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5 Types of Crises Self-Storage Operators Face and How to Prepare for Them

While you may hope a catastrophe never strikes at your self-storage facility, you should be prepared for one. Having a disaster plan is key to preventing loss and resuming operation quickly. Read about the five types of crises you’re likely to face and how to prepare for them.

7 Min Read
5 Types of Crises Self-Storage Operators Face and How to Prepare for Them

A sprinkler head is broken by a careless self-storage tenant and floods your building. A virus shuts down your computer network. A fire breaks out in one of your units. Someone falls and injures themselves on your property. The electrical grid goes down for several days, leaving you without power. An employee is caught stealing.

You might think, “It won’t happen to me. It can’t happen to my self-storage business.” Who knows, you might get lucky. Then again, these things happen in the industry all the time, and the facility operator almost never sees it coming.

Crises happen—to anyone. The above incidents strike self-storage operations of all sizes, so you must have a crisis-management plan in place. Preparing requires you to think through possible scenarios, then build strategies for responding to them. With proactive mitigation and a guide in hand, you’ll be back in business sooner.

Even if you’re hit with a disaster for which you haven’t planned, having a formal protocol in place will help you and your team react faster and more appropriately. Following are five types of crises you’re likely to face in self-storage and some guidance to help you prevail.

What Is Crisis Management?

Put simply, crisis management is a series of plans and processes that empower a business to recognize and mitigate potential harm caused by a disastrous incident and, most importantly, to learn from the experience. Job No. 1 is to get your business back to normal (or better) as quickly as possible. Job No. 2 is to analyze the event and use the information collected to improve procedures. This approach will help your self-storage operation evolve and be better prepared for the next emergency.

Five Types of Crises

Over the past decade, I’ve worked at all levels of the industry. Just when I think I’ve seen it all and am ready for anything, something unexpected happens. The fact is, there are five types of crises for which every self-storage business should prepare, whether you operate one property or many. They are:

  • Building failure: Power outage, fire, water

  • Natural disaster: Thunderstorm, lightning strike, tornado, flood, hurricane, earthquake, wildfire, etc.

  • Human misconduct or accident: Criminal activity, injury or death

  • Financial negligence: Employee theft, money mismanagement

  • Technology failure: Cyberattack, virus, hardware or software failure

As a self-storage operator, there are many ways you can help avert or mitigate the effects of the above list. Let’s explore what they are.

Building Failure

Power outage. Make sure your self-storage facility has a battery backup to keep computer systems and security equipment working. This can also prevent someone from being locked inside the facility. Randomly check exit-sign lights during monthly site audits to ensure they’re operational.

Fire. Routinely check in with your fire-alarm monitoring company. It should contact you immediately if your system devices ever stop communicating. I recommend using facility fire panels with cell service built in instead of a traditional phone-line hookup.

Fire extinguishers should be checked and tagged annually by a vendor. Also, make sure the fire doors are closed at all times. Tenants tend to prop them open, but they’re designed to contain a fire within a section of the building. If they’re left open, a blaze can quickly spread. Upgrade facility wall partitions from wood to metal.

In addition, remove any power outlets from your storage units. Some older buildings have light and plug outlets inside the spaces. Tenants can overload them and cause fires.

Water. Make sure sprinkler heads aren’t where tenants can break them. One New Year's Eve, a truck was exiting our drive-thru when it hit a head. Water poured into the load bay, got under our sliding-glass doors, and flooded the elevator shaft and most of the first floor. It wasn’t fun. I was at our facility all night and into the morning dealing with water mitigation, a disaster-restoration company, the fire department and upset tenants.

Natural Disasters

If you’re in an area prone to heavy thunderstorms and flash floods, install lightning rods and ground wires to conduct lightning into the ground and away from structures, preventing fires or electrocution. Regularly check your catch basins to ensure they aren’t clogged. If they are, clean them immediately to avoid rainwater spilling into your units. Also, install heavy-duty door thresholds on all drive-up doors. They help slow down water seepage. French drains in your drive aisles will also ease flooding.

Tornadoes, hurricanes and earthquakes can strike very quickly, so it’s critically important to plan ahead. Make sure you:

  • Identify onsite locations that are safe places to shelter.

