More Than One Basket

Amy Campbell Comments
Posted in Articles
Print

[ Mobile Storage ]

"There can be many advantages of expanding an existing self-storage operation into container storage, even for a mom-and-pop type of facility. Perhaps the greatest advantage is it adds diversification to the revenue of the facility. But, opening and running the day-to-day operations of a container-storage pick-up and delivery service can take a lot of work. For those wanting to do something with containerization, perhaps you might want to simply sell the service."

--Henry Cox, president, Box Trotters Inc., Conway, S.C.

The idiom "Don't put all your eggs in one basket" should be the mantra chanted by self-storage owners everywhere. With a sluggish economy and self-storage overbuilding creating significant concern, being the best on the block has a whole new meaning. Not only should you have the most competitive prices and outstanding customer service, you need to offer more than just storage. Hocking boxes and bubblewrap, offering rental trucks or adding a cell tower will help you leap ahead of the competition--and boost your profit margin.

"The mobile-storage industry may be regulated in your state. Further, there is an open question as to whether you are acting as a storage operator under the self-storage laws or a warehouseman when offering mobile storage, with bailment liability under the warehouseman rules and laws. You would be well served to seek out competent counsel on both issues."

--Jake Nist, Seattle-Tacoma Box Co., Kent, Wash.

"The mobile-storage business is a small but growing segment in the self-storage industry. Customers love the service, but most operators are still working on how to make money from it. The degree of difficulty in operating the business is definitely more challenging than traditional self-storage, but if you don't mind being a pioneer and taking some big risks, this is an exciting area of the industry."

--Jake Nist, Seattle-Tacoma Box Co., Kent, Wash.

"For the self-storage professional, providing containerized moving and storage services, simply put, is a way to increase customer service by saving the consumer time, labor and money in their moving and storage needs. And for those who can properly structure the technical features of their business, the sky is the limit in growth potential."

--Henry Cox, president, Box Trotters Inc., Conway, S.C.

"Mobile storage works exceptionally well when adding rental space to an existing facility or as a complete storage complex. The unit has an independent floor system, interior and exterior walls, and roof system that allows it to be easily transported and relocated."

--Johnny Green, owner and president, Portable Self Storage Inc., Bonney Lake, Wash.

"The biggest advantage to using portable containers is they are a quick and easy way to develop or expand an existing mini-storage site. A self-storage operator can easily change idle or lower-revenue-generating RV space into mini- storage. Some of these containers do not require a slab foundation as long as the corners are supported, which will help save time and money. They are easy to relocate and require low maintenance."

--Wayne Terry, director of marketing, A Royal Wolf Portable Storage Inc., Hayward, Calif.


[ Truck Rental ]

"From a storage owner's perspective, the main benefit of offering self-service truck rentals is the extra income they generate. Truck rentals deliver extra income every time a transaction takes place; they also deliver income through improved occupancy figures. Higher occupancy translates into the ability to raise rents."

--Lisa Breer, sales manager, Truck Leasing 4 Less, Barre, Vt.

"A separate insurance policy is absolutely required if you are going to rent or loan a truck. Your facility's general-liability/property-damage insurance, even if it has some sort of automobile coverage, always excludes the use of a vehicle for hire. Additionally, you may want to consider renting or loaning the truck through a separate legal entity, such as a separate LLC or corporation, to additionally insulate you from liability."

--Jeffrey J. Greenberger, Katz, Greenberger & Norton LLP, Cincinnati

"If you are a truck-rental dealer, there are no franchise fees, no capital investment. The only expense is a monthly phone bill and computer-program fee."

--Layton Baker, vice president of field-operations support, U-Haul International Inc., Phoenix

"A carefully-written use or rental agreement is absolutely imperative. Make certain you have adequate information about your tenant, including information you might need to report a criminal act, accident or damage claim to your insurance company. You should have a provision that states the tenant is liable for all fines or criminal charges levied during the time the truck is in operation. You must take a significant deposit or major credit card to cover you in the event of damage, and there should be the standard waivers of liability and indemnification provisions to best protect your interests."

--Jeffrey J. Greenberger, Katz, Greenberger & Norton LLP, Cincinnati

"Rental trucks are such a popular ancillary product because of the service they afford the storage customers, the money they save the owner and the money they can make for the owner. Customer service and one-stop shopping has become very popular in the competitive self-storage industry. Everyone is moving into and out of storage facilities in a truck. Why not your truck?"

--Kirk Nash, president and CEO, On the Move Inc., Boerne, Texas

"If you don't offer moving vans to rent at your storage facility, you are not only depriving your customers of a needed service, but you are also depriving your facility of customers. You could be chasing away half of your potential customers."

--Layton Baker, vice president of field-operations support, U-Haul International Inc., Phoenix

"The costs involved in starting a truck-rental service are relatively minor. They include the lease or purchase of a truck, insurance and some promotional expenses. Of these, the cost of the truck is the most substantial expense, running anywhere from $395 to $700 per month for a lease and up to $30,000 for a purchase."

--Lisa Breer, sales manager, Truck Leasing 4 Less, Barre, Vt.

