One reason to love self-storage is because there are tons of ways to make money in this business besides renting units. Facility operators can generate profit through myriad ancillary products and services like tenant insurance, packing and moving supplies, meeting-space rentals, wine storage, document storage—the list is almost endless.
Truck rentals are among the most lucrative add-ons to self-storage. Let’s examine how to get the most out of this income-generator and some common mistakes to avoid.
Why It Makes Sense
Many self-storage customers are, in fact, moving, so being able to rent a truck or trailer at their final destination is a big benefit. If there are two storage facilities within a one-mile radius, and all things are equal except you’re the one that offers truck rentals, you can bet you’ll probably get the business.
Next, truck rentals generate lots of foot traffic. Even if customers don’t immediately need self-storage, they’ll visit your site for a truck. Once they’re familiar with your facility and have a good experience with your staff, you’ll be top of mind once they need to rent a unit or a friend is looking for a storage recommendation.
Finally, most truck vendors make it very easy to add rentals to your facility. They typically have their own software or the ability to integrate with common self-storage management systems, and some are very well-known brand names. The brand aspect can be important, and many have a wealth of preprinted marketing materials they can provide to support your promotional efforts.
Leverage the Program
It’s important to understand how a truck-rental program works and how to maximize it. To limit your liability, you’ll need to comply with all your provider’s rules and regulations. While the vendor is typically responsible for maintaining the equipment, you’ll need to ensure any defects are reported immediately and no damaged vehicles are available for rent.
To really leverage your program, you want to offer a variety of truck and trailer sizes; though the amount of equipment you’ll be able to rent is obviously limited to your available space. Round out your program by offering a good mix of retail-related items like hitches, adapters, balls, dollies and tie-downs. This helps ensure customers won’t have to run to the local hardware store to accomplish the task at hand.
Though vendors make it easy to add a truck-rental program to your self-storage business, you still need to manage it. One of the biggest mistakes operators make is failing to understand the staff requirements. If you have a large facility and offer several trucks, your office could get very busy during peak times. It’s important to ensure storage tenants aren’t neglected while you’re providing an excellent experience to truck-rental customers. Consider starting slow with just a couple of trucks, then scale up as you better understand the impact on operations.
Another costly mistake is trying to pack too many vehicles into a small space. Moving trucks and trailers are large, and most customers don’t have a lot of experience in driving them. If you have tight turns and low overhangs, drivers will inevitably cause damage to your facility and the equipment itself.
Finally, when setting up your program, don’t hesitate to negotiate the percentage you receive through your truck supplier’s revenue-share agreement. If you have a good location and a large facility with plenty of room for equipment, your provider has as much to gain as you do. Don’t sell yourself short.
Truck rentals are one of the best profit centers you can offer in a self-storage environment. Not only is it complementary to your primary business, it increases awareness about your offerings and can help with customer conversions.
If you think a truck-rental program is a good fit for your operation, lay out a viable plan for implementation, including allotted space and impact on staff. Once you’ve negotiated your agreement, you’ll have a fantastic revenue-generator!
Scott Lewis is the co-founder and CEO of Spartan Investment Group LLC (SIG), where he’s responsible for developing business strategies and overseeing all operations and business activities. Scott has led several successful real estate projects ranging from single-family flips to ground-up self-storage developments. He’s also a major in the U.S. Army Reserves and a veteran of Operation Iraqi Freedom. SIG has completed $9 million in development projects, with $70 million underway. For more information, call 866.375.4438; email [email protected]; visit www.spartan-investors.com.