Sponsored By

Master These 3 Business Areas to Ensure Long-Term Self-Storage Success

Every U.S. business startup has a 50 percent chance of survival in the first five years, including self-storage. Guest blogger Mark Helm, a commercial real estate agent and self-storage investor, says the key to ensuring long-term success is creating strategic and efficient systems in operations, sales and finance.

Guest

April 7, 2016

4 Min Read
Master These 3 Business Areas to Ensure Long-Term Self-Storage Success

By Mark Helm

If you start a new business in the United States, including self-storage, you’ve got about a 50 percent chance of surviving in the first five years. I don’t know about you, but I don’t like those odds. What I see missing from most business owners, including those entering the self-storage industry, is a basic “business” mindset in running their operation.

Most owners have a basic skill with which they’re comfortable. In self-storage, this is often construction. Owners are very comfortable building, repairing or tinkering with a facility and keeping it in good shape. Some owners have a sales background and are good at marketing or setting up sales systems for managers to follow. Sometimes, but rarely, new owners coming into the industry have a financial background. They love running the numbers, analyzing sales per move-in, rentals-per-call ratios, and so on.

The problem is these owners tend to focus on the area where they’re most proficient or comfortable. They may or may not hire or contract people to address other areas. If they do hire someone to handle these areas of deficiency, a common pitfall is to pretend these areas are now “handled,” and they wind up focusing back on their comfort zone.

Then what happens? The manager quits. The bookkeeper is caught embezzling. Customers start complaining about poor service or poor upkeep with the facility. Once a crisis occurs, owners need to jump back into an area they thought was handled, and they’re left wondering, “How did I ever get into this mess?”

The self-storage business is like any other, only better. It has the same three components that UPS, Ford Motor Co., McDonald’s, or even the corner coffee shop has, and that’s operations, sales and financial reporting.

Before you close on your first facility, or even if you own three and are pulling you hair out, take a moment to think about how these three aspects of your business are covered. Chances are, you’re only good at one of them. Ensuring that operations, sales and finances are in order will lead to long-term success.

Operations

You have to have procedures in place to open the facility, run the facility and close the facility every day. You have to be able to handle past-due accounts, execute lien auctions, etc. Your self-storage business needs to be system-oriented, not people-oriented. In other words, you want a system in which you can drop anyone in with some basic skills and have a procedure for them to follow. Care for your people, treat them consistently and well, but have a system for them to implement. They, your customers and your business will appreciate it.

Think about how McDonald’s runs its business. The systems the fast-food giant has in place are such that a kid who can’t even make his bed can run a restaurant and, in less than a minute, create a consistent meal for customer after customer. It’s the system that creates the framework for success, not the reliance on a specific person.

Sales

Next, make sure you have a performance marketing system in place to help lead to sales. Today, this includes a lot of online marketing. Self-storage owners can no longer afford to say, “I don’t get this.” It’s your business, and if you don’t get it, your competition will and, in turn, endanger your relevance. Study, change, experiment and use the best professionals you can find to implement your marketing plan. Track everything, and if what you’re doing isn’t producing results, change and go in another direction.

Finances

Finally, track everything financially. Tracking where your new customers come from, for example, will tell you where to spend your marketing dollars. Know what the average value of a customer is, understand your seasonal income trends, and so on. I know the value of every facility we’re involved with—almost to the dollar—on any given day. I know how far ahead of budget or projections I am. Know your numbers, and if you’re not good with numbers, hire or outsource to someone who is and who understands self-storage.

If you’re going to invest your money and go on the line for millions of dollars, you owe it to yourself, your employees and your customers to run the business with this three-pronged, system-based approach. That is where the fun is—creating a great business from mere concrete and steel.

Mark Helm is a commercial real estate agent and self-storage investor. He began working with real estate investment trusts in the mid-1990s to locate and purchase self-storage properties, before striking out on his own. He is the author of “Creating Wealth Through Self-Storage,” and creator of “Storage World Analyzer,” a cloud-based, financial-analysis software tool designed to help self-storage operators and investors evaluate potential real estate acquisitions or development projects.

About the Author(s)

Subscribe to Our Weekly Newsletter
ISS is the most comprehensive source for self-storage news, feature stories, videos and more.

You May Also Like