"Many states have commercial- driving license laws that provide a requirement for a commercial driver's license to operate a truck of more than a certain length or tonnage. Make certain the truck you are selecting to allow your tenants to use for move-in does not exceed the length or weight permitted that would require a commercial driver's license."

--Jeffrey J. Greenberger, Katz, Greenberger & Norton LLP, Cincinnati

"What better way to advertise your facility than to have a rolling billboard (in the form of a rental truck) driving through your marketplace? You can also rent the truck to customers moving out of your facility or the general public and make a profit."

--Kirk Nash, president and CEO, On the Move Inc., Boerne, Texas


[ Boat/RV/Vehicle Storage ]

"Most boats and RVs contain great deals of potentially hazardous waste just waiting to leak into your soil or onto your parking lot. Additional precaution must be taken to make certain if you have vehicles with items such as large amounts of gasoline, chemical-toilet storage tanks, etc., appropriate drip pans or other remedies are taken to avoid having these items leak into your property, potentially causing an expensive environmental issue. Further, review your insurance to make certain you have or can purchase insurance that covers removal of hazardous waste in the event it is spilled or leaks from an RV/boat-storage situation."

--Jeffrey J. Greenberger, Katz, Greenberger & Norton LLC, Cincinnati

"Self-storage owners must gather adequate information about the vehicle being stored, including registration, VIN number, ownership information, insurance information and names of lien-holders in case there is a default or reason to move or remove the vehicle."

--Jeffrey J. Greenberger, Katz, Greenberger & Norton LLC, Cincinnati

"The newest and hottest thing in RV storage is angled covered parking. It decreases the size of the driveways required. Three-sided RV storage is also a very attractive building that affords just a little more protection against the elements."

--Nels E. Anderson, president, Anderson Building Co., Clovis, N.M.

"The newest thing in RV and boat storage is angled, enclosed storage. This allows enclosed storage with minimal driveways as well as easier access to the unit. There is another interesting concept that we haven't tried yet: building underground mini-storages below your covered RV storage, allowing you to get 100 percent coverage. This underground storage is comparable per unit cost to traditional self-storage construction."

--Robert Hayworth, CEO, Baja Construction Co. Inc., Martinez, Calif.

"If you have the land available to accommodate large buildings and wide driveways, RV and boat storage offers new earnings potential to existing facilities."

--Nels E. Anderson, president, Anderson Building Co., Clovis, N.M.

"Recently, I've been getting more inquiries about climate-controlling boat and RV units. This would mean you would go to an insulated sectional door, provide roof and wall insulation, and some type of evaporative coolers or mechanical units to climate-control the units. Also, most facilities are going to a 16-foot eave height. This allows for a 14-foot door. With bridge height being plus or minus 13 feet, 8 inches there would not be a vehicle you could not store in that unit. I'm also seeing most facilities build a wash bay. It's typically a 20-by-40-foot canopy."

--Caesar Wright, president, Mako Steel Inc., Encinitas, Calif.

"Depending on the layout, it could be difficult to add boat/RV storage to an existing facility. You need to keep in mind that your driveway width must be substantially increased. For example, if the unit depth is 40 feet, I would recommend the driveway width being a minimum of 55 feet."

--Caesar Wright, president, Mako Steel Inc., Encinitas, Calif.

"The biggest precaution a self-storage owner should take is determining economic feasibility. Does it make sense in your area? If outside storage goes for $20 a space, and there isn't any real demand or the location is not on the way to a recreation, than maybe it doesn't make sense. You need to be able to charge at least 25 cents a square foot to pay your debt service and make a profit."

--Robert Hayworth, CEO, Baja Construction Co. Inc., Martinez, Calif.

"The cost for an RV and boat canopy range from $3 to $6 per square foot supplied and installed, depending on your wind load and live load in your area. This would include footings. For enclosed RV and boat storage, the price varies greatly depending on whether they are angled or straight in, eave height, door quality, and wind load and live load. We have built them from $6.50 to $10.50 per square foot, including doors, on the customer's concrete slab."

--Robert Hayworth, CEO, Baja Construction Co. Inc., Martinez, Calif.


[ Cell-Tower Services ]

"Many zoning boards are requiring stealth technology--the flag poles, the palm or evergreen trees. These are more expensive but allow the cell tower to be approved."

--Marv Meier, leasing director, Shurgard Storage Centers Inc., Seattle

"The revenue generated, like all real estate, depends on the location. In general, an operator can expect $1,000 or more per month with built-in increases."

--Matt Hershey, director of business parks, U-Store-It, Middleburg Heights, Ohio

 "Although it's usually smooth sailing after the lease is negotiated and the cell tower is up, getting to this point isn't always easy. No matter how much you sell your sites to the carriers, you don't have a chance unless the radio-frequency engineers determine your site will work. Also, if you have plans to redevelop or expand in the future, a cell tower may hinder you."

--Matt Hershey, director of business parks, U-Store-It, Middleburg Heights, Ohio

"A savvy operator should negotiate the lease where the carrier is responsible for obtaining all permits, licenses, and everything else in the approval process."

