Managing Your Overseas Storage Operation
Copyright 2014 by Virgo Publishing.
By: David Blum
Posted on: 04/17/2008



 

Having spent the last 12 years in self-storage management, I’ve dealt with most of the common and unusual situations we’ve all faced. Little did I ever expect that I’d apply these principles and experiences in assisting developers around the world. In the past three years, though, I’ve been directly involved with operations in Brazil, Canada, Israel, Italy, Mexico, Romania and Trinidad. In addition, I have had inquiries from Africa, China, Egypt, Spain and Venezuela. All of these operations want to emulate the professional experiences most self-storage operators enjoy in the United States today.

I have had the fortunate situation where my clients are U.S.-based with some connection to the country in which they want to develop. This helps me bridge the language gap, as I do not speak any foreign languages. Therefore, in non-English-speaking countries, all my dealings are usually interpreted by the client. Though unable to converse, I have trained my ear to follow conversations, and even surprise myself by how much I eventually begin to understand. Whether it’s construction, development or operations-related, we all seem to talk in a common way.

Breaking New Ground

My very first assignment, which I am still involved with today, was in Sao Paulo, Brazil. I had the additional good fortune to work directly with a young gentleman who I actually had employed as an assistant manager in the United States. When he got stuck in Brazil, I put him in contact with the client, and he has been my "point" person ever since. He not only speaks perfect English, he has the added benefit of being familiar with the self-storage business.

In addition to creating a third- or fourth-generation storage facility project, I had the good fortune to integrate "American-style" operations with someone familiar with the peculiarities and idiosyncrasies of the Brazilian culture. As a result of these many months of working intimately with this project, I have adapted similar principles to opportunities around the world.

In many locations, self-storage is not as commonly or as widely known as it is in the Australia, the United States, or even some of the European countries where more facilities exist. When we started in Brazil, there were only 12 facilities estimated in the whole country. Today, there are 18 with several more planned. One of our first challenges was to locate a strong manager who understood self-storage. Fortunately, during our due diligence, we found a wonderful employee unhappy with her position with one of our competitors. The next challenge was to find a trainable assistant.

In this situation, we were not just looking for a typical assistant. Because of the aggressive expansion plans, we needed to find our next manager and the one who would become the manager after that. Not each situation is like this. Our plans in Italy require just one manager and one assistant, at least for now. The next facility may be a 30- to 40-minute drive and will require identifying more local talent. Plus, due to European labor laws, we may be better served with two part-time assistants rather than one full time.

Law of the Land

When you’re doing business in any foreign country, it’s important to become familiar with the local labor laws. In Europe, you become "married" to your employees as there are very strict rules for termination. In Brazil, the employee tax rate is almost 90 percent of the base pay due to a form of socialized medicine.

Each country has different rules that will apply. Remember, this industry is new to these markets so many precedents have yet to be established. Tread cautiously. You don’t want to be placed in a position where lack of knowledge leads to situations where new laws are established to negatively impact an emerging industry.

One of the most interesting aspects of this process has been translating terms we’re familiar with into the local language. In some cases, actual translations may not be appropriate. It’s not uncommon to bypass attempting literal translations in favor of introducing the American term instead. In many countries, the term "self-storage" is now commonly being used to identify the product and service. Of course, in France this was modified somewhat and is now known as "self-stockage."

Many of these emerging countries look to the United States for state-of-the-art products, such as software and security systems, designed specifically for self-storage. Keep in mind, many of them have not yet completed translations for all the words and terms visible to employees on their systems.

In some cases, we have created "cheat-sheets" for employee references to allow them easy use and access to security systems. In addition, we must translate not only the lease agreement, but all the various letters these systems print, as well as all the customer forms used in daily operations.

Software and Marketing

Although software and security companies are growing rapidly in the European market, some countries, such as Israel (where we estimate that there are only five or six facilities), translations haven’t made economic sense. In fact, most of what we have seen is rudimentary, locally designed Excel-style spreadsheets. And because they don’t use electronic security systems, no interface is required.

Marketing can be an additional challenge. Marketing training becomes one of the most difficult tasks when working in a foreign country. The usual low-cost methods we employ in the United States—Penny Savers, shared mailings, Coupon Clippers, etc.—don’t exist. You have to become educated in the various cost-effective media available, and then design a campaign that is culturally appealing and descriptive. Remember, you are attempting to attract an unfamiliar audience. Here is where a good website is critical. The Internet has proven to be one of the most active resources in these markets, generating on average more than 60 percent of all leads.

Integrated Learning

Even with today’s technology—e-mail, Internet and Vonage or Skype—it’s not like you can hop on a plane and go fix an issue every month. The travel coordination and logistics, not to mention the expense, poses another challenge. Having good "point" people becomes critical. This is not always easy. Even when you hire someone fluent in English, sometimes the translations just don’t always express the thought or idea you’re trying to convey. In addition, many of the nuances of our industry that we take for granted are as foreign to untrained people as the language itself. Attempting to communicate these ideas long distance just adds to the complexities of managing from afar.

The challenge is to first gain a good comprehension of the local culture. This is assisted greatly by working with someone from that market or who is familiar with the local culture. Together we take what is proven to work in the United States and integrate it into the design for the local operations.

Adaptability is the key phrase here. I never approach any of these situations the same way. Keeping an open mind and having the ability to be flexible appears to be the key ingredient for success. 

David Blum, an industry consultant, is president of Blum Management Services Inc., based in South Florida. He is also past president and founder of the Florida Self Storage Association. Mr. Blum has more than 13 years of experience in self-storage and more than 38 years of business experience. For more information, call 954.255.9500; e-mail dblum@blumms.com; visit www.blumms.com.