You must measure and monitor everything you present to your market. As you analyze your business, ask yourself these questions:
- Where do you rank among competitors in rates, service, management and site quality?
- Are your short- and long-term goals clearly defined at the ownership and management levels?
- How effective is your manager? How do you measure this effectiveness?
- How are you monitoring success and failure rates of existing operational, marketing and sales strategies?
- Are you considering additional investments and their expected returns in your business and manager?
- What internal threats are you facing? Employee theft? Declining revenue? Outdated features and benefits?
- Are you prepared for the external threats your business may face in the next 12 months, including an economic downturn, overbuilding, price wars, debt markets, unemployment, change in management and delinquency?
- How effective is your overall presence in your marketplace?
- What are the best ways to incrementally increase revenue and the value of your business?
- Are you willing to learn and implement better methods if it means more profit?
Asking the tough questions, and designing a program to capitalize on opportunities and manage risks, will enable you to create more profit, wealth and opportunities for yourself and, more important, your family.
Common Challenges for the Self-Storage Owner
When you ask these questions, you’ll be able to identify some key challenges about yourself, your business, and the vitality of your self-storage property or portfolio. There are common challenges you’ll face as you consider re-positioning your business, increasing your income, and enhancing the value of your assets.
As you read through some of these challenges, keep in mind that eliminating all complacency will enhance your profit now, and a future buyer will only pay premium prices for premium businesses.
Challenge No. 1: Your store manager has been with you for a long time. You like him and don’t want to let him go.
Train your existing manager, add an experienced salesperson, or sell now at a reduced price and let someone else do the work. This is a competitive business. You must either accept that or suffer the consequences of lost revenue, reduced profit and declining value of your assets.
This industry offers many training opportunities, often at the state and local level. Your managers should read industry trade magazines every month, and attend tradeshows and seminars. Your management team should be focused on getting new tenants in the door, maximizing revenue and beating the competition. As an owner, you must focus their activities to enhance your bottom line.
Challenge No. 2: Your manager is not great, but he is cheap.
That manager is the lifeblood of your operation. If he’s not strong, neither is your business. A cheap manager could care less how much money you make or lose. Invest in your managers! Audit their records. Give them goals. They are the one link between your customers and your bank account.
Challenge No. 3: I’m very profitable and don’t have the debt load those new guys have. So I can keep my rates low and occupancy high.
You’re losing value if you don’t keep your rates up. A good operator should always be looking for ways to give better service and enhance profitability. Being 100 percent occupied—in any unit size—is the tell-tale sign that your rates are too low. If you have no units to rent, someone else will build some and charge the next guy looking for that unit size to use it.