  • Know who’s on the property and where at all times.

  • Board up the windows if there’s time.

  • Notify tenants that facility access may be restricted.

If there’s damage to your self-storage facility:

  • Document it with written statements and as many photographs as possible, possibly even video.

  • Execute your crisis-communication plan. Tenants will want to know what’s happening, and the media may want to report on the situation.

  • Keep tenants informed about the status of their stored belongings, particularly the time frame for accessing it and any procedures they must follow.

  • Have a structural engineer deem your facility safe before you let anyone enter. You may have to fix things first.

Human Misconduct or Accident

Most self-storage leases address an operator’s rights in cases of suspected criminal activity, allowing you to enter units for emergency purposes. Double-check your rental agreement to confirm this is clearly stated. If you suspect wrongdoing, it’s best to call the local authorities.

Unfortunately, self-storage operators sometimes have to deal with tenant violence or suicide. Bodies have been found inside units or elsewhere on the property. It may not even be the actual renter but someone they invited to the facility, or an unauthorized person who entered without anyone’s knowledge. Conduct daily walk-throughs to inspect units and keep an eye on activity. Immediately contact the local authorities if a tenant or someone else is found injured or deceased.

Financial Negligence

Employee theft is an unfortunate reality of doing business, so it’s important to be vigilant. For your frontline self-storage staff, create financial controls to check and account for the accuracy of daily deposits. A team member who isn’t involved in the transaction needs to confirm that the daily deposit slip matches the bank receipt and the amount stated in your summary report from your facility-management software.

Also, create a cap on how much property managers can waive or credit when it comes to late fees. Usually, this can be set up in your software.

Finally, implement controls on spending approval limits for supervisors. For example, district managers can approve expenditures up to $1,000, vice presidents up to $3,000 and chief financial officers up to $5,000.

Technology Failure

It’s vital to regularly review your computer hardware and software, WiFi network and other technological equipment to ensure all systems are up to date and properly protected. Not doing so can leave your self-storage business vulnerable to cyberattack and viruses. Your information-technology team or vendors should have security firewalls in place to prevent ransomware and other kinds of attacks.

Stay current on the latest trends and innovations to ensure there are no gaps in your operation. Consider early adoption of new technologies, even as a test or trial. This can help you be ready for the global calamity. For instance, when the coronavirus pandemic hit in 2020, some self-storage operators couldn’t accept online move-ins because their systems weren’t up-to-date. They didn’t plan in advance, so they scrambled for solutions when their offices closed.

After the Incident

Once a crisis is over and your self-storage business is back up and running, take a deep breath, and another. Then start a post-mortem discussion with your team, stipulating that the analysis must be non-confrontational and non-accusatory. Ask yourselves the tough questions:

  • What worked, what didn’t and why?

  • What could’ve improved our planning?

  • What processes need to be changed or enhanced?

  • Is there hardware, equipment or software we need to be better prepared?

The goal is to learn from the crisis and evolve your business, so you and your team are better equipped to respond next time. Update your procedures and share them with everyone on your team. Review the plan once a year with all employees, and add a review to the onboarding process for new hires.

A crisis will happen at your self-storage business at some point. It’s how you and your self-storage team prepare for and react to it that matters most. It’s mission-critical to have plans in place, act quickly, resolve the situation, and get your business back to generating income as soon as possible. Then take what you can from the situation and better prepare for the future.

Peter Spickenagel, CEO and president of Citizen Storage Management, is a nationally recognized expert in self-storage management. A frequent speaker at national conferences, he provides industry leaders and owners advice on key topics such as creative marketing campaigns, operational best practices, revenue management and technology trends. To reach him, call 248.600.4970 or email [email protected].

About the Author(s)

Peter Spickenagel 

CEO and President, Citizen Storage Management

Peter Spickenagel is president and CEO of Citizen Storage Management, a third-party management and acquisition company. He’s worked in the self-storage industry for more than 10 years and managed more than 90 self-storage properties nationwide comprising more than 5 million net rentable square feet in 40,000 units. He’s also president of the Michigan Self Storage Association and a licensed real estate broker in the state. To reach him, email [email protected]

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