Hiring Outside Vendors to Support Your Self-Storage Business: How to Ensure a Successful RelationshipHiring Outside Vendors to Support Your Self-Storage Business: How to Ensure a Successful Relationship
You’ll occasionally need to hire outside companies to do work at your self-storage facility, maybe to make a repair or to provide ongoing services. To avoid risk and ensure a good business relationship, get multiple bids and thoroughly vet each vendor, then understand what the contract includes. The following advice will help you proceed with confidence.
July 29, 2024

At some point, every self-storage operator will need to hire an outside vendor or contractor for repairs or monthly services such as landscaping or pest control. There might also be times when significant renovations or replacements are necessary. You never want to risk these jobs by retaining an unlicensed, uninsured company, even if they are the cheapest by far. If a problem occurs, you’ll regret your choice! Instead, follow the below guidelines for choosing and vetting partners and establishing a positive work relationship that’ll benefit both companies.
The Search
When hiring a third party to handle snow removal, elevator maintenance, lawn mowing or other services or projects that are commonly needed in self-storage, get at least three estimates. Remember, cheaper isn’t always best. In fact, a low bid could mean the company missed something and their quote is incomplete. Some companies simply charge more than others, but if you’re seeing dramatic fluctuations in price from different candidates for the same work, something is wrong and you need to dig deeper. The last thing you want is to start a job and find out along the way that expensive change orders are required.
A good place to start is to reach out to your state self-storage association for referrals, or ask other facility operators in your area about the vendors and contractors they’ve used successfully. I’ve found this exercise yields a lot of information about the good, bad and the ugly.
The Evaluation
Once you have a solid list of potential providers, thoroughly vet each one. The most important thing is to verify that they are licensed and have insurance.
Verify that a vendor’s license is current and request a copy. If applicable, contact the register of contractors in your state or the Better Business Bureau to see if any complaints were filed against the license and whether those disputes were resolved. If you see multiple grievances, that’s a red flag. Avoid these companies.
In addition, ask for a certificate of insurance, coverage amounts and evidence of workers’ compensation. If the company refuses to provide this information or doesn’t have it, move on. It isn’t worth the risk. This is especially true if the company doesn’t carry workers’ comp. I’d rather pay a little more than risk being sued by a contractor who injures themselves on my self-storage site and has no insurance. If any of this is unclear, contact your insurance carrier for guidance.
Also, request references from each vendor and actually contact them. Ask about the quality of the provider’s work and product, if they showed up on time, and whether they were adept at complaint resolution. Look for potential workmanship or performance issues. If you can, see real-life examples of the company’s work, as that’s the best way to know their capabilities. For example, if you’re seeking a new landscaper, drive by other sites it services and see whether the curb appeal is up to your standards.
Once you decide to move forward with a vendor or contractor, ask it to add your self-storage company to its insurance policy as an additional insured. This guarantees that if there’s an issue and a claim is necessary, your business and site will be covered. This is especially critical for a large project like exterior or unit-door painting, asphalt, or any remodeling.
The Contract
Before signing any service agreement, read it word for word. If it contains anything you don’t understand, consult your attorney. Unscrupulous companies are notorious for roping business operators into multi-year contracts. Others layer in easy-to-miss renewal clauses.
When possible, hire local. It not only supports your community, it’s easier to build a positive business relationship. Furthermore, a smaller, private company may be more flexible in its policies than a large, national chain.
As a savvy self-storage operator keeping on top of your expenses, you want to negotiate the best possible contract terms. For example, consider cancellation. Any service contract you sign for your business should include a 30-day cancellation clause that allows you to withdraw with or without cause. You want to be able to get out of the contract for any reason, whether it’s non-performance of the vendor, dissatisfaction with their work or a better price available elsewhere. If the provider pushes back on this request or insists on a cancellation penalty, move on.
Finally, get a guarantee of workmanship and materials in the contract, so there are no misunderstandings.
Payments
There are also best practices to follow when it comes to paying any contractor that does work at your self-storage facility. I’m not talking about service providers you hire for simple tasks like mowing grass and shoveling snow. In this case, I’m referring to large projects that require a down payment.
First, never give a contractor a down payment of more than a 50% at contract signing. The balance should be paid upon completion and inspection of the work. If your job is large, there may be additional scheduled payments. Once you’ve negotiated these with your contractor, pay on time and in the agreed upon amounts. Just don’t render the final payment until the work is finished and both parties are satisfied with the outcome. In fact, some self-storage operators use project timing of completion in the contract to guarantee a finish date.
Be wary of any contractor who offer you a discount to make additional, non-stipulated payments before project completion. A contractor often has to pay for materials, labor and other supplies out of their own pocket to keep a job going while they await final payment. If they’re putting their hand out to you for money before you agreed it would be due, they’re likely trying to support someone else’s project with your money rather than their own cash flow.
Also, make sure you understand what a mechanics lien is and how it works. If you fail or refuse to pay a contractor’s final invoice, even if it’s because there’s a problem with their work and you intend to withhold funds until they fix it, they can file a document with the county recorder’s office to put a lien on your property until the debt is satisfied. In some cases, you might even have paid your contractor but they in turn failed to compensate one of their subcontractors, who can also file a lien against you.
When you make your down payment, get a partial lien release, so if things escalate, you can only be penalized on the unpaid portion of your contract and not the entire amount. Also, make sure the release is notarized and signed by an officer of the contracted company, not the receptionist. The same goes for the final payment.
Save all of your payment confirmations, including the address of the facility where the work was done, the amount paid, and a check or credit card confirmation number. Keep them somewhere safe and accessible in case the contractor files a lien and you need to prove that payment was rendered. If you’ve been withholding final payment to resolve an issue with the contractor, don’t remit payment until the lien-release document has been properly executed.
Do Your Part
Working with service vendors and contractors to support your self-storage business is a two-way street. You rightfully expect a lot from your provider, but you also need to be a good customer and work diligently to resolve any dispute before taking legal measures. Always communicate if there’s an issue and the work isn’t progressing as planned. Give the company a chance to fix things. This will go a long way toward building trust and goodwill.
Smart self-storage operators take the time to vet service providers and contractors before hiring. Never rush or be pressured into a contract. Demand the proper required credentials, verify references and work performed, and check the register of contractors for complaints. Never put down more than 50% for any project, and require lien releases. These precautions will help you avoid being taken advantage of by unscrupulous companies.
Andrew Kelly Jr. is principal of Sierra Self Storage Consulting LLC, which was founded in 2004 to help new and existing facility operators enhance their return on investment. The company offers brokerage and due-diligence services, consulting for new development, facility audits, owner and staff training, and property management. For more information, call 520.323.6169.
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