If you’re not keeping close track of your self-storage facility’s finances, you may be wasting thousands of dollars a year. Unnecessary spending can siphon away your profit.
“The biggest bang for your buck is to find ways to manage your property more efficiently,” said Robert Chiti, a board member of the California Self Storage Association.
Cutting back on spending doesn’t require special training—just an awareness of where your money is going each month. Here are for five tips for reducing your facility’s expenses.
1. Challenge Your Property Taxes.
Chiti said one of the most effective ways to cut expenses is to challenge your property taxes. If you think yourcounty assessor has overvalued your property, you can challenge the conclusions. Assessor’s records often contain errors. Mistakes about a property’s age, square footage or number of units can put a dent in your bank account.
“Challenge your property taxes,” Chiti said. “They are one of the highest expenses you have. It is worth trying.”
Jerry Jones, a Reno, NV-based CPA who specializes in self-storage facilities, recommends hiring a tax professional to help you mount your challenge. A number of companies nationwide specialize in handling tax protests, he said.
2. Make Insurers Compete for Your Business.
Insurance is one of the most competitive industries around. Anytime you turn on your TV, you’re likely to see a commercial urging you to switch insurance providers. If your property has seen a rise in yearly premiums, it’s time to start seeking quotes from other carriers.
Natolie Ochi, vice president of SKS Management, which runs storage facilities in California and Hawaii, said she was able to save one client $9,000 on property insurance simply by obtaining new insurance quotes.
Sometimes the cheapest policy isn’t the best policy, however. Don’t make a purchase until you understand the policy thoroughly and know that it meets all of your needs.
3. Adjust Your Business Hours.
Pay close attention to your busiest and slowest business hours, and adjust your schedule accordingly. Compare the amount of business that comes in during slow periods with the cost of keeping your doors open. If you find that Sundays typically are quiet, you may be better off limiting Sunday hours or closing entirely.
“Consider the best use of your staff,” Chiti said. “Think about hours when you don’t need a person on the property.”
It may pay to invest in an automatic kiosk that allows customers to rent units, make payments or take virtual facility tours while you are away, he said. These devices communicate with your company’s software, enabling customers to choose units from your inventory.
4. Turn Out the Lights.
Utility rates are rising around the country, forcing businesses to conserve energy or see their profits drop. Facilities with air conditioning and climate-controlled units feel the pain during summer months. One way to fight back is to review your utility bill closely each month. Place timers or sensors on your outdoor lighting to make sure it’s used no more than necessary.
Periodically check to make sure that doors are closed on climate-controlled units. Be certain that cool air is not seeping out through cracks or poorly sealed doors.
In addition, don’t forget to check your monthly water bills, said Diane Gibson, owner of Cox Armored Mini Storage Management, which runs facilities in the Phoenix area. A sudden spike in water costs usually means a plumbing leak needs to be repaired.
5. Evaluate All Service Contracts.
If you pay outside professionals to maintain your landscaping, control pests, clear away snow or make security checks, be sure you’re seeking new bids for those services each year.
“You should be thinking about a continual evaluation of the services you use,” Chiti said.
Also, consider whether your staff can take on some of these tasks, in addition to their regular duties. Just make sure your employees aren’t stretched too thin.
“Be careful that you don’t get your staff at the property responsible for so many things that they can’t do their key things correctly,” Chiti said.