Never in the 50-year history of commercial records management has there been the investment interest that exists today. Private-equity funds, investment consortiums and private developers are flocking to this once obscure industry that has always been under the radar for many investors.he commercial records-management industry has been entrepreneurial from its beginning. The companies that flourished tended to have great salespeople as their owner-operators. Over a 40-year period, some of these businesspeople have made millions of dollars with hard work, perseverance and a long-term business strategy. During the last 10 years, many have cashed out and sold to companies such as Iron Mountain, Pierce-Leahey and Recall (a subsidiary of Brambles International). Today we see a new flurry of activity. For the first time ever, investment groups with caches of underutilized capital are looking for long-term investments in the annuity-based financial model of commercial records management.

'What's the Buzz--Tell Me What's Happening'

This line from the rock musical "Jesus Christ Superstar" aptly summarizes new investor interest in records management. It appears the sudden interest is caused by several events over the past few years. Let's take a look at what is causing this:

The demise of the dot-coms. The investment boom of the late '90s has ended with a resounding thud. Those who invested in the smoke and mirrors of the technology boom are now looking for safer, more mundane investments. Iron Mountain (a publicly traded company) has received a "strong buy" recommendation from several investment advisers. The company's storage revenue has increased for 53 continuous quarters. Many industry insiders call storage revenue "permanent revenue."

Corporate lies and corruption. The fall from grace of Enron, Anderson, WorldCom and Global Crossing underscores the need for corporate responsibility in record- keeping and document destruction. In an article titled "Lies, Corruption and Document Destruction" (September/October issue of ARMA International's The Information Management Journal), author David Stephens writes, "Never before in the history of American business has a global corporation been destroyed by acts directly related to document retention and destruction."

Global terrorism. The acts of terrorism that have been perpetrated against the United States and other Western countries have heightened the need for a records-management strategy. Document creation, use, maintenance, archive and disposition policies mirrored in operating practices are critical to disaster avoidance. Businesses that lose vital records typically go out of business within a year after a disaster. Commercial records-management and destruction services are fundamental tools against terrorism.

The Health Insurance Portability and Accountability Act (HIPAA). HIPAA has confounded an already beleaguered industry. Healthcare practitioners are busy trying to determine the effect HIPPA has on their record-keeping practices. Its primary emphasis appears to be related to the access, distribution and destruction of private medical information. Commercial records centers and document-destruction services play a key role in this issue.

Private Equity Activity

In addition to the public companies that have aggressively taken positions in the industry are other private-equity groups actively at work. Two examples are:

ArchivesOne (www.archivesone.com)--Founded in 1991, ArchivesOne offers records management and storage to more than 2,300 businesses, including banks, law firms, hospitals, corporations and medical practices. The company offers storage and delivery of records to customers in Connecticut, New Jersey, New York and Ohio. (For more information, contact A. J. Wasserstein, president, at [email protected].)

Archive America (www.archiveamerica.com)-- In 1925, Sam Blank and his family founded National Brands (the world's largest Anheuser-Busch distributor), Seaboard Warehouse Terminals (one of Florida's largest commercial-warehouse operations) and Archive America (one of the fastest-growing, off-site, records-management companies in the industry). Under the leadership of Sam's grandson, Andy, Archive America has become a national leader in document-management services.

Interest Is Expanding

On a weekly basis, we are seeing interest from private-equity investors, equity consortiums and real estate developers with strong capital positions in buying and creating business opportunities. There are three sister industries that can be leveraged for maximum market penetration: commercial record centers, secure document destruction and data-media protection. Each of these industries can offer hundreds of products and services.

Commercial records management--This annuity component offers continued growth in base storage revenue and creates a client for life. EBITDA (earnings before interest, taxes, depreciation and amortization) can be improved over traditional records management by focusing on four operating principles: effective use of technology, strategic outsourcing, batch processing and personnel abatement.

Secure document destruction--An infant industry compared to commercial records management, document destruction has become one of the fastest-growing services in administrative management. In the past, shredding and the cost of recoverable paper drove this business. Today, the drivers are security and confidentiality. HIPPA and corporate responsibility are the predominate issues.

Data-media protection--Data media is everywhere and growing. We used to consider only tape rotation and historical archives as the principal services. This growing industry includes videotapes from daycare and elderly-care facilities, e-vaulting and other nontraditional methods.

