The records-storage market is unlimited in virtually every self-storage market in the world. How can you tap into this potential gold mine?
Self-storage entrepreneurs in most cities refer to their individual markets as areas within a two- to five-mile radius. Records-storage businesses, on the other hand, generally include entire cities, counties and sometimes even beyond. Regardless of which way you look at it, the business of records storage has barely been tapped when viewed from a self-storage point of view.
Today’s self-storage facilities have a mix of individual and business customers. It is fair to say that facilities average about 75 percent individual renters and 25 percent business clients. Of the latter, most represent small businesses that need extra space for records. It is very common to find law firms, accounting firms, clinics, mortgage companies and other such businesses storing records at a self-storage facility in a casual manner.
Small companies in North America represent more than 50 percent of the business volume in employees and revenue. You likely have hundreds of small businesses in your defined market. This size company typically has the most problems with business records, because of management issues. Simply put: They can’t find a file when they need it.
What does records management mean for the business professional? Knowing what you have, where it is, how to find it and when to get rid of it. Sound pretty basic?
It always surprises me how simple records management is. So why is it such a big problem in today’s business? I’ll give you four reasons:
- Records are a big pain in the neck.
- They aren’t important until you need them.
- Businesses rarely have a budget for record-management.
- People don’t know the true cost of record-keeping.
Stop Selling Storage
I know you are a storage business but I am telling you not to sell storage. This may seem counter-productive, but if you sell records management, you will get more storage customers ... and for a very long time. Records stay on the shelf for an average of 16 years. Records contracts are usually considered permanent contacts because of their "evergreen clause" and because the cost of moving them out is greater than keeping them where they are. Plus, businesses have a hard time figuring out what to keep and what to toss. These days, everyone is afraid of making a bad decision so the trend is to store things longer than necessary.
Most commercial-records centers keep records for large clients; probably 50 percent of the records in these large-client accounts are not necessary to keep. But rarely does anyone actually try to do something about it.
Iron Mountain, the only publicly traded company (IRM) in records management, is a highly rated stock and very profitable. Yet, the basis of its business is simply storage, just like you. The difference is Iron Mountain’s storage does not come and go like yours. It stays forever. Iron Mountain boasts of decades of continued storage growth in its annual report on www.ironmountain.com.
Mimicking Iron Mountain
The formula for successful operation of a commercial-records center is straightforward and right under your nose. You already have a storage business and a larger market than both Iron Mountain and the local commercial-records centers. How can that be?
Commercial-records centers focus on larger businesses because of the volume of records per account. Iron Mountain averages several thousand boxes per account, and the local records centers average about 750 boxes per account. It takes sales efforts to go get them and the biggest accounts are already taken.
Right now there is a feeding frenzy in the industry with records centers trying to snatch accounts from each other. But why fight for business when there is so much still available?
Small businesses account for most of the business in North America and are very difficult for commercial-records centers to attack because of the cost of sales. There are a few that understand the value of the small-business clients, which, in fact, yield as much as three times the yield per box of the big corporate accounts prized by Iron Mountain and the others. You have the secret ingredient: walk-in clients.
Marketing on a local scale can be inexpensive and quite lucrative using a two-pronged approach: self-storage and records-storage at the same time.
Success in records management in self-storage can be measured in quite different terms than that of big companies because you do not have the same overhead and staffing requirements. Additionally, you can do anything the commercial-records center does by forming alliances with other small businesses right in your community.
If you’re looking for more income, look no further than your own self-storage doors. You just need to know how to mine for the gold to enjoy its glitter for a long time to come.
Cary F. McGovern is the principal of FileMan Records Management, which offers full-service assistance for commercial records-management operations. For help with feasibility determination, operational implementation, marketing support and/or a free 90-minute consultation, call 877.FILEMAN; e-mail [email protected]; visit www.fileman.com.