Italian Facility Starts Small

Kimberly Hundley Comments
Posted in Articles
Print

The European self-storage landscape is dominated by multi-facility operators involved in a seemingly endless stream of acquisition, mergers and expansion plans. But a few single-site enterprises are making a name for themselves, too.

Last year, Sara Keller founded Spazio in Piú, a small facility, in Pavia, Italy. An American raised in Arizona, Keller moved to Italy with her Italian husband in 1995, working as an English teacher for American companies. Their facility is a conversion of a factory once used by her husband’s sheet-metal company.

After witnessing the success of the storage industry in the United States, Keller decided to bring the concept to her mobile community of 80,000. The city, just south of Milan, is home to a university and major hospital. Keller lives on site and, though she’s the sole employee, the job of manager/owner allows her the flexibility to be a full-time mom to her two children.

Is Spazio in Piú the first family-owned and operated facility in Italy, and is its owner the only female operator in Europe? Keller isn’t sure—small storage owners generally can’t afford to join national self-storage associations, and they don’t have an open forum to exchange information as U.S. operators do. She did, however, share some of her insights with Inside Self-Storage.

How did you research the industry?

The Internet was invaluable for viewing other facilities and finding suppliers. Our building supplier was incredible—it even sent me an informative CD on how to plan a facility right down to unit mix and budget planning. It was a great resource because there’s limited info out there for the European market. The ISS website gave me a great boost in demonstrating how much the business is expanding abroad and in the United States. However, prospective owners who don’t speak English would have a problem—the information I found is inaccessible without that skill.

Why did you make the leap into self-storage?

I wanted to make use of a mostly empty factory we’d originally purchased to expand my husband’s manufacturing business. In 2003, we moved almost all production to Slovakia and another site because the 9/11 disaster, combined with greater competition and strict Italian regulations, made it too hard to remain competitive. However, the property had a few years left on its loan, and it’s situated along a motorway that connects Pavia and the freeway to Milan.

According to my Internet research, our 2,000 square meters of factory space on 5,000 square meters of land was ideal for self-storage. We can provide ample parking and have room to provide external units for recreational vehicles. Most important, we can construct the units ourselves—at cost and gradually—as demand increases. The opportunity was too good to pass up.

What kind of marketing did you do?

I began researching the project in December 2004 and legally opened the activity a month later. The first thing for me to do was advertise—to feel out the market and begin educating the public. In the first six months, I spent €10,000 on ads like the local Yellow Pages, fliers (not much response), a home fair, ads in small local newspapers, and a simple website I created myself. I spent hours registering my site on search engines.

In April, I had my first request for space, and the client found out about the service through word-of-mouth. We also installed street signs in the immediate area directing people to the site (with name, number and an arrow). Surprisingly, this brought me business right away from passersby. We had a stand at the local home fair to diversify my presence. By summer, I increased my monthly publicity budget to about €1,500 per month. I’ve done a couple radio interviews and am airing ads during fall sporting broadcasts.

Describe the conversion process.

I prepared three units (9, 20 and 40 square meters) and rented them immediately. My first customers were an antique-furniture dealer, a family that was remodeling its home and a home-fair organizer. Slowly, more requests came in, and I had more units prepared within a week to meet demand. By July, I had completed one-quarter of the total project with 90 percent occupancy.

We are now in the process of finishing the first half of the project. I want to phase in the remaining 1,000 square meters the same way: First get tenants, then invest in creating units. I’m currently at 100 percent occupancy, with a waiting list for six more units of 2 and 6 square meters.

To better serve customers, I’ve agreed to store urgent goods for customers awaiting space in one large unit and move it myself when their individual units are ready. Customers are rather satisfied with the situation. I originally hadn’t given RV storage much thought; but I had so many requests I figured we should try it, so I’ve projected 13 outdoor spaces for RVs and 30 for motorcycles.

Who are your customers?

