Those self-storage adventurers who seek to offer more than traditional products and services have long been intrigued by records management. But like any pioneering excursion, entry to the business requires preparation. You must gather your charts, understand the terrain and set a course. The unknown becomes less frightening when you have a plan and resources to forge ahead.
Every week, I receive questions from self-storage operators about offering records management as an ancillary service. This column reflects some of the more important questions that should be considered before you enter the records-storage business. The answers can assist in business-plan development and will help identify available options.
How much space do I need?
In self-storage, you already have space. You can start with just a few storage units and expand from there. Many operators start with a row of 10-by-10s, and then later add larger units or buildings designed for records storage on their properties. Start wherever you are with whatever you have.
Do I need special software?
Yes, but it comes in inexpensive, entry-level, small-business packages from all of the major vendors. Don't try to start without it.
Do I need my own delivery resources?
No, deliveries are a commodity these days. Every part of your pickup and delivery process can be outsourced for a larger profit with no capital or human-resource cost to you. You will stabilize your margin dollars by outsourcing your courier services.
Are will-call services practical for small clients?
Will-call allows clients to pick up their own records rather than use a courier. The records are pulled and are waiting for them at your front office. This is a very good option for small nearby businesses.
What about additional manpower requirements?
Except for the management role, all manpower can be outsourced. My column in the November 2004 issue ("Manpower for RS-Lite") identifies several options for skilled, flexible staff resourcesfor example, stay-at-home parents who generally have the hours of 10 a.m. to 2 p.m. available to earn some extra cash. Other resources include small moving companies and courier subcontractors.
How do I maximize my profits?
In a typical self-storage environment, the rental of cubic footage rather than square footage increases the revenue of any space. Higher ceilings are great but not even necessary; you can work with your current unit height. Services must be designed around margins and driving new customers to your core business: storage.
What services do I have to provide?
The difference between records storage and records management is storage is passive while management is active. If you want to provide storage only, all you need to provide is space. To move to records management, seven services are a must:
- Box/file storage 2. Box/file retrieval 3. Delivery (via courier, will-call, fax or scan-on-demand)
- Pick-up (via outsourced courier)
- Box/file re-filing
- Box/file indexing
- Box/file destruction (outsourced to a document-destruction company)
Can I easily convert from records storage to traditional records management?
Yes, without a missed stepif you plan and understand the opportunities from the very beginning. One minute of planning saves 10 minutes of doing.
How do I sell records-storage services?
You have an opportunity to sell with seven levels of sales, and you can choose to stop at any point. The methods are:
- Converting existing business clients
- Converting existing competitor business clients
- Over-the-counter sales
- Agent sales (paid agents of other businesses)
- Part-time sales (in-house staff)
- Full-time sales (in-house staff)
Do I need a different contract?
Yes, the standard industry contract specifies limitations of liability, terms (usually five years), evergreen renewals, price increases and many other important items. The industry considers this nearly a permanent contract.
Is there a downside to records management?
Yes. It requires hard work and attention to detail; but it isn't rocket science. It is simply inventory control. The business is straightforward, but you must be disciplined to run it successfully.
How can I get out of the business if I don't like it?
Interestingly enough, you can get out anytime you want. There is a very easy, accessible market and a formula for selling your book of business. Today, there are 10 buyers for every sellerwith no real estate transaction involved. It's simply a matter of selling the contracts. Of course, this means contracts must be in the proper form and have the right components to ensure maximum value.
Commercial records management has long been important to large businesses. Because of the need for privacy, security, confidentiality, regulatory compliance and litigation avoidance, even the smallest businesses are eager to find a better way to manage their records. You are the first place a small business goes for storage, since you are close by, easily accessible and a known commodity. As such, you may want to consider adding records storage or management to your portfolio of ancillary services.
Regular columnist Cary McGovern is the principal of FileMan Records Management, which offers full-service assistance for commercial records-storage startups and sales training in commercial records-management operations. For help with feasibility determination, operational implementation or marketing support, call 877.FILEMAN; e-mail [email protected]; www.fileman.com.