October 1, 2004

4 Min Read
The Convenience Store

Smaller, Simpler, More Profitable

By Cary F. McGovern

This article discusses why small records-storage clients maybe more valuable than large accounts in a self-storage records center. It ispossible to yield three to four times per unit of storage compared to the localfull-service commercial record centers in your town.

For several years, records-storage providers operating withinthe walls of self-storage have discovered the amazing yield of thesmall-business client. In fact, the smaller the client, the greater the yield perunit of storage. How can this be? It is an interesting phenomenon that hasescaped the notice of major industry players. As a self-storage operator, youactually have several advantages over the big guys:

  • VisibilityYouhave curb appeal and high visibility in your storage location and Yellow Pagesadvertisements.

  • Walk-In TrafficYouhave a steady flow of prospects and clients through your facilities.

  • Turn RateYourunits usually turn over in seven to 12 months, so you service a constant flowof new prospects.

  • Business ClientsDependingon your location, you could already be servicing many businesses.

  • Sales OpportunityYourwalk-in clients may not be looking for records storage, but nearly every onewill be either an employer or employee, both of which are prospects for recordsmanagement.

  • MarketingSelf-storageoperators know their markets within the five-mile radius of their operations.Depending on your location, there could be hundreds or even thousands of smallbusinesses in your area. You already have a focus market.

  • Target-Market IdentificationSincesmall businesses are strung together in neighborhoods by block, it is possibleto market records storage to these groups using guerilla marketing.

The Convenience Store

Why do people choose to go to a convenience store instead of asupermarket, especially when they know theyre going to pay more for thethings they need? Its fast and easy to get in and out. I like to comparecommercial records centers to supermarkets and self-storage facilities toconvenience stores. There are several good analogies at work here:

  • Closer to Your ClientsProximityallows the client to avoid delivery costs. He can easily come to your facility for his records.

  • Neighborhood BusinessesSmallcompanies like to do business with their neighbors and form relationships withothers in their same shoes.

  • FlexibilityUseof small-business packages (as described in last months column) allowscustomers to choose a service that fi ts their budget.

  • Same Value but Less HassleYoucan offer the same value as full-service records centers but with much lesstrouble for the customer. His records are out of sight but well-controlled andin a safe place.

Small-Business Clients

The traditional, full-service, commercial records centermarkets its services to larger businesses because of the relatively high cost ofsales. A sales call and client-needs assessment can cost between $100 and $500or more depending on the size of the business. For this reason, commercial centers cannot waste their time on50- to 100-box accounts. Remember, prospects do not go to them, and rarely does a smallbusiness even know or understand the value of the service.

According to the most recent census data, small businessenjoys the largest market share in the American economy. It remains virtuallyuntouched by traditional commercial records centers. It is easy to identifysmall businesses in your area: Simply go to www.superpages.com, type in thecity, and select a business type. The results are your prospect database. Ofcourse, there are many other options for finding prospects to whom to marketyour services.

Smaller but More profitable

Your records-storage volume could be one-tenth the size of thefull-service commercial competitor in your town. You could also earn moreprofit, make a greater return on your investment and diversify your services.There are several important things to keep in mind:

  • Yield is Different than PricePriceis the amount stated on your price list. Yield is the actual amount each storage box generates. Aprevious column discussed the differences between price and yield. You can readmore at www.insideselfstorage.com by entering price and yield differencesinto the keyword search.

  • Small-Business PackagesDevelopment of these packages is crucial to improve yield in records storage.You must understand how to present, offer and bring value to your client whilemaximizing your return.

  • Simplify Your OperationYouroperation must be simple and easy for clients and staff to use. It must alsominimize your expense and overhead while improving yield.

  • Offer Ancillary ServicesBuildyour base revenue and add value by offering services through outsourced resourcepartners who do the work for you.

  • Create Permanent Annuity RevenueUnderstand the principles of customer service and follow through so you neverlose a client.

  • Creep GrowthCreeprefers to the annual internal growth rate that normally occurs in therecords-storage industry. Creep averages as much as 13 percent to 17 percent ayear from existing accounts.

  • Minimize Labor-Intensive ServiceLabor costs are your primary enemy in the records-storage business. Operatingpractices must be designed to eliminate or reduce labor costs.

  • Minimize Delivery and Fuel CostsWill-call pickup and courier delivery reduces or eliminates the high costof resource-intensive delivery options.

The most misunderstood area of records storage is thesmall-business concept. It is a gold mine for those who put this to work intheir facilities. If you have multiple store fronts, there is an even higher yield potential.

Regular columnist Cary McGovern, CRM, is the principal of FileMan RecordsManagement, which offers full-service records-management assistance forcommercial records storage startups, marketing assistance, and sales training incommercial records-management operations. For assistance in feasibilitydetermination, operational implementation or marketing support, call877.FILEMAN; e-mail [email protected]; www.fileman.com.

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