From April to August, we had about 60 total invoices for 30 customers. I don’t have enough data compiled to say that one group is more of a target than another. There is an enormous possibility that, sooner or later, everyone will need a flexible storage solution. But this is what I’ve been able to pinpoint so far: 35 percent live within a 10K radius; 35 percent within 20K; 15 percent within 30K; and 15 percent from farther away. One client traveled more than 300K to reach me because I was midway between Venice and Genoa, where he is moving, and there’s nowhere else for him to store his things.

About half my customers are residential, most moving to another home or remodeling, and a few with limited space at home. The other half is mostly small commercial businesses and artisans: a shop owner, antique-furniture dealer, art dealer, used-book dealer, parquet-floor installer and handyman, to name current clients. They usually take spaces that are 15 to 20 square meters, long term. Many have even asked to leave their vans over weekends and holidays.

What security features do you offer?

I checked into many different security/ access-control systems. While some cost nearly twice as much as less sophisticated options, I think the best investment is one that is industry-specific and can be built upon as a business grows. Unfortunately, I’m not ready to invest in any system at the moment, for financial reasons as well as the fact that the site is not complete. I foresee that within 12 months, however, a quality security system will become a necessity.

For now, I have functioning offices with employees who watch over the storage during the day, and I’m present at night and on weekends. The grounds are gated, and the main entrance is locked at all times. We use a private security service, which does rounds in the neighborhood for other businesses and homes. We’re installing security cameras at the entrances and inside the main area, though that’s really more a deterrent than anything else.

What advice would you give someone trying to start a self-storage business in Europe?

Know your market. Invest in an area where you live, and find a highly visible and accessible site on a main road. It’s not necessary to dive into major cities and be in direct competition with large international providers. There are thousands of small towns with populations of 100,000 to 200,000, where there is zero saturation and high demand.

What really surprised you about the business?

Honestly, I surprised myself. It started out as an idea, and I wasn’t that enthusiastic about having to dedicate so much time and energy to a business outside my field. But the more I researched the sector and things started falling into place, the more excited about self-storage I became. Since it’s a small company, and I do almost everything myself: planning, budgeting, creating a marketing campaign and dealing with customers. It is a huge learning opportunity, and it has already been very satisfying to watch the business grow.

What’s it like to have an independent facility competing with larger companies?

I don’t really see the chains as competition, and none are nearby. This is a family-run, local business tailored to the needs of clients. For example, I occasionally have requests from small commercial business to have material delivered to the site directly. They give me an arrival date; I accept the merchandise and give them a call. This saves them dead time waiting for trucks to arrive.

It’s exciting that I can take our services in any direction—from adding more RV parking to changing the layout of the other half of the facility to include larger spaces/aisles for business. I could buy a forklift and hire a worker to help store heavy commercial/manufacturing items.

How are residents responding to the self-storage concept?

Italians are a bit wary of the business. They can’t quite believe they can drive up, rent a space without lengthy binding contracts in about five minutes, unload their stuff, and go home. They’re used to everything being very bureaucratic and complicated.

I also have a policy of total flexibility. I don’t require any notice for termination of a contract. Payment is for one month in advance, and when the customer wants, he may vacate without penalty. This is highly appealing to customers, and I’ve found everybody gives at least a week’s notice before moving out. I’ve only had to refund two customers for time paid but not used.

How did you decide on pricing?

I studied my operating costs, and then took my building supplier’s advice for calculating delinquency and vacancy. Finally, I compared it to what garages and small factory space is renting for locally. I charge about half of what my competitors charge in neighboring Milan, where costs are admittedly higher. I feel prices should be straightforward and the customer should be able to shop and compare, so I post them on my website.

Plans for the future?

I’d love to be able to say a year from now that the conversion process is complete; self-storage is a household name in Pavia; and Spazio in Piú will have to open a second location to keep up with demand! One of the reasons we gave the industry a try was also to give my husband’s company some hands-on experience in self-storage supply. He has two plants and another opening in the Ukraine, and plans to produce metal products for the South Europe self-storage market.

For more information, e-mail info@spazioinpiu.com;  visit www.spazioinpiu.com.

Comments
comments powered by Disqus