“Most of us spend too much time on what is urgent and not enough time on what is important.”
~Stephen R. Covey
Operating a self-storage facility is just like running any other kind of business: It’s easy to get caught up in the minutia and forget about the things that make you outshine the competition.
In his book “The 7 Habits of Highly Effective People,” Stephen Covey lays out a road map of success. Habit No. 7 is to “sharpen the saw,” which means setting aside time to improve yourself, or in this case, your self-storage business. Sharpening your saw will not only keep your operation running smoothly, it’ll lead to greater accomplishment.
One area that always seems to fall low on a storage owner’s list of things to improve his business is to conduct an internal audit. I’m the first to admit that facility audits aren’t the most exciting thing to do, especially when there are other fires to put out; but they’re the most valuable tool you have in your arsenal to maintain and improve your bottom line. Here’s why audits are key to sharpening your saw.
Think of each audit as a report card. Just as learning must be tracked when getting an education, processes and procedures must be tracked in business. If you don’t consistently track, how will you determine if things are being performed to the expected standard? Audits are essential to understanding where you need to improve. If you’re not constantly progressing, you’re losing ground to the competition.
Audits are effective in determining where your staff needs additional training. Without input from you, team members will go about their jobs thinking they’re meeting expectations. If not taught differently, they may think it’s acceptable to clean a vacant unit with only a broom, not knowing they’re also expected to wipe down the walls, vacuum the corners, perform any necessary door maintenance and remove any stains. Train managers based on your expectations, then periodically monitor their performance through auditing.
The areas of focus for an audit can vary from operation to operation, but here are four types of evaluations to strongly consider.
Unit audit. Inspect all vacant units for cleanliness and proper function. Also verify that all rented units have customer locks, and all vacant units have store locks. It’s not my intention to imply wrongdoing, but facility managers have been known to do things “under the table,” and finding a vacant unit with a customer lock is a red flag that requires investigating. It could be a simple mistake. Perhaps the wrong tenant was vacated, or a customer moved into the wrong space. Unit audits will reveal these things and minimize embarrassing surprises.
File audit. While each storage business may have different requirements for what goes into a tenant’s file, certain items should always be included such as a signed rental agreement, any tenant-information sheets, a copy of the tenant’s driver’s license, signed insurance forms, military addendums, vehicle registrations, and so on. Not only should these be in the tenant’s file, they should appear in a specific order so they’re easy to locate. You don’t want to get into the lien process only to find you don’t have a signed agreement or discover the name on the lease doesn’t match the tenant’s name in your management software.
Maintenance audit. This will vary from one facility to the next, but all storage properties have some form of regular maintenance that should be done. When was the last time the HVAC filters were changed? Is the correct type of filter being used? Is gate maintenance being conducted regularly? Are golf-cart batteries being kept full of distilled water? How long has it been since anyone checked the roof for issues? There are many ongoing items to consider, and failure to keep tabs on them could be an expensive mistake.
Financial audit. This is typically done away from the office by whomever does your book-keeping, but there are also regular items that should be checked during store visits, such as petty cash. Are funds being tallied each day? Are they accurate? Are there receipts for outstanding funds? Is the cash drawer balanced? Is the money taken in each day being deposited at the bank within the allotted timeframe? There needs to be a daily tracking system in place, especially if you have more than one person handling money. An audit will ensure these tasks are being performed correctly and in a timely manner.
Other areas that can be audited include marketing, inventory and lead tracking. Think about where your business may be falling short or could be improved to help determine which areas should be emphasized.
This really depends on the importance of the audit, what you want to accomplish, and the needs of the specific facility. If a store team is weak in maintaining tenant files, conduct a file audit every time you visit the location until you’re comfortable with the team’s performance. Once you’re satisfied with how well staff is keeping the files, consider reducing the frequency of this audit to once per quarter.
Audit frequency depends heavily on what you find. If I’m doing a unit audit and every space examined looks spotless, I might inspect only five or six instead of every vacant unit. On the other hand, if three of the first four units I look at need cleaning, I’ll examine every unit available and conduct immediate training on expectations.
Certainly, if a facility has a known deficiency, auditing must be done more frequently until the problem no longer exists. Your schedule depends entirely on your expectations as an owner and how confident you are that they’re being met.
Audits are multi-purpose. They can be used to verify expectations, train for deficiencies and reward for exceptional performance. I can’t stress that last point enough. Self-storage staff are typically underpaid for the work they do. A little recognition for a job well done goes a long way toward making great employees even better and keeping your business saw sharp.
Monty Rainey is owner of RPM Storage Management LLC, a Texas-based third-party management company that also performs self-storage feasibility studies, due diligence, staff hiring and training, and more. Prior to launching RPM in 2014, Monty served as a district manager for a self-storage real estate investment trust as well as a property-management firm. In his career, he’s led the successful management of more than 100 properties in Colorado, Oklahoma and Texas. For more information, call 830.832.9496; visit www.rpmstoragemanagement.com.