Emerging security concerns, sister industries, privacy law and changes in global policy all create greater opportunities for records management and fuel the fires of interest in that arena. As a result, more private investors are exploring related opportunities in the field. This expanded interest--and corresponding investment of capital--may translate to phenomenal growth in an already attractive business venture.

Regular columnist Cary McGovern 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.

WOULD ANYONE CONNECT A NAME LIKE RED DEVIL WITH SELF-STORAGE? Probably not. That is precisely why entrepreneurs Angus and Simon Burnett chose the name for their corporation. The name, along with its fiendish image, makes the company memorable. And there's no missing the glowing, 8-foot devil on the roof of the Red Devil Storage London headquarters, a former warehouse built around 1900.

Red Devil Storage is on the fast track to success. It opened its first facility in March 1998 and filled less than two months after opening. Today, that first facility remains 97 percent full, and the company has quickly followed with two other central-London facilities. The fourth facility, in Aylesbury, Buckinghamshire, has just been completed.

Red Devil Storage is part of holding company Eaton Securities, a private company involved with several industries. It is owned and operated by brothers Angus and Simon Burnett. The brothers follow the entrepreneurial footsteps of their father who, after selling his engineering yard on the Isle of Dogs, owned restaurants, petrol stations and car parks. Angus studied business at Manchester University, and Simon obtained a degree in art at the University of Reading, Berkshire.

"We see self-access storage as the area to expand out of the various others we are currently involved in," says Angus. "Our aim is impartial, professional advice to provide storage solutions to suit individual customer requirements."

The brothers' first venture into storage came almost by accident. One of their tenants, a self-storage operator, defaulted on his rent. The facility had been struggling to fill its 7,000- to 8,000-square-foot space it occupied in the brothers' basement car park in Princes Gate, Kennington. It took a great deal of work to make this site suitable.

"Kennington had been derelict for more than two years and was in a dreadful state of repair," says Angus. "We did a lot of power-blasting of walls, painting and making good. Once the partitioning system was in, it hid a lot." Then they focused on marketing the facility; but the building's excellent location almost sold the storage service by itself. "We concentrated on the locality and relied on walking around the area doing leaflet drops," Angus says.

The facility in Aylesbury was formerly a car showroom with a mechanics bay and spare-parts storage. Conversion included installing mezzanine flooring and changes to the existing structure. "It has worked very well," Angus says.

The facilities offer clean, secure storage, and removals and packaging supplies. Conveniently located, the facilities can be accessed seven days a week Patrons have access to archive, storage and wardrobe boxes; padlocks; tape; bubblewrap; racking; mattress, sofa and armchair covers; and a man and van to help move goods. Red Devil is also the agent for Teacrate PLC that makes plastic crates for rent or sale.

How have the Burnetts selected sites for each facility? "Location, location, location ... and price," says Angus. In addition to selecting a highly visible location that draws foot as well as drive-by traffic, marketing for the facilities is done through the Yellow Pages. Although there is strong competition for suitable sites for storage facilities, Red Devil has an ambitious agenda that includes plans to expand to 10 facilities.

Angus is excited about the self-storage industry and his own company. "It's a great business to be in, with good future-growth potential," he says. "You just need to have access to funds to drive it along as fast as you would like to."

For more information, e-mail [email protected].

THE WORLD WIDE WEB CAN BE A TREMENDOUS TOOL for self- storage owners. The problem is, there are a lot of misconceptions regarding how to use the Internet to market a storage facility. Here are some good ways to make the web work for you and your site.

In the storage industry, the ultimate goal is to get people to rent units, not win awards with our websites. When it comes to Internet marketing, many people don't understand this. The only thing your bank accepts is money. This being the case, you need to create a website that sells. Can it also look good? Sure. But the selling power of the site should take precedence over its aesthetics, bells and whistles.

How do we define a website's success from a sales standpoint? From the number of renters it generates. Many visitors to your site will not rent a unit online. Most interested parties will want to physically visit your site before renting from you. (But I still encourage you to create an online form they can fill out to rent a unit if they should so desire.) The goal of your website, then, is to provide a seductive enough offer to make prospects want to visit or at least call you.

What should that offer be? Before you make that decision, figure out the value of every visitor to your facility. How much is every prospect worth? Without that knowledge, it is impossible to make an intelligent decision regarding how much to spend and offer to get people to visit.

