To survive the worst recession in 70 years, small businesses must find ways to run more efficiently than ever. In self-storage, there’s an exciting development that has the potential to generate a tenfold cost savings in a business’ office and inventory overhead. My partners and I discovered it a bit by chance, while getting a push from tough economic times.
Just East of Highway 97 on Reed Market Road in Bend, Ore., is a new self-storage facility with oversized units for warehousing as well as the storage of boats, RVs and other vehicles. Dean Cameron, Gene Hoskin, Ravi Vedanayagam and I, all Oregon residents, developed Reed Market Storage during the aftermath of 9/11, when RV demand was strong and owners were looking for secure off-street storage.
Reed Market Storage is quite different from the traditional self-storage facility. The units vary in size from 15-by-30 to 15-by-60 feet, with a 14-foot ceiling height. They’re all situated along one wide, straight-access drive, so a vehicle as large as a semi-truck can comfortably pull up to the front of a unit for loading and unloading. Our customers appreciate the extra space, inside their individual units and throughout the facility.
Given their super size, all unit doors have automatic openers, allowing for easy entry and exit. State-of-the-art security features include digital video surveillance, giving customers peace of mind. Every unit is insulated, and there are options for heat and electricity throughout.
Our facility was built with the intent of offering the RV owner convenience and security at an affordable price. Extra-large 15-by-50 units are available at less than $300 a month, based on the current move-in special.
We love our RV and boat customers. What we didn’t expect was the wide variety of new customers our business now supports. In fact, many of our tenants are using their units as individual business warehouses. The size, accessibility and convenience of the facility have filled a need we even didn’t know the community desired.
When we look at the harsh realities of small-business operation and inventory costs in the current economy, it makes a lot of sense. In the recent past, a small-business owner might have leased flex-space, which included a reception and office area, bathroom and adjoining storage area. This type of commercial property might lease for $1,500 to $2,500 a month, depending on location, size and other factors. The storage area was used for inventory and miscellaneous equipment.
Today, the new model for a small business is a home office and a storage unit for equipment and inventory, drastically lowering overhead. A business owner can scale back rental costs while maintaining a healthy inventory. Anyone who has worked out of a home office understands the convenience and efficiency. With an extra-large self-storage unit, inventory storage problems are solved with compelling savings.
Reed Market Storage’s occupancy has been close to full based on a wide variety of small-business applications. With our customers finding such a tremendous savings, we have to wonder: Will a product of today’s recession lead to even more home-office plus self-storage warehousing in the future? It certainly looks very attractive today.
Michael Gutmann is the managing director for VGX Capital LLC, a private investment company. A small-business owner and operator, he co-developed and operates Reed Market Storage in Bend, Ore. He was a software engineer and manager for Intel Corp. for 20 years. To reach him, e-mail [email protected].