Many of us want to have as much as possible to sell to customers, but do we really sell everything we display? What length of time should we allow for product movement? If it takes us six months to sell an item, is there really a reason to re-order it once it's gone? Is this the most effective use of our money? These are hard questions to answer, but some stores have thousands of dollars tied up in retail inventory for an extended period of time, sometimes unnecessarily.
Audit Your Energy Costs
Have you recently completed an energy audit of your facility? You might be surprised, but next to taxes, payroll, marketing and insurance, utility costs are usually the next highest expense. Can you adjust the temperature in the climate-controlled building by 2 degrees? How much would it save you in the long term? Can you turn the lights off after 1 a.m. without compromising your facility’s safety or security?
Again, these are questions we never seem to ask because we’re so focused on increasing income. However, imagine what your bottom line would look like if you could reduce these expenses by 10 percent? Things like leaky faucets, toilets or hose bibs are just allowing us to throw money out the window. These expenses are manageable and should be constantly maintained.
Pay Your Managers Well
Last but not least in the discussion self-storage operating expenses is your payroll. Are you over or under compensating your management team? Many owners think the lower wage they have to pay, the better off they are. This sounds good in theory. In reality, it’s probably the most wasteful spending you’ll ever do.
You get what you pay for. If you want to pay minimum wage to your manager, expect minimum results. If you compensate well, you should expect higher returns. Examine your operating hours and payroll obligations to see where you can make improvements. Create a team you can compensate based more on performance and give them an opportunity to increase their income by growing yours!
One alternative is to install a self-storage kiosk to reduce some of your employee work hours. It might not only save you money but allow your managers to make more by focusing on facility performance. The important thing is to weigh the cost against the benefits and have a clear objective.
Many owners won’t even consider installing a kiosk because they fear how it will affect their managers, who often relate the automated machine with a drop in pay. Nothing is further from the truth. A strategically placed and used kiosk can actually increase their income by paying a bonus for every rental gained from the kiosk, for example. Kiosks also extend your renting hours, which can improve overall occupancy.
If you can offset the cost of a kiosk with increased rentals, the savings can be huge. I’m not promoting kiosks for every facility, but we have to embrace the technology tools out there to help us improve our bottom line. In many cases, kiosks are a great alternative and an asset that should be examined closely.
Managing your self-storage facility’s expenses is hard work. However, the rewards of efficiently doing so can be exponential, making it well worth your time and effort.
Mel Holsinger is president of Professional Self Storage Management LLC, which oversees the operation of more than 40 facilities in Arizona, Colorado and Texas. Holsinger has been in the self-storage industry for more than 25 years. To reach him, call 520.319.2164; e-mail firstname.lastname@example.org; visit www.proselfstorage.com .