Starting in 1993 with zero customers, zero employees and zero revenue, today, INFO STORs three facilities are collectively billing in excess of $5 million annually, with the very real prospect of doubling that number in the near future.

Vince Gaeta, INFO STOR

Records storage is highly profitable, with profits increasing every yeareven if you do nothing. But youre in self-storage, not records storage. How do you operate a records business in the day-to-day? Here is Records Storage for Dummies, so to speak. It illustrates the basics: storage and services. You will quickly see that what should be complex is completely automated via software. Armed with the facts, you can decide if this business is the add-on for which youve been looking. Odds are, you already have the client base. What customers wouldnt want the option of having their information delivered to their doorstep? For your customer, it means convenience; for you, it means a chargeable service.

Outlined below are the very basic methods for operating a recordsstorage business. Keep in mind that methodology can vary from software to software. You can get more complex and also have a great degree of flexibility. With a few simple steps, you can get started storing, servicing and billing your customers in the profitable business of records storage.

Step One: Setting Up Racking and Charging for Storage

When storing boxes, you will need racking. You can rack as you go, or rack-out a certain percentage of your facility. There are many designs with regard to mapping your facility but Ill save that for another article.

Your racking is broken down into sections and barcoded with individual location stickers. Typically, a single location will hold nine one-cube boxes that are stacked three high and three deep. Each barcode location sticker is assigned in your software to an associated container size, one cube, two cubes three cubes and so on.

Each new account is given barcodes, and those barcodes are placed on the containers. The barcodes are either assigned to the account prior to being released or, when a work order is created to pick up those containers, the boxes become assigned to that account via the work order. When the account returns its containers with the barcodes applied, you place the boxes on your shelving. As you place each box, it is scanned to the location (first you scan the location barcode, and then the box barcode). When the scanner is downloaded, the system knows whose box it is by the box barcode, and how big it is from the location barcode.

In records-center software, you will establish pricing. You will set up service and storage prices for each account, or you may use a standard default. Right now, Ill focus on storage rates.

When establishing storage rates, you can give a rate per box or a price per cubic foot. With the latter, the system will calculate a price per box, i.e., 25 cents x 1.2 cubic feet (the standard box size) = 30 cents. When you run your invoice at the end of the month, the system will tally how many boxes each account has by counting box barcodes. It will know how big the box is from the location barcode. It then multiplies the number of boxes by their size to calculate your total storage charge.

Just thinkyour storage charges are all completely automated, and all you did was scan boxes to the shelf. Not to mention when a customer calls you for a box, you know exactly where it is to be found by the location number.

BOX BARCODE	PROVIDES	ACCOUNT
LOCATION BARCODE	PROVIDES	BOX SIZE
ACCOUNT PRICING	PROVIDES	RATE
INVOICE	TIES TOGETHER	TOTAL BOXES PER ACCOUNT X BOX SIZE X RATE = MONTHLY STORAGE CHARGE

Step Two: Servicing Customers and Charging for Services

When storing boxes, one expectation is that, upon request, a box or individual file will be delivered. You can accomplish this via your own vehicles or a courier. In the long term, your own vehicle is far more profitable and more marketabledue to associated confidentiality and security issuesthan using a third party.

When a box is requested, you will charge to pull the box from the shelf and for the delivery. If the customer wants the delivery expedited, you will also charge a rush delivery charge. If he wants a box picked up, you charge for the pick up and the re-file (to put the box back on the shelf). All these service charges can be set up in your software on an account-by-account basis or as a standard default.

Now automation comes into play. With every service requested from a customer, you create a work order, select an account number and add the delivery items. You print the work order and give it to the driver or courier. The customer signs upon receipt. Your service is complete.

By placing a box on the work order, you have told the system the box is now out. It knows to bill for delivery as well as a pull for this box on this account. At the end of the billing cycle, the system ties the service completed to the associated rate and bills the customer.

The same applies to a pick up. A work order is generated. The boxes are picked up. The boxes are scanned into locations. The system now says these boxes are in, and charges for the pick up and the re-file. At the end of the billing cycle, everything ties back to invoices. You have complete automation:

• Services are placed on a work order.
• The box status is changed from in to out or vice versa.
• At the end of the month, an invoice is run.
• Services times your account rate equals your service total.

Ancillary Profit Sources

As I said earlier, storage and service are basics. Your storage revenue will grow annually for each customer. The industry average is between 10 percent to 20 percent, which not a bad increase. Yet there are many other services and profit streams.

For example, your customer base will need and purchase boxes. Just add the box-order purchase to your work order. Your customer may also want you to complete data entry on each box so you have an inventory of what he has in storage. You can then sell him a report of his inventory. You can complete inventorying projects for your customer and catalog the contents of his containers. The one thing to keep in mind is for every service you provide, you bill the customer. Service means revenue and can make up to 60 percent of your profits.

Summary

Records storage was made easy by the advent of barcode technology, scanners and sophisticated software. If you can scan boxes to shelving and deliver them to the customer, you can master the fundamentals of records storage.

As time goes by, you may become a more sophisticated operation and offer web access and other services. But in the beginning, the most important thing is to set up the system correctly from the get-go. Attend a training class, learn your software and do it right the first time. Buy your last system first. Then sit back and watch your inventories growas well as your profits. Records storage is beautiful thing.  

Anne Sommi Edmonson is the director of marketing for ONeil Software Inc. For more information, e-mail [email protected]. 

When mobile storage emerged a few years ago, it seemed like the next big thing. Sometimes called portable storage, it was convenient, expanded a self-storage operators market beyond the typical 5-mile radius, and enabled self-storage to compete with moving and storage companies. Now, some companies, including big guys Shurgard Storage Centers and Public Storage, are re-evaluating their commitment to mobile storage. And many have found mobile storage isnt as easy or convenient as they imagined. This begs the questionis mobile storage a viable business?

To be fair, mobile storage is still in its infancy. Emerging on the market less than a decade ago, it is often likened to pizza delivery. Simply put, a mobile-storage company delivers a box-like container; the customer fills it and locks it. The storage company picks it up and returns it to the facility, earning a profit on the pick-up and delivery and the monthly rental of the storage container. Mobile storage essentially cuts out the moving middle man.

Every self-storage customer has a need for transportation, says Randy Weissman, president of Storage Banc. The St. Louis, Mo.-based storage company offers four types of storage, including mobile storage. Why not solve that need? If we make it easy to get things into storage, maybe we will attract the fringe customer who would love to clean out the basement, garage or attic, but doesnt want to hassle with renting a truck to get their belongings into storage, he says.

It is this concept that drew many companies to mobile storage. It was a new market, a niche, and seemed to go hand-in-hand with self-storage. The attraction drew Tim Riley from his post as director of marketing for Shurgard. He launched Door To Door Storage in 1996. With the slogan You pack it up. We pick it up, Door To Door set out to revolutionize the mobile-storage delivery service. To date, the Kent, Wash.-based company services 3,000 towns and cities nationwide.

Around the same time Riley founded Door To Door, Shurgard and Public Storage jumped on the mobile bandwagon. Shurgard opened five Shurgard To Go warehouses, primarily on the West Coast, investing an estimated $21 million. Public Storage expanded its mobilestorage operation rapidly, reaching 55 facilities in 14 states. In the past year, both companies have pulled back, closing facilities, and essentially putting the kibosh on future mobile-storage expansion. We have backed off certain cities because we are still trying to make the business model work, says Steve Tyler, Shurgards senior vice president of operations for sales and marketing. The Seattle-based company closed two of five facilities in 2002 after a huge loss in 2001. We have not found a business model that works, Tyler says. Maybe someone else can. On paper, I still believe mobile storage makes sense. Some day, someone will figure out a way to make it work.

Riley, Weissman and others are unwavering in their quest to make mobile storage a profitable business. Coming from my years in selfstorage leadership, it is a surprisingly difficult business for many who have tried and failed, but it can and does work, says Riley. Further, many people dont want to work that hard to make money, and this is a business that you have to manage on a minute-by-minute basis.

Bump in the Road

Many liken the challenges mobile storage faces today to the same ones self-storage overcame in its early days. Lack of customer awareness, an unproven business model, expensive start-up costs and operating expenses, are just a few. As an entrepreneur, we always tend to think the last person who tried this business was an idiot, or that we know what the real problem is and have the ëkiller answer to solve it, Riley says. Unfortunately, this business quickly chews up and spits out people with that type of attitude.

I dont think some of the people who have tried mobile storage understand what is involved, agrees Weissman. Ive talked to so many people who just dont have a clue about what it takes to be successful in this business. Weissman gives the example of one operator who purchased the equipmentcontainers, roughly 20 tarps, a truck and forkliftand was hoping to rent out all 100 containers over Memorial Day weekend. He didnt think about the fact that his one truck held only five containers, he points out. If he averaged one hour per stop and two containers per customer, he could put out 16 containers per day. By the second stop on day two, he would run out of tarps. That doesnt account for stops to pick up any full or empty containers.

For Shurgard, the lack of success boils down to one issue: economics. Our customer base does not value the delivery-service portion enough to be willing to pay for it. That, in a nutshell, is the biggest issue, Tyler says. They directly compare the price of pick-up and delivery to our self-storage, and the vast number of customers sticks with self-storage when they do the comparison.

