O'NEIL SOFTWARE INC., IN ITS 20 YEARS providing records-storage solutions, has worked with hundreds of people in different aspects of the records-storage, self-storage and moving and storage industries. Clients range from the industry veteran with many years of experience to the newcomer who sees an opportunity to build a new business but does not know where to begin. The common ground among them is their involvement with an industry undergoing rapid transformation.

Originally, records storage was a relatively sleepy and quiet industry. However, technology has allowed aggressive upstarts, using new generations of management techniques to grab marketshare. The reason for the interest in records storage is simple: It offers exceptional profit potential and consistent revenue. In records storage, revenue grows at an average rate of 20 percent per year even if operators do nothing to expand their business.

For the established company looking to diversify into records storage and the entrepreneur starting from scratch, O'Neil is a great source of software and know-how. The company has more than 20 years of industry experience, having provided 700 installations in 40 countries.

O'Neil's solutions are used by startups and world leaders. The company wishes to share its expertise and provide the tools to properly analyze a potential records-storage business. Interested parties can visit www.oneilsoft.com and download or request a free copy of "The Secrets of Getting Started in the Record Storage Industry." This book answers many of the questions prospects have and offers new ideas for greater success in the industry.

The Technology

O'Neil is one of the pioneers in records- management software. In 1985, the company introduced the industry's landmark barcode technology with its Record Storage for DOS software. Although commercial records storage was still in its infancy, this development gave O'Neil users the unique ability to manage large volumes of hardcopy information through the use of barcode tracking. Multidepartmental invoicing, remote communications, portable receipt printers and intelligent scanners were just some of the enhancements early clients capitalized into competitive advantages.

In 1995, the record center's end user became savvier about the benefits of technology and information management vs. warehouse storage. O'Neil introduced RSWin (Record Storage for Windows), which enabled clients to take advantage of the new Windows operating systems. A major redesign in the product line featured Table Technology that allowed faster and easier queries and searches. Features that took hours before could now be done in minutes through the power of global functionality.

Today, O'Neil continues to set a standard in software solutions for the records-storage industry. Its newest software product, RS-SQL (Record Storage for SQL Server), was unveiled in 2000. It continues the O'Neil philosophy of full database compatibility. RS-SQL users have the advantage of unparalleled features:

• Open architecture with Microsoft's SQL- Server database engine
• Scalability (lab tested to 100 million records)
• Web-browser (RS-WEB) technology
• Application programming inter- faces to tie into other external database tools

In addition, all O'Neil's features are included at one price. This means a startup can benefit from the same advancements usually reserved for world leaders. Between the company's industry experience and large customer base, O'Neil's software products have evolved into full-featured commercial and corporate records-center tools. Industry software development is not a side product for the company--it is its only business.

When it comes to technical support, O'Neil is second to none. When asked about his experiences, O'Neil customer Mike Rich of Records Central says, "Not having O'Neil support is like having a car without gas. As I matter of fact, just today I called twice. The response I got was immediate and effective, and I had an instant solution. When I call, they treat me like I am their only client. I think the O'Neil support team is the best in the business." That says it all.

In 1995, O'Neil University was created to offer a full curriculum of customer classroom training and consulting. Since O'Neil draws to its team experts and talented professionals from the records-storage industry, the university has been a valuable resource to established record centers and startups alike. The company helps its clients stay abreast of the ever-changing advances in the records-management business.

O'Neil makes continual investment in its software development. The company's development team has a full slate of RS-SQL enhancements scheduled for release (enhancements have historically averaged one every six weeks). With this type of ongoing evolution, O'Neil's clients, big or small, will continue to have technological advantages in their particular marketplaces.

For more information, call 949. 458.1234; visit www.oneilsoft.com; e-mail [email protected].

Thousands of self-storage facilities have yet to make the change from DOS to Windows management software. Every one of them knows that, sooner or later, they will make this jump; but for one reason or another, they are not yet ready to do so. The most common reason, I suspect, is the fear of problems that may accompany the change. This is not an unjustified fear, as such a transition is not a simple process and often does cause problems.

What makes the process so complex is not the change in the software itself, but the impact that change has on all of the processes that make up the business of self-storage. Management software--DOS or Windows--is a facility's primary information source. When the presentation of the information is changed, you have to alter your procedures to match. Some examples include audits, overlock/unlock routines, accounting-system reporting methods, payment processing and banking.

Since sites often have their management and security software linked, the change from DOS to Windows can affect security procedures as well. Then there are hardware issues: Do you need new computer equipment? Internet access? Finally, what about training for your employees?

Why Switch?

Reading this, you might wonder why you should even make the switch if it involves so many potential pitfalls. There are several reasons, but one very compelling one is the richer content you get with Windows software. Here are just a few examples:

• Screens are more readable, with your attention drawn to the most important information.
• Information can be presented visually, as in an on-screen map of your facility or graphs that show marketing and occupancy statistics.
• E-mail and Internet access can be integrated into the system. This allows you to e-mail reports to the home office, verify customer addresses on the Internet, e-mail a client a statement of his account and more.

Here's another reason to change: DOS is dying. It's only about 20 years old, but that's about a gazillion in computer years. Soon will come a day when you cannot even purchase computers that will run DOS software. Each version of Windows Microsoft releases makes this more inevitable. Many printers are already incapable of printing from DOS programs, and that trend will only continue.

"OK," I hear you say, "but my equipment is working just fine." However, when your equipment eventually fails (and it will), you may find it very difficult to replace. A new computer will come with Windows XP or some later version, and it won't run your software. "No problem," you say, "I saved my Windows 95 CD and I'll just put that on." That's a good idea, but you will probably find you cannot install Windows 95 on your new computer because when you do, it is incompatible with the mouse or the video or the CD-ROM drive, and you are unable to use the system at all. Or you may buy a replacement printer and find that while it is compatible with DOS, you have to go to the company's website and download the correct driver. Then you find the company doesn't offer a DOS driver for your new version of Windows.

Finding yourself faced with these problems, you decide to make the change from DOS to Windows management software. The good news is the problems associated with a change can be virtually eliminated with proper planning.

Planning the Change

There are a lot of variations in how these changes affect each self-storage business. You can use the following as a guide. Look carefully at all your daily procedures and think about the information on which they rely.

Windows. One of the great benefits of Windows is all its compatible software works pretty much the same, so learning how to use a new program is generally easy. The exception to this can be when an operator has no previous Windows experience. In that case, sign up for a general Windows class, such as an inexpensive one-day training class at a local computer store or community college.

Management Software. Familiarizing yourself and your staff with the software before you actually start using it is essential. Most software vendors provide demonstration or practice systems that allow you to learn the software without the pressure of using it for real business. This is a very useful training tool, and you should take advantage of such as system as a starting place in the transition.

As you go through the software, first learn the basic daily operations: move-in, move-out, taking payments, bank deposits, etc. Much of our daily operations consist of lots of "little" things--reversing payments, voiding late fees, or changing a customer's address, billing status or access code--so make sure you learn how to do those as well. Don't worry yet about things you won't do that often. You don't have to learn it all right away. Now you need to look at the procedures that are the life of the self-storage business.

