By Cary McGovern
In the self-storage industry, records storage is considered an ancillary service, but it has the potential of being the most profitable of your non-core offerings. Some self-storage companies have done so well with the service that they've developed a traditional records-storage business separate from their traditional operation. Let’s explore the reasons records storage is such a powerful addition to a facility’s book of services and how you can get in on this good thing.
There are a number of encouraging reasons to offer records storage at your self-storage facility. Each should be considered carefully so you can weigh the benefits and costs and determine if this profit center is right for your business. Here are some things to consider:
Long contract term. The standard records-storage agreement term is from one to five years rather than a 30-day lease. It’s relatively easy to open with a one-year lease and close with a five-year lease. Contracts contain an “evergreen clause” that require positive action by the customer to end the agreement only at the end of the term. Penalties exist for early withdrawal. Even at the end of the contract, there are retrieval and delivery charges.
Renting air. Self-storage rents square feet while records storage rents cubic feet. This will generate two to three times the revenue of any space depending on where you are located.
Walk-in traffic. Commercial records centers have no walk-in traffic whereas self-storage facilities have prospects coming through the door every day. With about 25 percent of your customers being business customers and others likely to be owners or employees of businesses, everyone who walks through your door is a records-storage prospect.
Small-business packages. By using a service-bundling or package approach, you’ll save your customer 50 percent on his current records-storage costs and make at least twice what you already earn on storage. Your customer saves—and you make—more money. Packaging is flexible and pricing is guaranteed to cut costs. Here are some suggested packages:
- Economy (Bronze): From one to 50 boxes, with minimal services built in. At 51 boxes, the contract automatically rolls to the Small Business (Silver) package
- Small Business (Silver): From 51 to 100 boxes, with minimal services built in. At 101 boxes, the contract automatically rolls to the Professional (Gold) package.
- Professional (Gold): From 101 to 200 boxes, with minimal services built in. At 201 boxes, the contract automatically rolls to the standard account package.
- Standard Account: More than 201 boxes. The customer automatically becomes a standard customer account and remains in that status until the contract term is complete.
Quarterly credit card billing. The cost of billing can be a significant cost of operation for a small-business account. To reduce costs, use simplified automatic billing and electronic-funds transfer. This makes a time-consuming task easy.
Limited liability. All records-storage companies have limited liability. Much of your existing insurance will be sufficient for the records maintained under your management. An additional insurance for $2 per box addresses the loss of the boxes through fire, water damage, acts of God or other causes.Equipment requirement incremental. Racking is a capital cost and can be purchased one unit at a time or leased depending on your financial issues. Shelving vendors already have pre-designed shelving for any storage-unit size. Most equipment can be made available to you in two weeks or less.