Another problem is lack of awareness of what the product is. Awareness of the service is very low, but growing, Riley says. It is certainly a factor limiting the growth of the industry today. In many ways, it suffers the awareness problem that mini-storage had in the early 70s.

One of the barriers to success in mobile moving and storage is cooperation among independent operators, says Henry Cox, president of South Carolina-based Box Trotters Inc. If a local mobilestorage operator is set up for local moving and storage only, it places great limitations on the business ability to grow, and on the operators ability and resources to serve the largest segment of consumers possible, he says.

A final oversight mobile-storage operators seem to make is in the capital investment in equipment, Cox adds. Many seem to be following the pack, and they are selling the business or liquidating the assets. Whereas, others seem to be making prudent, wise investments in equipment that is long-lasting, requires minimal maintenance and is internationally standardized. For operators investing in nonstandardized equipment, it can be the deathblow from the beginning.

Riley spent several years partnering with Seattle-Tacoma Box Co. inventing just the right container. The mobile storage containers are 5 feet wide by 8 feet long and 7 feet tall, which is generally accepted as the industry standard.

Smooth Ride

So what does it take to make mobile storage work? I have been at this business 24 hours a day, seven days a week, 365 days a year for more than seven years, and that answer is still changing, and changing rapidly, Riley says.

However, Riley has gleaned some insight over the years. It is a very different business than traditional storage and needs to be a separately run and managed entity, he says. Also, a good amount of capital is vital. Mobile-storage operators need containers, tarps, flatbed trucks, forklifts and much more on a grand scale. Start-up costs vary but can reach as high $2 million and are largely undefined in this market.

Many have grossly underestimated the operating expenses to run the business because many of the operating expenses are tiny, little soft costs that add up to one of the largest numbers on my P&Ls, Riley says. Many believe they can make the business work on a small scale with less than 2,000 containers, and that gets them. Some operators think they can get away with shoddy or no customer service, and that kills them.

Another fundamental: pricing the service high enough to cover expenses. Many think they can price the service low or give away the pick-up and delivery, Riley says. Charging double the rental rate of self-storage is not uncommon.

As with self-storage, location is a key factor, Weissman says. One reason some companies fail in this business is they dont believe the location of their warehouse is important because product is delivered. We believe location is important. Just because we deliver a mobile vault to a customer doesnt mean he doesnt want it stored reasonably close to where he lives or he wont come to your location to pay the bill or access his goods, he says. Operating out of an old, dirty warehouse in a questionable part of town because the rent is inexpensive may not be the best way to set up shop. We also air-condition our pick-up and delivery warehouse. We sell the service as a safe, secure way to store your goods.

Another way mobile-storage operators are hoping to ensure the success of this struggling industry is through an alliance. Aptly named The Mobile Storage Alliance, the group began with a core group of operators, including Weissman, Riley, Hal Spradling from All Canadian Self Storage, and Steve Wilson from Hide-Away Storage Services. The Alliance has since grown. In March, a meeting in Sarasota, Fla., drew nearly 30 companies to mull over three major issues: vault shipping, marketing and legal concerns.

The primary focus of the Alliance is to facilitate interstate shipment of self-storage containers between operators. The group is also considering joint purchase of transportation and logistic equipment, insurance, tarps, containers and software. Our Alliance has introduced operators to one another and helped facilitate relationships, Weissman says.

Despite the hard work and long odds, some believe theyve uncovered the secrets to the success of mobile storage. As long as American consumers want to save time, labor, money, and have convenience, the demand for container moving and storage will grow, along with the service providers who are stepping up to serve their needs, Cox says. The service providers that will invest in operating knowledge and training, and network and co-op with other parties with like interests, will flourish and grow value and wealth.

Out of the Box An easier way to go mobile For self-storage operators unwilling or unable to invest in mobile storage, Box Trotters Inc. offers an alternative. Storage operators can become a cooperative network member, sales agent, service agent or any combination of these titles. Here are some of the benefits: EQUIPMENT AND ASSET INVESTMENTBox Trotters sponsors capital equipment purchases that enable cooperative purchases to be made, resulting in larger orders and reduced investment. COOPERATIVE ADVERTISINGIn select areas, Box Trotters will participate in cooperative advertising campaigns and shared advertising investment. BROCHURES AND PROMOTIONAL MATERIALSBox Trotters provides free promotional materials to its associates. SERVICE-AGENCY SHIPMENTSBox Trotters will authorize service agents who pick-up and deliver container moves in certain areas. SALES-AGENCY SHIPMENTSBox Trotters pays generous commissions to self-storage operators who sell Box Trotters long-distance container moving and storage service. This is an excellent way for independent selfstorage operators to generate added revenue without having to spend the time required to manage a truck-rental agency. WEBSITE BENEFITSBox Trotters encourages those who want to be affiliated to sign up at the website. The company gives sales, service and cooperative members access to a large variety of moving and storage leads.

What do you think of when you think of RV and boat storage? The word booming should immediately come to mind. There is an RV craze sweeping the nation as baby boomers retire and, for the first time in their lives, invest in fun and leisure. A popular bumper sticker sums it up nicely: We are spending our kids inheritance.

The younger generation isnt left out of the RV trend, either. Busy parents want to spend quality time enjoying the outdoors with their children. However, they are unwilling to give up all the conveniences of homean indoor toilet, a comfortable bed, cooking appliances, etc. An RV vacation offers the best of both worlds. Families that RV also benefit financially. On average, a family of four saves more than 70 percent on vacation costs over other forms of travel. More than 16,000 public and private RV parks, ranging from simple campgrounds to luxury resorts, cater to this crowd.

There are several other reasons RVing has become so popular. Concerns with terrorist threats and emerging patriotism have caused many folks to avoid air travel and explore vacation spots such as national parks and monuments. RVing can also provide a great tax break. What most people dont know is if you finance an RV with a kitchen and bathroom, you qualify for a tax deduction as long as you occupy it 14 days out of the year. It can actually be considered a second home.

Still not convinced? Current statistics from the Recreational Vehicle Association show there are more than 7 million RVs on the road and more than 30 million people using them. These numbers are expected to rise a whooping 15 percent in the next seven years.

In August 2002, RV shipments to dealers were reported to be 17 percent higher than the same seven-month period the year before. Additionally, six out of 10 RVers say they plan to purchase another unit in the future, with 40 percent indicating it would likely be a new vehicle. Of those who dont already own RVs, a recent study showed one out of six households intend to purchase some type of recreational vehicle in the near future.

Finally, an article from Naples News earlier this year stated the weak economy hasnt put the brakes on RV sales. In fact, according to the Frommers Travel Guide, RVs are getting hotter and hotter.

RV Storage Skyrockets

With the RV market growing so quickly, the RV-storage business has really taken off. The average RV ranges from 12 feet (a small travel-trailer) to 40-plus feet (a large-class motorhome). Even when there is ability to store RVs in driveways, they are cumbersome, block normal use of the driveway, and are an eyesore to neighbors. This also leaves vehicles open to the elements and vulnerable to vandals.

Many local ordinances prohibit larger RVs, usually those longer than 22 feet, from being parked at curbside for longer than 72 hours. With sideyards basically nonexistent in newer housing developments, RV owners are left with no choice but to pay for RV storage. Current market trends show that not only will RV owners pay for storage, they will pay top dollar for good storage.

RVs are a major investment, costing from an average of $25,000 up to $1.5 million for luxury models. The majority of damage to RVs and boats is caused by exposure to the elements. Prolonged exposure to the sun can damage siding, tires, gaskets and seals, and will cause interior deterioration. Similarly, marina storage for boats is becoming increasingly difficult to find and leaves boats open to harsh weather conditions.

With the demand for RV and boat storage being so high, one might think the market was saturated with storage facilities. Think again. There are huge opportunities in this expanding business. There are few dedicated RVstorage facilities and, of those that exist, most are strictly open-storage facilities with few amenities.

The future of RV and boat storage looks promising. Research shows younger generations are even more interested in the outdoors and openair sports than those preceding them. It is likely their sense of adventure will continue into their adult life and be passed down to their children.

Storage Options

RV-storage lots of yesterday provided little more then a gravel road, chain-link fence and padlock for security. RV storage of today provides covered and enclosed parking in secure lots. Common amenities include security cameras and touch-pad entry with 24-hour access. Higher-end lots may even provide climate- controlled enclosed spaces with running water, electricity, wash bays, dump stations and propane.

There are three basic types of RV- and boat-storage options (aside from open parking). Fully enclosed units are similar to garages. They have roll-up doors and offer the most security. Often times, these units are sold like condominiums. This type of storage offers the best security and protection.

Units covered with three walls provide upper, rear and side protection. This protects an RV or boat from sun as well as wind. It also provides better protection for sites with property-line divisions. Covered (flat or angled) units are similar to a basic carport design, but are taller and wider to accommodate RVs and boats. Angled covers generally provide better site coverage and space utilization, and more spaces per acre.

