By Aycha Williams
As self-storage operators, we continuously look for innovative ways to increase the cash flow from our properties and become more profitable. At my company, we use the annual budgeting period to first evaluate the success of the current year’s programs and revisit each property’s annual financial reports. How did our marketing investments benefit each property? Were we able to stay within budget for all expense items? What other methods can we apply to cut down on both recurring and non-recurring costs?
Based on this data, we’re able to make our new marketing and training-investment decisions and adjust budgets for seamless operation. We also look at each expense category to find new ways to decrease our costs.
Here are 10 areas on which we focus to minimize the expense of big-picture items and smaller costs. They can make a considerable difference in reducing the overall expenses for your property, too.
As a self-storage owner, you know quality site management is key to the success of your operation. Great managers will make the difference on your facility’s occupancy and profitability. Hiring capable, talented and experienced employees is crucial and, in most markets, will come with a higher hourly rate. On the other hand, the efficiency and success of qualified employees will considerably lower overtime costs and result in higher sales.
Consider hiring qualified employees who will increase profit through their superior abilities. While the hourly rate may be higher, you’ll benefit from increased income and save on high overtime expenses you would have otherwise incurred.
2. Administrative Costs
The cost of telephone and Internet access is constantly falling thanks to multiple carriers and technological advances such as Internet telephony. Whether you have multiple properties or one, taking the time to call a few competitors can save you thousands of dollars each year. Two years ago, we saved 50 percent on our phone and Internet costs across 15 self-storage properties by simply switching carriers. This year we’re forecasting 30 percent more savings.
While it’s a time investment to research and complete the change, the savings will make it worth your while. Consider price shopping for all your administrative needs, whether it’s for office supplies, print services or any other professional service.
3. Property Taxes
There aren’t many commercial real estate properties that weren’t affected by the economic crisis. The lowering of property values has one positive outcome and that’s lower property taxes. It would be wise to get your commercial property re-evaluated before the upcoming year’s property-tax period.