Cost and Space
Some other reasons why records management has become such a booming business boil down to real estate, simple economics and issues regarding space. A records center does not require a prime location. Storage operators can invest in a less desirable area and arm themselves with sophisticated security and tracking devices.
Their customers (law firms, insurance companies, etc.) find it cost-prohibitive to store records on site when a records center can do it for less. Equally important is the records center can often manage information with a greater degree of accuracy than they could themselves.
Finally, many smaller and mid-size corporations not yet hit by the threat of large and costly litigation want records safe but out of the way. Space becomes an issue, and housing what is considered to be nothing more than ancient history now becomes a back-office expense, adding little or no value to a company.
What’s in It for You?
Records management is constant. You can sell an account one time and it keeps growing. Looking at the statistics, an average account grows at a rate of approximately 12 percent. Larger accounts tend to grow at a more rapid pace.
Another benefit of records management is a stable customer base. Once you win an account, it tends to stay with you. As long as you provide great service, it’s unlikely a customer will move to another vendor. Switching service providers in records management means moving inventory and, in most cases, paying costly out-charges from the current provider. Many customers do not feel comfortable moving their critical information, much less paying termination fees.
In addition, records management, although far more high-tech today, is still a rather simple business model with minimal liability. Claims for breakage and damage are virtually eliminated. Through the use of standard industry contracts, your financial exposure is typically limited. Customers who require excess value pay for the additional insurance.
Another great attribute of the records-management business is the sale value of the established business, as there is an active market for existing records-management operations.