Banking. The reports you use to compile your daily bank deposits will change, so make sure you review those reports and are aware of the differences between them and the ones supplied by your DOS program. If a list of checks is involved, is the new one acceptable to your bank? Or will you have to write out bank-deposit slips by hand?

Often, part of the banking procedure is reporting to a home office. If so, review your reporting procedures and update them to reflect the new reports and take advantage of any new capabilities. For example, your new Windows software may allow you to e-mail the banking report to the home office as opposed to printing and faxing it. And don't forget to review your procedures at the home office--you may be receiving these reports from multiple sites and will need to revise how you compile and audit the banking information.

Overlocking and Unlocking Units. If you overlock units (and, therefore, have to remove overlocks when customers pay), review the overlock/unlock report in the new software or the unit listing that shows the status of each unit. If there is a significant difference from your old software, make sure your overlock/unlock procedures are up-to-date.

Collections. Most of us use a past-due (receivables) report as a worksheet from which we make our collections calls. Compare the report in the new system with the report from your DOS software. Note any differences and review how they can affect your procedures. For example, your new report may include the phone number of the customer so you no longer need to look up that information before beginning your calls.

Bonuses. Often, bonuses for managers and other staff are calculated based on a number of different factors: receivables, occupancy, inventory sales, etc. You probably calculate the bonus by running one or more reports in your DOS software and then applying some formula to the numbers. Review the reports used to make the calculations, then make sure you know which similar reports have to be run in the Windows program.

Accounting (Check-Writing, Reporting). If you do some or all of your check-writing in your DOS software, you must make sure you can do the same in your Windows software. If you are unable to do so, you should plan for a new procedure. Many self-storage facilities use QuickBooks or another third-party accounting software. If you do, review the procedures you follow for importing your information into the accounting software. It is likely you are entering the information into QuickBooks manually.

Many Windows systems for self-storage include the ability to export to QuickBooks or other programs, eliminating the need for manual input. However, you must update your procedures to reflect this. For example, you may have to create a procedure that says the manager must run the export program every Saturday at the close of business and then e-mail the export file to the home office. Exporting to QuickBooks or another accounting system may require you have your new system set up with the same general ledger account numbers as those in use in the accounting software. If so, be sure you know how to set that up in the new system.

Compare the accounting reports in your old system (income/expense statement, balance sheet) to the reports in the new one. Make sure the new system provides the information you need. If you are required to send the reports to a home office or partner, you probably can take advantage of the e-mail capabilities of the new system to e-mail reports. Again, don't forget to update your home office procedures to reflect these new methods.

Interface With Security System. If your DOS software is interfaced with your security system, you should plan to upgrade to a Windows version of your security-system software. Contact your security vendor for information on this upgrade and its ability to interface with your management software. This will ensure you are taking advantage of all the new features available.

Summary

Plan your change. The process will usually take two to four weeks for an average facility. Here's the process in sum:

• Purchase Windows software.
• Purchase adequate computer hard-ware, if necessary.
• Purchase security-system upgrade, if necessary.
• Obtain training (Windows, management software).
• Set up the practice version of the software to your settings.
• Practice with the new software.
• Refine the system settings in practice as needed.
• Determine and document procedure changes.
• Determine how Windows software will be loaded: data entry or data import?
• Select a date and begin with your life system.
• Keep old/new systems up-to-date with all daily activities (move-ins, move- outs, payments, etc.) until data entry is complete.
• Run the old and new systems side by side for a week or two.

While it is tempting to run systems simultaneously for an extended period to ensure the new system is accurate, I do not believe this to be beneficial. It is an undo burden to operators, and data-entry errors are bound to occur, which, in turn, take too much time to track down. The differences in the systems often make it difficult to match numbers anyway; for example, late charges reported in two categories in your DOS system are in five categories in your new Windows system.

The change to Windows can, and should, be a smooth transition. Like all endeavors, the change from DOS will be successful if these two basic principles are followed: Plan for it, then train for it.

Michael Richards is the president of HI-Tech Smart Systems, maker of RentPlus^® and Mini-StoragePlus^® software for self-storage. Mr. Richards has been involved in the self- storage industry for more than 20 years, and has been a frequent speaker at industry events and a contributor to industry publications. He can be reached via e-mail at [email protected];  phone 800.551.8324; visit www.hitechsoftware.com.

Interest in the development of new, commercial records businesses has never been higher. Entrepreneurs desiring an unusually high return on investment are drawn to this industry. New startups are at an all-time peak. There has never been a better time to enter the commercial records-management business. Curiosity in commercial records management has climbed steadily over the past few years, and attendees at this year's Inside Self-Storage Expo in Las Vegas demonstrated an astonishing interest. There were at least six exhibitors that serve the consulting, software and equipment needs of the commercial records industry. My educational seminar was delivered to an audience of nearly 400, and the roundtable discussion regarding records management was packed. For an industry that has been virtually unknown by most developers, this truly represents amazing growth.

Commercial records management has been an obscure but highly profitable business opportunity during its 50-year history. The industry is mature, with unusual returns and compound revenue-growth potential. It has been growing steadily for decades with no end in sight, but it is an enigma to most business-planning sensibilities. Why would an industry that stores boxes be such a good investment? The answer to this question lies in these unusual industry attributes.

Permanent Revenue

Yes, permanent revenue. The storage agreement is structured to keep clients in your storage facility. If you follow the rules for maintaining satisfied client relationships, your revenue base will grow each and every month. Iron Mountain, the worldwide market leader in commercial records storage, is a publicly traded company and discusses storage revenue in its press releases on a regular basis. (For more information or to access releases, visit www.ironmountain.com.)

Compound Growth Rate

Although the compound growth rate of storage decreases over time as each individual client matures, the industry averages a more than 13 percent growth rate from existing clients. Records storage reflects storage-volume growth from a low of 7.5 percent from very mature clients to as high as 25 percent from newly outsourced businesses.

Customers for Life

The storage agreement is self-renewing, with a retrieval charge and other fees associated with termination. The cost of moving boxes to another facility is generally not cost beneficial to your clients. Of course, as in any business, you must maintain high levels of service in order to keep satisfied customers.

Myth of the Paperless Office

I remember reading an article in 1967 about the "paperless office" becoming a reality by 1980. It hasn't happened yet and won't for a very long time. The issues around the movement to digital records include sociological issues, migration costs, strategic planning and many other complex subjects. Suffice it to say, it will be 20 to 30 years before the migration is complete. In the meantime, paper is the clear choice.

Renting Cubes vs. Squares

As you convert your storage units from passive storage to active records management, you will change the basis of rental from the square foot to the cubic foot. You will maximize your storage revenue by an average of three to five times depending on the area of the country in which your facility is located.

Compatibility With Self-Storage

Self-storage operators and developers are very well positioned to transition to records- management services. Many of the same components are required. It does take a perspective shift, though, since it changes the nature of your storage facility from passive to active management.

