It’s 9:20 a.m. on a Tuesday morning and your day has started off like most. You arrived at your self-storage facility at the normal time. You turned the key and opened the office. The lights came on, the computer fired up, the printer started spitting out your morning reports, and the coffee machine filled the air with the smell of fresh brew. Not bad.
Fast forward to 9:30 a.m. One of your customers, George, walks into the office. He’s at a loss. He entered his code into the access system, but the gate won’t open. This is odd because George is on autopay and his rent is current.
A feeling of dread slides down your spine. You notice your gate log doesn’t show anyone accessing their unit within the last 12 hours. You walk quickly from your office to the gate keypad and enter your manager code. Again, the gate doesn’t open. Now the adventure begins.
Your Role as Expense Manager
This scenario is nothing new to most self-storage managers. If you’ve been managing a facility for a while, you know things can go wrong. In your role, you’re a jack of all trades and master of none. You’re the facility life coach, interior decorator, bartender, moving and packing expert, maintenance person, and psychologist. You’re also the expense manager.
Some self-storage managers have more financial authority than others. Some participate in the development of their facility’s annual budget. Some have the authority to make decisions about site repairs and maintenance. But regardless of how much “power” you have at your facility, you can always network and make vendor friends, which can be incredibly useful in a pinch.
Networking is important because every major repair always comes down to “Did you call The Guy?” The Guy is the person who knows how to fix Problem A so it doesn’t turn into Problem B or C and allow the natives to become restless. The Guy can get to your facility quickly, fix the problem, and put you back in business.
What does this have to do with expense management? Now matter how involved you are in your facility’s budgeting, you’re still at the front line. This position allows you to affect the overall success—and revenue—of your property by keeping expenses in check.
The Gate Fiasco
There are two ways to increase a facility’s net operating income. You can increase revenue, which is something you should be pursuing regularly, and you can decrease expenses. One thing that dramatically affects both is time.
Let’s go back to the damaged gate. Most of the gate systems in our industry are serviced by a licensed (aka qualified) repair company that understands the hardware and software and how they work together. This software lets the gate know when to allow customers into and out of your facility—a fairly important function.
For the sake of discussion, let’s assume you’re a relatively new facility manager and you haven’t yet built a network of “qualified” service contractors. You call to a gate company and are told a repair technician can’t make it to your property for three days, which might as well be three years in self-storage time. You sit and wait. You can’t focus on marketing, delinquency calls, etc., because you’re too busy fielding customer complaints.
Finally, your repair person arrives. He checks out the gate and doesn’t understand why it isn’t working. Physically, it’s fine. It rolls up and down the track, the motor is functional, and it has power. He’s baffled. When you mention the gate is operated by software, you might as well be speaking Martian. This tech isn’t familiar with that system. He thanks you for the business, and leaves you with a bill for the $85 service call. You’re left with a broken gate.
At this point, customers are agitated. Your work days are starting to resemble the movie “Groundhog Day,” only the movie was much more fun. You decide to call the gate-software company and get a recommendation. It gives you the contact information for a licensed representative in the area. You call, and thankfully, this company can send someone out the next day.
You’ve now reached day five of your fiasco. The second service tech arrives and quickly diagnoses the problem. He says he needs to order a new board for the gate controller. It’ll take a day to get the part, but your nightmare is nearly over.
What Did You Lose?
On day six of your disaster, George walks into your office. He says he’s moving out. The situation with the gate made him realize that he should have thrown out all this stuff a long time ago anyway. George’s rent is $150 per month. He’s on autopay, he has tenant insurance, and he’s been receiving and accepting regular rate increases every year. He’s the customer you don’t want to lose! At the end of day seven, your gate is repaired and everything is back to normal—except you have two repair invoices to pay, and you lost George, which will cost you $1,800 in annual revenue.
This is just one example of how time can cost you money (and some of your sanity). How often does a situation like this arise? HVAC, electrical, computer and plumbing issues all rear their ugly heads from time to time. Having a stable of qualified and talented contractors will help you keep these expenses under control, even if you don’t have a lot of financial authority.
The time you save by addressing items quickly and effectively will help you protect your top and bottom lines. Keep your ear to the floor and be part of the community, and you’ll introduce yourself to every friend you’ll ever need, which will help you keep expenses in check.
Matthew Van Horn is a member of the operation team at Reliant Management, a full-service management company specializing in management, feasibility studies, facility acquisitions and joint ventures within the self-storage industry. He’s also president of 3 Mile Domination, a full-service self-storage marketing and strategy company. For more information, visit www.storesmart.org or www.3miledomination.com.