference between the storage and management of records. Records storage is passive, while records management involves active participation with a client’s business records. We want to make it very simple to support records management in a self-storage environment. The “lite” method operates around a minimalist framework that includes:
Why Provide Records Storage?
Using the “lite” model described here, you can garner several benefits from records storage. First, the contract is long-term, some say permanent. Second, the yield per cubic foot can be extraordinarily high using the small-business package model. Third, you offer a valuable service with very little new cost, one storage unit at a time.
At the end of the day, you will find the single biggest benefit you gain from offering this service is annuity revenue you can sell at any time. Commercial records centers gladly purchase books of business from numerous sources. You have locked customers into long-term contracts with price escalations and withdrawal penalties, and they are assignable and sellable at a multiple of annual revenue if you do it right. There is virtually no downside to records storage lite!
Regular columnist Cary McGovern, CRM, is the principal of FileMan Records Management, which offers full-service records-management assistance for commercial records storage startups, marketing assistance, and sales training in commercial records-management operations. For assistance in feasibility determination, operational implementation or marketing support, call 877.FILEMAN; e-mail firstname.lastname@example.org; www.fileman.com.