By Timarie Kilsheimer Thompson
My husband and I have just opened our brand-new self-storage facility, Delaware Beach Storage Center (DBSC) in Lewes, Del. Over the past year, “Inside Self-Storage” has published articles in which I describe our decision to develop this new 675-unit property and, later, how we designed and implemented our marketing strategy for a facility in lease-up. As construction on our project neared completion, we then turned our attention toward the operational framework that had to be in place before we could open our doors.
To many, building and operating a self-storage facility appears to be an easy and lucrative way to own your own business. Although the operation will become less intensive on a day-to-day basis once the units are leased, the initial foray is elaborate. It’s essential to establish a working foundation on which to run the site. Will you think of everything and get all the details correct? Probably not, especially if you’re new to the industry. Can you do your best to create a comprehensive to-do list using industry resources? You bet!
The first step in tackling what might initially seem an insurmountable task is to build a spreadsheet containing all key action items. Nothing is too small—order name tags, anyone?—or too big. Understand that many of these are ongoing as a part of a project timeline. Having all of these tasks in one place, with each job “owner” and a target completion date, will be invaluable so nothing falls through the cracks.
Once you’ve assembled the list, group items into components—some are fundamental, others more tactical. Many key sections are fairly obvious, but not necessarily easy or quick to address. Most of the marketing tasks (website, marketing strategy, etc.) were addressed in my last article. Below are some other areas for discussion.
Creating an operational framework for a new self-storage facility, including the company's policies, best practices and procedures, sets out the way you do business. It’ll generally outline guiding principles on employment, employee conduct, customer interaction, safety, facility maintenance and security. Additionally, it will include detailed information on day-to-day operation such as:
- Opening and closing procedures
- Daily reports and tasks
- Customer service including sales and service philosophy
- Lead fielding, follow-up and closing
- Telephone and in-office etiquette
- Handling customer issues or disgruntled customers
- Tenant insurance
- Retail sales
- Making reservations
- Taking payments
- Vacating a unit
- Lien sales
The sum of these components, in the form of an operational handbook, will establish and develop a company ethos and culture. If you need assistance in this area, there are industry veterans who’ve written manuals for you. You can use them as is or as a starting point to customize policies and procedures for your store. Either way, it may be a good (and fairly modest) investment if you’re time-constrained.
Maneuvering within the legal arena is tough enough for a layperson. Add the complexity of industry-specific issues and constantly changing laws and you have challenges with potentially significant business and monetary ramifications. Establishing a solid legal base (addendums, leases, waivers, etc.) for your new operation is critical. You must make sure your lease is iron-clad, reflects your business rules, and adheres to your state and local laws.
Just as important is having a strong legal resource once operation is underway. Challenges include lien sales, auctions, abandonment of goods, tenant bankruptcy or death, collections, and continuously changing laws, among many others. Failure to follow these laws and execute accordingly could leave you open to litigation.
From the very beginning of our project, we recognized that we “didn’t know what we didn’t know,” and the legal component was no exception. We felt it was essential to team up with an industry veteran to establish our initial documents. Self-storage law is all that he does. As such, he’s privy to the changing legal landscape, helping us consider issues we never thought about. He’ll also serve as an ongoing resource as we encounter day-to-day legal challenges and questions, whether it’s a lien sale or language for our marketing campaign.
Choosing a software to manage your operations is critical, not only for in-office tasks but for your online business, which has become a vital success factor for self-storage. With multiple vendors in the industry, how do you decide? First, you need to determine your needs. Below are the elements that were most critical to us:
- Customer service, training and support: Not knowing the software, it was important that we were comfortable with the functionality and interface, and that we would be able to receive timely and comprehensive support.
- Online payments, rentals and reservations: Online presence and this functionality are key differentiators in our market. We’re expecting them to help streamline and expedite lease-up.
- Accounting and reporting: With 680 units, bookkeeping will get complicated fast. A user-friendly software that has the capabilities to provide the necessary accounting reports will make our lives easier. It’ll also enable us to ensure the business is on track. If it’s not, it’ll alert us to fix it!
- Lead tracking: With a new store, we can’t afford to let any potential customers fall through the cracks.
- Electronic signature: Providing customers with a convenient (and green) way to sign or renew a lease is yet another amenity that isn’t common in our market.
After you’ve determined your needs and priorities, talk with different industry software providers. From there, try the demos and participate in online webinars to get a taste of what you’ll be working with every day. Based on that, you can make an informed decision and move forward with implementation.
General vendor selection is another important point to consider. Who’s going to provide:
- Trash removal?
- Phone and Internet service?
- Security monitoring?
- Janitorial services?
- Facility-maintenance services?
- Equipment leasing?
- Insurance (business and tenant)?
- Payment services?
- Retail product?
Sometimes you may not have a choice. We decided to handle a lot of things ourselves—although I did put my foot down on the trash, so we bid that out!
Tenant insurance has become the industry norm and no longer considered an optional amenity. Customers expect it, and operators can garner an important revenue stream from this offering.
Evaluating merchant-service providers and performing a rate comparison, especially if you’re going to strongly “recommend” auto-pay to your customers, will have a potentially significant effect on your bottom line. In this domain, however, we also strongly weighed the provider’s customer service and support. The last thing we want is to encounter an issue and not be able to resolve it immediately.
Retail is yet another income source and something to consider as we market ourselves as a “one-stop-shop” for moving, packing and storage materials. Surprisingly, this is something our market currently lacks.
Framework in Place, Now What?
Establishing your framework is just the first step. Now you need to implement, and there’s still much work to be done. Keep in mind:
- Writing your operational handbook will happen over time, not overnight.
- Vet and select your legal counsel early in the process. Even if you don’t start working on your documents immediately, you don’t rush this important part of your business.
- Once you decide on a software provider, it still takes time to learn the program, get comfortable with it, get all the settings right, input your data (and at 680 units, that was no small feat!), integrate with your website and merchant services provider, and test everything.
Most of this sounds logical, however, many underestimate the time it takes to not only establish these key business components but execute them. The last thing you want is to be behind the eight-ball when your doors are about to open.
Timarie K. Thompson and her husband, James Blair Thompson, are the owners of Delaware Beach Storage Center in Lewes, Del., which opened in June. Timarie has been involved in the marketing and strategic-planning fields for more than 20 years. She lives in Rehoboth Beach, Del., with Blair and their son. For more information, e-mail [email protected]; visit www.debeachstorage.com.