Investing in RV Storage

There are four reasons to invest in RV storage: easy construction, simple maintenance, an untapped market and the rising popularity of recreational vehicles. To make the most profit, investors need to ride the wave of the RV craze and build now. Many dont know the return investment on RV storage can be greater than that of self-storage, since the building costs are less. Structures are easy to build since there are no moving parts (except with enclosed spaces), and the sites are virtually maintenance-free once operational.

RV- and boat-storage investors need only follow these simple steps to get their project off the ground:

• Locate a property. There are several factors to take into consideration when choosing property for RV and boat storage. Properties near freeway entrances and those visible from the freeway do well. Sites near vacation spots, such as lakes, have an added bonus. Boat owners typically want to park their vessels closest to where they launch. Owners can actually save money this way, as savings in gas often makes up for storage costs.
• Consider the marketability of the area. Is it a safe area where people would likely want to store their belongings? A few hours on the Internet can sometimes show you the demographics of a location. This is important, since we know the average RV owner is married, owns a home and has a median household income of $56,000. We also know through research that the baby boomer population (those ranging in age from 35 to 54 years old) is the leading force behind the upswing in the market.
• Find out if market competition is fierce or loose. Dont be discouraged if there is already a facility in town. If the market is right, several facilities can exist at 100 percent occupancy without a problem. In fact, once you begin looking around, you may find several have waiting lists of customers needing storage.
• Look into zoning. The city-planning center or a commercial real estate agency can tell you if the property is zoned for a storage facility.
• Secure financing. You can obtain financing through small-business administrations, banks, personal loans, etc. Some steel companies will lease you the materials needed to build the storage facility, thereby reducing initial start-up costs.
• Choose a design. An RV- and boat-storage professional can suggest the best design based on property size and your budget. He will provide pictures of facilities he has built in the past and will work with you one-on-one throughout the design phase.
• Hire an engineer. Many construction companies provide in-house engineering. Engineers will create the blueprints and calculations needed to obtain permits. Unless other arrangements have been made, customers will usually need to pull building permits from the city themselves.
• Build the structure. Construction time will vary depending on the size of a project. Generally speaking, it will take two to three weeks to build 40,000 square feet, once engineering is complete and materials are on site. Construction costs vary depending on the structure. Fully enclosed units will cost between $6.50 and $9.50 per square foot to build; covered units will cost between $3.50 and $6.50 per square foot; and three-walled units will cost between $4.50 and $7.50 per square foot.
• Create a marketing plan. RV- and boat-storage business owners can market through the Yellow Pages, the Internet, direct mail, etc. Many who hire a professional to create a marketing program are surprised to find they have actually reduced their marketing costs.

Associated Costs

The daily operating costs associated with running an RV- and boat-storage facility is minimal. Most storage facilities have an on-site manager residing in an apartment to keep constant surveillance. Insurance fees can be obtained through an agent/broker or self-storage specialty insurance agency. This insurance will cover losses due to theft, etc.

The cost of security will vary depending on what you provide. The most desirable storage facilities will have locked gates with keypad entry, security cameras, perimeter fencing and special lighting.

The money you spend on advertising is worth its weight in gold. The best advertisement by far is a good location, visible from the freeway or a main street. Many facilities have had great luck advertising in the Yellow Pages, on the Internet, through direct mail and through local RV clubs. One storage owner launched a successful advertising campaign and, as a result, had 75 percent of his RV spaces reserved even before construction began. Other miscellaneous expenses to keep in mind are property taxes and repairs.

Getting the Most for Your Dollar

Geo Self Storage designed a graph that concisely describes how vehicle-storage investors can get the most for their money. In general, it shows the best return on investment for land that costs from $2 to $4.50 a square foot is RV covers. At $2 a square foot, its a 40 percent cash-on-cash return. For land that costs $4.50 a square foot and up, the best return on investment is underground self-storage with RV covers above.

Whether you choose to build enclosed units, covered units, covered units with three walls, or combine RV and boat units with self-storage, it is important to act quickly. Now is the perfect time to cash in on the RV craze. Its really quite simple: Find land. Build project. Start renting.

Robert Hayworth is CEO of Baja Construction Inc., which has been at the forefront of the turnkey metal-structure industry for more than 30 years. The companys structure gallery includes self-storage, carports, and RV and boat storage. Baja maintains the highest standards while keeping costs low and construction time to a minimum. For more information about starting a project in your area, call 800.366.9600; visit www.bajacarports.com. 

Popular Q & A Q: How much rent can you charge for RV- and boat-storage spaces? A: Spaces range in price from $45 to $750, depending on the type of structure (coverage) and amenities offered. Q: What happens if a tenant doesnt pay his monthly fee? A: Similar to self-storage, liens are the most common remedy for tenants who refuse to pay their rent. Access to property can be denied by changing access codes. If rent remains unpaid, you can place a lien and sell items within the states guidelines. Vehicles abandoned on property can be towed. Customers will have to deal with towing companies to reclaim their vehicles. Q: How much land do you need? A: The optimum amount of land is 10 acres. Although you can build a nice facility on 1 acre, you will not have any room to expand in the future. Q: What kind of coverage can you get per square foot? A: You can typically get about 40 percent coverage. Q: Whats the best layout design? A: I recommend putting the buildings back-to-back, with spaces on a 60 degree angle11-by-30-foot spaces with 35-foot driveways. Spaces designed perpendicular would require 50-foot driveways. Q: What size spaces do you recommend for the units? A: I usually recommend 11-by-30-foot units set back-to-back.

Records management has become a dynamic revenue producer in self-storage. Technology, competitive advantage, access to clients, simple solutions and low entry cost all add up to big bucks for operators willing to add this service. This article focuses on why 2003 may be the year to consider it. There is no better time than now to add records management to your existing self-storage operationfor several very important reasons. This article attempts to provide the advantages of building or operating a joint self-storage and records-management operation within the same facility.

Over the past seven years, I have written a monthly column on records management for Inside Self-Storage. And in that time, I have touched briefly on many of the considerations for building a commercial records-storage business in self-storage. At first, many people were skeptical because the two do not seem compatible.

Yes, it is true records-management services require active participation with clients business records. Yes, it is quite different from self-storage. Nonetheless, records storage can be a maximum provider of ancillary revenue if you approach it with your eyes open and a focused business strategy.

There are two primary records-management strategies that can be implemented. Each has several potential tactics that can be employed. Lets take a look at the two and how they differ.

Nontraditional Strategy

This strategy has the lowest cost and is the easiest to implement. Although its certain to work in others, it succeeds in four business types that most often extend themselves into records storage:

• Self-storage
• Moving and storage
• Courier services
• Document-destruction services

Each of these business types has its own advantages, but they all have one thing in common: Their customer base includes businesses that need records-storage services. Self-storage facilities have a huge advantage over the other three. They already have records in passive storage in some percentage of their existing storage units.

I estimate between 5 percent and 10 percent of the selfstorage units in North America are already storing some business records. If we do the math for the number of potential boxes, we find between 40 million and 60 million boxes in self-storage. That number accounts for between 75 million and 100 million billable cubic feet of storage sitting idly.

There are two key advantages to converting clients from passive self-storage to records management. First, you convert your existing billable space from the square foot to the cubic foot. In effect, you now can rent the air space in your units. Second, you convert a very tenuous 30-day lease to a permanent one.

Nontraditional records management is aptly described by its name. It is simply a different way to build a recordsmanagement business. It is not at all like traditional records management. This strategy uses technology and unique operating methods that have been developed over the years in similar industries but have rarely been applied to a traditional records-management model. The nontraditional model uses a vastly different selling method as well. Lets look at the components of the nontraditional method and discuss why it is so unique:

1. FACILITYIf you currently own a facility, leverage your existing assets. One of the first questions most operators ask is, How much space do I need? The answer is, as long as you have existing space or the ability to add more, use whatever you have. Yes, there is an optimum facility size, but it doesnt seem to matter at the beginning. Using what you have gets you by the start-up process with very little new cost.
2. SHELVINGBuy only what you need when you need it. Of course, there are cost breaks and freight factors to consider in the decision, but the main ingredient is shelf design. Use only the proper shelving that will maximize storage your current space.
3. SOFTWAREAll three of the major recordsmanagement software companies have a small-business edition that includes one PDT (portable data terminal) barcode scanner, training and support for the first year.
4. TRAINING AND SUPPORTThis is available from consultants in the records-management industry. It is important your training be repeatable and simple. Your work processes must be limited to only a handful.
5. COURIER SERVICESOutsourced courier services reduce the need for vehicles, personnel and all the associated fuel and maintenance items. A model already exists to control and manage outsourced resources.
6. LABORThere are 16 roles and responsibilities in a records-center operation. Of those 16, 14 can be outsourced. The secret to outsourcing any administrative function is to manage the outsourcer to the contract terms. It should act as you would and be invisible to your client as an outsourced resource. There are four ways to staff any business: full time, part time, temporary or outsourced. Outsourcing activities can give you more control and cost management than the others. It is essential to have specific measurable terms to the outsourcing agreement.
7. SALESSelling in a nontraditional facility must be done in incremental steps. You and only you will draw the line at the level of sales you will use. Suffice it to say, the more levels of selling you entertain, the more sales you make.