Various Operating Models

It is true to say there is no longer only one way to provide records-management services. Traditionalists believe self-storage and records management are strange bedfellows. However, over the last few years, there have been some important changes that enable several different operating models to work very well. Four pricipal methods have developed:

• Traditional
• Nontraditional
• Boutique
• Virtual

Each of these operating models requires a different set of capital and labor components. They vary from very little cost to a substantial investment. The return on initial investment can be unusually high, and the time to profitability can be as little as 90 days depending on the operating model you choose. As I assist entrepreneurs and developers in the implementation of new commercial records businesses, I emphasize four fundamental principals of operation:

• Effective use of technology
• Strategic outsourcing
• Best industry practices
• Labor abatement

Each of these principals delivers increased profitability and improved operations and requires diligence in the development and management process. Commercial records management is not for everyone, but for those willing to venture into these waters, it can be an extremely valuable addition to your business portfolio.

Regular columnist Cary McGovern, CRM, is the principal of FileMan and FIRMS (FileMan Internet Records Management Services), which offer full-service records-management assistance for commercial records-storage start-ups in self-storage operations. For assistance in feasibility determination, operational implementation or marketing support, or for questions on the FIRMS Sales Manager, call 877.FILEMAN, e-mail [email protected]; www.fileman.com.

Editor's note: This month's topic is special to self-storage owners. Though this column generally focuses on points unique to managers, we recognize there are still owners who manage their own facilities and will grapple with some of these ownership issues.

Every owner has at one time or another replaced or hired new employees to handle various responsibilities throughout their sites. Once they have staff in place, the next decision is whether to tackle the payroll in-house, use a payroll service or place the employees in the care of a leasing company. Each of these alternatives has advantages and disadvantages.

In-House

If you own other businesses, you likely have office staff and personnel who already handle your accounting, including paying bills, doing the payroll, filing employee taxes, and paying workers' compensation and disability/general-liability insurance. Adding a few more employees to the payroll will probably not be a big burden on the current office staff. They are already being paid an hourly wage or salary, so the advantage is you don't incur any additional costs. However, it may be the office staff are lax in paying those taxes, lack time to shop disability-insurance rates or aren't payroll specialists. They may not be up to par on changes in the employment laws and tax rates. You may need to hire someone just for payroll if you operate numerous sites. This could be the most cost-effective option.

Payroll Service

There are many national payroll companies. They can help you set up an account and make it easy for you to process your payroll. They will provide worksheets and timecards, file all employee taxes, process W2s or 1099s, and give you updated reports on your payroll charges, checks sent, etc. This is probably the best scenario for the small- to mid-sized owner.

The cost of this service is usually at a fixed rate of, say, $25 for the first check, then $2 for each check thereafter. Filing tax forms may incur an extra fee. You can find these services in the Yellow Pages under "Payroll Service." This sort of arrangement affords you the most control and flexibility in regard to your payroll.

The one disadvantage is payroll companies will only process what they are told. They will not tell you if you are in violation of not paying overtime correctly or guide and direct you in employment issues.

Employee-Leasing Companies

There are several national employee-leasing companies with which an owner can place his staff. In essence, the staff member becomes the employee of the leasing company, not the facility. Some will offer discounts on air travel, movie tickets, etc., for becoming one of their employees. They provide all the employee handbooks, supervisor manuals, warning letters and other documentation necessary to manage people. Because these companies are usually rather large, they can offer a discount on workers' compensation and disability insurance. They usually charge a percentage of your total payroll as a fee to process it.

The disadvantage to this arrangement is the employee "belongs" to the leasing company, not you. If you have a problem employee--one who disrupts business with a negative attitude or poor work habits--you must be prepared to work under the leasing company's regulations, rules and guidelines for dealing with him. It is not easy to replace a bad employee when he is leased.

I had some horrible experiences with a large leasing company where we were forced to keep employees while watching the office morale erode. In some cases, we lost good employees because of one bad one. In my opinion, the savings on workers' compensation and disability insurance is not worth revenue lost in employee turnover. Leasing companies like to make you think you must continue to use their employees or bear the risk of a wrongful-termination suit. You need not be intimidated. If you have the proper documentation in dealing with your employees, e.g., verbal and written warnings, recommendations for correcting behavior, etc., you shouldn't have reason to worry.

No matter which payroll option you choose, you should determine which will afford you the most control. Doing your payroll in-house probably demands the most attention and time. Using a payroll service affords you more flexibility in hiring and replacing staff; and it's easy to replace a payroll service if you don't get the service you require. Having your hands tied by a leasing company can cost you much more than any annual savings. Ask yourself how much a bad employee can cost you.

Just remember, all of these alternatives require keeping accurate employee records, time cards, letters of employment and tax information. Gather all the information you can, and be sure to scrutinize any applicable contracts or agreements before making a final decision.

Pamela Alton is the owner of Mini-Management^®, a nationwide manager-placement service. Mini-Management also offers full-service and "operations-only" facility management, training manuals, inspections and audits, feasibility studies, consulting and training seminars. For more information, call 800.646.4648.

Chart of Software Suppliers

When selecting a records-management program for your business, there are several things to consider. First and foremost, you must select a program designed to fulfill the needs of your record center today and into the future. Too many new users getting into the business think basics, barcodes and scanners, only to have their first customers ask for features such as Internet access, custom reports and automated backups. They then face the inevitable upgrading to a more robust and feature-rich package. This article will tell you what to look for in a records-storage software package to make the right decision the first time.

Business Rules

On the most fundamental level, every system is built around a set of business rules. These rules dictate how the system operates and protects the user from making any grave errors that can ultimately compromise system integrity. For example, if a container does not have a barcode or has a duplicate barcode, the system will notify you and give you an error or exception. This reflects the business rule that every item that enters the system must have a barcode, and no two barcodes can be duplicated.

The better the package, the more sophisticated the business rules. Some systems can require the user to dictate what boxes are to be picked up and when. If he picks up the wrong container, he is notified. Again, this protects the records center from making errors. When shopping for software, ask the vendor to describe the benefits of its set of business rules. If the company tells you it doesn't have business rules for the sake of remaining "flexible," move on--you are leaving yourself open for critical mistakes.

Barcoding

This is records storage 101. Introduced in the mid '80s, barcoding is the glue to any software package. Every file, tape or box should have the ability to be barcoded. The same goes for X-rays, CDs and so on. The barcode tells the software where an item is at any point in time. Equally important, it eliminates the element of human error, as everything is captured from a portable scanning device.

In the past, when a user needed to capture 40 box numbers on a pallet, he first had to write down the numbers, key them into the software, then doublecheck for errors. Now this can be completed in minutes with 100 percent accuracy through a laser scanner. Laser scanners have also improved in quality, making them more durable and the technology more affordable. Every major software vendor of any value should contain barcoding as a basic element.