Here's how to make that determination: Take the total number of new people who visit your facility in a given month and divide it into the net amount of dollars you generated from those visits. For example, let's say you had 100 prospects visit. (You won't normally close every visitor, but for the purposes of this example, let's say you do.) Let's also assume the average person rents for seven months and the average rent is $100 a month. If you net $300 out of the $700 gross receipts for each person, you produce a net revenue of $30,000. Divide that number by 100 prospects, and you now know you can afford to spend up to $300 per visitor and not lose money. Of course, you don't want to spend that much, but you know you can if you need to.

The key to cost-effective marketing is to pursue those avenues that provide the greatest leverage. The web is one of those avenues. Let's say you were to offer people $50 just for dropping by. You know the average visitor is worth $300, so if you have to give away $50 bills to get people to come by, you'll do it--provided you've tried every method of marketing that costs you less than $50 first.

The nice thing is you don't have to offer people $50. You only need to offer them something that has a very high perceived value but low cost to you. This should appear on your website as an "Internet special." Create a unique offer that appears only on your website so you can track its effectiveness.

Make sure the offer is front and center on the website's first page. I know most owners want to put the facility name in the most prominent position on the page, but truthfully, this is not important to a prospect. Instead, highlight your irresistible offer. For example, you might have a line that says, "$50 in cash for everyone who takes a tour of our facility" or "Free first-aid kit (value of $38) for everyone who tours our facility."

Your site should be simple and easy to understand and navigate. Test the site on a 6th-grader. If it's too complicated for him, you need to go back and redo it. A simple site that shows a picture of your facility, and highlights your unique selling points, features and benefits will work. Also make sure people don't have to scroll forever on a page to get your information.

You should have no more than five pages linked to your home page. Those should be:

• A map to your facility
• Contact information
• Helpful storage tips
• Pictures of the facility (not too many)
• Description of unit sizes and what they can hold (no prices!)

Driving Traffic to Your Site

After you've designed a site that sells, you have to draw Internet "traffic" to it. A great site without traffic is worthless. First understand that, for the most part, storage is local. Promoting your site to a national audience doesn't make a whole lot of sense (unless you're a large national company like Public Storage).

Find ways to link with others who get a lot of local traffic and might help your cause. This would include local real estate agents, moving companies, schools, churches, chamber of commerce, etc.--any business people might contact if they were moving into the area.

Getting high rankings in the search engines will help you a lot. There are many search engines through which you can register for free, such as Yahoo! The next key area is paid search engines, where you pay to have traffic directed to your site. One of the most popular is www.goto.com, where you can register on a trial basis for $25. Some search engines charge a monthly or annual fee, others use a "pay-per-click" method (for a complete list, go to www.payperclicksearchengines.com. Registering on the search engines is very simple to do, and there are many out there.

The most important thing, when registering on search engines, is to select the right key words under which people might search to find you. Let's say your facility is in Orlando, Fla. You may want to choose the key words "Orlando," "Storage" and "Self-Storage." This will ensure you come up in a top position any time someone types in these or any other key words you select.

There are many other ways to create a website that sells and drive traffic to it, but these will get you started. I will cover this topic in greater detail in future columns.

Fred Gleeck is a self-storage profit-maximization consultant who helps owners/operators during all phases of the business, from feasibility studies to creating an ongoing marketing plan. Mr. Gleeck is the author of Secrets of Self Storage Marketing Success--Revealed! as well as the producer of professional training videos on self-storage marketing. To receive a copy of his Seven-Day Self-Storage Marketing Course and storage marketing tips, send an e-mail to [email protected]. For more information, call 800.FGLEECK; e-mail [email protected].

Editor's note: The following was recently sent to Inside Self-Storage as a letter to the editor. I thought it was a good idea to start a new tradition with this particular issue, the theme of which is "Managing Managers," to recognize outstanding employee performance in the self-storage workplace. There are so few opportunities to acknowledge the hard work of managers and other office-support staff. If you would like to commend a co-worker or employee in the magazine, please send an e-mail to [email protected].

Dear ISS:
My name is Geneen Gieseke. My fiancé, Bud Warner, and I are property managers for Stor-It Self Storage in San Juan Capistrano, Calif. Recently, Bud and I were scheduled for a vacation. Our regular relief managers, Patti and Paul Bitzer, were covering most of our days off. There were only two days they could not cover, and the home office sent our floater, Donna Abernathy.

