What could be simpler than operating a self-storage facility, right? In theory, renting empty space should be the classic no-brainer. But in practice? It takes an iron will, determination, smarts, an eye for detail and the ability to predict the future.
If you’re an operator, some of these 10 New Year resolutions are on your mind.
1. Hire Mr./Ms Right
“You want a people person who genuinely understands how the business works,” said Katy Tynan, founder and operations executive of Liteskip Consulting Group in Hudson, MA. “If they’re too empathetic, they’ll bad-mouth the organization; if they’re a corporate climber, they’ll bad-mouth the people underneath them. You need someone who understands both perspectives and can be the effect liaison between them. Not everybody is good at that; it’s a hard thing to do.”
2. Tidy up
When your product is empty space, there’s really no place for trash to hide. Management consultants like Bill Cohen of New York City-based Storage King USA can tell by one visit to the restroom if management is slacking off.
“There’s an old expression: ‘the fish stinks from the head,'” he said. “Our philosophy is that every facility that we own and operate be kept clean for both our customers and our employees.”
3. Count the cash drawer. Twice.
Andy Kelly, founder of Sierra Self Storage Consulting in Tucson, AZ, starts every facility audit by checking the cash drawer.
“If there are shortages in the cash drawer, further investigation is needed on how much is missing,” he said. “If it balances, then I may look into petty cash to see if all tools and supplies bought for the facility are accounted for.”
4. Don’t be a sucker: raise those rents!
The same people skills that make a good manager often prevent them from raising rents, according to Matt Van Horn, vice president of Cutting Edge Self Storage Management in Port St. Lucie, FL.
“Being a storage manager is like being a bartender without alcohol; you hear about everyone’s problems because most people are using storage for some kind of life change – moving, a new job, divorce,” he said.
5. Mind your occupancy
As counterintuitive as it may seem, 100 percent occupancy is not only not the goal; it’s usually a sign you’ve screwed up.
You sell space after all, so without some, you’re turning customers away, not to mention failing to get top dollar for your facility. As a rule of thumb, you want to start bumping rents as you approach 90 percent full, thinning the herd so you can move new customers in at a higher rate.
6. Hammer out your training
Although it may not be apparent to the casual observer, a facility that consistently trains its employees fair far better than those that don’t.
“You can absolutely tell; they fill faster and tend to do better,” said Mike Mele, first vice president of the Mele Group at Marcus & Millichap Real Estate Investment Services of Florida.
7. Automate collections
Phil Murphy, owner of 14 Next Door Storage facilities, never looked back after automating collections calls.
“Once you free up management from ‘dialing for dollars,’ all of a sudden you have a lot more time to handle leads, do follow-ups and rent units,” he explained.
8. Meet a niche need
One thing about storage space: it’s versatile. Just ask Daryl Henline, who oversees seven band practice spaces as manager of Bridge Storage and Art Space near San Francisco.
“Our seven band spaces rent for 15 percent more than our 11 other 10x25s,” he said. “Our plan is to build the rest out as band spaces.”
Resolve to identify artists, musicians, craft brewers and other passionate pastimes in your area and customize your space to their needs.
9. Feel the (audit) burn!
Veteran Virginia-based storage consultant Jim Chiswell says regular financial audits are the key to keeping your facility in top shape.
“You go in and literally look at the lifestyle of the facility,” he said. “I tell the manager, ‘Listen, this is going to be worse than an IRS audit because I know the questions to ask.’ I know the corners to look in to find the skeletons.”
10. Invest in the facility
Carl Touhey, cofounder and president of Performance Self Storage Group of Redwood City, CA says you can’t go wrong by making your place look right.
“In today’s world, it’s essential. For the biggest bang, clean up the front landscaping and redo the office,” he said.