Ease of Use

Each area of the software should be consistent. If you go from one item such as containers and move to locations, the screens should follow the same format. This type of development makes it easy for the user to learn the software, as it follows a logical pattern. To view the ease-of-use of a package, go from screen to screen and notice the flow. Remember the level of the employee working the software in customer service--it should not require a technical degree.

Internet Access

This is a buzz word these days. All of your competitors will be out there touting Internet access. You need to have it--if not for today, certainly for the future. It is one of those glamorous items on a sales call. It makes you look like you have the technology. Odds are, the majority of your customers won't ever even implement it. Then again, if you don't offer it, you may be left out of the competition.

For those customers who will use Internet access, it should be a live link to your database vs. a replicated or copied database. A replicated database is a copy of the database that resides on the Internet and is updated at scheduled periods. It is not truly live Internet access. With a live connection, as soon as you download a container, it is visible by your customer, which is really what you have advertised. With a replicated database, there is a time delay.

Flexible Invoicing

If you can't bill the customer, why buy the package? Every software package should offer invoicing. The key is how everything flows back to the invoice. The system should track and bill for everything from data entry, sales of new containers, deliveries, pickups, labor, repacking, etc. Everything should flow back to invoicing, and it should be automated.

When you scan a box, it should automatically charge for an add and perhaps data entry. The more that occurs without having to rely on hand keying the charge the better. Just imagine how many times a customer-service representative forgets to charge for the data entry or the repacking of a box in one month alone. Every time he forgets equals lost revenue for the records center. If you spend a little more on a software package on the front end, you will save thousands of dollars in revenue on the back end.

Invoicing should also be flexible. For as many customers as you might have, there will be formats in which they want to see their invoices. It is essential to select a package that can give the customer the information the way he wants to see it. The package should have several invoice formats from which to choose. Better yet, it should contain multiple variables your users will be looking for: bill daily, monthly, yearly, bill forward and so on.

Automated Backup

Now more than ever we see the importance of the backup. When looking into a software product, identify its ability to back up while the system is "live" or has users at work. Some systems require all the users to get off the system to complete a backup. This makes completing multiple backups throughout a day almost impossible. When the backup occurs with the users on the system, you can backup throughout the day without interrupting the activity.

Should a failure happen, you should also have the ability to recover right to the point of the failure--even if a backup was four hours ago. Several packages maintain transaction logs throughout the day that capture all the activities the records center performed. If the system experienced a failure, you can simply apply the transaction logs to the last backup and you haven't lost any information. As you can see, this feature alone is quite critical.

Technical Support

This is not an optional feature. You need technical support. Make sure the company can provide it when you need it. If support is optional, no level of support cannot be guaranteed at any given time. Don't be fooled--regardless of the quality of the software product, you need technical support.

Track and Trace Mobile Computing

You should be able to tell your customer where anything is at any time of the day. Therefore, your system should provide the ability to track any item within your records center from shelf to van to customer and back again. With such tracking, you have complete control of your customer's inventory.

Aside from the "glamorous" features, such as Internet access, your customers think they want, this is what they really need on a day-to-day basis. With track and trace, a customer can call the records center and ask the whereabouts of a file, and the center can tell the user "Jim placed the file on the van at 10:05 a.m. It should arrive at your offices at 10:30 a.m." or "It was delivered by Jane at 7:15 a.m." If you want to take track and trace one step further, you can couple it with a portable printer and provide the customer an itemized printed receipt. Track and trace is the ultimate in inventory control.

Reporting

Reports are a necessity in this business. What good is having information in a database if you cannot retrieve it in the format desired by your customer? A superior software package will allow you to print several "canned" or standard reports or create your own in accordance to the needs of your customer. Reports should be flexible. You should be able to save them to disk, or e-mail or print them. Take a look at the software package's reporting capabilities and keep in mind reports alone aren't enough--you need to be able to manipulate the data.

Upgrades

Every software package should have the ability to grow with your business. The software vendor should provide regular releases to meet the growing and changing demands placed on the records center by the industry. If you select a software vendor that does not offer consistent upgrades, you will be ahead of your competition only once. If you want to be competitive again, you will need to reinvest in a new product. With a software company in constant development, so are you; yet you can continue to focus on what you do best: managing your records center.

There are many software vendors out there. The only right choice is the one right for your business. Take a look at the needs of your records center, the features of the software, and make sure there is a fit. Think long term. Think residual value.

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

At the Inside Self-Storage Expo in Las Vegas, Feb. 13-15, we saw a lot of interest in the industry because of the instability of the stock market and people's desire for the steady cash flow self-storage offers. For this month's roundup, we focus on self-storage as an investment vs. other types of real estate. I surveyed our Midwest brokers for their insights: Bruce Bahrmasel, The Preferred Realty Group, Lincolnwood, Ill.; Arnold Erickson, Commercial Realty Services, Des Moines, Iowa; Larry Goldman, Prudential Commercial Resources Realty, Kansas City, Mo.; Mark Helm, RE/MAX 100, Louisville, Ky.; and Peter Hitler, Investment Real Estate Specialists, Mequon, Wis.

1. Is it a good time to sell self-storage? Please elaborate.

Bahrmasel: This is an outstanding time to sell self-storage. There is not a lot of product in the Chicago market.

Erickson: Yes, interest rates are very low and, in this area, the occupancy and income are very high.

Goldman: If the seller is considering selling within the next few years, time may not be on his side. Lender underwriting is getting more and more difficult. In some markets, overbuilding is hurting occupancy and rental rates.

Helm: Yes, it's a great time to sell self-storage, nationally as well as here in Kentucky and southern Indiana.

2. Is it a good time to buy self-storage?

Bahrmasel: It is a great time to buy. Despite the dearth of product, interest rates remain low and self-storage remains attractive.

Goldman: Yes. Interest rates are low, which helps buyers and sellers achieve their investment objectives. After the rollercoaster ride the equity markets have been through, the steady, diversified cash flow from self-storage is looking better than ever. The buyer has to be select in choosing the right market, as overbuilding exists in some areas.

Erickson: Yes. Interest rates are low and there is still a great deal of potential in this area for further growth of the business.

Helm: Yes. There is great investment potential and low interest rates.

3. Do you believe other types of real estate are underperforming and attracting buyers to self-storage?

Bahrmasel: Yes. While cap rates in other real estate investment types are as low as 7 percent to 8 percent, self-storage cap rates are usually above 10 percent, making it very attractive.

Erickson: Probably. I think the office market is slow and retail is flat.

Goldman: Yes. The diversified income provides more stability than single- and some multitenant properties. With the Enron debacle, even investment-grade, triple-net, "coupon cutter" properties are not looking as attractive to buyers and lenders as they once did.

Helm: Other real estate is underperforming, but I don't necessarily believe it is leading to a jump to storage--at least not here. Storage is selling fine without any help from outside factors.

Hitler: I think the performance of the stock market is having an effect, bringing buyers to self-storage. Other real estate owners are sitting on their investments.

4. We've heard replacement costs are putting a cap on values. What has been your experience?

Bahrmasel: I've had some deals that have not appraised out to their sales prices primarily due to replacement costs. But banks and customers are downplaying that aspect due to good performing cap rates in these projects.

