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Why You Lose Business to Commercial Record Centers

Cary McGovern Comments
Posted in Articles, Archive

Why You Lose Business to Commercial Record Centers

By Cary McGovern

In my last two columns, I described why records management is always cost justified and that self-storage is an easy mark for traditional commercial records centers as a source for new business. This article describes why every self-storage operation should offer records-management services. You have many options that range from very low cost and low maintenance to the more traditional high-maintenance, high-cost versions. If you do not offer records-management services you will continue to loose this lucrative business to your competition. It is your choice.

Two Absolute Truths

If there were two absolute truths in the records-management business, they would go something like this: 1) commercial records management is always cheaper and better than self-managing your records; and 2) the best source of new records-management customers is always self-storage. I have been working in the commercial records industry for more than 30 years, and if there was ever a truthful business statement, these are two examples. You notice that I use the word "always" in the above declarations. There is a reason for that: There is never an exception to these two rules.

For a moment, let's agree that I am correct. Then the question has to be, "Why aren't you offering the service?" For the last three years I have spent a great deal of my time educating the self-storage marketplace with some success. I must admit, though, that there is still quite a bit of misunderstanding by self-storage owners and operators concerning records management.

Always Cheaper and Better

In the May 2000 issue of ISS, I discussed the way to cost justify records management. It is very straightforward and quite simple. One of the problems with records management in most businesses is that it takes such a low priority and isn't important until there is a problem. When a problem arises, it is usually in the form of litigation or an audit. Records then vault to the highest level of importance immediately.

Managing records assumes that you know what you have, how to find it when you need it and when to get rid of it. Records management is inventory control. Inventory control presumes two things: First, you take an inventory, then you keep control. In the commercial records industry, inventory control is done as a regular course of action. It is simple when done by using an inexpensive method: bar codes.

Self-Storage Always Loses to Commercial Records

Since we can always cost justify it and it is less trouble for the customer, it is simple to get commercial-records business. Uninformed businesses always look to self-storage to get rid of their "stuff." They really do not know of any other way. You are close by, and storing with you gets their stuff out of the way.

But sooner or later, the volume grows and disorganization occurs. No one in the customer's business wants to go and search for records within a system that lacks organization. As time goes by, it gets worse and worse. The customer looks for a better way. Commercial records is the easy solution. It is cheaper, better and much more professional. Why would anyone want to do it themselves when you can hire someone to do it for you cheaper and better? Commercial records salesmen look for self-storage records customers on a regular basis. I recently spoke to one such salesman who has gotten more than two dozen accounts from one of my self-storage customer's operation before he began offering records-management services.

The Big Self-Storage Excuse

"Records management takes too much effort and I want to operate simply." This is what I hear from many operators and managers, but most of these folks are not aware of the various methods available to them. These methods range from very simple and inexpensive to very complex and expensive. Although there are several models, many entrepreneurs want to jump to the high end immediately because of the revenue projections. It is true to say that records-management revenue always is a minimum of three times that of passive self-storage. Lets review your options:

  1. Traditional Records Management: High capital cost, labor intensive and approximately two to three years to break even. This also provides the highest levels of revenue and profitability in the long run. It usually requires a separate facility with a high ceiling, dense storage racking, and an intensive and relatively expensive sales campaign.
  2. Boutique Records Management: This method is an offshoot of traditional records management. It implies a vertical market (i.e., medical or legal) and a packaged set of services designed for that industry group. This works well, but also requires relatively high costs for start-up.
  3. Nontraditional Records Management: This method was specifically designed for the self-storage market. It requires very little new cost. It can be operated out of your existing facility using existing units. It presumes that you will outsource many of the activities. The net result is very little effort, very little cost and three times the revenue of each unit utilized for records management. It also ensures that you do not lose any of the business to traditional commercial records centers and improves your cash flow--forever.
  4. Virtual Records Management: This method is by far the most misunderstood. It requires no additional expense, no work by your staff and no hassle. It requires that you enter into a business agreement with someone who will use your facility as his base of operation. You will lease him one unit at a time and provide access to work space. This agreement can be a partnership in a traditional sense, a resource partnership in the newer sense, or simply a lease relationship.

I have discussed each of these methods in separate articles. These are available at (search the archive for my name) or at This site also includes many resources available to you at no charge, including the Revenue Calculator, which allows you to determine how much records-management revenue is available within any size unit or building.

Regular columnist Cary F. McGovern is a certified records manager and the principal of File Managers Inc., a records-management consulting firm that specializes in implementation assistance and training for new, commercial records-center start-ups, as well as marketing support for existing records centers. For more information, contact Mr. McGovern at File Managers Inc., P.O. Box 1178, Abita Springs, LA 70420; phone (504) 871-0092; toll-free (877) FILEMAN; fax (504) 893-1751; e-mail;

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