Since its inception in the 1950s, the records-management industry has been perceived by many to consist of simple storage and retrieval services. But these days, the business is extremely multifaceted. As a provider of records storage in a self-storage environment, you have options when it comes to your level of service, which depend on human and financial resources and operational goals.
Some philosophers argue that the era of industry and agriculture has passed, and knowledge is all we have left to barter. Whether we trade or sell it, information has become the primary component of our economy. As a result, business records have risen to unprecedented levels of importance. Held in repositories that range from huge “server farms” to commercial records centers, they’re maintained for four primary reasons:
- Regulatory compliance
- Litigation avoidance
- Sound business practices
- Fraud and theft prevention
When it comes to managing records, the challenge isn’t storage; it’s finding the right record in a timely fashion when it’s needed. Business owners can store their records anywhere, including a self-storage facility, warehouse, attic, closet, etc. But documents must have integrity, which means they must be available and reliable. The best way to ensure this is to keep them in a safe place with limited access. As a self-storage operator, you can offer many solutions. Following is a description of your options, from basic to complex.
Options for Storage Operators
Passive storage.Most self-storage facilities already offer passive records storage—all they do is rent units in which business customers keep their boxes. The operator has no direct involvement with tenants’ records. There are approximately 100 million boxes of records sitting passively in self-storage facilities throughout the world. Few records-management companies are fortunate enough to have that kind of volume under contract.
Passive storage with shelving and boxes.This next level is easy to manage and brings value to the facility and customer. In this scenario, you simply sell shelving and boxes as retail items. Boxes in particular are high-margin items.
Passive storage with shelving, boxes and software.This is a new twist on the passive-storage concept. It’s still simple, but in addition to shelving and boxes, you offer software the customer can use to index and locate his boxes. You set up a work station and data-entry forms, and the client enters his own information and prints his own reports. You can charge for use of the software on a monthly basis or per transaction. In either case, you still have no involvement with customer records.
Records storage “lite.”Several of my past columns have addressed this concept, which is a combination of passive storage and active management. You no longer rent storage units to customers. Instead, you rent storage space by the cubic foot. You also become responsible for retrieving and indexing boxes in inventory. In essence, you become the customer’s custodian of records. This method includes several key components:
- Small-business packages
- Will-call pick-up
- Standardized pricing
- Five simple services
- Permanent revenue
- Permanent contracts
- A simple operating method
- A simple sales method
For more information on RS-lite, you can read past articles in the Inside Self-Storage online archive.
Nontraditional records management.More complex than RS-lite, this method includes extra services and sales methods. It requires additional manpower, capital and training as well as strategy, strict rules and outsourced resources. It’s also a stepping stone to full-blown, traditional records management.
Multiple storefronts.This recent method is financially advantageous for self-storage operators with multiple facilities in a single market. It works best with more than five stores. It involves a strategy developed by operators who have grown their records-management volume to several hundred thousand boxes and vaulted into traditional records management without missing a step. (For more information, refer to my column in the January 2005 issue.)
Traditional records management. This method can be approached in two ways. The first is to build to it slowly using one of the above methods. The other is to launch your records business as a traditional startup from day one. In this case, you open your records center as a separate business, build a book of services and provide them from a single-purpose facility. This approach is the most capital-intense, especially during the first three years. Some traditional centers reach breakeven in as little as two years, but you can minimize costs and enjoy profitability almost immediately by experimenting with more basic methods first.
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.