Erickson: I don't know. I can see where this would be a factor, considering all of the soft costs and hard costs for a new facility, including the rent-up time frame.

Goldman: It is almost all about track record and net operating income.

Helm: I have no experience in this. It isn't an issue in my area.

5. Are you or your buyers having any difficulty getting loans for your self-storage sales and projects?

Bahrmasel: I have had a few problems, but this was more due to the banks' lack of understanding of the nature of the business and the underwriting of self-storage projects. Increasingly, self-storage has been looked upon more favorably by local and regional banks and large lenders.

Erickson: I have not tested this recently.

Goldman: Debt-coverage ratios and loan-to-value ratios are getting increasingly more conservative.

Helm: Loans have tightened up. Loan criteria has tightened up. Lenders in this area are definitely looking closer at a borrowers' criteria before they lend.

Hitler: No. If you have a relationship with a local banker, you should be OK.

6. Having marketed self-storage properties for sale, what do you see as being the most important factor to successfully selling a property?

Bahramsel: The most important factors are room for expansion at a facility and ability to increase income. Ability to expand is very important for potential buyers.

Erickson: I see the most important factors as proper pricing and marketing exposure.

Goldman: Maintaining adequate records of operating history is a major challenge--most buyers and lenders like three year's past performance on older facilities. The ability to expand and critical mass are very important and create significant value.

Helm: Getting realistic operating expenses from sellers. Sellers are operating on a shoestring and new buyers won't operate them that way.

Hitler: A seller must realize his present income is what a buyer will use to calculate his purchase price. Future pro forma income is interesting, but the important information is what the facility is doing today and what rents customers are willing to pay. Sellers should realize that for every dollar they increase their bottom line, the selling price will increase by a factor of 10. Sellers should raise their rents as high as possible and then price the facility on what the business is doing today.

Michael L. McCune has been actively involved in commerical real estate throughout the United States for more than 20 years. Since 1984, he has been owner and president of Argus Real Estate Inc., a real estate consulting, brokerage and development company based in Denver. In January 1994, he created the Argus Self Storage Real Estate Network, now the nation's largest network of independent commercial real estate brokers dedicated to the buying and selling of self-storage facilities. For more information, call 800.55.STORE or visit www.selfstorage.com.

Joe Twentysomething suddenly wakes during the night with the realization he's five days late with his storage payment. His battered but beloved Tama drum kit, precious collection of long-play albums, family photos and Auntie Agatha's antique roll-top desk are among his many treasures stored there. He rushes to his computer. With fingers flying, he goes online to the UFO Store-and-Go website and makes his payment. Relieved, his goods safe, he goes back to sleep. Mr. Jones, owner of UFO Store-and-Go, is checking his receivables online the same night and is also relieved when he sees Joe's payment recorded.

Self-storage owners and managers are rapidly realizing the financial boon e-commerce offers their businesses. It is no longer just a matter of e-mail correspondence or web advertising--online technology is a direct cash pipeline.

Why Have an Online System?

Online point-of-sale management technology is a direct, real-time portal to a facility for the customer, owner and manager. Customers seeking self-storage units can use the Internet to find facilities anywhere, and make reservations and payments online. And the hassle of remembering when their monthly payment is due can be eliminated when they set up an automatic monthly payment schedule. This reduces the problem of loss of goods because of nonpayment and subsequent lien sale.

At the other end of the pipeline, owners and operators can access their records from any Internet location at any time. "Online technology allows customers to search, locate, reserve and pay for storage units from the convenience of their home or office, 24 hours a day, seven days a week," says Rick McGee, president of Online Self Storage in Oro Valley, Ariz. "For owners and operators, this technology can be embedded onto any existing website, allowing them to easily post available inventory, highlight the amenities and features of their property, and advertise pricing, specials and promotions."

"An online centralized-data system should provide up-to-the-minute analysis of site performance and key statistics that can be accessed remotely via the Internet," adds Bill Hoban, president and CEO of Centershift. "Data should be available at all sites and offices from any location, any time." The Salt Lake City-based company is a third-party provider of self-storage management- software applications. Instead of installing software directly on a company's computers, software and data is stored at Centershift's central location, which the owner and manager can access via the Internet.

E.J. "Joe" Shoen, chairman and CEO of Phoenix-based Amerco, the parent company of U-Haul International Inc., points out a more subtle benefit of having an online system--it's a psychological bonus. "Having a web-based reservation, payment and management system says 'I'm in the 21st century' to your customers." Nearly a year ago, U-Haul launched Webselfstorage.com, a real-time online point-of-sale and management-software system for its 3,000 affiliates. Eventually, the system will be made available to nonaffiliated facilities. "An owner can look at his facility records at any time, anywhere--the Philippines for instance--as long as he can access the Internet. He can see his transactions in real time," Shoen says.

Find a System That's Right for You

Developing an online point-of-sale and management-software system requires resources many facility owners do not have. Big companies--Shurgard, Storage USA, Public Storage and U-Haul, for example--have developed their own online systems. But small companies and independents do not have the resources to develop their own software. This has created a niche for third-party application providers.

However, whether the software is used for one facility or an entire chain, it must offer several basic components to be an effective tool. "Before selecting a system or service, owners need to have a basic understanding of how the technology really works and what capabilities the proposed system offers vs. those capabilities that it cannot offer," Hoban says.

Owners also need to know how the software will interact with their inventory, adds McGee. "You need to know how it interfaces with your management software to allow ease of changes and modifications." Also, if the corporate entity moves toward the use of online reservations or the use of a call center to capture customers, it is important the system operates in real time. If it is important to an operator that the potential customer actually is assigned a unit at the time of reservation, real-time capability is needed, McGee states.

The online system must integrate with management software. The application should also:

• Provide remote administration of common activities
• Automate space reservations
• Automate rent payment
• Provide the customer with the ability to set up recurring billing
• Centralize data
• Generate reports
• Provide management of data backups
• Provide audit and security capabilities
• Provide direct deposit of payments

But getting reservations is only half the fight. Self-storage management must be able to collect payments. "A payment service should increase your collectibles, as well as decrease the number of excuses as to why your customers don't pay you," says Brent S. Hoffmannn, marketing and sales manager for Payment Service Network Inc. (PSN). PSN, headquartered in Madison, Wis., is a financial- services firm providing online funds transfer. The online service links consumers with private businesses and government agencies including self-storage property owners and managers.

"The system should be very easy to use so customers are not confused when they go to the site," Hoffmann says. "You want a company that offers as many payment options as possible, including checking and saving accounts, money-market accounts, money orders, and credit and check cards."

Is technical support important? "Technical support is always important, whether you utilize an online technology or not," says Hoban. "But with an online technology, the client in many cases has no control over the physical environment of the servers that house the data and software. It is, therefore, imperative that online technology vendors supply extensive, easy accessible technical support."

McGee disagrees. "This is the beauty of an Internet system. For customers, all they have to know is how to use the browser. For the client, once the set up is done, it is not usually too support-intensive--although support is there if the owner needs it."

