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-storage consultant is, "Is it possible to provide records-management services in a self-storage facility with no added costs to my existing operation?" For a long time I thought that the answer was "no." But new methods and technology have changed that answer to an emphatic "yes." I not only recommend it, but have knowledge of the 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 the United States and Canada. I have always believed that the records-storage business was capital intense and required a specific set of financial rules. Today, new technology and simpler 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 folks that had a different point of view than mine. They said, "I want to do records differently. I want to do records management within my existing operation. Can I do that with little or no new capital expense?" I returned to my office with a quest: find a way to provide records-management services from this different perspective.
It first occurred to me that we have new tools and resources available that have until just recently never existed before. It took me more than a month to work out the details, but I assure you it can work and, at the same time, provide higher storage revenue.
To provide the methods and resources for self-storage operators to offer two levels of services without added facilities, personnel and computer systems at their existing self-storage facilities. The two levels of services are named here for reference purposes only, as records storage and records management. Each has a different requirement and scope of services.
To provide self-storage operators the ability to offer professional records storage to existing or new customers who want to provide their own retrieval services. This method can allow the operator to improve storage revenue by as much as 2.5 times current unit revenue with little or no additional cost. It also provides the operator with new revenue sources to support the records-storage option.
To provide records storage and a specified level of records-management services to customers who want the self-storage operator to provide basic records-management retrieval and inventory-control services. The services can include retrieval, delivery, pick-up, re-file, indexing, and an automated management inventory-control system, accessible to both the customer and operator.
The Problem to Overcome
Several problems existed to solve. I realized that in a traditional records-management operation there are some key components to long-term success that would not exist in a self-storage operation. The following is a list of items that need consideration for records management in a conventional self-storage facility:
- Low ceiling heights within existing self-storage units.
- Racking-design optimization and cost reduction.
- Use of existing software.
- No vehicle requirement for pick-ups and deliveries.
- No additional personnel requirements.
- A simplified set of business processes that ensure control.
Each of these seemed formidable initially but, with a some work, we have solved each of the 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, the ceiling heights go up to 25 feet high. The typical self-storage unit is only 8 or 9 feet high. The key here is optimization of space. If you can't go higher, you must deal with the density issues within your space by designing for optimum density. Remember, records storage 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 while changing the way a facility charges customers, from the storage unit itself to per cubic foot or per box being stored.
Racking-design optimization and cost reduction
Racking costs in a traditional records-center operation can equal 75 percent of the first year's storage revenue. You must use proper racking or your storage plan really cannot 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," but we do not recommend that you utilize any unit smaller than 10-by-10 feet for records management. There are shelving designs that optimize the space of industry-standard storage 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. Most records-storage software systems, by the time you consider training, installation, equipment and maintenance, can cost more than $20,000. My concept provides a transaction-based software that requires no initial cash outlay and requires only a PC with Internet access. You can bill your customer for each transaction and the software vendor is paid a small part of each transaction fee for software access. The software also provides monthly summary billing information.
No vehicle requirement for pick-ups and deliveries
Couriers and taxis have long been used in the records-storage industry for overflow and "STAT" deliveries of one hour or less. It is reasonable to construct an agreement with a local courier to provide all or most of your required material 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 through existing accounting services. Retrieval requests can be fulfilled by your site manager and your courier.
Simplified business processes
Discipline is the key to any inventory-control system. Business processes for records management in a self-storage operation must be simple, straightforward and easy to follow. In order to provide the control you need with limited functionality, it is imperative that interactive prompting and training is designed into each work process.
Sure, the services that you will offer are smaller in scope than in full-service records-storage centers, but it can deliver an increase in storage revenue and add new service revenue with little or no cost. FileMan is developing a comprehensive package of services that can provide solutions to these problems.
Regular columnist 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-room management and litigation support services for the legal industry. For more information about records management, contact Mr. McGovern at File Managers Inc., P.O. Box 1178, Abita Springs, LA 70420; phone (504) 871-0092; fax (504) 893-1751; e-mail: [email protected] or Web: www.fileman.com.