ONE ON ONEAn Interview WithJoe Niemczyk and Mel Holsinger
Joe Niemczyk is president of Executive Self Storage Associates Inc., a Tucson, Ariz.-based consulting and management firm specializing in self-storage management, development and consulting. A graduate of the University of Northern Colorado with a Bachelor of Science degree in accounting, Mr. Niemczyk served as a pubic accountant before entering the private sector in 1981 as an assistant controller for National Self Storage Inc., a Tucson-based management company. There he became president during his tenure and oversaw the operations of almost two million square feet of storage properties throughout the United States. Mr. Niemczyk also established the first formal training facility for self-storage managers and spearheaded the opening of the largest and most successful document-storage company in Tucson. He left National Self Storage after five and a half years and, together with his partner, Mel Holsinger, established Executive Self Storage Associates.
Mr. Niemczyk currently resides in Denver with his wife, Lori, and their three children, Amanda, Tyler and Travis. He has been a frequent presenter at Inside Self-Storage expos.
Mel Holsinger is the executive vice president of Executive Self Storage Associates. A graduate of Black Hills State University with a degree in business administration, Mr. Holsinger began his career with International Minerals & Chemicals Corp. as an office manager for a mining location in South Dakota. He then went on to other management positions with Anamax Mining Company, ASARCO and General Instruments.
Mr. Holsinger entered the self-storage industry as the controller for National Self Storage Management, where he was involved in the company's accounting and financial functions. After three years with the company, in 1987, he joined with Mr. Niemczyk to form Executive Self Storage Associates, now one of the top 25 operators in the industry. As a frequent speaker at self-storage conventions, Mr. Holsinger has advised participants in areas such as auditing, management issues and the development of successful self-storage business plans.
Mr. Holsinger is currently a director in the Arizona Mini Storage Association and a member of the Executives Association in Tucson. He has also been involved in local Rotary Clubs, the Elks, the National Association of Accountants, and several Chambers of Commerce. He lives with his wife, Tracy, and two sons, Kyle and Joshua. The family are avid roller hockey players, black belts in tae kwon do karate and enjoy activities such as camping, fishing and golfing.
We are honored to present an interview with Joe Niemczyk and Mel Holsinger...
Explain the evolution of Executive Self Storage and how you see the company in today's marketplace.
Executive Self Storage Associates Inc. was incorporated in the state of Arizona on June 11, 1987, and is headquartered in Tucson, Ariz. The company also maintains regional management offices located in Colorado, Utah, Tennessee and Southern California. Since its inception, the company has managed, developed and consulted on projects in 15 states and the U.S. Virgin Islands, consisting of more than 6,800,000 square feet of storage.
Executive Self Storage Associates Inc. has been retained by several national and international organizations such as Citibank, Crown Life Insurance Company, Professional Savings Bank and First Security Mortgage to consult and manage various self-storage properties located throughout the United States. In addition, the company functioned as an approved service provider for the Resolution Trust Corporation.
Executive Self Storage Associates Inc. currently oversees the operations of 42 self-storage facilities in Arizona, California, Colorado, Florida, Nevada, Tennessee, Texas and Utah. The Company's current portfolio consists of more than 2,000,000 square feet and 21,000 individual spaces.
The company was established by principals Joseph P. Niemczyk and Melvin L. Holsinger. Mr. Niemczyk and Mr. Holsinger were the past president and treasurer of National Self Storage Management Inc., operating more than 2,00,000 square feet of storage. With degrees in business administration and accounting, combined with their frequent appearances as featured speakers at the industry's national trade conventions, they have established themselves as leaders in the self-storage industry. In addition to their other accomplishments, the first formal resident manager training university in the country was established under their direct supervision, and today still serves as the model for similar programs.
What are each of your roles in the company?
Joe Niemczyk is the president of the company and deals primarily with management operations, marketing, new-client development, and has been involved in developing several facilities for various clients. Mel Holsinger is the executive vice-president and deals primarily with the financial operations, administration acquisitions, development and client relationships.
What is the company's objective for the upcoming year, five years, 10 years?
The current focus of ESSA is the enhancement of our existing stores in the areas of standardization of operations, more extensive manager training and depth in the mid-level management ranks. In the next five years, it is our intention to take our operating methodology into the 21st Century. We will be improving our use of computers, e-mail, the Internet and several other technologies that other industries have been using for years. In addition to our technological advances, we will obviously be expanding our operations over the next five to 10 years. However, our methods will take a less-traditional approach, given the continual growth in the industry. Our strategy will be to provide a vehicle for the smaller operators to receive professional management at competitive rates and eventually help them with a possible exit strategy for their store.
What is your view on management training and what makes yours successful?
Management training is quite possibly the single most vital piece to the success puzzle. Well-trained management cannot only produce more sales, but can also reduce expenses, save the store from enormous legal liability, and maintain a stable customer base, even in hard times. It is unfortunate, however, that in our industry a large portion of these vital positions are paid a wage that can only be described as disgraceful.