Having a full-time sales person delineates the difference between nontraditional and traditional records-management sales. Lets look at the nontraditional selling model:

LEVEL 1EXISTING RECORDS-STORAGE CLIENTS

Every self-storage company stores business records in passive storage units. It is likely, depending on the location of your facility, between 5 percent and 10 percent of your existing clients have business records stored in your facility. You probably already know who they are. If you do not know, this is always the place to begin.

LEVEL 2ALL OTHER EXISTING BUSINESS CLIENTS

All businesses have records. Therefore, your current business clients are your first target for sales. They have business records somewhere that are probably problematic for them. Records take the lowest level of importance in a businessuntil they take the highest level. There is an old saying in the industry, Records go from the basement to the boardroom overnight.

LEVEL 3OVER-THE-COUNTER SALES

You have a captive audience as soon as contact is made at your service counteryou simply need a strategy. Years ago, in the banking industry, management began to understand that, nine out of 10 times, the teller was the primary contact for each customer. What a marvelous sales opportunity! But tellers are transaction-oriented people, not salespeople.

The banks then devised methods to assist their tellers in using simple repeatable selling methods. The CIF (customer-information file) was born. When the teller encountered the customer, his computer terminal looked at the transaction, determined the best sell, and flashed a message on the tellers screen, such as Give the customer a consumer- loan brochure. It took the thought process away from a transaction-oriented person. The same can be true at your sales counter.

You must have a selling strategy, a way of identifying prospects, a script, a cost benefit and a closing process right there at the counter in a simple, repeatable method. The counter employee must be trained, and the method must become second nature to him. It has to be simple and take little effort. It should be repeatable, because you certainly will have others who will be trained to use the method over years.

LEVEL 4OTHER LOCAL SELF-STORAGE CLIENTS

Perhaps the biggest trick of all is attracting accounts from existing self-storage competition. This level takes thought and strategy. It is fertile ground. Many clients records volume grows in self-storage until it becomes too large to control. Then it becomes fodder for the local commercial records-center operation or your self-storage competition they will try to take it away from you. And it is easy for them to do so because of your simple 30-day lease, during which you have had little or no interaction with the client.

The first sign you are losing an account is a truck coming to pick up the spoils of its sales. Self-storage has been considered helpless in the past because its 30-day lease has no penalties. Records-management contracts require a term of one or more years, an evergreen (self-renewable contract), a retrieval fee, plus a permanent retrieval fee to exit the facility. These are considered permanent leases because of how difficult it is to get out of them. You can attract the local self-storage records client base and keep it forever at three to five times the yield of square footage in self-storage.

LEVEL 5AGENT SALES

As a businessperson and entrepreneur, you are likely connected to other peer business owners in your community. Operators of office-supply and equipment stores, filing-system products, imaging services, computer-support companies and many others are in the field working with business clients. You can give them an incentive to become an agent for you by paying them a commission for leads or closed agreements. This is a simple and workable method to root out small, under-the-minimum accounts that are generally not worth a full sales effort. The model for training and a commission structure already exists and is proven to work.

LEVEL 6PART-TIME SALES

Owners, equity partners and managers can become valuable part-time sales agents for your company. Part-time selling requires a process just as full-time selling does. Some operators employ part-time sales representatives who are compensated on a commission basis and set their own work schedule. Outsourcing sales can be an inexpensive and valuable practice; but you must train the sales staff and manage the sales process for it to be effective.

LEVEL 7FULL-TIME SALES

This is first of the two components that separate nontraditional from traditional records management.

Traditional Strategy

As I mentioned earlier, traditional commercial records management is how it has always been done. Easily 95 percent of the industry got started this way. It takes more capital and much more time, and it does not use the leverage of another business to launch. It requires a commitment of a facility, usually 10,000 to 20,000 square feet, a full-time operations manager and a full-time salesperson to start. It takes a minimum of two to three years to get to a breakeven point. Although this has proven to be a sound business model over the 50 years of this industry, it is certainly time for a fresh new look.

A nontraditional records-center operation can easily vault itself into a traditional one by shoehorning into a traditional model. As I mentioned earlier, there are two major differences between nontraditional and traditional records management:

Facility Size. Is there an optimum facility size with which to start? I have come to some conclusions on this question, and I admit they are arguable. I prefer a first building of 10,000 square feet with a 30-foot ceiling. I will use this size as the basis of an example calculation.

A nontraditional records-center operation can easily vault itself into a traditional one by shoehorning into a traditional model. Using an industry standard, 300,000 square feet of overall cubic feet is reduced by 45 percent. This will approximate the yield of billable box positions. Every warehouse varies, and the actual yield may be between 40 percent and 52 percent. This variable exists because of roof slant, internal columns, warehouse and office-space configuration. But for planning purposes, the 45 percent factor is a good rule of thumb.

This example yields 135,000 box positions. A box position is a standard 1.2 cubic foot letter/ legal records-storage container. Using industry averages of 25 cents per cube and 65 percent additional service revenue, the annual gross yield for this space when full is $801,900. Self-storage facilities can reap a much higher per-unit yield, and traditional records centers can move the service-to-storage ratio to 1:1 or greater.

Full-Time Sales Effort. A full-time sales effort is required because you need to fill your facility as quickly as possible to get to the break even point. Full-time sales efforts require three components to be part of the process:

• Qualified and well-trained sales representatives.
• A proven selling method.
• A sales-management process that is measurable and manageable.

A realistic sales goal is 100,000 cubic feet of billable storage within 30 months, which is achievablealbeit difficultif you employ the three components. Using thesealong with a capital structure that can support themyou can develop a profitable traditional records-management business quicker than the industry average.

Back to the Original Premise

What makes this the right time to strike out your course in commercial records management? The factors abound, particularly if you have a self-storage facility or are considering one. You do have several choices to make right from the start:

• Do I start with a nontraditional facility within the walls of my existing or planned facility?
• Do I build a traditional facility within the walls of my existing or planned facility?
• Do I begin with nontraditional and leverage my existing assets until I can shoehorn my records business into a traditional one?
• Do I begin nontraditional and remain in it while, focusing on only a high-yield, low-volume, low-retrieval sector of the business?

You really do not have to make the decision yet. You can begin with the low-cost nontraditional model first and move step-by-step up the sophistication levels until you decide to stop. The industry is adding more new service providers every year. The market is expanding and doesnt seem to be slowing.

The need for records management is greater now than ever, and you already have a facility and records to start your business. You can join the hundreds of self-storage operators who have made the commitment and followed proven paths to successful operations.

Regular columnist Cary McGovern, CRM, is the principal of FileMan Records Management, which offers full-service records-management assistance for commercial records-storage startups, marketing assistance, and sales training in commercial records-management operations. For assistance in feasibility determination, operational implementation or marketing support, call 877.FILEMAN; e-mail [email protected]; www.fileman.com. 

With the continuing popularity of recreational travel and boating, stringent CC&Rs that dont allow parking of recreational vehicles within their neighborhoods, and stricter city ordinances, boat and RV storage is becoming more of a necessity then ever before. More and more self-storage facilities are being designed to accommodate RVs along with traditional self-storage units. In fact, more are being built every year dedicated to RV parking.

Historically, boat and RV storage facilities were open areas with the bare-minimum chain-link fence. With no security but the fence, these areas were typically afterthoughts of self-storage. But todays RVs can be extravagant, long-term investments. Theft, burglary and vandalism are ongoing concerns of prospective tenants. They are looking for a higher standard of security. Owners of these vehicles want to be sure their investments are safe and secure. With the availability of sophisticated security systems, boat and RV storage operators can now offer these customers the security they demand.

Lines of Defense

Naturally, the first line of security is a perimeter fence, which must be tall enough to discourage would-be intruders from simply climbing over it. The added protection of razor wire will further discourage them.

Infrared perimeter beams are also a very effective means of preventing security breaches along the fence. They are set up at specific points along the perimeter of the gate. When the infrared beams are broken by unlawful entry, audible alarms, such as sirens and/or strobe lights, can be set off throughout the facility while relays are triggered simultaneously for alarms to contact the facility manager, security-monitoring company and the police.

Adequate lighting is another positive addition to the security of boat and RV storage facilities. Effective lighting provides clarity with night-time video-taping capabilities and acts as another deterrent to intruders. Lighting also creates a safer, more comfortable environment for tenants picking up their vehicles or arriving home during the night.

Security must also be applied to the most common threat of invasion: other tenants. There is no better way to obtain access to a storage facility than being an existing renter. Computerized security-gate access is one of the most effective means of security for any type of storage facility.

A good access system will track the entrance and the exit activity of the facility and maintain an infinite history. Keypads can be set up strategically throughout the site to create security zones. A standard storage tenant can have access to the front gate, but there is no need for him to have right of entry to the RV-parking area. Security zones prevent unauthorized tenants from entering those limited access areas. The access system should also lock delinquent tenants out of the facility automatically and remain locked out until paid, weeding out higher-risk tenants.

Keypad Entry

Many RV storage facilities have made gate access easier by mounting two keypads at every entry and exit gate. The shorter keypad, mounted approximately 42 inches from the ground, allows access for standard cars and trucks. Keypads mounted approximately 66 inches from the ground allow RV drivers to access the facility without having to exit their vehicles.

