Records Management in Self-StorageSo misunderstood!

June 1, 2000

6 Min Read
Records Management in Self-StorageSo misunderstood!

Records Management in Self-Storage

So misunderstood!

By Cary McGovern

After almost three years of writing columns in Inside Self-Storage, I continueto get questions from owners and operators that show a degree of misunderstanding abouthow to operate records management in a self-storage operation with little or no cost oradded effort. This column focuses on clarification of those issues.

What Drives Growth in Records Management?

I have been working in the records-management industry for more than 25 years. Duringthat time, I have witnessed the growth of the industry beyond anyone's expectations. Earlyin my career I thought that government regulation drove the need, and so it does to somedegree. But the single most prevalent reason for the huge growth in records management is"fear." It is the fear of litigation, fear of not keeping the "rightstuff," fear of being blamed if something goes wrong. Fear drives recordsmanagement today.

Records Management is an Absolute for Business

Businesses have no choice--they must keep records. The problem is that it is veryconfusing, and there is no immediate payback for keeping records the right way. I havewitnessed, in literally thousands of companies, that business records always have thelowest level of importance until something goes wrong. The problem is that when somethinggoes wrong, it could cost millions of dollars, usually in litigation; and the very thingthat they try to protect is the thing that gets them. Keeping records too long is the mostcommon mistake and the rule of the court is, "If you have it, you have to provide itin legal discovery."

Growth in Records-Storage Revenue

Iron Mountain, the worlds largest commercial-records business, wrote the following in arecent press release (For the complete press release, visit

Storage revenues increased to $82 million for the third quarter of 1999 from $60million for the same period in 1998. This marks the 43rd consecutive quarter for whichIron Mountain has reported increased storage revenues. Storage revenues, which areconsidered a key performance indicator for the records and information-management servicesindustry, are largely recurring since customers typically retain their records for manyyears.

Question: Do you know where most new accounts for records storage come from? Answer:Self-storage. The industry has used self-storage as the feeder system for new business. Ihave talked to records-storage salespeople who literally follow your customers into yourfacility and sell records management to them on your premises. If you don't believe that,then I can also tell you that I personally have done it many times. There was oneself-storage facility I know well that had little or no security. I actually walkedthrough their facility, took notes on who had records there, and eventually got more than90 percent of the business from them. You, as a self-storage operator, are an easy target.

The industry estimates that approximately 5 percent to 10 percent of your self-storageunits contain business records. Since most of you have only a month-to-month lease foryour space, it is easy for your competition to get the business away from you. It is trueto say (without exception) that records management is always cheaper and better thanrecords storage. It is also true to say that records-management revenues in self-storageare three to five times the revenue of traditional self-storage. So, if you want to keepunits full, offer records management services. When you convert them from records storageto records management, you lock them in because there is a retrieval fee for each carton.You have them, as the industry says, "held hostage."

Additionally, your revenue per unit in records management compared to self-storagegrows significantly. Your customer gets better service, variable charges, doesn't have anyhassle and you get more money. What's wrong with this picture? I always say to customers,"Yes, we can fix your records system, but the only problem is, it will cost you lessto do it right." (You may want to refer to some of my past columns for additionalresources. You can access them at www.insideselfstorage.comor

How Do You Stop the Exodus to Commercial Records Centers?

Yes, you can offer records-management services without hassle. This is where themisunderstanding comes in with owners and operators who call me. As soon as they startthinking about records management, nearly everyone wants to jump in and compete with the"big boys." That may be a mistake for many of you who just want to hold on toyour business and increase revenue with little or no new cost. Of course, if you have thewhere-with-all to do traditional records management, then do it. Most of my customerssimply want to add value, increase revenue and use existing resources.

Records Management--One Unit at a Time

My proposed method of records management will do just that: Help you add value andincrease revenue at your facility while utilizing your existing resources. You alreadyhave the basis of a profitable business in 5 percent to 10 percent of your existing units.You can go into the business within two weeks if you follow my nontraditional model,accruing very little new cost and becoming profitable in less than 90 days. (See my columnin last month's issue of Inside Self-Storage.) The components of the model include:

  1. The use of existing units. It is common for my customers to choose several larger, contiguous units, usually 10-by-10 or larger, to start. Simply take the divider walls down between the units. Remember contiguous units are not required, but simply assist in the logistics.

  2. Lease racking one unit at a time only when you have the business to fill those units. Racks always maximize storage revenue. My shelving partner has designed layouts that maximize revenue in units size 10-by-10 or greater. My leasing partner can design a lease that can be added to as a facility grows.

  3. Use time-shared software. Pay only when you use it. There is no up-front cost for this software and only a one-time cost for bar-code scanning equipment that can be added to your lease agreement along with the racking. (See for more information.)

  4. Outsource the labor and delivery manpower. I recommend outsourcing all of the activities. You will make a little less in transaction revenue, but you will have no personnel overhead.

  5. Allow the customer to add new box and file data and request transactions via the Internet. Your system should allow the customer to add new boxes, request delivery and generate reports without any interaction with your manager. For this, you and the customer need only three things: Internet access through a service provider, e-mail and Microsoft Internet Explorer (all of which can be obtained for free).

  6. Automatic billing. Billing should be automatic, with transaction and storage fees computed and maintained throughout the month. At the end of each month, billing is generated for you to send to your customer.

  7. Training and education. A start-up manual, video training, audiocassettes training and a distance-learning program can be provided to you via telephone or the Internet.

You Should Be in the Records-Management Business

Regardless of your size, location or resources, if you own or operate a self-storagefacility, you should be in the records-management business. Remember, it can be simple ifyou follow the nontraditional model. If you begin with this model, it may lead you to adecision about going into the more traditional form of the business. My advice to you isto take it one step at a time.

Regularcolumnist Cary F. McGovern is a certified records manager and the principal of FileManagers Inc., a records-management consulting firm that specializes in implementationassistance and training for new, commercial records-center start-ups, as well as marketingsupport for existing records centers. For more information, contact Mr. McGovern at FileManagers Inc., P.O. Box 1178, Abita Springs, LA 70420; phone (504) 871-0092; toll-free(877) FILEMAN; fax (504) 893-1751; e-mail [email protected];

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