What are some of your marketing strategies?
It is our belief that marketing strategies are store and market specific. Although there are some traditional methods of advertising and marketing, such as Yellow Pages, there are many more that should not be applied unilaterally. Therefore, the easiest way to find out is to experiment. Just because display advertising didn't work five years ago doesn't mean that it can't be effective today. For the smaller operators, it's important to keep the focus on the basics and remember not to be enthralled with that catchy name you thought up. Self-storage has great product recognition but poor name recognition. Focus on promoting your location and services because this is what the customer is concerned with.
What are three keys to great customer service?
We do not believe that being good at customer service means that you always give in. We believe that great customer service begins by applying your policies equally and consistently to all customers. Making exceptions for some customers may solve the immediate problem, but are you prepared to make the same compromise to all your customers? If you're not, have you provided the majority of your customers with good customer service? The solution to great service is to make sure that each customer thoroughly knows the policies of the store--both positive and negative--before they move in. This way there will be no surprises, and a possible negative situation can be avoided before it starts. The vast majority of self-storage users are not looking for a free ride, only fair and consistent treatment. The ability of the on-site personnel to be able to solve problems with a smile and a tone of concern for the customer, whether or not you compromise, will be the most important ingredient in your customer-service arsenal.
How do you see the self-storage environment changing in the next five years, especially in regards to mom-and-pop owners vs. multiple operators? What about consolidation and acquisitions?
The mom-and-pop operations are being phased-out in unprecedented numbers. However, with the industry still dominated by these entrepreneurs, we feel they are still going to be the majority of owners of facilities for at least the next decade. The industry will see increasing numbers of consolidations and acquisitions by the REITs and public companies, and we expect to possibly see some of these companies merging as well.
Most of the mom-and-pop locations are still centered in smaller markets. We see the major metropolitan areas as being dominated by the public and REIT companies. We see this trend in every market we are involved in.
What are your views on the future of available financing?
Financing availability will become more difficult at some point in the near future because we feel that in many markets the community is overbuilt and various facilities will begin to suffer extremely. While not trying to be pessimistic, we feel that the next cycle of foreclosures will be greater than previous cycles experienced in the '80s and early '90s.
With interest rates at an all-time low, financing is easier to obtain for both new and existing properties. Several lenders established solely for self-storage products are now diversifying into other commercial areas as a result of available conduit dollars. Every owner should at least look at the availability of funds today and, if it makes economical sense, immediately seek out a new lender for the better rates and service now available. First Security Commercial Mortgage, for example, is an excellent lender that is very knowledgeable about the self-storage business, and working with them over the years has been very rewarding for us and some of our clients.
Since you are mainly concentrated in Arizona and Colorado, do you plan to expand into other markets as well?
Actually we are located in numerous states. Besides Arizona and Colorado, we manage properties in California, Nevada, Utah, Texas, Tennessee and Florida. We have been in these markets since 1988. Additionally, we have managed properties in Connecticut, Ohio, Mississippi and Washington. We do plan to expand into other markets and are, in fact, working on several deals not in our current market areas.
How does ESSA position itself in order to stay competitive in today's marketplace?
We pride ourselves in first taking care of our existing clients. Most of our business has been from referrals, and we are very proud of that. We continue to attend the Inside Self-Storage Expos, we advertise in the Inside Self-Storage magazine and we are involved in various state self-storage associations. We take pride in the fact that both of us are actively involved in each of our stores and that our management and office staff are professionals doing a great job for us in support roles.
What advice would you give to people just getting started into the self-storage business? What about people who have been in it a couple of years?
For people just getting started, we highly recommend that you first seek professional help. From the outside, this business looks easy but, after you have considered all the management, legal, financial, marketing, maintenance and other issues, you will quickly find out that the business is more complex than it initially appears. Professional management services will save you money in the long run, but many new owners are reluctant to invest in our services because they perceive that business as being easier to succeed in than it actually is. We know of many owners who attended several conventions and training seminars and feel that that's all they need. We have taken over numerous self-storage facilities that were near failure due to the lack of knowledge and skill of the owners. Fortunately for most, we have been able to help them turn the business around.
With respect to owners who have been in the business a few years, we advise them to look at alternatives to their existing management structure if they are having problems in their operations. Additionally, the question they should also ask is: Can I better utilize my time and assets if I allow a management company to run my stores for me? We effectively run your business so that you can go out and create more business without being saddled by the day-to-day situations of management.
In general, what do you see in the future of the self-storage industry?
We see the business continuing to grow, both in terms of number of facilities as well as the number of people using the product. We view competition being good for the consumer and good for us because it forces us to all become better managers as well as ambassadors for the industry. We truly enjoy what we do and have especially enjoyed the friendships we have made over the years with the people in the industry.