Other security-gate options can be added to enhance accessibility for RV drivers. The addition of a proximity reader allows entry to the facility by waving a card, comparable to the size of a credit card, up to the access device. A remote-entry device, similar to a garage-door opener, can also be used. Remote-entry devices allow customers access to the facility with the push of a buttonthey dont even have to open the vehicle window. These convenient features can be offered to boat and RV customers for an additional charge, turning a security system into a revenue-generating service.

Wireless Options

With security gate access comes the ability to arm each individual door with an alarm. Of course, this method is not possible for most boats or recreational vehicles; but with the advancement of wireless technology comes wireless security. Many of the more sophisticated security companies have embraced this new technology and created wireless alarm systems designed specifically for self-storage.

Wireless brings a new and unique diversity to boat and RV security. These facilities can now offer security using motion detectors, which are simply placed in the vehicle. The detector checks in consistently throughout the day. When the owner is granted access to the facility using the security gate, the motion detector is disarmed. If an unauthorized person enters the vehicle, it senses the activity and the security system will be activated. Audible alarms, strobe lights and/or triggering relays will be used to contact the manager, security-monitoring company and/or police.

Video Surveillance

One of the most obvious means of preventing intrusions in an RV storage facility is a surveillance system with cameras. CCTV and digital-video recording is vital to the security of any such facility. Cameras throughout the boat and RV storage area recording all activities and persons entering will promote the highest confidence in potential tenants.

Owners and operators can monitor each cameras view from anywhere, anytime using high-speed Internet connections. Digital-video recorders commonly come with this feature to accommodate off-site surveillance. Not only can owners and operators view video of the facility, with operator-provided web addresses, customers can access the video via the Internet to check on their prized possessions.

Sleek and attractive lexan panels can be prominently displayed in the storage facilitys office, showing customers and potential tenants the security measures in place. Aesthetically pleasing site maps can be added to the prominent display showing the layout of the facility and the status of each storage space, whether it be traditional self-storage or boat and RV spaces.

With todays focus on recreational relaxation, lifestyle and luxury, and all the latest enhancements in technology, boat and RV storage has become more competitive than ever. It is imperative potential storage developers examine each areas demographics and customer base. What exactly are customers looking for when it comes to boat and RV security? As a storage owner, it is wise to invest in a higher level of security, win the confidence of tenants, and maintain customer loyalty and continued business.

Karen Genualdi is a marketing representative with Scottsdale, Ariz.-based PTI Integrated Systems Inc., which offers a complete, integrated management-control system for self-storage. Courtney Doerfler is business-development assistant for PTI. For more information, call 800.331.6224; visit www.ptiaccess.com. 

One of the most common mistakes a self-storage operator makes is to keep spending money on Yellow Pages or other advertising in an attempt to boost profits. In many cases, it can decrease profits because the added expense ends up being more than the additional revenue it generates. Why? Because there is a lack of attention to the phone-sales presentation! In other words, we can spend as much as we want on marketing and advertising, but if we cannot convert the caller to a renter, we are wasting our money and time.

What about the self-storage caller we perceive to be in a hurry? Maybe its a businessman on his cell phone and all he wants is a quick price, or the customer who says, All I want to know is how much your 10-by-15s are. What about the customer who is a little more aggressive and wants to hurry along the conversation? How are you handling these types of customers on the phone?

If you are spending $1,800 per month on advertising and marketing to make the phone ring, and you are averaging 60 calls per month, this is a $30 phone-sales presentation. And what about the incremental value of each rental you are losing? For example, if your average rental is worth $80 per month and the average length of stay is seven months, this is a $560 rental. Lets say you lose eight rentals per month because you are not equipped to handle these types of customers. How much are you really losing? In this example, you are accruing $4,480 in lost revenue.

Its not always best to throw money at advertising and marketing to make the phone ring. In many cases, its better to spend the money on education and training to equip your staff to become better at phone sales.

The Short Version

One way to handle the caller who is in a hurry or just wants a price is to prepare a two-minute presentation. This is a modified version of the presentation you would normally give. Even though every phone-sales presentation is a little different, it is important to list the features and benefits most important to each individual customer. If you only provide him a price, that is all he will remember about you!

We are often too quick to give the customer what he wants. It is important to overcome the urge to divulge the price right away and take control of the conversation. Always remember: Never give the price of a unit until you have built the value of your store. This will minimize any pricing objections and give the customer something to remember about your store. If you know the differential advantages you have over your competition, this will help you tremendously in setting yourself apart from the rest of the marketplace. It is important to give those key features and benefits that will make the biggest impact on the customer.

In a typical sales presentation, it would be important to provide a list of six to eight key features and benefits about your facility. This will help you to educate and build value with the customer. If he is in a hurry or just wants price, you can streamline the features and benefits and give just three or four. This will shorten the presentation and still give you the opportunity to set yourself apart from competition.

It is even more critical to educate and build value with a customer if you are the price leader in your market. For example, if you offer the highest rates in town and only give the price to the customer, he will only remember you are $8 more per month on a 10-by-15 than everyone else he called. However, if you avoid the price issue at the outset and give three or four key features and benefits, it will help you overcome any pricing objections and give you a much better chance of setting an appointment.

Many times, we perceive a customer to be in a hurry when in reality he is not. It is imperative not to get caught up in the moment, to slow down and listen to the customer. When you slow down, listen and take control of the conversation, the customer will often want to hear everything you have to say. If he is calling around for prices and your competition has obliged him, this is a golden opportunity to educate the customer on his specific needs and what to look for when using self-storage.

Once you have done this, setting the appointment becomes much easier. If you approach every customer in this fashion, you will be amazed how many will slow down and open up during the phone conversation. Once you have made a connection with the customer and given him some real value, he will be ready to visit the store.

Prepare a two-minute presentation for those customers who are in a hurry or only want a price. This will equip you to handle this type of caller and will give you an advantage over the competition. To grow any organization, we must grow the people within it. The self-storage industry is becoming more competitive every day. To overcome this, we must equip and educate ourselves to become the best we can. The biggest asset any self-storage operation can have is the people running it.  

Brad North is founder of Advantage Business Consulting and specializes in sales and marketing training to the self-storage industry. He has produced two live videos along with a workbook called Maximizing Your Sales and Marketing Program. This resource will help managers take their sales and marketing programs to a higher level. Mr. North also offers comprehensive on-site sales, marketing, feasibility and operational training to the self-storage industry. For more information, call 513.229.0400 or visit www.advantagebusinessconsulting.com. 

One of the most difficult issues for a selfstorage facility to handle is the disposal and sale of a vehicle when a tenant is in default. Storage of a car, boat, RV or other vehicleespecially outdoor storagecan be a lucrative part of a storage business, but when a tenant fails to pay rent, profits seem less than worthwhile compared to the problems created.

Vehicles are unlike anything else stored at a facility because they have titles, and titles often have liens attached to them. Getting a title into your name to sell an abandoned vehicle is one problem. Getting around the lien on the title is a second. While some states require you to ask tenants to declare liens on stored property or check for liens before a sale, you often do not find them on household goods and furnishings. That does not mean there are no liens on the property certain types of liens are simply not recorded. With vehicles, there is no way to avoid knowledge of a lien. To further complicate matters, details regarding vehicle sale and disposal may not be addressed in your states self-storage statute. So what is a storage operator to do?

State Statutes

Several states have procedures set forth in their self-storage statutes specifically setting out an operators rights when it comes to vehicle disposal. They outline how to retitle and sell a motor vehicle stored at a facility when a tenant is in default. The statute may also discuss what happens to prior lien holders. This could be a blessing or a curse.

For example, California has a lengthy, complicated procedure for selling a motor vehicle stored at a self-storage facility. The states statute goes so far as to draw a distinction in sale practices between cars and boats. If you are in a state like California, you need to follow all of the time lines and notice requirements of the states statute to sell a vehicle legally. If you are able to follow this maze of guidelines properly, you will generally be able to get a title to the vehicle, sell it, and pay off the lien and your sale expenses.

There are other states that have requirements for the sale of vehicles in their self-storage statutes, and some give some hint of law to secure the title or sell without being as difficult as the one mentioned above. For example, the Michigan statute gives some direction of what to do to sell a vehicle in default and handles the title issues. Other states, such as Arizona and New Hampshire, offer some procedures for safely selling vehicles. North Dakota, Oklahoma and Wyomings statutes provide for the transfer of title on sale of a vehicle. Virginia grants priority in the first $150 of storage fees if you sell a vehicle. Unfortunately, in other states with self-storage statutes, disposal of a stored vehicle is not even mentioned.

Protect Yourself Against Claims

There are several things an operator must consider to protect himself from a lawsuit over the wrongful sale of a vehicle or having the lienholder sue for wrongful conversion of his liened property. The first consideration is whether the state statute speaks to stored vehicles in default. If not, he must look at whether his lease speaks to the issue of default and if he has provided himself any specific rights to remove vehiclesspecifically, the right to tow a vehicle after the default has been declared.

An operator must also determine the approximate value of the vehicle to be disposed/ sold. Several states have junk-vehicle statutes that allow anyone who has an abandoned vehicle with a certain maximum value on their property to have the vehicle retitled as junk and dispose of it.