--Matt Hershey, director of business parks, U-Store-It, Middleburg Heights, Ohio

"The main pitfall is the long-term agreement, which could run anywhere from 15 to 25 years. The property owner needs to be very cautious about how long he's allowing his property to be tied up. Also, because it is such a long-term deal, make sure the deal resembles the market for that type of use, so you're not giving away something for significantly less than what you could get for it."

--Marv Meier, leasing director, Shurgard Storage Centers Inc., Seattle


[ Office and Mail Services ]

"Any means a facility has to generate additional income through ancillary sales should be investigated. The market will only support so much as far as rental rate increases, so for a site to improve its financial position, ancillary products are a must. I have seen candle sales, locksmith services, car washes, notary services, packing and shipping, as well as the easiest: box sales."

--Scott Harris, president, Dana Management Group, Pittsburgh

"The beauty of offering a P.O. box is it's a one-time investment. A bank of 30 mailboxes will cost about $500. It pays for itself very quickly and there is no maintenance."

--Ricardo Alva, outside sales manager, Salsbury Industries, Los Angeles

"The storage operator must be cautious when providing private mail boxes. There are federal regulations and guidelines that must be strictly followed and complied with."

--Scott Harris, president, Dana Management Group, Pittsburgh

"There are many benefits to adding mailboxes to a self-storage facility. It already has an existing client base. This is just an additional service it can provide the customer. Also, having a bank of mailboxes can draw more business to the site."

--Ricardo Alva, outside sales manager, Salsbury Industries, Los Angeles


[ Wine Storage ]

"Wine storage is still defined by geographic locations. You don't have to be in a wine area, but you do have to be in an area where people collect wine. If you do have a location you can succeed in, it can be very lucrative."

--George Cohen, owner, Storage By George, Napa Valley, Calif.

 "There's definitely a market for people who don't have their own wine cellar but want to collect good wines."

--David de Sieyes, owner and president, Habitat Monitor/CMT Inc., Essex, Mass.

"So far, wine storage is in a very limited market. But more facilities are building wine-storage areas. It's in its infancy right now."

--Terry Rider, national sales manager, Roll Right Industries Inc., Anaheim, Calif.

"Costs will vary depending on the size of area dedicated to wine storage, whether you're building from the ground up or converting existing space, and the materials you use; but wine storage is generally quite expensive. However, the return is also there. Rental rates typically run about $1.50 per case, per month. An eight-case locker will net a $144 income annually."

--Inside Self-Storage, October 2001

"A variety of locker sizes ensures a better occupancy rate. Lockers can be constructed from several kinds of materials including simple plywood boxes, cages of wooden slats, elaborate oak lockers with louvered doors or any combination. Some permeable surface, such as that provided by slats or louvers, is preferred to assure proper air circulation within the lockers. The lockers can be spaced on 3-foot aisles within the room. A rolling staircase should be provided to allow convenient access to the upper-level lockers."

--Inside Self-Storage , October 2001


[ Moving and Storage Supplies ]

"Every customer you provide a quote should receive a mailer on your products and services. Offering moving supplies to your customers allows you one more thing to talk about when you do a follow-up call to close the sale or offer additional services."

--Chad Miller, CEO, Tag A Room, San Antonio, Texas

"Everyone who comes to a self-storage facility has a need for moving and storage supplies. Many self-storage facilities are unaware of the revenue potential moving and storage supplies represent. Moving and storage supplies are an excellent opportunity for additional revenue."

--Roy Katz, president, Supply Side, Cleveland

"There are several advantages to offering a quality lock. It's convenient. Customers can buy their security products onsite. Also, the owner offering a quality lock helps ensure the security of the facility."

--Christopher Shope, vice president of marketing and sales, Lock America International Inc., Garden Grove, Calif.

"The small, medium and large boxes are a must for any storage facility. Also, your customer needs tape to put them together, so carry a couple of varieties such as a plastic and a paper tape. Add-ons such as bubble and packing paper are huge sellers as well. These can be easily sold along with boxes and tape as long as the manager successfully positions these products as must-haves to protect what's being moved or stored."

--Ken Van Slyke, president, NationWide Box Inc., Houston

"Design your store according to the flow of traffic. Give the customer room to move around and see a well-organized, clean and bright display of product. Use matching printed signage or price labels so customers do not have to ask about pricing. Try to show an abundance of each product so the customer will not miss an item. Use bright and colorful signage to attract the customer's eye even before he walks in the store."

--Nancy Martin, vice president of sales and marketing, Chateau Products Inc., Bradenton, Fla.

"Never allow a new or existing tenant to walk out the door without inquiring about his needs for padlocks, packing supplies, boxes, etc. A knowledgeable manager who actively promotes his retail products can make a big difference on the bottom line."

--Jim Bryan, director of products division, MiniCo. Inc., Phoenix

"An initial investment in these items can be minimal. A $400-$450 order will supply a storage facility with a good mix of products and some effective marketing tools to help sell them. Begin with the most popular items to help maximize inventory turnover. As your business grows add more specialty items to broaden your product mix. Our suggested retail can yield our customers 45 percent to 55 percent gross margin, depending on the location."

--Ken Van Slyke, president, NationWide Box Inc., Houston

Comments
comments powered by Disqus