However, if you have a partnership, then I highly recommend hiring a management company, particularly because a third party is neutral and will have all of the owners’ best interests in mind. The management company will report to all owners and handle all accounting, unless an outside accountant is hired to do the bookkeeping. Some management companies offer full-service accounting; others offer operations management only while utilizing an outside payroll service and accounting service.
If you have an existing facility not experiencing the potential income you assumed you would, then perhaps a management company is the answer for you. Many times a management company will receive calls from a distressed owner who has managed the facility by himself or left his manager to manage the facility with little or no direction due to the lack of expertise. Perhaps the owner had a management company but did not receive the quality of service necessary to make the facility profitable. This is when the owner begins looking at different management companies to come bail him out of a bad situation.
Don’t expect miracles from the management company; it took you a while to get the facility into the mess it is in now, so give a company time to fix the problems. If you do choose this route, make sure your site management knows there is a new sheriff in town. Your managers should no longer call you with their questions or problems, but communicate through the management company.
You may have to remind your managers of this more than once. But don’t interfere. It only causes staff confusion and delineates from progress. Let the management company do the job you hired it to do.
Finding a Fit
Are you opening a new facility? Do you need to turn around a distressed facility? Has your lender required a management company be onboard? Do you have partners and would it be advantageous if a management company was hired? Once you have determined your needs, then it’s time to investigate management companies, but how do you find a good one?
Begin by getting involved: ask questions, get referrals, call the Self Storage Association, attend tradeshows, ask venders and inquire with other self-storage owners. Using these suggestions, make appointments to meet with representatives from the different management companies. Come prepared to this meeting with a list of questions to help you make an informed decision:
- Expertise: Have they opened a new facility. What is their track record of turning around distressed properties? What would their game plan be to help you and your situation?
- Current status: How many facilities do they manage now? Is there enough personnel to cover existing management contracts in addition to your property?
- Communication: How often do they conduct site visits, inspections and audits? Do they communicate daily with the site personnel to answer questions and solve problems? What types of reports do they prepare and how often will they send them to you?
- Marketing: Do they set up all marketing programs and materials?
- Documents: Will they provide all facility forms such as leases and daily management forms?
- Personnel: Do they provide employees or work with your staff?
- Pricing: Besides the monthly management fees, are there any other costs? Are fees flat or based on a percentage of the gross?
- Services: Can you pick and choose various parts of their management program: short-term solutions, training, audits, inspections and the like?
- Length of service: How long is the agreement and can you cancel it anytime, or is there a fee for early termination?
- Comfort level: Do you feel comfortable communicating with the company and letting it take over operations?
- References: Ask for current and previous owner’s references, and then be sure to call them.