If an operator does not have a self-storage statute that speaks to vehicle disposal, or his lease or statute does not allow him to tow a vehicle, he must look at other laws that might allow him to remove or sell. While many state statutes do not actually deal with statutory lien sales of vehicles, many have separate statutory sections that protect other industries, such as towing companies who charge storage fees or mechanics who make repairs and are not paid. This is the next place an operator should look. I recommend you consult an attorney for assistance at least on your first attempt to find and apply these statutes.

Often, if you find an applicable statute, it will provide for a specific lien and process for disposal of a vehicle in storage with a towing company or auto mechanic. Selfstorage facilities may be able to assert a lien right under these statutes because they are, in fact, storing the vehicle. You should be able to follow the disposal or retitling procedures set forth in towing and storage statutes (sometimes called livery statutes) in your state. These may make the most sense to follow because you cannot convey clear title to a purchaser at a lien sale, public sale or auctionyou have to be the titled owner or power of attorney to do so.

Next, do not overlook the possibility of contacting the lender who has the security interest in the vehicle. That lender will often pick up the vehiclealthough it may not be willing to pay the full storage charges. Still, you are better off to have the vehicle off your property and make space available for a paying tenant than to squabble over a few dollars. You will have avoided the issue of securing the title, extinguishing the lien and removing the vehicle.

Remember, if you sell the vehicle without resolving the first lien, in many states, you will be doing all the work for the secured lender. However, the towing and livery statutes in your state may have a trumping mechanism over secured lenders for the storage lien. If at all possible, follow that procedure (which, unfortunately, varies widely by state and cannot be discussed in this short article) to obtain a title. This will make your storage lien superior so you can hopefully recoup some of your selling expenses and lost rent.

If you are really sharp on your rights and know the livery or storage statute in your state, you can possibly explain to the secured lender why it may end up taking a second position to your lien if it does not claim the vehicle and pay storage charges. You will be able to get more secured lenders to pay storage fees and remove abandoned vehicles from your property.

A Final Option

While the first and best option for a storage operator may be to use the livery or towing storage statute and its lien-sale procedures, he does have another option: eviction. Selfstorage facilities often spend a great amount of time and money finding liens, pursuing changed titles, notifying lenders and selling vehicles. After all this, he may find:

1. The secured lenders lien trumps his lien and he gets no money.
2. He does not recover enough money to pay all costs.
3. He is being sued by the owner or secured lender for making some procedural error.

In most states, you can file a forcible entry and detainer action (eviction) for any storage unit or space at your facility. The default clause in your lease must provide that you may exercise all other remedies available in equity or in law. This would mean that, if permissible under the eviction statute in your state, you would have the right to commence an eviction action against the tenant.

The logic in considering this option is the time period for an eviction is generally short. The court will grant you restitution of your premises and, normally, for an additional fee, you can have a sheriff or bailiff come out to enforce your writ. Enforcing your writ, in most circumstances, means having the court appointed towing company take the vehicle into custody. In other situations, it means the bailiff/sheriff may simply watch you tow the vehicle off the premises. Again, laws and rules for writ enforcement vary almost by jurisdiction, let alone by state.

If you are allowed to have a sheriff tow the vehicle into the courts impound lot, retitling and disposal becomes the sheriffs problem, not yours. Better yet, if you are allowed to tow the vehicle elsewhere, you may have an interesting option available to you:

If your state permits execution of personal property, such as a vehicle, to satisfy your judgment, and your states exemption in a vehicle is not a large dollar amount, you may consider filing a complaint against your tenant for damages along with or after your eviction action. If the tenant does not answer the complaint, you will be allowed to take a default judgment against him and collect the money due you. You can order the sheriff to execute against this vehicle to satisfy your judgment. He would take the vehicle into possession and sell it. Proceeds from the sale may be distributed to you on the execution of your judgment or, in some states, any prior lien is paid first.

Even if you do not get much or all of your proceeds, think about what you may have accomplished. For the cost of a complaintfiling fee and maybe an execution fee, the sheriff, who has much better resources to accomplish retitling of vehicles, has done all of the title and lien-check work with the Department of Motor Vehicles. If any procedural errors are made by the sheriff, the liability for those errors lies with him, not you. For a smaller sum of money and a shorter time period, you have saved yourself an enormous amount of work, gotten your space back sooner, and done a good job of insulating yourself from certain liabilities. If your jurisdiction has liberal execution procedures, this may be a concept worth pursuing.

In sum, short of never disposing of stored vehicles, your options are:

1. Have the secured lender take the vehicle off the property.
2. Revise or enforce your lease provisions to allow you to tow vehicles to a towing yard that can exercise its towing and storage lien rights.
3. Follow the towing and storage/livery lien laws in your state, having the vehicle retitled under the storage and towing statutes.
4. Try the eviction and execution route.

The most important thing for a storage operator to understand is he takes on a great deal of risk if his states self-storage statute does not speak to the disposal of vehicles. Selling an abandoned or defaulted vehicle requires jumping through many hoops.

Jeffrey Greenberger practices with the law firm of Katz Greenberger & Norton LLP in Cincinnati, which primarily represents owners and operators of commercial real estate, including selfstorage. Mr. Greenberger is licensed to practice in the states of Ohio and Kentucky, and is the legal counsel for the Ohio Self Storage Owners Society and the Kentucky Self Storage Association. He is a regular contributor to Inside Self-Storage magazine and the tradeshows it sponsors. For more information, Mr. Greenberger can be contacted at Katz Greenberger & Norton LLP, 105 E. Fourth St., Suite 400, Cincinnati, OH 45202, or by calling 513.721.5151.

 

Auctioning goods from a self-storage unit in default is complicated enough for any self-storage owner, but do you know what to do if wine is part of those goods? Wine is a valuable commodity and is usually kept by collectors under controlled conditions. However, there are times, such as divorce or death, when the storage unit goes into default. It is then the facility owner has to do more than the normal procedures to auction off wine and reclaim his costs.

Jeffrey Greenberger, with the law firm of Katz Greenberger & Norton LLP in Cincinnati, says some states have a limited license to accommodate a lien sale of wine, although there are state-by-state differences. The place to start is to call your state department of liquor control and find out what their requirements are. Generally, the state regulates sale of beer, alcohol and wine because of taxation, he says.

Greenberger recommends facility owners consult an attorney and get a formal ruling from a state authority before acting. For example, under Ohios revised code 4301.29, a lien alone does not get it done, he says. I suggest you prosecute to obtain a judgment against the tenant. The judgment can be executed against the wine, which can be taken by the Sheriffs Department and turned over to the liquor-control board for sale. The proceeds are turned over to an officer of the court, who will give the money to the facility owner.

D. Carlos Kaslow, legal counsel for the Self Storage Association and author of The Self Storage Legal Review, says, If I were dealing with wine, theres a possibility it could be extremely valuable, or more valuable than goods found in a typical self-storage space. Unless there are state regulations prohibiting selling wine at a lien auction, instead of holding a typical lien auction, Kaslow suggests making inquiries of people who regularly deal with wine.

Wine is an item for which there is a recognized marketplace; and the value of the wine would depend on what kind of storage space it is, Kaslow says. If kept in a wine-storage facility, it would command a better price, because there would be greater confidence it had been stored properly than if it had been kept in a regular storage facility. Its not hard to get a sense of what its worth and who would want to buy it, Kaslow says.

If a sale is legal, theres nothing wrong with contacting people in the wine business to take a look. We requested an opinion from our state Attorney General as to whether we could legally sell wine pursuant to an auction without a liquor license, says George McCord, co-owner of Plantation Cellars, Bluffton, S.C. It was his opinion that, since the sale of wine was really not in the ordinary course of our business, but would merely be in the liquidation of a security interest in the wine, it was incidental only to foreclose a security interest in that property. We would not need a liquor license to sell it.

Plantation Cellars lease includes the same lien rights as any other storage lease under South Carolinas state statutes. In the event we have to foreclose and we havent yetwe would go through the same procedures to foreclose the interests of a tenant and sell his goods at an auction, McCord says.

McCord suggests facilities in other states contact their attorneys and get an opinion. They could also obtain a formal ruling from the state authority on the legality of a sale pursuant to the lien rights granted by state statutes to a self-storage facility when it involves wine.

We always go through our lawyers and then go through the court system, says Vaughn Clarke, manager of Katonah Storage, Bedford, N.Y. A judge has to authorize the sale of any wine product, and then we have to advertise it. Katonah Storage has only been open for a year and so far, Clarke reports, it has had no defaults.

Goleta Valley Mini Storage, near Santa Barbara, Calif., offers wine storage as part of the facilitys unit mix, which also includes gown and fur storage. The facility has not had to enforce any lien sales on our wine storage, says Joanna Von Yurt, the facilitys owner. But if we did, it would be handled the same way as other tenant liens in accordance with our state laws. Prior to enforcing a lien sale, Goletas management makes every effort to contact the tenant.

Differences in State Requirements

Each state has its own regulations pertaining to the lien sale of alcohol from a self-storage facility, and they vary widely. A few examples are:

Arizona. Arizona Department of Liquor Licenses and Control has no provision for a special permit to sell wine at a lien auction.

