If it feels like the self-storage industry is suddenly accelerating around every bend, you’re probably not alone. For months on end, operators have been bombarded with talk about record demand, heightened investor interest and increased adoption of new technologies and remote-management capabilities. While the business is most definitely in the midst of a large-scale evolution, being fit for survival isn’t necessarily about beating everyone to the punch.
While the inference of everything that’s occurring around the industry is that there’s never been a better time for independent operators to cash in or grow exponentially, the potential pitfall for some is to give in to the pressure to accelerate before its prudent or practical.
Decisions on what to adopt and when are largely predicated by what your end game is. If you’re motivated to amass a portfolio of several properties in a metropolitan area or across multiple states to attract institutional buyers, your impetus for change may be different than someone who’s comfortable with a niche portfolio of one to three sites that they plan to pass along to loved ones.
I’ve often admired the steadfastness of single-site owners who are determined to run the best business possible without the added pressure of trying to become a conglomerate. There is often beauty and serenity in simplicity, and there’s nothing wrong with carving out a nice living for yourself before selling for retirement or bequeathing to beneficiaries. One of the self-storage industry’s greatest strengths is there’s room for big players as well as small, family businesses.
The challenge for small operators is maintaining market relevance. Standing pat in the midst of wide industry change does a disservice to your business and customers, while also devaluing your company. Staying nimble and dedicated to offering the best customer experience possible, allows you to see the playing field clearly, keep pace and leverage specific tools and strategies to enhance the operation when they fit business needs, not before (or when it’s too late).
If you’re keeping your eyes wide open on the competition and paying close attention to customer preferences, you’re likely well-positioned to transition to some mix of smart locks, unit monitoring, remote access/management and new web strategies on your clock to either stay current in your market or take a leading role.
In turn, that allows you to charge premiums for certain spaces and services, as well as apply cutting-edge revenue-management techniques to improve facility performance. As rates and occupancy begin to slide back toward pre-pandemic “normal,” reducing operating expenses and improving income from existing clientele gains greater importance.
In my mind, an incremental, managed plan to invest in and push forward the business is better than being forced to make sudden pivots to fill a widening gap against more forward-thinking competitors. In other words, it’s better to adopt new tools and strategies when it’s time, not when there’s little other choice or recourse.
What’s key about all of the operational enhancements that are now available is that they also make portfolio growth easier, while satisfying customer wants. Remote-management tools have allowed small operators to expand with satellite locations using the same amount of management staff and without accruing a lot of added infrastructure or burden on resources.
That’s a game-changer in terms of doing more with less. All of the traditional due-diligence principles still apply, of course, but given favorable market conditions, portfolio growth with favorable margins is available to those who wish to take advantage.
As the dust settles from the flurry of activity through the last three years, those who have been patiently maintaining key systems and upgrading services to meet market needs should be in excellent shape to make beneficial investments back into the business and stand to be rewarded.