Donna is a very energetic, dedicated employee. Sometimes, when there is need, she will work seven days a week. She loves her job and enjoys the people for whom and with she works. The morning before she was scheduled to work at our property--Sept. 11--she fell down the stairs at home, breaking her leg and fracturing her arm.

The day she was scheduled, I went to the office to say "hi" before leaving on our trip, not knowing what had happened to her. There she was behind the counter with her leg in a cast and her arm in a sling. I could not believe my eyes! I said, "Donna, what in the world are you doing at work?" She replied, "I would rather be at work than sitting at home doing nothing." She begged the doctor and the home office for a work release, even though she still had to return to the hospital to have further tests on her arm that evening.

The home office sent Warren Van Alstine to help her that day, and they rented a few units. Two days later, she was scheduled to work for us again; but this time the little trooper was on her own. She drove herself to work in her cast and took care of the property. She did not want to disappoint Bud and I, as we had not had a vacation in a long time.

Donna is absolutely amazing. Her dedication in this matter and all other situations is above and beyond the call of duty. She is a wonderful person and friend, and we would like to thank her for all her hard work and dedication. Without her help at all of our properties, things would not run as smoothly. I wish there were more people in this world with her work ethic and enthusiasm. She is a joy and pleasure to know.

Thank you, Donna. We love you!

--From all the employees at Stor-It Self Storage

OVER THE PAST THREE AND A HALF YEARS, MY HUSBAND, DAVID, and I have worked for an excellent company whose owner has shown us support in numerous ways. An owner should always be attentive to his managers' creative sides--some of us have great ideas, especially when it comes to marketing. Most of the time, managers come to the table with a variety of skills and knowledge picked up from miscellaneous jobs they've had. If you think you have a clever idea for a marketing event, don't hesitate to put it in writing and pitch it to your owner. If you don't have a creative bone in your body, ask friends, family, even tenants what they like to do on the weekends for entertainment--this should generate some inspiration.

If you have an event you'd like to host, you must first have a plan. Do not just give the owner a vague thought. Sketch out a preliminary budget, know if you have the right support staff, and create a list of what you need to buy, rent, have donated or make yourself. Then make a list of the companies with which you'd like to work.

Use your chamber of commerce to find local business listings. Once you've decided on a date and theme for your event, you can send these businesses a letter asking them to donate goods or funds in exchange for a sponsorship. You'll be able to follow that letter with an invitation to your event, whether or not they contribute. Use a notebook to store all your quotes, in-house invitations, fliers and any other related materials. This way, if your owner asks you to further present your ideas, you are one step ahead with organized notes.

I have held several business after-hours parties through our chamber of commerce because it will advertise the event and reach maximum potential customers--especially if your thrust is file, merchandise and equipment storage for the business owner. These professionals want a short party where they can come right from work. They want to network, eat and drink, see a limited tour of your facility and leave with some giveaways. You may not earn any immediate customers, but the referrals and positive conversations at attendees' respective offices on the next day could do your location wonders.

I held my first party in one of our climate-controlled buildings just six months after opening a property. I used 10-by-10s for catered spreads of food, 10-by-15s for rented golf and toss-football games, and a 10-by-20 for rented bar tables and chairs. The feedback was extraordinary. The common theme of comments I received was, "I didn't know storage facilities could be so nice."

In October, I was given authorization to host a Halloween haunted house in which I used climate-control and traditional units in themed ways. The 10-by-20 became a graveyard, the inside 10-by-15 a haunted livingroom, and a 5-by-10 featured a hanging ghoul and coffin. I also used several units for pumpkin-carving, face-painting, games and food. I wrote to local businesses--small and large--to assist with the costs. I even asked our local grocery store to donate apples and called Pepsi Cola of Buffalo, N.Y., for a donation of soda.

Remember, you cannot charge admission to your marketing events. They should be community-oriented and kid-friendly. Most important, always give your sponsors plenty of recognition. Last but not least, make sure every one of your guests leaves with a brochure, business card, referral voucher, etc. And don't forget to track your response in calls and rentals. If you earn a dozen customers from your event, chances are your owner will approve it again for next year.

