On a recent visit to a self-storage facility, I encountered a manager who left me shaking my head. As I approached the office and looked through the window, I could see a pair of boots on the front desk, attached to some ragged old jeans. I thought, “Hmmm ... The maintenance guy must be taking a break in the office.”
As I entered the office, I noticed two, ah, gentlemen behind the counter. One was watching TV, and the other appeared to be doing bookwork. With no phones ringing, a TV blaring, and no other customers around, the “boots on the counter” guy asked me if I could hang on a minute.
Perhaps the president was buying another industry or something, and I just didn’t get the memo. After a minute or so, and some light conversation, I learned the guy doing bookwork was the owner, and “boots” was his son, the manager. Are you serious?
It’s amazing the number of owners out there who operate with little more sophistication than a lemonade stand. Complacent managers and distracted owners translate to weakening bottom lines. Can you make money that way?
A lot of self-storage owners have for many years. Keep expenses low and hope for the best. But that’s not good business, and as we all know from recent experience, the best is not bankable. If you want your business to be profitable in the long term, you’d better get serious now. Otherwise, you’ll lose.
Developers, owners and managers should look for better efficiencies, tactical marketing initiatives, and ways to sharpen their competitive edge, no matter what stage of the self-storage life cycle they’re in—development, startup, leaseup, stabilization or sale. The key is to get serious about your business. This article targets the self-storage owner, who always holds the keys to success or failure.
Exercise and Strengthen
No matter how good you’re doing, you can get better. And when you’re struggling, there are probably opportunities being overlooked. The whole point of opening our doors every day is to make a profit, not just pay the bills. Focus on being profitable because it’s good for you and good for our industry as a whole.
First, take a hard look at your manager. Don’t be cynical, but as the lifeblood of your operation, your managers deserve a lot of attention. Start this process with a manager’s self-evaluation. The best way to improve the manager’s performance is to engage involvement.
Provide your manager with some guidelines. Here’s the fine line: Be broad enough to allow honest input, and specific enough to attract valuable feedback. Encourage managers to be very specific with this exercise, focusing on internal strengths and weaknesses as well as market or economic threats and opportunities. If this type of formal self-evaluation is new to your employees, it can be a good idea to give them a sample of a completed evaluation, such as this one:
- Write your ideal job description, custom-tailored to your strengths and weaknesses. Be specific as to duties and time requirements.
- List and describe specific details of our performance over the last year. What could you have done better?
- What is the facility’s biggest weakness? What’s your biggest weakness?
- Provide an analysis of the local self-storage market. Who is the best competitor?
- What opportunities do we need to capitalize on this year? Are we ready?
- What is the biggest threat the facility faces in the marketplace?
Be creative in guiding the process. Let managers know the objective is to strengthen the business, and their honest―blunt, if necessary―input is important to the process. Ultimately, you want to encourage your staff to review details of their own performance, and look ahead in offering specific goals and objectives for the year. This also allows you to set a tone of expectation for the future.
By starting with the self-evaluation, you should gain insight to their perception (accurate or not) of the market and their role in your business. Following a careful review of what they present, you can follow up with key objectives for their position.
For example, if performance weakened in 2009, begin reworking goals for 2010, and invite your team to submit ideas for reaching them. When goals and objectives are developed with their input, it’s easier to get their “buy in” on specific new initiatives and activities.
Setting the Tone
As the owner, you must develop the type of dynamic that keeps the business strong. If you take details seriously, so will your employees. If you accept a dirty office, so will they. If you give the manager incentive to sell, he’s more likely to think about ways to rent more units, sell more retail or add more to the bottom line. When you create an environment that’s attentive to customer needs and profitability, your team will follow.
After the economy jumped off a cliff in late 2008, everyone talked a lot about efficiencies and cost-saving approaches to operation. But let’s be careful, though, of falling into a single-minded approach in cutting costs. As the owner, you can control expenses through a strict budget. But the quality of your sales and customer-service force is where income is created or lost, and that tone is set by the owner.
In many ways, 2009 forced us all to take a hard look at where we spend money. Perhaps now, in a leaner operational mode, we can focus on better sales, better collections and a stronger bottom line. Get serious, keep your boots off the counter, and take the first steps to strengthening your business in 2010.
Benjamin K. Burkhart is owner of BKB Properties and StorageStudy.com, a full-service self-storage consulting and resources firm. He works with developers around the country in assessing site feasibility, market strength, marketing strategies, financial analysis, profit enhancement, site design and deal structure. To reach him, call 804.598.8742; e-mail [email protected]; visit www.storagestudy.com.