Yes, But Is the Money Safe?

So, the customer has selected his unit, placed his order and paid for it. The facility manager sees this transaction, either in real time or on a report. And the money is out there on the ethernet. But customers or facility managers may ask, "Is my money safe?" The heart of any funds-transfer system is its security protocols. With hacking honed to a fine science, any system must offer protection.

The National Fraud Information Center, a project of the National Consumers League, reported $4.4 million in losses from Internet fraud during the first 10 months of 2001, up from $3.9 million in 2000. "Managing risk and preventing fraud are both major concerns to organizations doing business on the Internet," says David L. Merritt, chairman of the National Automated Clearing House Association's (NACHA) Internet council and vice president and product design manager for Mellon Global Cash Management.

NACHA is developing two industry publications designed to provide financial institutions and merchants with educational resources on managing risk and preventing fraud associated with Internet-initiated payments. The first identifies and catalogs the various types of Internet-payment fraud such as transaction-level fraud, identity theft, invalid accounts and nonsufficient funds. The second project focuses on the risks of Internet-initiated payment types such as automated clearing house (ACH), credit card, online debit card, off-line debit card and person-to-person payments. The projects are scheduled for completion by mid-June. "Through these projects, the Internet Council will assist organizations in identifying the types of risk and fraud that pose threats to their businesses, and in adopting methods to mitigate them," Merritt says.

Many of these methods are already in place in systems used for online self-storage. For transaction security, Centershift uses SSL 128-bit encryption certificates in the central facility plus firewalls, passwords and robust virus software. PSN has proprietary encryption software. Online Self Storage has a web server certified by VeriSign, an encryption system, plus several layers of user security. Employees can only access the section they have been cleared to use.

Bottom-Line Benefits

By reducing time, paperwork and workforce, a facility owner can be optimistic about increasing cash flow. By using online technology, operators can decrease the need to send e-mail and fax reports, which cuts down on paperwork and frees up employees for sales and service. Data within a central database can be consolidated for more effective reporting. If much of the auditing process is accomplished prior to a facility visit, a regional manager can spend quality time at the facility instead of wasting time printing various reports.

How fast a facility gets funds into its account is the bottom-line concern of operators. Electronic interbank clearing of electronic payments means an operator knows much sooner if funds are available than with conventional paper processing. If a customer pays with a credit card or direct checking, there is no problem. The facility operator knows immediately if the funds are available. But what about nonsufficient funds? "Our online system allows one to two days NSF notification," says Hoffmann. "We call the property manager when we have problems with a payment, and either the client can contact the customer or we will." This decreases the time funds are being processed from the standard 14 to 21 days to three to five business days.

Resisting the 'Cloud'

With so many benefits, why would self-storage owners/managers resist implementing an online payment and reservation system? "The Internet is often referred to--even in technical publications--as the 'cloud,'" says Hoban. "This portrayal does nothing to aid in understanding of what the Internet is or does. We need to explain the basic concepts of the proposed technology and draw real-life analogies to how the technology is currently being used by major companies such as Amazon.com, Dell.com, MSN, CNN, ESPN, etc."

"With the recent failure of some Internet companies, people are shy of using an online system," says McGee. "We point out the benefits to their customers--the ease of being able to make rental payments say at 10 o'clock at night, the fact the owner's facility can be online 24-7. This expands their hours of operation without increasing staff. We know there is a lot of training involved, but being online means an owner can be accessible to the 10 percent to 15 percent of customers who want to use the Internet."

Techno Future

Just as it is affecting nearly every facet of modern business, online technological changes in the coming years will contribute to the effectiveness of the self-storage industry. "Perhaps the single biggest impact could be the current legislation on broadband access," says Hoban. "If the roadblock to generalize broadband availability is cleared, I see far more people going online to perform their business operations."

Hoban also thinks wireless technology is on the verge of a breakout if the standards committees can agree on the specifics of delivering the technology. Businesses will be far less constrained in their accessibility to a network than by the traditional communications service provided by wire and fiber infrastructure.

"What we're seeing now is most operators are going out and finding some sort of third-party software that will either be compatible with their property- management software or allow them to take reservations and or payments," McGee says. Currently, facility operators either have to develop an application on their own that would be like an e-commerce capability application but that becomes fairly complicated. However, McGee sees more software integrated onto the online server and greater versatility of integrated technology in the future. Also, although his company is only the third one in the United States selling customer-controlled, web-based payment technology, he sees this becoming a trend.

U-Haul's software does more than bring the company's affiliates into the 21st century. The system links them with a community of self-storage owners and managers and opens up a whole new world of information and support. "People need to grasp the advantages of online networking," Shoen says. "This is the way the future has to go."

PROVIDERS OF ONLINE TECHNOLOGY

Modern management software can collect your rental revenue automatically, without any action by your employees. The benefits are profound: reduced overhead, accurate auditing, reduced customer costs, increased occupancies and increased rental rates. Once you learn a few basics, your transaction fees will never be more than 25 cents per rent collection. Your bank deposits will occur automatically and long before your tenant's grace period has expired.

Corporate giants such as America Online, Microsoft and General Motors have already embraced the benefits of this economic technology. For example, Internet providers, utility companies, cable-television companies and banks automatically debit their customers' account every month. Yet most self-storage facilities still collect rents the old-fashioned way: through paper checks. This is the most expensive method of rent collection. Consider these costs:

• Mailing expense: Tenants may need a reminder of when it is time to pay their rent. Each mailed invoice involves printing, labor, envelope and postage costs. These expenses can be reduced by e-mailing tenant invoices. However, not all of your tenants will have e-mail capability, so this may not be an option.
• Lost use of funds: Tenants often wait until their grace period is about to expire before mailing their rent check. This delay in receipt of rental funds is a temporary loss of use of that money. This monetary delay, called "float," is small per check, but becomes significant for your facility's gross income.
• Customer dissatisfaction: Tenants that mail their payment as their grace period is about to expire risk your receipt of this payment after a late charge has been assessed. A disagreement over this charge is likely to follow. No matter who wins, you just lost some customer satisfaction.
• Labor expense: Your employees must identify the correct account and then post each check payment into your management software. If checks are lost or stolen, additional time must be spent asking tenants for replacement payments.
• Collection costs: Mailed payments make it easy for a customer to fall far into arrears. The impending collection expense, lost income and aggravation make this a losing scenario for everyone.

Missed Occupancy

As imposing as the above expenses are, they exclude the grandaddy of them all: missed occupancy. Have you ever paid an insurance bill and found yourself wondering about your alternatives? Maybe you could find a less expensive vendor that could provide comparable coverage. You didn't think about that potential until it was time to part with your hard-earned income. Your customers go through this same thought process when they write that check to you each month.

With traditional rent collection, you receive the tenant's payment after he reviews an invoice listing his rental charge. This gives him an opportunity each month to reconsider his rental. With automatic rent collection, the tenant's payment is deposited before he reviews his bank statement. This often results in additional months of occupancy with no effort by you or your staff. With existing tenants staying longer, your occupancy rate increases, vacancies diminish, and you can easily raise your rental rates. So what's the catch? Processing fees.

