The first year of operations of your commercial records business is the most important to its ultimate success. Critical decisions will guide the business for several years to come. Design of an effective operating strategy, creation and implementation of a strategic marketing plan, and the adoption of measurable management principles are key components.
Industry observers suggest there may be a three- to five-year window of opportunity for new commercial records centers to position their businesses as market leaders and garner optimum market share. Opportunities like this do not come along often. To ensure maximum market share and high-yield records management, you must be fast afoot and savvy.
My assessment of the industry is there is still great opportunity but limited time for successful implementation. With that understanding as a backdrop, those entering the business must be diligent and single-minded. The ingredients of this focused approach must include the following components.
Effective Operating Strategy
We live in an era Peter Drucker, legendary management scientist, calls the Post-Capitalist Society. We have discovered world-class methods and practices that are tried and true, and we have proven they work if properly implemented. The question we should ask ourselves is how to use the tools and resources available to us. No longer are land, labor and capital the principle resources. As Drucker says, knowledge is the prime resource. The principle attribute of knowledge is it is infinite--unlike land, labor and capital, which are all finite.
How do we use knowledge in the development of our operating strategy? No one can be the best at everything. We have become a nation of specialists. For example, doctors find a practice area that is unique, such as pediatric ophthalmology. These are specialties within a specialization. This is the nature of the post-capital society. So, let's use it to our advantage.
If we are not the best at an activity, we should find out who is and let him handle that task. It is better and less expensive to search out those who add value and reduce cost to your company. Outsourcing and re-engineering are the mantras of our times. There are better, simpler and more effective ways to do everything. But outsourcing tasks and responsibilities are appropriate only when you can manage the outsourcer to the standards of performance you set.
Strategic Marketing Plan
Sales drive commercial records management. For decades, the industry has accepted a long sales cycle of six months or more. Why? Because "It has always been that way." It could be six months or longer if you do not control the sales cycle.
Get in control. Take charge of your marketing program. Manage your sales staff. Make it a 60-day sales cycle. The six-month sales cycle is a myth fostered by those who can't sell. The sales cycle must be managed and it must be structured. I recommend a seven-step sales cycle that ensures a 75 percent close rate at the end of step three. Don't waste your time on those who aren't buyers. A prospect is someone in a 60-day buying window, who has a need for your service and the money to pay for it. I want you to mine gold in a gold mine. Why endlessly prospect where there is no gold?
Measurable Management Principles
If you can't measure it, you can't manage it. The first principle of managing anything is understanding its nature. If you are going to be in the commercial records-management business, you should understand the business. You wouldn't consider going into the legal profession without knowledge of the law, or becoming a doctor without studying medicine. Yet I hear from folks every day they want to go into the records-management business without understanding the nature of business records. "Well, it's just storing boxes isn't it?" they ask. No, it is not!
There are three levels of understanding to consider. First, you need to understand the need of businesses to maintain appropriate business records. Second, you must understand the value of commercial records management to the marketplace. Finally, you need to understand the notion of process managing, setting standards and then benchmarking them.
In Managing in a Time of Great Change, Drucker insists we must constantly evolve and adapt to survive in today's business climate. Commercial records management, not unlike any other industry, must seek best practices, reduce operating costs, manage its assets and constantly strive for change--not for the sake of change, but to improve return on investment. Managing the bottom line is a process that includes managing people, process, technology and assets of a company.
The cornerstones of successful bottom-line improvement in a commercial records center are the principle of effective use of technology, the principle of personnel abatement, the principle of strategic outsourcing and the principle of batch processing. Last month we addressed these in detail. Developing, owning and operating a commercial records-management business requires hard work, diligence, attention to detail and a keen business focus. The rewards are great for those with the "right stuff."
Regular columnist Cary McGovern, CRM, is the principal of FileMan and FIRMS (FileMan Internet Records Management Services), which offer full-service records-management assistance for commercial records-storage start-ups in self-storage operations. For assistance in feasibility determination, operational implementation or marketing support, or for questions on the FIRMS Sales Manager, call 877.FILEMAN, e-mail [email protected]; www.fileman.com.