While running my last business, I acquired nearly 200 self-storage facilities and converted each of them to a proprietary, fully automated operating platform that could be managed remotely. By the time I stepped back from my position as CEO, I had attained 7.5 million square feet and picked up about as many valuable lessons along the way. I hope some of what I’ve learned can help other self-storage operators choose potential solutions for their own facilities.
Evaluating business needs is mission-critical when it comes to understanding if and how technology may be a good fit for your property. Here are five ways to assess your operation for potential upgrades.
1. Evaluate Strategically
First, think about your self-storage business goals and how automation could help you achieve them. These might include:
- Improving the customer experience: You can create a completely virtual interface for customers or add convenience to their onsite experience.
- Creating operational redundancy: A resilient operating platform can help overcome unforeseen personnel risk.
- Empowering staff: Provide your employees with a broader reach across the business through robust remote-management tools.
- Controlling costs: Technology can generate meaningful operating efficiencies, especially at scale.
- Growing revenue: An easy-to-use, front-end interface combined with automated revenue management can lead to a significant boost in income.
2. Evaluate Specifically
Automation technology is designed to solve specific tasks, so pinpoint what you want to accomplish in your self-storage operation and find the appropriate solutions. This will help you maximize your investment while mitigating the risk of unintended consequences. Keep in mind that you may need to integrate multiple tools through an API (application programming interface) or other method.
Here are some areas on which to focus and the possible technology solutions:
- Sales and rentals: Kiosk, QR codes, mobile app, mobile-optimized website
- Payments and collections: Autogenerated text and emails with a link to your online payment portal
- Liens: API integration with third-party, lien-processing software
- Overlocks: Integrated electronic lock systems or software-supported combination-lock system
- Revenue management: API integration with powerful algorithmic pricing tools
- Customer service: Remote call center, IVR (interactive voice response), chat bots, live chat
3. Evaluate Holistically
Incorporating automated solutions into one part of your self-storage business can lead to unintended outcomes in other areas, so create a post-implementation workflow to help identify potential problems and proactively incorporate solutions. For example:
- If you accept late payments via your kiosk, you’ll need a way to remove the overlock from the delinquent tenant’s unit. An electronic lock can be the solution.
- If you automate onsite rentals and payments through a QR code or kiosk, you’ll still need a way to manage retail sales. Thankfully, vending solutions are numerous and easy to implement.
- If you replace your call center with artificial-intelligence (AI) technology to answer basic customer inquiries, it may not be equipped to handle unique situations or non-standard questions. To solve this problem, create customer-service architecture that can escalate special circumstances to a live, remote manager.
4. Evaluate Financially
Once you’ve evaluated your business needs, identified specific tasks to solve and created a post-implementation roadmap, you’ll be equipped to evaluate the financial merits of technology. Self-storage is pretty straightforward, and calculating return on investment (ROI) for automation and remote-management tools is fairly simple; however, the math becomes slightly opaque if the investment will increase operating expenses.
For example, I recently acquired nine self-storage properties with extremely lean operation and no technology. Converting these facilities to be fully automated increased operating expenses by 37% but also improved revenue by 62% and net operating income by 49%. The takeaway is that while calculating a return on savings is basic math, understanding true ROI requires some informed assumptions about upside potential.
You also need to consider the effort to implement the change successfully, whether you’re automating one portion of your self-storage management platform or transitioning to full remote management. While I’m an advocate for automation and firmly believe in the value it creates, I also recognize two important factors: The juice must be worth the squeeze; and if it ain’t broke, don’t fix it.
For example, let’s say Owner A has one self-storage facility with a good manager. It serves as a side business, and they plan to sell in three years. I’d recommend this owner consider making a minimal investment in technology that easily integrates into the existing management platform, such as automated lien services or collections tools.
Owner B is relatively young and owns one facility that serves as their primary business. Their plan is to develop or acquire more sites down the line. In this case, I suggest they invest heavily in automation to support operating scale and facility value.
Technology comes in many shapes and sizes, which is why understanding the right fit is critical.
5. Evaluate Physically
Today’s self-storage facilities range from first-generation, corrugated-steel buildings on country highways to third-generation, state-of-the-art, multi-story buildings in big cities. Thanks to technology, they all could be remotely managed, but that doesn’t mean they should be. Accounting for a facility’s key physical attributes and unique market dynamics is extremely important.
For example, let’s say Property 1 has high rental velocity. Leasing is accomplished online or via kiosk or mobile app; however, the loading areas have a tendency to get blocked with too many vehicles, which slows the move-in/move-out process and hurts the customer experience. In this instance, the owner might consider automation for sales and collections but retain a reduced onsite staff to help manage logistics.
Property 2 is a class-B facility in a secondary market, with an unusually high percentage of commercial tenants. Though rental rates are at the high end of the market, businesses like using this facility because the onsite manger will accept deliveries on their behalf. In this case, the competitive advantage is the site’s location combined with services offered by staff, so technology upgrades aren’t likely to make a significant impact.
The Big Picture
Adopting automation and remote-management technology doesn’t mean a self-storage facility runs by itself. It redirects routine tasks away from people and toward systems; however, the systems must still be monitored. There may be fewer people necessary to support the organization, but those individuals play a more significant role.
Also keep in mind that self-storage is a brick-and-mortar business that requires regular cleaning, maintenance, audits, etc., all of which require hands-on personnel. While customer management has rapidly evolved, physical property management remains unchanged. To successfully manage a self-storage facility remotely, you must find a solution to integrate these two workflows.
When it comes to technology, it’s easy to get overwhelmed. By conducting a comprehensive evaluation of your self-storage business, selecting the appropriate solutions to fit your needs and forming an implementation plan, you can make your business more scalable and profitable. As customers grow accustomed to the convenience and ease of interacting with technology interfaces, you must choose whether to lead your business into the future or risk falling behind.
Seth Bent is founder and CEO of StoreLine Self Storage, which uses a technology-based platform to manage 250,000 rentable square feet across nine facilities in Wichita Falls, Texas. Prior to launching StoreLine in 2020, Seth was founder and CEO of Red Dot Storage, which he helped grow from a single facility to nearly 200 locations comprising 7.5 million square feet across 16 states. During his tenure with Red Dot, he led the development of the company’s remote-management platform.