Nothing but the Facts
|Copyright 2014 by Virgo Publishing.|
|By: Cary F. McGovern|
|Posted on: 06/01/2003|
The simple truth is business-records storage fits well into the existing operation of many self-storage facilities. Although it is quite different from self-storage in many ways, it has similar components. It takes only a shift in perspective and a desire to achieve higher return on your existing investment.
During the past several years, there has been a consistent increase in those self-storage operators who understand records storage makes for a sound business opportunity within the walls of an existing facility. More and more self-storage developers have made the decision to include records storage as a service at their sites. This shift in perspective has taken place because several operating and technology dynamics have changed, and entrepreneurs have begun to understand the long-term annuity basis of records storage.
Even still, there are naysayers in the crowd. Records storage is not for the timid. It does take a different approach. But those who say it doesn't work are wrong. Time after time, its success has been proven by those adventurers not tied to traditional methods.
The records-storage service is off of the beaten path the elders in self-storage have commonly taken. It is also fair to say the existing, traditional records-management community does not want you playing on its field. But you have a real advantage over the traditionalists: You are not steeped in the "we have always done it this way" syndrome. After all, this is 2003, and there are new approaches, improved methods and ways to create high yield that have never before been developed by the traditionalists in this industry.
The Facts on Records Storage
All business clients have records. Every business has business records. They may vary in volume from a handful of boxes to several thousand. The smaller-volume accounts represent your ideal niche market.
Clients with 25 to 250 boxes provide the highest yield. There are literally thousands of these accounts in your marketplace. They are under the radar for traditional commercial-records vendors because they are under their minimum charge. But these accounts can yield two to three times the quoted price per unit of storage. (For more information, see this column in the May 2003 issue.)
Small businesses have no expertise in records management. But they abound in our economy. More Americans are employed by small businesses than major corporations. Rarely does a small business have any plan at all for managing its business records.
Small businesses are an overlooked market. Since traditional commercial-records centers focus on larger accounts to support their sales efforts and operating costs, small businesses are not regarded as prospects. All businesses start small. If you capture them when they are budding, they will remain your accounts as they grow.
You are the first choice for records storage. The first storage issue businesses encounter is lack of space for records. Self-storage is the most common dumping ground for passive storage--it keeps records out of sight and out of mind. A simple twist in perspective turns a records dumping ground into a thriving business. (For more information, see this column in the March 2003 issue.)
Records storage is "permanent" revenue. One key difference between records management and records storage is the services provided. The client must pay for retrievals and other handling, for example. In addition, a permanent-retrieval fee is a deterrent to clients leaving a facility. The commercial records-management industry regards accounts as permanent, as boxes remain in storage for an average of 16 years and generally grow at a compound rate. (For industry studies that document these facts, write to firstname.lastname@example.org.)
You can use existing storage units. The most common component of a records business is storage space, which you already have readily available. Existing units can generate from three to five times the current yield. Yes, there is a required strategy to move yield to this level of productivity, but it works even in 10-by-10 units. Although my recommended strategy prefers larger, contiguous units, other options work well also.
You can use existing personnel. The only personnel requirement is a site manager, and strategic outsourcing of some or all labor components can actually increase yield. Outsourcing any activity requires setting expectations, benchmarks and standards of performance, and measuring those criteria--in other words, it requires management.
There is a low entry cost. Nontraditional records management within the walls of an existing self-storage business can have an entry cost of as little as $10,000 to $12,000.
Implementation can take place in 30 days or less. You can enter the market and be ready to operate in 30 days or less. Implementation can be simple, training can be repeatable and you have total control over the service levels you offer.
Profitability can increase in 90 days or less. Getting to a profitable position within 90 days requires a marketing strategy. You can determine which level of marketing you will implement. Marketing starts with converting existing business accounts from passive unit rental to managed storage.
Records storage provides product diversification. It increases your potential for profit maximization at an existing location. It adds another valuable service level to your business and acts as a product differentiator from your competition.
Records storage gives you a testing strategy. Nontraditional records management provides an inexpensive testing ground for the potential of a more aggressive approach. The low cost and easy entry provide you a way of understanding the industry, determining your interest and lowering your risk of failure.
Records storage provides a launching pad for traditional records management. If you are successful, a low-cost entry into records management provides an excellent basis for moving further into a booming industry.
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 email@example.com; www.fileman.com.