California. Although Rule 79 of the California Code of Regulations states all sales of alcoholic beverages in California require a license, subsection (d) of Rule 79, titled Sales Without a License, covers the sale of alcohol when there is a lien due to default on payment. It reads:

Sales to Enforce Warehousemans Lien. A warehouseman, making a sale of alcoholic beverages to enforce a lien acquired under the Warehouse Receipts Act, shall sell distilled spirits only to distilled-spirits manufacturers, manufacturers agents, rectifiers and wholesalers, and shall sell beer and wine only to beer manufacturers and importers and to wine growers and importers. Written notice of sale shall be given to the California Department of Alcoholic Beverage Control at least one week in advance of sale.

Delaware. Under Section 4301-29 (a), Delawares liquor license law states:

Subject to the provisions, restrictions and prohibitions of this title, the commissioner may grant a wine auction license to each qualified applicant therefore. No person shall operate a wine auction unless licensed to do so by the commissioner. For purposes of this section, a wine auction shall mean a person, partnership or corporation that sells rare or fine wines on consignment from the owners of said wines at public auction to those persons who are of legal age to purchase such items. A nonprofit organization may apply for a wine auction gathering license for a specific date upon application to the Commissioner as a fund raiser for their organization.

Florida. Floridas Division of Alcoholic Beverages and Tobacco will issue a license for a one/two/three day permit or special sales license under Florida Statute 561.20(12)(a), Special Sales License. According to law:

This special sales license may also be obtained from this application for the sale of alcoholic beverages for a period of up to three days. This license does not permit the sale of alcoholic beverages for consumption on the premises, and only allows package sales in sealed containers.

Upon the filing of an application and payment of a fee of $25 per permit, the division may issue a license authorizing the sale of alcoholic beverages in sealed containers only, for a period not to exceed three days. This license is issued only for the purpose of authorizing a sale pursuant to: levy and execution; bankruptcy; insurance companies in possession of alcoholic beverages; license suspension or revocation; goods damaged by a common carrier; bona fide wine collector; pursuant to part 5 of chapter 679; or a bulk transfer pursuant to chapter 676.

Illinois. According to the Illinois Compiled Statutes Liquor Control Act of 1934, 235 ILCS 5, to sell liquor in Illinois, the seller must have an auction license. An Auction liquor license requires a person to obtain prior written approval from the state commission to sell or offer for sale at auction, on a specified date, wine or spirits for private use or consumption, or for resale by an Illinois liquor licensee in accordance with the provisions of this act.

The license will allow the licensee to sell and offer for sale at auction wine and spirits for use or consumption, or for resale by an Illinois liquor licensee in accordance with provisions of this act. An auction liquor license will be issued to a person and it will permit the auction liquor licensee to hold the auction anywhere in the State. An auction liquor license must be obtained for each auction at least 14 days in advance of the auction date.

The most recent requirement, which was imposed on applicants for an auction license, is that the applicant must first become licensed pursuant to the Illinois Auction License Act (225 ILCS 407/5-1, et seq.). This practically limits liquor-auction licenses to professional auctioneers. The Illinois State Office of Banks and Real Estate should be consulted for additional information concerning the issuance of auctioneer licenses.

New York. The New York State Liquor Authority MW-735 Lienor (One Time) requirements authorizes a warehouseman, railroad company, steamship company or other person who has acquired a lien pursuant to the law for the storage or carriage of alcoholic beverages, to sell alcoholic beverages to a licensee under the following conditions:

1. The alcoholic beverages will be sold and delivered only to duly licensed manufacturers, wholesalers and retailers.
2. The sale will be held on premises for which a warehouse permit has been issued.
3. The alcoholic beverages will not be stored at the place of sale in excess of 48 hours after the date of sale unless stored in the name of the purchaser.
4. Only alcoholic beverages in the original sealed containers, which comply with the provisions of the law with respect to labels and sizes of containers, will be sold.
5. The duplicate permit or a photostat copy thereof will be delivered to each purchaser.
6. The permittee will pay all excise taxes imposed by or under the provisions of the tax law.
7. Such permit shall be valid for one transaction only.

The application must be accompanied by a typewritten list, signed by the applicant, listing the alcoholic beverages to be sold and stating quantity, type, brand name and the size of the containers.

Conclusion

Regardless where a self-storage facility is located, it is obvious disposing of wine found in a defaulted unit can involve legal complications not easily solved through the usual liensale process. It is critical to find out if your state allows the sale of wine without a liquor license. It is also critical to follow all the guidelines set forth by any state that allows the sale of wine under a lien sale.

Facilities should contact their attorney and also get an opinion or a formal ruling from the state authority that a sale of wine goods, pursuant to the lien rights, can be granted by state statutes to a self-storage facility, McCord says.  

Sources: Arizona George Graham Deputy Director Arizona Department of Liquor Licenses and Control 602.542.5141 California Patrick Deasy Chief of Business Practices Department of Alcoholic Beverage Control [email protected]  Delaware Donald Bowman Delaware Department of Public Safety 302.577.5210 Florida Application of One/Two/Three-Day Permit www.state.fl.us/dbpr/abt/forms  Illinois Karen Faltin Director of Media Liaison State of Illinois Liquor Control Commission [email protected]  New York Joanne Miranda Department of Public Affairs Copy of Alcoholic Beverage Control Miscellaneous Permits 518.486.4767 www.abc.ny.us  For a list of state liquor-control boards, visit www.aft.treas.gov/alcohol/info/faq/subpages/lcb.htm

Casaforte Self-Storage S.p.A.’s marketing strategy has evolved over the last six years, becoming an increasingly more targeted and professional process. As a team of people who believe in the project, the Casaforte group has worked on this process, turning its marketing strategy into a highly responsive mechanism. It is always sensitive to market changes, but also aware of the practical aspects of each individual advertising campaign. This is especially required when approaching the Italian selfstorage market, where customers still must be sensitized to the service, and marketing tools must continuously be readjusted to the public’s changing needs.

Casaforte’s marketing strategy is flexible and structured through a series of steps. First, the staff performs a study to identify the perfect location for a self-storage facility. The objective of this analysis is to verify the existence of a potential target market in the area.

Second, more research is done to profile the local target market. Size, age, income and lifestyle of the resident population are some of the evaluation criteria. This phase is critical to the definition of the marketing plan. The marketing staff uses official statistical data, interviews and the support of local partners to identify specific categories of consumers within the target market to design direct marketing actions devoted to them. While addressing its communication efforts to the general public, Casaforte considers subgroups of potential customers with particular needs in terms of storage services.

The local market is examined in regard to many aspects, including:

• What types of media do the consumers prefer and trust?
• How do these consumers use the Internet?
• What type of marketing contact do they like best (telephone, direct mail, newsletters, etc.)?
• What contexts (local fairs, trade fairs, special events) are more suited to the presentation of self-storage, and which events do these target groups attend?

The Marketing Plan

After the analysis, the marketing staff draws up its final plan, which usually includes different types of intervention. Casaforte has always achieved the best results by applying a mix of marketing tools. National and regional differences in Italy and Europe—in media preferences, habits, language and lifestyle—mean frequently changing the mix, making the experience more challenging but ultimately more successful.

Casaforte’s communication to the general public aims to be attractive, to encourage people to visit a facility and help them understand the core concept of the new service. Massive distribution of leaflets, availability of detailed information through the Internet, presentations of the service in malls or at local fairs or trade exhibitions, numerous ads in the local newspapers, and commercials on local radio and television are all means of making contact with potential customers. These means are defined and scheduled through a specific advertising plan.

In addition to these standard marketing actions, Casaforte has successfully experimented with a very “Italian way” of getting in touch with people and effectively spreading the word about self-storage. It is very easy: You just need a small portable gazebo, leaflets and brochures to distribute, a couple of outgoing and nice people from the management staff, sweets and chocolates, and the right place to set up your stand.

Casaforte typically uses a stand during the spring and summer months on a few select Sunday mornings. It chooses strategic spots, like central plazas, with high levels of foot traffic. In this relaxed context, people stop, ask questions, exchange opinions with the staff, collect advertising materials and eat the sweets. The occasion ends up looking more like a family reunion than the promotion of a new service. Also, the feedback has always been very encouraging: One in six people who stopped by the stand called the self-storage facility to ask for more information.

For direct marketing, Casaforte produces letters addressed to people with filing needs that require increased archives: lawyers, professional accountants and notaries. In some areas, where particular customer groups could be interested in the self-storage business—such as Chinese Importers in the center of Italy—commercial letters have been written in the language of the addressees, taking into consideration their cultural habits and usages.

The Advertising Plan

The advertising as well as the marketing plan always involves a mix of media. The ideal mix includes newspapers ads, and radio and television commercials. Casaforte facilities are always located in points of greatest visibility, which already represents a strong advertising medium.

Usually, the plan provides for a launch phase. During this period (usually three to four weeks), the incisiveness of different media is tested and customers’ reactions are monitored. People who visit the facility or call for information are always asked how they heard about the facility. Strong relationships are developed with the press, television and media agencies.

In Italy, it is critical to the visibility of the business to organize an event for the opening. Journalists, opinion-makers and representatives from the local media are invited personally to the event through letters of invitation and follow-up calls. Usually, they enjoy a visit to the facility and a presentation on the business by the investors. They are then invited for lunch or a cocktail (our popular “aperitivo”), the Italian way. Thanks to this friendly way of managing public relations, Casaforte has gradually gained spontaneous attention of the mass media and, as a consequence, a lot of free visibility.