Electronic Funds Transfer

Automatic rent collection is an electronic funds transfer (EFT). There are two common methods of EFT used in self-storage--credit cards and checks--and each carries its own merchant-fee structure. The conventional choice is to accept credit cards at your facility because they provide speed and convenience. There is no need to carry cash when a credit card only takes a few seconds.

The Federal Reserve controls all interstate commerce, including credit-card use, and only a few processors are authorized to link to the Federal Reserve system. All financial providers that handle credit cards, such as banks, must use at least one of these processors. With credit cards, there will be a processor and a financial provider, and they each add their own servicing fees.

Credit-card merchant fees are assessed as a percentage of the transaction. This ranges from a discounted 1.2 percent to a more common 2.5 percent, and these rates are negotiable. Some banks also add a flat per-transaction fee. Your merchant rate will depend on the card types you accept, your monthly transaction activity and your business clout. Generally, if your management software integrates with an in-office credit-card reader, your bank will award you a discounted merchant rate.

Your choice of bank will determine which credit-card fee structure is available to you. If your relationship with your bank was prearranged by your management-software provider, they may have a profit-sharing arrangement that adds another fee layer to your merchant rate. As with all business arrangements, adding middlemen adds unnecessary costs.

Automatic Clearing House

The second method of automatic EFT is the electronic check draft. This processing method is called an automatic clearing house (ACH). ACH is not new. It is the same system used by the federal government to distribute pension, insurance and retirement payments as well as collect taxes. Similar to credit cards, ACH is conducted through the Federal Reserve Banking System's electronic network.

For ACH, the renter can have any type of checking account--which 90 percent of all adult Americans have--or a savings account that has check-writing privileges. When a tenant's payment is processed through ACH, only two to three business days are required for the funds to transfer. Furthermore, ACH transactions are given preferential treatment. If a tenant's account has limited funds, the ACH debits are processed before any paper checks.

"This is a win-win arrangement secured by the protection of the Federal Reserve Board's Regulation 'E' and the U. S. government's Electronic Funds Transfer Act," says John Hinton, president of ePaymentSystems Inc. "The tenant simply signs a form to authorize automatic deductions and can revoke that authorization at any time."

You and your tenants will receive a monthly reconciliation report detailing the automated payments. Another advantage to ACH is, unlike credit cards, there are no transaction fees paid by the customer. The only transactional charge is a deposit reduction paid by the storage operator. ACH charges less than 25 cents per checking transaction. As with credit cards, the management-software companies and third-party agencies are free to participate in profit sharing and design their own retail-merchant pricing. "We provide an ACH integration to several software makers. We batch process the checks each evening," says John Boylan, president of EFTechnologies. He warns, "There is no method for us to know if the checks are good."

Self-storage owners are the end user, and their processing fee will range from a flat rate of 25 cents to a high of 1.2 percent of the transaction value or more, depending on the fee arrangement made by the other companies involved. These fees can dig deeply into your income stream. Let's say your site has an average monthly rental rate of $70, and 200 tenants use your convenient ACH service. At a flat rate of 25 cents per EFT, your annual servicing fee totals $600. At a rate of 1.2 percent of the transaction, the annual fee jumps to more than $2,000, and some companies are charging even higher rates.

As with credit cards, ACH merchant fees are quite negotiable and vary widely. If you plan to actively use the ACH program, you should shop around for the best pricing. The potential savings will pay for your management software many times over. At the same time, your customers will love your EFT services. They will save check-writing time and postage expense. They remove the risk of their payments becoming lost or delayed in the mail. Their bill is paid on time even if they are busy or away from home, and that prevents a late payment that could damage their credit rating.

By offering EFT services, you strengthen your customer relationship and enhance customer retention. Without question, automatic rent collection is sheer moneymaking power, and a must-have feature for any thriving business.

Doug Carner is the vice president of marketing for QuikStor Security & Software, a Sherman Oaks, Calif.-based company specializing in security, software and management for the self-storage industry. For more information, call 800.321.1987; e-mail [email protected]; visit www.quikstor.com.

This is the first column I've written since I spoke at the Inside Self-Storage Expo in Las Vegas, and I'd like to take the opportunity to thank the individuals who made my participation possible. Thank-you to the folks at Inside Self-Storage for continuing to help us in our quest for information regarding the industry. I always come away from the expo seminars having learned something that lets me do my job more efficiently and effectively.

Thanks also to Jim Chiswell of Chiswell & Associates, who continues not only to educate, but to entertain and delight us with his years of industry knowledge. His "war stories" of things he has personally experienced or witnessed in our industry help us learn through the mistakes of others.

Gratitude also goes to Richard Hamister, my boss, for his continued support, for helping me grow personally and professionally, and for understanding our company can only benefit from participating in industry events.

Last, but certainly not least, I want to thank everyone who attended the show, contributing to its record turnout-- especially those who attended my seminar on "Successful Facility Management." I was pleasantly surprised by the overwhelmingly positive response. I hope those who attended learned as much from me as I did from speaking to owners and other managers--which brings me to the topic of this month's column. I'd like to comment on some recurring themes I heard discussed at the show.

Lockouts

It is impossible to talk about delinquencies and collections without talking in terms of aged receivables. Statistically speaking, the longer a customer remains delinquent, the less of a chance we will collect. In our industry, time is not on our side when it comes to collections.

Each state has a law that determines when a customer can be considered delinquent. Most of the self-storage lien laws allow operators to deny customers access to their units if they don't pay. This should also be a clause in your rental agreement. This is where the (sometimes heated) discussion begins. Do I lock my customers out the first day they are late? No. I lock them out the first day they are delinquent, which is when they are 11 days late.

The majority of managers I met at the show argued they do not want to upset their customers, and I fully understand. However, if you let them continue to access their storage space, where is the incentive to pay? Or to pay on time? You are not doing them any favors by letting them get 30 days or more in debt, either. Most people are on a budget; if they weren't able to find the money to pay you last month, what makes you think that they will find twice as much money this month plus fees? There are a few exceptions, but you know as well as I do, the majority of people on your collections list are the same every month. Safeguarding against delinquent tenants is legal and your lease should provide for it. If you're not taking advantage of this, you are giving up your best line of defense in the collections process.

Lien Sales

The same people who want to debate the lockout issue generally follow up with questions regarding lien sales. Go figure. If you take my advice on the first, you will have less of the second. But if you are forced to hold a lien sale, do so legally.

I was astounded when one gentleman who didn't want to upset his customers by locking them out or incur liability for selling their stuff confided to me he would wait the required amount of time, then "dispose" of the contents of the delinquent units. I tried to explain he was opening himself to 10 times the liability by doing so--unless his state law provides for such a remedy.

