When making your spring cleaning list, I urge you to dust off that list of customers paying non-standard rates. If youve had your store for any length of time, youll always have a group of people paying below market rates for their units, from 5 percent to as much as 50 percent.
The list might include Debbie, the pharmaceutical rep whos been with you for years, or Charlie, a loyal tenant since the grand opening. However, you do them a disservice by deferring their rate increases. I have seen owners acquiesce to manager concerns about rate hikes for existing customers. A few years later, they realize good old Charlie is now 15 percent behind the 2006 rates. If they adjust the number all at once, theyll drive him out, even if a cheaper unit isnt available elsewhere. A much better plan would have been annual increases of 3 percent to 4 percent.
This doesnt apply only to long-term customers. In many cases, the problem is owners themselves. Im now working for a client where the owner uses 9 percent of facility space for miscellaneous, personal and business storage. If youre an owner, my advice is to actually pay for the units you use. One of two things will happen: 1) The stores bottom line will increase from your payments, or 2) Youll realize you need only half as much space.
Finally, clean-up your charity units. Many owners have big hearts and want to help local community groups with discounts or comps. I applaud that, but dont fall into the trap of letting beneficiaries take your gift for granted. Send a formal letter declaring you are renewing your arrangement with them for the coming year. Make sure board members realize your contributions.
Better yet, consider the checkbook strategy some owners employ with charities. They write a personal check to the store to cover the rent. This gives them a personal tax deduction while increasing property value, and the group keeps its unit. If a unit is $100 per month, or $1,200 annually at an 8.5 percent cap rate, asset value increases by $14,000!
When you apply the principle of spring cleaning to more than dirty windows or repairs, you can stack up quite a few shiny new pennies.
Watching Your Every Move
Security continues to be a top priority for customers. Scarcely a day passes when I dont see media reports of criminal activity at self-storage facilities somewhere. It takes only one front-page story about cut locks and tenants lost possessions to cripple a stores reputation and bruise its bottom line.
A new Arizona company is filling a void in the security business with a service many facility owners may find beneficial. Most of us have alarm systems watched by a central monitoring service, complete with fire and smoke alerts to the fire department. IntelaSight, based in Mesa, Ariz., offers full-service monitoring of video feed from property cameras.
As you consider upgrades to your stores security plan in 2006, take a minute to visit www.intelasight.com. Using off-the-shelf hardware/software and Internet feeds, the company has prevented criminal activity at several client locations.
Such a service also can help with liability protection. Self-storage operators must be vigilant in how they use the word surveillance in their marketing materials. As industry attorney Jeffrey Greenberger warns, the term surveillance implies your video images are under constant observation. For a great article on how to Watch Your Words, visit the "Industry Insider" section of Jeff's website: www.selfstoragelegal.com.
I dont bring IntelaSight to your attention as a commercial (I have no financial interest in this firm). I want to encourage you to think about how technology can better your competitive position. Ive seen firsthand how some owners tap into their video feeds to do a sneaky peek at their office, for example.
Since they dont do this full-time, their main accomplishment is an implied threat to the manager that Big Brother may be watching. Real and consistent monitoring can have more valuable results.
Also, dont overlook the chance to involve off-duty local police officers in your review of systems and procedures. Invest a couple hundred bucks, and you can buy the time of a ranking captain or lieutenantperhaps one from the detective bureau.
A Host of Clutter
Every owner I know is constantly looking for the latest hot marketing idea to draw prospects to their stores. How about hosting a meeting for a local organization? Specifically, Im talking about a chapter of Clutterers Anonymous (CLA).
According to its website, CLA is a fellowship of individuals who share experience, strength, and hope with each other that they may solve their common problem with clutter and help others recover (www.clutterersanonymous.net).
I realize some sufferers of obsessive-compulsive disorders cant bring themselves to abandon anything they find. My point is that putting possessions into storage can help people create a more livable environment for themselves and their families. Ive heard psychiatrists claim self-storage is a contributor to clutter addiction; that somehow, having a 10- by-15 unit available on Main Street has triggered someones obsession. I dont buy that for a minute.
Tossing out junk is now the focus of at least five home-improvement TV shows. An entire industry of professional organizers has exploded in the past 25 years. These organizational whizzes charge $50 to $200 an hour to go into clients homes and tell them what to give up. Self-storage professionals help people do that everyday!
There is even a National Study Group on Chronic Disorganization (NSGCD) to assist professional organizers in ministering to the messy legions. Members developed a Clutter Hoarding Scale. To get your free copy, visit www.nsgcd.org. My position has been, and always will be, that our industry provides a vital service for individuals and businesses across America. We supply solutions to storage problemswhatever those might be.
Jim Chiswell is the owner of Chiswell & Associates LLC, which has provided feasibility studies, acquisition due diligence and customized manager training for the self-storage industry since 1990. A member of the Inside Self-Storage Editorial Advisory Board, he contributes regularly to the magazine and is a frequent speaker at ISS expos and association meetings. He is also part of a new education initiative: the Self Storage Education Network. For details on online training options, visit www.selfstorageedcuation.net. Mr. Chiswell may be reached at 434.589.4446; visit www.selfstorageconsulting.com.