Choosing a Management Company
|Copyright 2014 by Virgo Publishing.|
|By: Brian Byrd and Jeff Etter|
|Posted on: 04/02/2007|
As the self-storage industry becomes increasingly competitive, it’s imperative your self-storage operation run as smoothly and efficiently as possible. At the helm, owners need an individual or a management company knowledgeable about current industry trends, market conditions and relevant laws.
As an owner, you may decide you or your current management team isn’t excelling in these areas and it’s time to consider a professional management company. When choosing a candidate, look for experience and a strong track record of increasing revenues and profits for existing projects. The right company should also have experience with lease-up and turn-around properties.
The management company you select must be able to provide solid service and reliability in the area of operations. This will include the staffing and training of the storage facility employees and routine site audits and inspections (internally and externally). The management company should also provide a strong direction for a marketing program suitable for your property and the local market.
In searching for the right candidate, consider the following:
Revenue Management. Most management companies charge a management fee based on gross revenues. A professional management company with strong revenue-management practices can improve profits for the property owner and themselves. Ask candidates to demonstrate how they will increase your property’s revenue.
Your management company should have the necessary staff experienced in all aspects of revenue management to maximize potential revenues. Using dynamic pricing principles, the staff should monitor your property’s competitors, market trends, economic variables and other statistical data on a monthly basis, at a minimum.
Accounting. If you desire full-service property management, the company should have a professional accounting package and staff that employs generally accepted accounting practices. This package should include detailed monthly, quarterly and yearly financial reports, cash flow analysis and annual budgets. Accounts payable or bill paying will also be included in the package with loss-prevention controls in place.
The management company should be able to demonstrate procedures to ensure your money and assets are protected. Anything less, and you're not getting your money’s worth.
Human Resources. Next, you should require your professional management company to have a full-time and dedicated human resources manager. This person will help ensure employment laws and regulations are followed and programs are up to date and compliant with local, state and federal laws. The HR manager will oversee payroll and insurance administration, and ensure onsite management hiring is compliant with applicable laws and practices.
Lien Sale Coordinator. The company should have a lien sales coordinator to help your site remain legally compliant. This should be a dedicated position that focuses on lien sales questions, and uses a system of checks and balances to protect the facility owner as well as tenants.
Adequate Staffing. Is there enough staff to provide support for onsite managers and be readily available to answer your questions? Many management companies don’t have an adequate number of employees, negatively affecting operations in numerous areas. At a minimum, look for a company that has a CFO, dedicated accountants, a marketing manger, operations managers and the other positions mentioned previously.
Location. It’s important the management company be familiar with the area in which your facility is located. Most owners feel their management company should be no farther away than a two-hour plane ride. It’s unlikely an outfit in the Midwest could effectively manage properties in Maine unless they had corporate personnel based in the area.
Management Package Options. The company should have a slate of options to suit the level of management you desire. Choices should include a total management package with quarterly meetings between the company and the facility owner, all the way down to a basic package with services such as staffing and training, site inspections and auditing (without accounting services).
When interviewing management companies, consider whether they have the capability to service your facility today and into the future as they help grow your business. Select a company primarily focused on the self-storage industry, as it will be better suited to handle your facility’s needs and issues.
Of course, check references and track records; the company should be able to back up anything they’re telling you.
Brian Byrd is vice president of sales and marketing for Landvest Corporation, based in Wichita, Kan., offering facility management, training, consulting and development services to the self-storage industry. Jeff Etter is the company’s chief financial officer. For more information, call 316.634.6510.