Republished with permission from EZstorit.
Though businesses face challenges even during the best of times, no one expected the difficulties brought about this year due to the coronavirus pandemic. Though many self-storage operators are open and even thriving, they still face obstacles to success.
If you have concerns about how your operation may weather the current health and economic crisis, it’s wise to perform a SWOT (strength, weakness, opportunities and threats) analysis. Do one now, and then revisit and evaluate at least annually if not more often. This exercise can serve as a road map for future improvements and strategies.
Looking Inward: Strengths and Weaknesses
No one knows your business better than you and your team, so gather your brightest people and brainstorm about what your organization does well and not so well. Identifying and facing organizational weaknesses can be unpleasant, but if a SWOT analysis is going to be valuable, it has to be brutally honest and identify areas for enhancement.
Consider how you can improve your team, training programs, policies and procedures. Are you using technology that could create greater efficiency? Are you taking advantage of all the latest marketing channels? Are you evolving and innovating quickly enough to stay in front of the competition?
Focus on the following areas, and don’t be afraid to unearth hard truths about your self-storage operation. Once you know where your weaknesses lie, you can implement ways to make strategic, lasting progress.
Staff. While employees can be a company’s greatest asset, payroll is a large company expense. How you develop and motivate your team matters. Remember, not everyone is driven by money. Job satisfaction is a major factor in staff motivation and loyalty, while dissatisfaction negatively affects business performance. Ask the following questions:
- Do employees feel valued and empowered? Are their ideas and input considered?
- Do you have high employee turnover? If so, you need to know why.
- How diverse is your staff? Diverse teams often are the most innovative.
Finances. Do you have enough capital in reserve? Financial experts recommend that individuals have at least three months of expenses in savings. Similarly, businesses should have reserves in case of an unexpected loss. COVID-19 aside, self-storage operators are susceptible to many emergencies, including natural disasters. How well would you cope if you suddenly lost a large portion of your buildings or workforce? Having several months of cash flow at the ready can make the difference between staying afloat or going out of business.
Customers. Consider conducting a customer-satisfaction survey to understand how your tenants see you. Look at your churn rate. Acquiring new tenants can be costly, so it’s good to know why some people leave for a competitor while others are happy to stay renting with you.
Competition. A SWOT analysis is your opportunity to close competitive gaps, so look at what your competitors are doing that you aren’t doing or could be doing better. What weaknesses and strengths do they perceive in your business? What enviable resources do you have? What do your people bring to the table? Examine any products or services that are valuable points of differentiation. What is your operation doing to lead the market?
Looking Outward: Opportunities and Threats
While assessing your business strengths and weaknesses is about looking inward, identifying opportunities and threats is often about external factors.
Have you ever looked at your competition and thought, “Hey, why didn’t we do that?” If so, you recognized a missed opportunity. New opportunities exist everywhere, but you have to uncover them. You need to constantly examine new market trends or developments that can save time and money. Even small opportunities, leveraged at scale, can increase your advantage and create revenue that can be put back into the business.
Pay attention to population profiles, lifestyles trends and societal patterns. Companies that are able to quickly pivot and adapt to changing economic environments are most likely to succeed. Self-storage has served as a good example of this during COVID-19, with operators offering touchless reservations and move-ins. Contact-free services have allowed facilities to maintain safe for customers and staff. As another example, many restaurants have survived by offering meal kits of their most popular menu items that customers can prepare at home. The ability to innovate and implement changes increases survival rate.
The other side to that coin is identifying threats that could negatively impact your business. How would your company be impacted if there were disruptions to the supply chain or shortages in raw materials? What about market shifts including impact from local and state regulations? Some changes, such as moratoriums on development or new zoning requirements, can create challenges. It’s imperative to be on alert, to anticipate potential threats and formulate plans of action.
While technology can create opportunities, it can also be a threat. Consider the impact streaming services have had on the movie-rental business. Are there technologies or new types of service providers coming online that could potentially disrupt self-storage? Just as you should take advantage of innovations that could benefit your business, pay attention to evolving trends that could pose new challenges.
Threats can also disrupt the workforce. Prior to the pandemic, unemployment was at an all-time low. That was quickly flipped on its head, causing many businesses to face hiring and retention issues. Many states have also recently enacted increases in minimum wage. Higher wages can threaten the bottom line and negatively impact operation if you have cash-flow or bad-debt issues.
Though the coronavirus pandemic is a once in a lifetime event (we hope), let it serve as an example of an existential threat. Take the time to do a thorough SWOT analysis and act upon the findings. Doing so will help your self-storage operation prepare for new challenges and adapt to an ever-changing world.
Lee Preston is the director of marketing and promotion for EZstorit.com, an online directory that helps consumers find and choose self-storage facilities in North America. It offers flat-rate pricing for self-storage owners who wish to have their facilities listed. When Lee’s not working with partner operators, she’s writing about topics that affect our daily lives.