Records Management and Storage
Increasing revenue with little or no start-up cost

By Cary F. McGovern

Abstract: The most frequently asked question that I encounter as a records-storageconsultant is, "Is it possible to provide records-management services in aself-storage facility with no added costs to my existing operation?" For a long timeI thought that the answer was "no." But new methods and technology have changedthat answer to an emphatic "yes." I not only recommend it, but have knowledge ofthe method.

Over the past 22 years, I have assisted more than 100 entrepreneurs in assessing,organizing and developing commercial records management and storage centers throughout theUnited States and Canada. I have always believed that the records-storage business wascapital intense and required a specific set of financial rules. Today, new technology andsimpler business practices have enabled that to be a thing of the past.

Recently at an Inside Self-Storage Expo, I was pummeled with questions from folksthat had a different point of view than mine. They said, "I want to do recordsdifferently. I want to do records management within my existing operation. Can I do thatwith little or no new capital expense?" I returned to my office with a quest: find away to provide records-management services from this different perspective.

It first occurred to me that we have new tools and resources available that haveuntil just recently never existed before. It took me more than a month to work out thedetails, but I assure you it can work and, at the same time, provide higher storagerevenue.

The Goal:
To provide the methods and resources for self-storage operators tooffer two levels of services without added facilities, personnel and computer systems attheir existing self-storage facilities. The two levels of services are named here forreference purposes only, as records storage and records management. Each has a differentrequirement and scope of services.

Records-Storage Services:
To provide self-storage operators the ability to offer professionalrecords storage to existing or new customers who want to provide their own retrievalservices. This method can allow the operator to improve storage revenue by as much as2.5 times current unit revenue with little or no additional cost. It also provides theoperator with new revenue sources to support the records-storage option.

Records-Management Services:
To provide records storage and a specified level of records-managementservices to customers who want the self-storage operator to provide basicrecords-management retrieval and inventory-control services. The services can includeretrieval, delivery, pick-up, re-file, indexing, and an automated managementinventory-control system, accessible to both the customer and operator.

The Problem to Overcome
Several problems existed to solve. I realized that in a traditionalrecords-management operation there are some key components to long-term success that wouldnot exist in a self-storage operation. The following is a list of items that needconsideration for records management in a conventional self-storage facility:

Each of these seemed formidable initially but, with a some work, we have solved each ofthe problems. Let's look at each one separately:

Low ceiling heights within existing self-storage units
Remember that in a traditional commercial records-storage operation, theceiling heights go up to 25 feet high. The typical self-storage unit is only 8 or 9 feethigh. The key here is optimization of space. If you can't go higher, you must deal withthe density issues within your space by designing for optimum density. Remember, recordsstorage requires racking, whether it is for box or file storage.

The right optimization plan can net 2.5 times the current revenue per square foot whilechanging the way a facility charges customers, from the storage unit itself to per cubicfoot or per box being stored.

Racking-design optimization and cost reduction
Racking costs in a traditional records-center operation can equal 75 percent ofthe first year's storage revenue. You must use proper racking or your storage plan reallycannot work. Quick access to files or boxes is a primary component of management control.In an existing self-storage facility, each unit has a smaller "footprint," butwe do not recommend that you utilize any unit smaller than 10-by-10 feet for recordsmanagement. There are shelving designs that optimize the space of industry-standardstorage units. You can build out only one unit at a time with leasing plans available.

Use of existing software
Believe it or not, this was the toughest issue for us to deal with. Mostrecords-storage software systems, by the time you consider training, installation,equipment and maintenance, can cost more than $20,000. My concept provides atransaction-based software that requires no initial cash outlay and requires only a PCwith Internet access. You can bill your customer for each transaction and the softwarevendor is paid a small part of each transaction fee for software access. The software alsoprovides monthly summary billing information.

No vehicle requirement for pick-ups and deliveries
Couriers and taxis have long been used in the records-storage industry foroverflow and "STAT" deliveries of one hour or less. It is reasonable toconstruct an agreement with a local courier to provide all or most of your requiredmaterial handling services.

No additional personnel
Your existing staff can perform all of the activities if you plan it right.Accounting and billing can be provided utilizing the transaction-based system and throughexisting accounting services. Retrieval requests can be fulfilled by your site manager andyour courier.

Simplified business processes
Discipline is the key to any inventory-control system. Business processes forrecords management in a self-storage operation must be simple, straightforward and easy tofollow. In order to provide the control you need with limited functionality, it isimperative that interactive prompting and training is designed into each work process.

Conclusion
Sure, the services that you will offer are smaller in scope than infull-service records-storage centers, but it can deliver an increase in storage revenueand add new service revenue with little or no cost. FileMan is developing a comprehensivepackage of services that can provide solutions to these problems.

Regularcolumnist Cary F. McGovern is a certified records manager and owner of File Managers Inc.,a records-management consulting firm that also provides outsourcing services, file-roommanagement and litigation support services for the legal industry. For more informationabout records management, contact Mr. McGovern at File Managers Inc., P.O. Box 1178, AbitaSprings, LA 70420; phone (504) 871-0092; fax (504) 893-1751; e-mail: [email protected] or Web: www.fileman.com.