For several years, self-storage owners and operators have asked the questions: How can I simplify records storage? and Can I do it myself without a lot of front-end cost? Today, because of technology and technique innovations, it is not only possible but quite practical. This article discusses these innovations and the implementation process of a records-storage product that diversifies your business and improves square-foot yield.
First lets take a moment to recount the benefits of record storage within self-storage:
- Improved yield by renting cubic rather than square feet
- Increased contract term from 30 days to essentially permanent
- Long-term revenue growth that always increases each month
- Compound storage growth rate of between 7 percent and 25 percent annually from existing accounts
- Product diversification and differentiation from competition
- An opportune cross-sell item
- A catalyst for additional box sales
- A platform to launch a full-service records-management business
The first of our questions is, How do I make this simple? We have a tendency, in our fast-paced world, to overly complicate things. This is easily done with computers and technology that never seem to slow down the pace of our life. So, in this instance, what we need to do is get back to the basics. Records storage at its base is quite simpleit is inventory control.
Businesses all need to keep their records, whether they like it or not. No one likes to keep these things, but they must; and they generally do not know what to keep and what to throw out. You may have a simple, inexpensive and easy solution for them right in the palm of your hand.
Lets define a simple records-storage system. It is made up of seven components:
- Box storageStorage of boxes can be facilitated by creating only three box-size categories. Box size No. 1 is anything up to and including 1.2 cubic feet; box size No. 2 is any box that measures greater than 1.2 and up to 2 cubic feet; box size No. 3 is any box that measures between 2 and 3 cubic feet. Charges are assessed at the rate based on the box size.
- Box retrievalThe issue of inventory control requires that someone carefully manage the account. It necessitates a simple check-in and check-out system using barcodes. You create a work order, pull the box, scan the barcode, and move the box to a shipping area.
- Box deliveryOutsourcing this step to an independent courier is a key to simplicity. Of course, selecting the courier, training him on the process, and managing the process is very important.
- Box re-filingRe-filing boxes into storage is done as a batch process. As boxes come into inventory, you stage and barcode scan them into a temporary receiving area. They are returned to shelf storage only when you have the time. Batching the work process makes labor cost inexpensive and increases work-unit profitability.
- Box indexingAlthough more indexing is always best, many records centers require a client index the box so they maintain only a box number as a reference. Box numbers can be the barcode number, which is scanned by a reader, and no keying is required.
- Creating client reportsFrom time to time, clients require reports. The inventory-control system can easily generate them. This service can be quite profitable.
- BillingMonthly billing is done in advance for storage and in arrears for services. The major records-management software products all have a billing module with exports to standard accounting packages such as QuickBooks.
Do It Yourself
Our second question is, Can I do it myself without a lot of front-end cost? Of course, there will be some cost involved with this business decision. What we want to achieve is low front-end cost and 90 days to profitability. Lets look at the cost components and see how we can recover them quickly. They include software, racking, setup process tools, training and support.
- SoftwareDo not think you can store records without software. That is a certain invitation for failure. Software is available in a low entry-cost, small-business version.
- RackingThe cost of racking in self-storage generally equals about four to six months of records-storage revenue. It is purchased only as you need it, one storage unit at a time.
- Set-up process toolsThese are available from vendors and include business processes, strict control and management oversight.
- TrainingThis is essential, but it must be repeatable so that, as personnel changes, there are no glitches in the turnover.
- SupportTo ensure success, you will need ongoing support. It is available on a contract or as-needed basis from several industry sources.
The answer to both questions we posed in this article is yes. The implementation of a records-storage business within the walls of an existing self-storage facility can be a painless process that takes less than 90 days.
Regular columnist Cary McGovern, CRM, is the principal of FileMan Records Management, which offers full-service records-management assistance for commercial records storage startups, marketing assistance, and sales training in commercial records-management operations. For assistance in feasibility determination, operational implementation or marketing support, call 877.FILEMAN; e-mail [email protected]; www.fileman.com.