The famed artist, sculptor and engineer Michelangelo is credited with this quote: “The greater the danger for most of us lies not in setting our aim too high and falling short, but in setting our aim too low and achieving our mark.”
If your self-storage business is experiencing a crunch from the economy, if new competitors have moved in on top of you, or if your site is the oldest in your marketplace, you have a problem. But you also have a big opportunity to revitalize your business, grow your personal wealth and sharpen your competitive edge. It may require a repositioning of your business. It will require you to cut out the cancer of complacency among your staff and advisors.
In many markets, a strange phenomenon is apparent. The stores with the lowest rates often have the lowest occupancy, which ultimately translates into the weakest asset. Here are some ideas on how to make your operation better—no matter where you are in the business life cycle.
Two Case Studies
First, here is a tale of two self-storage businesses that are just minutes apart in the same market. Operator No. 1 is a true visionary. He built his stores 30 years ago when self-storage was a new concept. The business is operated as a family venture. Resident managers occupy four stores on major thoroughfares in an urban market. Worth noting is their prices are 20 percent to 30 percent lower than their competitors’. The stores offer limited security features, and the gate is always up during business hours.
The owners and managing staff believe the market is overbuilt, because occupancy is showing a steady trend of decline over the past several years. This company has frozen all spending on capital improvements and facility promotion. At one location, the resident-manager team, a senior couple, is unaware of the rates at competitors’ stores and truly believes the market is terrible for everyone. They plainly read from a price and availability script when answering the phone, and sometimes greet customers in their bathrobes or pajamas. The office carries the odor of the managers’ apartment and last night’s dinner.
Operator No. 2, with two stores within 2 miles of Operator No. 1, is a fully modern operation. The management team wears uniforms and greets customers as soon as they walk through the door. They are quick to offer tours of the facility, which they are upgrading. Security features are evident in the office and around the site. The managers take turns operating the front desk one day and, on alternate days, contact customers, prospects and referral sources, either by phone and e-mail or in person.
The store’s well-designed website generates many leads, and one of the stores has rented 160 units in the past two months. Unit rates lead the market for standard and climate control. One of the managers, well-trained in sales and customer service, has partnered with other local businesses—a car wash, nail salon and moving companies—to create synergy. Occupancy hovers around 90 percent year-round, even in this tough economy.
These stores compete every day for the same customer. Which store are you?
Complacency Is the Great Evil
It’s the “Ah” moment. When you finally move your business from the lease-up phase into the realm of profitability, it feels like it’s the top of the mountain. No more red ink. No more deficiencies.