I often hear people say that owning and operating a self-storage facility is simple, but that isn’t always the case. Like any business, self-storage has its challenges. To overcome them, it can help to look inward for answers.
I find that the facility-management software reveals valuable truths about an operation and can even supply solutions. However, the concept of “garbage in, garbage out” holds true. If you want good data from your software, you have to feed it good information. Assuming you do, let’s look at what your software and its reporting features can do for your self-storage business.
Finding the Data You Need
Your self-storage software likely generates many useful reports, but my go-to is the management summary. This is a synopsis of key business metrics such as customer inquiries, move-ins and move-outs, occupancy (unit, square footage and economic), gross potential rates, actual occupied rates, receivables, and outstanding debt. Every one of these numbers tells a story; it’s how you react to this information that can impact your facility’s financial stability.
For example, let’s look at rental rates. If I’m trying to decide whether to raise my rates and by how much, it’s important to know how many increases I’ve executed in the last year, with which customers, by how much and how they reacted. Many self-storage software programs will provide tenant-increase tracking logs to help us set street rates as well as those for existing tenants. By using this data, we can drive more facility revenue.
In fact, there’s no end to the valuable information available in your self-storage software program. The trick is in the analysis. Everyone might read and interpret the information differently. Personally, I’m a data geek. I like to export my reports to Excel, as there I can do a deeper dive.
For example, one report I like to pull is the lead funnel, which is a list of new-customer inquiries that come from walk-ins, facility calls, our call center and online. I use the functions in Excel to sort the data and discover where our business originates. How? We use tracking numbers so we know the source of each lead. A phone lead might come from the main facility number, the website or the call center. An online lead might come from a third-party aggregator or an online quote or reservation. If our staff enters this information into the software every time they get an inquiry, the lead report allows me to see where we should invest our marketing dollars.
How to Use Your Data
Having all this data about your self-storage operation is great, but it’s what you do with that’s important. At my company, we use it to understand where we have weaknesses and can bolster our training procedures. It also helps us recognize where we may be leaving money on the table and where we should be investing more.
At the end of the day, the almighty dollar is what drives self-storage success (or failure). Looking at your management reports, you can see how many of your self-storage tenants are past-due, by how long, and how much money is outstanding. A good report will show you how many collection calls were made and how many late fees were charged or waived, and in what amounts. It should also show you deleted charges or payments. Would that raise a red flag for you? It does for me!
I recently analyzed a report for a self-storage owner. He was ecstatic that his facility was fully occupied until I showed him where he was leaving about $9,000 per month in rent on the table. He had high unit occupancy but low economic occupancy. I also noticed he wasn’t charging an administrative fee or offering tenant insurance or a protection plan. Doing some quick math, I knew the business was missing an additional $12,000 in revenue per month. All this was determined by looking at a simple management summary.
Think of your self-storage software reports as a treasure map. Use them right, and they’ll lead you to greater profit! When looking at your data, take your time. It’s your business, so understand the details. Data is king, but it’s what you do with it that counts.
Jim Mooney Jr. is vice president of operations for Freedom Storage Management. He leverages his 20 years of experience to improve the performance of the company’s portfolio of Pennsylvania self-storage properties. He was formerly a vice president for Devon Self Storage, where he held various positions. He serves on the Pennsylvania Self Storage Association Board of Directors and has been a speaker at numerous industry events. To reach Jim, call 717.767.2735; email [email protected].