David and Tina Fleming are an award-winning management team with Premier Self Storage Inc. of Western New York. David has more than 10 years of experience in the self-storage industry, having managed facilities in three states. He is currently a corporate trainer and senior site manager overseeing five locations. He and Tina work as full-time resident managers of Premier Self Storage in Lancaster, N.Y. To contact the Flemings, call 716.651.9500; e-mail [email protected].

As we endeavor to perfect our self-storage operations, it is imperative we create a work atmosphere conducive to higher productivity. Not only will this act as motivation for our staff, it will give them a sense of ownership as they strive to make a difference. One of the most effective ways of achieving this is to create an environment where everyone involved feels a part of the success. You can accomplish this with incentive programs, contests, recognition, and opportunities for your managers to take ownership in the operations of their stores.

Incentive Programs

An incentive program is one way to create a highly productive work environment. These types of programs, if properly implemented, can create an atmosphere in which a standard of excellence and healthy competition are fostered. The goal is to level the playing field so each member of your team takes part in and ultimately drives the success of your operation.

Most storage operators fail to recognize the importance of including their entire team in their incentive programs, but it is the only real way to achieve success. For example, you can give each of your storage locations a monthly goal tied to a bonus. Everyone involved in the running of the store is a part of the program. If a store hits its goal, the manager, relief manager and anyone else involved is given a bonus for his efforts.

A successful incentive program also requires a means for instant gratification. I have found monthly incentives are the most effective. For example, you might try an individual incentive for employees who achieve a certain score on their monthly telephone-mystery shop. This will help relief managers and part-time employees feel part of the team. With everyone striving to score as high as they can, healthy competition is created and the store's overall mystery-shop score improves. Each person desires to score high, not only to receive the bonus, but to achieve his personal goal. You can then recognize everyone's level of performance in monthly staff meetings.

Contests

Another approach to developing more productive work environments is running creative contests between your stores. You can really sense excitement from everyone involved, because they are all part of the program. They have fun and even tease each other, which creates more cohesiveness throughout the team. As everyone strives to come out on top, you'll see improvements in the communication and enthusiasm of your staff.

For example, at one set of stores where a contest approach was used, everyone involved in the selling process had an incentive to follow up and prospect for new rentals. Because of their overall attitude toward winning, the employees continually called each other to update on new customer appointments or follow-up calls to be made and discuss how to create more customer visits to the store. There was positive feedback from almost everyone involved. Not only did the staff develop stronger relationships with each other, but also with the employees at the other stores. As you look at new and innovative ways to develop a more productive work environment, be sure to consider running contests between your stores.

Awards and Recognition

Another technique for creating a highly productive work environment is to publicly reward your team members with annual awards and in monthly staff meetings. Public recognition will not only show how much you appreciate particular individuals, but will indicate to the rest of the team the skills and talents it takes to excel in the operation. It will increase the respect your team members have for one another. For example, I nominated one of my managers for a national "Manager of the Year" award, and she won as a runner-up. Not only do her peers have greater respect for her, they now realize what qualifies as a standard of excellence.

Positive feedback for good performance is just as important as compensation for achieving a goal. In staff meetings, it is important to recognize and reward contest winners and team members who have met or exceeded their goals for the month. Team members like to feel as though they are contributing and enjoy being recognized for it. Offering positive recognition in front of peers is a wonderful way to show your people how much you appreciate their contributions to the success of the operation.

These practices and programs prompt managers to become more proactive in the marketing of their stores and take a greater role in making it successful. Because they know the value of their contributions, they are more willing to learn what it takes to build relationships with key influencers who will increase their referral business and give them the opportunity to earn more money. They also understand providing a positive experience through the best possible customer service encourages previous customers to come back and to refer their friends.

Incentive, contest and recognition programs cannot be successful unless facilities maximize their overall sales programs. Everyone involved in the selling effort must know their conversion ratios (number of callers converted to renters) and consistently try to improve them. Making the phone ring is useless without the commitment to maximize each call and rent more units. When everyone at a store is involved in the sales effort and is given an incentive for high performance, the store is ultimately more profitable.

True success comes from a partnership between you and your team. If you help your people become successful, they will make you successful. Use the above programs to create a highly productive work environment. Provide incentives based on goals, run contests and recognize the efforts of your team members as much as possible. Involve your managers in the operations of their store, and always seek opportunities to ask them for their input. You will see your team members flourish and your profits soar.

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 titled "Maximizing your Sales and Marketing Program." This resource helps 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.