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A Customized Business Model in Colombia: Bodehogar Storage

By Carlos Cardona Comments
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After living in the United States for 18 years, I decided to return to Colombia in 1997. My plan was to invest in real estate and work in the flooring industry, because that was my trade. However, my Colombian family were pioneers in the moving business dating back to the 1950s; and in 1978, I was offered the chance to purchase one of our established companies in Cali, Colombia.

After a couple of years of learning the legal and operational aspects of the moving business, I saw another opportunity—to offer furniture-storage services to existing customers. Initially, we used one big space inside our warehouse to store clients’ belongings. Then in 2005, we built our first self-storage units inside a 4,000-square-meter warehouse and opened them as Bodehogar Storage.

At the time, self-storage was an unknown service to most of our customers, except to those who had traveled to the United States. To spread the word about this new offering, we began attending real state conventions. Demand grew, and investors opened additional storage facilities in other parts of Colombia, which helped self-storage become more widely known by the public.

In 2007, we opened a second branch in Cali, and in 2013, we opened facilities in Bogotá and Barranquilla in 2013. We opened our fifth site in Medellín last year. The demand has been so great that we’ve begun adding more units to our existing properties. We’re also building another large site in Bogotá that will contain 150 units.

A New Model

The U.S. concept of self-storage doesn’t completely resonate with Colombians, even today. Those looking for storage aren’t interested in the do-it-yourself model of packing their own belongings, transporting them to a facility and loading them into a unit. Most would rather pay someone to pack and move their belongings into a mini-warehouse.

Bodehogar Storage in Cali, Colombia.One reason this model is so successful is because it offers the security of traditional self-storage with the convenience of packing and moving services. Our climate-controlled units are available in a variety of sizes, and our facilities include several security measures, including central alarms and video cameras.

Another reason many people choose our mini-warehouse model is most traditional self-storage facilities have restrictive hours. They might be closed on Sundays and holidays, offer limited access on Saturdays, and operate only during normal business hours Monday through Friday.

Some of our customers never visit our facility at all. Unit selection payments are completed via phone or through our website. The average tenant stay is about six months. When the lease ends, the customer pays to have his belongings moved from the storage unit to his new address. We have our own trucks, and personnel is available at an additional cost to complete the task of packing and moving.

Challenges

Our main obstacle to growth is the high interest rates and short terms offered by the banks. Also, the high cost of land obligates us to build our facilities at a distance from higher-income neighborhoods, though we’re still in the main cities. This can sometimes make reaching our potential customer base problematic. To attract tenants, we rely on a strategic marketing program that includes the purchase of Google AdWords and organic search engine optimization.

The four major cities in Colombia—Bogotá, Barranquilla, Cali and Medellín—have a combined population of 45 million people. While there are several traditional storage facilities and mini-warehouses in the area, there’s a rise in demand for both. Bodehogar Storage and others are adding more units and new properties in these large towns. In addition, Colombia’s 20 mid-sized cities have a great need for self-storage, presenting an opportunity for those looking to invest in an untapped market.

Carlos Cardona is the owner and general manager of Bodehogar Storage. The company operates five storage facilities in Bogotá, Barranquilla, Cali and Medellín, Colombia, and has another under development. For more information, visit www.bodehogar.co.

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