Reflections on the Self-Storage Biz: Industry Education, Software Data and Challenges of Refinancing
|Copyright 2014 by Virgo Publishing.|
|By: Jim Chiswell|
|Posted on: 03/08/2010|
I know this is something that’s only talked about in whispers. It’s a subject that’s hard to bring up, even with the people you know. I’m talking, of course, about Education Dysfunction, or E.D.
E.D. is a condition sometimes brought on by a difficult budget or simple neglect. It’s defined by most professionals as delusional thinking that “you already know all you need to know,” or the misconception that “there’s really nothing new about this business,” so the same-old, same-old is good enough for you.
The result of not diagnosing the early stages of E.D. can be a deterioration in skill level—a reduction in motivation until finally sinking into a “whatever” attitude about performing your job. The good news is you can treat E.D. quickly, and it doesn’t require long-term therapy or expensive prescriptions.
You fight Educational Dysfunction by simply encouraging those around you to share a book, or read and comment on a recent business article about self-storage. Even a few hundred dollars, properly allocated, can bring new knowledge to your desktop through webinars and online course work.
There are opportunities to battle E.D. in your company, but it starts with a management/ownership commitment to prevent it from even starting to infect your team. Your intention to make continuing education a part of your company culture requires making it a stated goal with a budget line to help fulfill the promise. It must be considered by everyone to be as important as answering phone inquiries or making collections calls.
Learning must be considered a basic part of the business, not a luxury or extravagance. Once firmly rooted in your company’s thinking, a permanent defense to Education Dysfunction can be achieved.
The vast majority of self-storage operators manage their day-to-day business with the assistance of industry-specific software. Many are passionate in their support of one program over another, while others seem to never be satisfied with the version they’re using and feel stuck with it until the economy improves.
I’m not writing to provoke a landslide of e-mails about specific programs but to make a simple point: Every one of these self-storage software programs is producing mountains of information in self-storage offices worldwide. We can draw from the data to help make better business decisions. Are you doing this?
When milestones are achieved in your business, do you recognize them? Do you know when you rented your 200th unit this year? How about the first $50,000 or $100,000 in gross revenue? What about the record for the longest tenant? Which customer lives the farthest from your property? All these high points are recorded for you every day without anyone having to take any action.
Unfortunately, for many owners and managers, the hard drive of their computer is as far as this data gets. Very few operators are taking the time to print out a ZIP code or tenant-longevity report. Few are looking at a digital pin map to see what marketing holes exist in the areas their facility serves. Ask managers what percentage of their customers are paying via autopay, and the blank deer-in-the-headlights stare is their answer.
We must work smarter if we’re to achieve success in the years ahead. The days of easy rentals are over forever. We’ll need to fight for every new customer, but not by giving away bigger discounts or more free months―it will be accomplished by understanding what’s working, and when and why people are renting from us. It’s by discerning usable operations data that current and future business decisions can have a lasting, positive impact on bottom-line results.
I can’t remember when a week has gone by during which I haven’t gotten questions from a facility owner about sources for refinancing. I’m not talking about new startups―those are a topic for a future column. I‘m talking about established projects with solid occupancies in the 65 percent to 80 percent range, whose owners are having trouble getting their current loans refinanced.
I continue to get call after call from owners reaching out for help. I wish I had it to give them, but as I write this column, the prospects appear to be getting worse, not better. The indecision in Washington coupled with the “what’s in it for me?” attitude of many lenders is letting the hangman’s rope draw tighter around the necks of many self-storage entrepreneurs.
I’m hopeful an answer can be found soon so calamity can be avoided, not only in our industry, but in the worldwide real estate industry. I urge everyone to hang on, because I know there will be more bumpy air ahead as we fly toward better financing alternatives. Maybe by the time we all gather in New Orleans for the Inside Self-Storage World Expo, Sept. 29-Oct. 1, there will be some positive signs for all of us.