The fact is lien sales are a necessary evil in our industry. That's why 47 out of 50 states have lien laws specifically for self-storage. No one wants to go to auction on a customer's unit, but if you find yourself in the unfortunate position of having to "dispose" of tenant's goods, please do so legally. You can find a copy of your state's lien law through the Internet, a law library, county courthouse, state storage association, national storage association, industry expert, etc. Do not be afraid to hold a lien sale--just don't do it illegally.

Manager Compensation

This is a subject dear to my heart. Every manager wants to know what he could be making, while every owner wants to know what he should be paying. In the classic struggle of the haves vs. the have-nots, I would like to go on record as saying that wages in this industry are notoriously low. The reasoning behind this, when it comes to resident managers, is they don't have any living expenses. Owners consider that compensation, even though it's not taxable. Therefore, resident managers are paid less than nonresidents. So let me get this straight: The whole concept behind resident managers is they are available to customers even during off hours. So they get paid less money to do more work? No wonder owners love it.

Since my opinion is obviously biased, I gathered some data on what self-storage managers are making on average. My calculations indicate approximately 30 percent of all managers make less than $10,000 a year. Another 30 percent make between $10,000 and $20,000. Another 27 percent fall into the $20,000 to $30,000 range. Only 9 percent make between $30,000 and $40,000, and only 4 percent make more than $40,000 a year. These are only averages and don't necessarily constitute justification to demand more money. It is interesting to see, however, what our owners think we're worth.

David Fleming and his wife, Tina, are an award-winning management team with Premier Self Storage Inc. of Western New York. Mr. Fleming 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 Amherst, N.Y. To contact the Flemings, call 716.688.8000; fax 716.688.6459; e-mail [email protected].

You operate a great self-storage facility. Your site security and customer service are top-notch. You purchased advertising space in both the local newspaper and the Yellow Pages. You want to entice people from the local area, not around the globe, so a web page never seemed necessary. Yet a website is your best marketing tool.

A website is your 24/7, customer- relations information center. Your printed advertisements can never say enough about all the special benefits offered at your facility; but a web address listed in your advertising can direct potential customers to a one-stop information source. Even a simple website allows customers to:

• Print a location map and driving directions.
• Learn about your convenient hours and services.
• E-mail questions.
• View promotional pictures of unit choices.
• Select a storage unit that matches their specific needs.
• Decide which boxes, tape and truck-rental services to use.
• View live video from any site security camera designated as public.

How To Be Web-Ready

Making a promotional website may seem overwhelming, but it only takes a few evenings. Here's how:

The friendliest--and often overlooked--web tool is Microsoft Word. You might already use this program in your normal workday. Just select "New" under the File menu. Choose the tab labeled "Web Pages" and select the Web Page Wizard. You will be asked for a page title, layout, content and theme. The page-setup wizard will suggest frames--accepting the default is highly recommended. If you previously created a company brochure using Word, be sure to add that file during the content questions.

At this point, you will want to add two helpful toolbars to enhance your effort. Go to the View menu and scroll down to "Toolbars." Choose "Web Tools." This toolbar allows you to add sounds, buttons, forms, boxes and scrolling text. The other recommended tool bar is "WordArt." It allows you to create colorful titles and headings. I could go into elaborate detail, but the best way to learn is for you to spend a few minutes with each option.

Word lets you add fonts of almost any size, shape and color. You can also add pictures to your new site using the "Images" option listed under the Insert menu. The design limits are only bound by your imagination. Periodically, you will want to select "Web Page Preview" from the File menu to ensure your web page will look the way you expected. Don't worry about making corrections. Just as with any Word document, you can highlight anything and cut, copy or paste. If you make a change you don't like, just select "Undo" from the Edit menu to reverse your latest alteration.

Your web page should reflect your corporate image. Professional web developers recommend you follow a few critical rules:

• It is better to have several brief web pages than one giant page.
• Never exceed the width of your browser screen.
• Keep your site informative but always uncluttered.
• Every page should have a link leading back to the main page.

Now that you have the makings of a web page, it is time to create a web folder. Select "Save as Web Page" under the File menu and then click on "Web Folders." Give your file a name that does not include any spaces. Now click on the small folder icon with a star (the pop-up hint says "Create a New Folder") and give your folder a unique name. Save. From this point on, you only need to select "Save" from the File menu to save your updated versions.

Publishing

Now that you have a website saved on your computer's hard drive, it is time to upload your work to the Internet. All you need is a hosting service, and here you have three choices:

1. Free hosting

2. Pay hosting

3. Courtesy hosting

Free hosting services, such as www.geocities.com, will host your site without any charge in exchange for displaying unsolicited advertising to your page's visitors; but this does not present a professional appearance. Pay hosting services range from $10 to $40 per month. You will not have any undesirable advertising, plus you can have your own domain name. Courtesy hosting is the best of both worlds. Several software vendors will host your website for free in appreciation of your business. Visitors will not see any third-party advertising. Furthermore, you can still have a personalized corporate domain name. All three of these solutions will provide you tools and guidance for transferring your creative work to your new website.

Once your web page is available on the Internet, it is time to tell the world. You want customers and prospects to use this resource to learn more about your products and services. Your business cards, letterhead and all brochures should clearly list your new website.

What to Expect

Once your site is available, the search engines will not know you exist. That may be fine, since you do not want to solicit business from thousands of miles away. However, if you want a web presence, you can list on one of the most popular search engines, Yahoo!, for $199. Be sure to request a listing in the regional index so you attract the desired prospects. Other search engines, such as AltaVista, are free.

Your primary audience should be those who saw your website in printed advertising and are looking for more information. It only takes one new tenant to cover all of your web- development costs. That turns a website into your best advertising bargain.

Doug Carner is the vice president of marketing for QuikStor Security & Software, a Sherman Oaks, Calif.-based company specializing in security, software and management for the self- storage industry. For more information, call 800.321.1987; e-mail [email protected]; visit www.quikstor.com.

SEARCH ENGINES

Once you've designed a web page that sells, you need to drive traffic to your site. Getting high rankings in the various search engines is a great way to do this. Search engines act like fully-stocked, 24-hour-a-day libraries. A user enters a keyword or phrase that connects him to a database. The search-engine software (called "spiders") continuously combs through Internet pages looking for documents and their web addresses that pertain to the user's keyword or phrase. These are collected and sent to the engine's indexing software, where information is extracted and sent to a database. Some engines index an entire document; others index by title only. The search engines then assemble a web page, listing the results as hypertext links.

At their core, the major search engines (Yahoo!, Alta Vista, Dogpile, Google, etc.) use a location/frequency method to determine relevance. Because location and frequency are so important, the title--called the Meta tag--for each page on your site should get careful consideration. The search engines will use the Meta tag to determine the relevancy of your site to the user's keywords. The best practice it to design your site's verbiage so that it marries your Meta tag with potential keywords that can be used to find your product and services.

There are many paid search engines out there. These are places where you can pay for the opportunity to have people click on your site. One of the largest paid search engines is www.goto.com, where you can even get a low-cost, trial membership. For a complete list of options, visit www.payperclicksearchengines.com.