While some property expenses are out of a self-storage manager’s control, there are many items you can address to make your facility more profitable. This article covers some simple steps for cutting costs. Let’s take a look at a few money-saving strategies you can use to improve the business you operate.
A self-storage facility has a number of ongoing service expenses. Reviewing these can sometimes become rote, which creates missed opportunities to find savings. Never let your expense sheet become routine!
When was the last time you reviewed statements for your Internet service, phone and utilities? Are there any charges that shouldn’t be there? Can you negotiate better rates? Phone and Internet companies often provide bundle packages that might save your property a few hundred dollars annually. Can you consolidate costs by partnering with another facility in your company or even a friendly competitor for volume discounts on often-purchased items?
If you’ve always purchased items or services from the same vendor, it may be time to look around for a better deal. Re-bid your lawn care, security monitoring and pest control to compare pricing. Look for new sources of consumables such as paper, pencils, pens, ink and toner. A cost savings of $2 to $5 per ink cartridge adds up quickly.
Speaking of consumables, when was the last time you checked pricing for restroom paper products? If you’re picking up supplies at a place like Target or the grocery store, you’re spending way too much. Check out bulk discounts through warehouse stores such as Costco and Sam’s Club. There’s a reason hospitals use cases of Georgia-Pacific toilet paper—it’s decent quality and cost-effective.
For most operators, facility maintenance is a high-ticket line item on their budget. However, there are places where you can save money. Here are simple ways to slash a few bucks here and there:
- Bollards and curbs: Can you wield a paintbrush? Rather than hire someone to repaint your curbs and bollards, do it yourself. A fresh coat of paint adds appeal, and you’ll save a few dollars by doing this in-house.
- Gate sensors: You know those sensor loops in your asphalt for your gate controllers? There’s a quick-seal product you can buy at your local hardware store to cover them when the filler starts to wear down. It takes less than 30 minutes per loop to clean (we use a blower) and refill the crevice.
- Unit doors: Ask your door supplier for extra rubber strips for your roll-up doors instead of calling a repair service. While you’re at it, ask about proper procedures for making your doors last. Replacing a single roll-up door can run upward of $600, including shipping and installation charges.
- Tools and supplies: Taking proper care of your tools and supplies can save money in the long run, as they won’t need to be replaced as often. When you’re finished using a tool or machine, clean it and put it away properly. Always keep these items under lock and key to avoid theft.
- Cleaning supplies: Purchase a commercial mop bucket with a squeeze mechanism and good quality mop. This can help you save money in the long term. Ours is still being used 18 years later! This product is a great value compared to the cheap models from the local hardware store that will need to be replaced often.
Another big expense for self-storage facilities is energy consumption. There are several ways you can reduce your utility bills. First, keep your heating and cooling equipment in good shape with preventive maintenance. If it isn’t working properly, address it quickly. Also, make sure your thermostats are locked so tenants can’t adjust the temperature.
Keeping your facility well-lit is vital for tenant safety but can also be costly; however, there are savings opportunities here as well. We lowered our electric bill more than 40 percent by installing new exterior lighting. It came with rebates and incentives from various sources, including our utility company. The breakeven point was one year on the cost of the installation. At the same time, we replaced all our incandescent bulbs in the storage units with compact fluorescent lamps. In our case, the monthly decrease in expenses averaged $800 to $1,000, depending on the season. That’s an annual savings of more than $10,000.
While reviewing your energy costs, don’t overlook the potential savings you can gain by installing dimmers as well as movement and occupancy sensors for lighting when not in use. Spending a small amount on timers or motion detectors for light switches in restrooms and common areas can save big over time.
Credit Card Fees
Credit card processing can be pricey, so it’s critical to regularly visit this expense. When was the last time you renegotiated your charges for processing payments?
Researching options led us to a new vendor. Our merchant charges were off the charts. We’d been with the same bank, which changed hands several times, and the charges kept creeping up little by little. To find a better deal, I began researching choices and found a new merchant with better rates. We were able to save more than $1,000 per month on merchant-processing charges. It wasn’t an easy task to make the switch, but it was well worth the cost savings. An added bonus in this endeavor was a happy boss. Who doesn’t want one of those?
Also, have you asked about a lower rate on your company’s credit card? A half percent here or there can add up to hundreds if not thousands of dollars over the course of a single year, depending on your charging habits.
Are you taking advantage of any available member savings? Many card issuers offer travel bonuses or gift cards for points earned. You could use your credit card for regular facility purchases, and then trade in the points for office-supply gift cards and save even more on the items you purchase anyway.
I’d also advise you to set up alerts on payments and charges so you can track what’s happening at any given moment. Having online access to your charge accounts is only good if you remember to check them. An alert reminds you to watch where your money is going on a timely schedule.
Other Ways to Save
Take advantage of rebates and look for tax incentives for any planned improvements on your property. There are many options available; it just takes some time and research to find them. For example, we found a huge grant for solar installation through the U.S. Department of Agriculture that our potential solar provider didn’t even know about. Learn to use Google—it’s your friend in the research department.
Need some temporary help for a project? Why not hire an intern? Yes, there are folks out there who are interested in how self-storage operates. You might find a college student interested in business who would be perfect for running some statistical reports. Or if it’s a physical project, such as painting or lawn care, look for a group of students seeking school credit.
When it comes to saving money, it’s critical to review each expense. Is there a better, cheaper or more efficient way to operate your facility? If you break down all of your regular expenses, you’ll see where the majority of the money goes. This will give you a better picture of your overall outlay and aid in your quest to save.
Gina Six Kudo is general manager of Cochrane Road Self Storage in Morgan Hill, Calif. She has more than 16 years of self-storage experience, and a strong customer-service and sales background. She’s also a moderator on Self-Storage Talk, the industry's largest online community. For more information, visit www.cochranestorage.com.