More and more self-storage operators are considering the addition of records storage as a value-added service to their existing business. The most important ingredient is planning the space to accommodate the new venture. There are four options:
Option 1: Adapt Existing Space
The most common option is to adapt space you already have, increasing the value of existing property. Records storage is a natural fit because it is easily added with very little capital. Take a look at your unit mix. Is there a particular size that is under-rented? Consider converting unused units for records storage.
Records storage works best in 10-by-10 or larger units with 8-foot or higher ceilings. Units smaller than 10-by-10 should only be used if you can combine adjacent units by removing interior partition walls. Use of contiguous units is always better than random placement throughout the facility; it generally adds 10 percent to 20 percent of revenue to the space.
Because records storage is based on cubic rather than square footage, the higher the ceiling the better. If you have access to a row of 20 10-by-10s with 8-foot ceilings, you have 16,000 cubic feet of space to accommodate approximately 8,000 box positions, which is an excellent starting point. Another great option is to convert unused boat and RV storage units, which tend to have higher ceilings than regular storage.
Option 2: New Space and RS Lite
The developer of a new project has an ideal opportunity to add records storage to his business plan from the very beginning. If you’re not sure records storage is for you, explore the possibility of records-storage (RS) lite, which operates out of standard units. The space can then be used for self-storage if you decide against storing records. (For more information on RS lite, read my past columns in the archive at www.insideselfstorage.com.)
Start with pads designed for adjacent 10-by-10 or larger units, simply leaving out the interior partitions. As your records business grows, you can move boxes to a larger facility and retrofit these units to standard storage space. Adapt the property based on your success so you only use the space you need.
Option 3: New Space and Traditional RS
The fundamental difference between RS lite and traditional records management are simply this: a dedicated building and salesperson. The optimum records-storage building is 10,000 square feet with a 30-foot ceiling. This will yield an average effective volume of 135,000 billable box positions after about three years of sales, assuming you use a full-time sales representative.
In actuality, you can use RS lite and traditional records management at the same facility. Some developers begin by using RS lite to accommodate walk-in clients and move toward the traditional method as their volume increases to 30,000 billable boxes.
Option 4: Multiple Storefronts in a Single Market
This model is designed for you adventurers out there. It provides the highest yield potential in records storage, but presumes you have three ingredients:
- Multiple self-storage facilities within a 25-mile marketplace. The more sites you have the better, but five or more is best.
- Small-business packages designed to capture 10 percent to 20 percent of walk-in traffic.
- A trained office staff that is generously compensated for their sales efforts.
Initially, storage can be handled using converted units at each individual site with management handled from a single office. As volume surpasses 35,000 billable boxes, all records storage is transferred to a dedicated building in a central location.
No matter which option you choose, planning for records storage from the beginning of your project will help ensure maximize revenue from this amazing ancillary opportunity.
Cary F. McGovern is the principal of FileMan Records Management, which offers full-service assistance for commercial records-storage startups and sales training in commercial records-management operations. For help with feasibility determination, operational implementation or marketing support, call 877.FILEMAN; e-mail email@example.com; visit www.fileman.com.