After the launch phase, the efficacy of each advertising medium is evaluated. Following the results of this evaluation, a maintenance-advertising plan is defined. The maintenance plan aims to preserve public interest in the topic, widen public knowledge about self-storage, and attract specific target groups.

The Internet as a Source of Interaction

Casaforte devotes a great deal of resources to the development of its increasingly interactive website. The site, www.casaforte.it, contains a detailed description of what selfstorage is, for what it is used, and who uses it. Each facility is fully reviewed in the “Where We Are” section. Maps and interactive-map services are provided to help people locate and reach the facilities. Pictures of the facilities with interiors and details of each structure are displayed on every link.

The website also offers interactive tools. The “Space Calculator” and “Transport and Handling” help a customer get a detailed estimate. The “Casaforte Store” is the virtual store where customers can buy packing materials. “Logistics” estimates shipping or transport costs that can occur during a move.

Involvement and Collaboration

In defining the marketing and advertising plans, Casaforte’s marketing staff involves interlocutors from various local institutions who have a thorough understanding of regional habits and cultural peculiarities of the resident population. These interlocutors are always professors from local universities, opinion-makers and intellectuals who actively participate in the formation of public opinion.

Direct contact with locals is also highly regarded. In fact, the managing staff is always made up of people selected from the area. These people are asked to collaborate in the development of the marketing and advertising strategy. Involvement of local interlocutors, along with collaboration with the resident staff, has proved to be the most effective way to meet public expectations in terms of communication of what self-storage is and what the service itself involves.

Branding, Branding, Branding

Casaforte’s brand name is identified by specific colors (yellow, black and red) and identification marks. Bright, distinctive colors and strong unmistakable marks have proved to be very effective in attracting attention and affirming the brand.

Great effort is made to adhere to the image standards in the production of ads and other communication material. Free gifts bearing the company logo, such as pens, hats, lockers, stickers and pins, are distributed to customers and people who visit the facility.

To reinforce the idea of a strong coherent image, all Casaforte facilities respect the same standards of structural efficiency and customer care. The managing staff is trained according to the same program, and they approach and take care of the customers following the same procedures. Either in defining standards of structural efficiency, human-resources management, and customer- care standards, Casaforte has codified specific procedures, which have to be followed in every facility. By sharing the same procedures, every facility can provide customers the same high-quality service, strengthening the branding coherence.

With its strong brand name, Casaforte is working toward becoming something more than a self-storage service. It aims to become a common concept where customers feel they are home.

Sabrina Tordo is the marketing and communication manager for Casaforte Self Storage S.p.A. For more information, visit www.selfstorage.it.

When Stuart Ross, founder of Ross Construction, died suddenly in September 2001, his daughters, Victoria and Penelope, did not hesitate to pick up the reins of the family business. At the time of her fathers death, Victoria was working as an event manager for pharmaceutical clinical trials in London. Penelope was in New Zealand working as a research and marketing manager. They returned to Rialto, Calif., in January 2002 to take on the management of the company.

Stuart had revolutionized the self-storage industry by being the first to design and build metal self-storage facilities. He had built a solid foundation for the company and had a great team of loyal employees. Fortunately for the sisters, General Manager Eamon Lyons made the task of running this phenomenal enterprise much less daunting.

We are very inspired by what our father has done for the self-storage industry, Victoria says. We hope to accomplish the same. The companys scope of activities includes design, engineering, manufacturing and installation of complete selfstorage systems, including structural steel, roofing and partitions, as well as metal buildings and architectural metal roofing.

It took 22 years for my father to impact the selfstorage industry in the manner he has, Victoria says. We have been told time and time again what an innovator he had been in the industry, how hed advanced the way the facilities are built. Even today, Stuarts innovations are an integral part of Ross Constructions services and products.

The Experience of Four Generations

Although Ross Construction started as a family business in 1992, it has four generations of solid roofing and construction history behind it. Founded in New Zealand in 1946, Ross Roofing Ltd. remains a strong, family-owned business that manufactures and distributes steel-roofing products throughout the world

My great-grandfather manufactured and installed concrete roofing tiles. Then my grandfather took over his fathers business and expanded it to manufacture for export, Victoria explains. My father and uncles worked with my grandfather for a number of years, then expanded the company to a variety of roofing materials for residential and commercial properties.

Victoria and Penelope grew up around roofing and construction. The majority of our cousins work for the family business in New Zealand. So, it truly is a fourth-generation company.

In 1977, Stuart moved to California to help set up a concrete-tile manufacturing facility with a friend. The stay was supposed to be just for three months, but he saw other opportunities and made the move permanent. In 1979, a friend of Stuartsa storage ownerwanted to build a new facility. His current facilities were made with particleboard. Stuart suggested using steel instead, since it would be a more durable product. Shortly thereafter, he imported a long-run metal machine and started building facilities with it.

A new trend in self-storage construction was developed when Stuart launched Rib-Roof Industries in Rialto, Calif. He revolutionized the look of self-storage by introducing metal and light-gauge steel as a main component of storage buildings. He also designed the Klip- Rib system, a nonpenetrating roof-panel system that is held down by clips to withstand 90-mph winds.

Victoria and Penelope have been able to take on the responsibilities of the legacy left by their fatherin part due to the support of their family. Until my grandfather passed away nine months ago at 83, he would still phone from New Zealand offering to come and help us and reinforce how proud he was of us for having the confidence to manage the business without our father, Victoria says.

Products and Services

Ross Construction, which has 25 full-time employees, provides in-house design and engineering, complete steel systems, singleand multistory construction, Zincalume UL90 standing-seam roofing, pre-finished trim and accessories, partition systems, climate-control systems, conversions and recovers. The company serves the United States and Canada, employing approximately 75 experienced installation crews across the country.

An in-house design team works closely with architects and engineers to produce full design-build packages based on the companys industry experience. This ensures a cost-efficient solution for owners and enables the construction process to be considered from the start. Complete design and engineering services provide an economical, quality steel-roof system.

Ross provides several products to its clients:

• A light-weight, metal-chip-coated product is manufactured in Belgium, New Zealand, South Africa and the United States.
• Standing-seam roofing is made of coldroll formed, long-run steel (60 feet plus) offering maximum design flexibility. It is adaptable from a near flat (minimum 1/4:12) to steep pitch. Installed directly over an existing roof, a Ross retrofit application does not disturb business during installation. The R-value of an existing roof system can be dramatically increased by use of batt-type insulation applied between the existing and new roof system.
• Beam-and-purlin steel-roofing design offers complete versatility of interior-unit arrangement, allowing for a variety of storage area sizes and shapes. Partitions for self-storage facilities and commercial or industrial installations provide for secure and economical interior-wall arrangement and versatility.
• Post-and-purlin steel-roofing design offers an economical alternative by eliminating the cost of beams, while providing easily rearranged partitions to allow versatility of interior units.
• A batten-seam system is designed to be installed over open framing. It snaps together with clips that hold firmly in place without exposed fasteners. This system allows a continuous appearance that is aesthetically pleasing as well as reliable.
• A standing-seam system is a waterproof, aesthetically pleasing roof system. It is available at a minimum pitch of 3:12, with UL580-Class 90 wind ratings. It is Class A fire tested, therefore extremely beneficial in areas where fire or wind is a concern. Available at a variety of widths, the standing-seam system is a favorite with clients.
• Partitions for self-storage facilities and commercial or industrial installations provide secure and economical interior-wall arrangement and versatility.

New Marketing

Victoria has a positive assessment of the self-storage industry. Buildings are becoming more visually appealing and complex in their design. Increasingly, it is women who are renting units, and facilities are responding to their needs, including security and cleanliness, she says.

Facilities have to adapt to meet new expectations, such as better lighting, security and aesthetics. Similarly, the growth of alternative storage for documents and wine has shifted the focus to more sophisticated facilities. The industry is responding by blending properties with the environment, which can only aid the growth of self-storage. Convenient, accessible storage will continue to be a drawing card for all communities, but particularly in areas where increasing population density and/or land prices are forcing families into smaller dwellings.

Rosss marketing program is being developed to refresh the companys brand, reflect the changes in the company and respond to the industrys needs. Marketing is done principally through building and maintaining strong customer relationships with existing and new clients. Participation in all national tradeshows and advertising in various trade publications are also an integral part of the program. Our aim is to make the projects as easy and seamless as possible so clients continue to work with us, says Victoria. We deliver what we promise and focus on providing the best service to them.

Ross Construction wants to ensure it meets all of its customers needs and expectations. Recently, one of the companys largest clients called and said he had been watching the company with a magnifying glass since the death of the founder. He wanted to congratulate Victoria and Penelope on their efforts. He let them know he and his project managers were more than satisfied with their work, and they have complete confidence Ross Construction can deliver a quality product, on time and within budget.

We were more than thrilled with this call, as we knew it meant Ross Construction was exceeding expectations, Victoria says. For more information, call 800.572.6993; e-mail [email protected]; visit www.rossconstruction.net.