Many state self-storage statutes require that your lien sale be held in a "commercially reasonable" manner, but what does this mean? On Tuesday, May 9th, join Inside Self-Storage and industry legal expert Jeffrey Greenberger as they present a free, live webinar on "The Importance of Holding a Commercially Reasonable Sale." The session examines a definition of "commercially reasonable" from the Uniform Commercial Code and applies it to a self-storage lien sale. It also answers key questions, for example, are you allowed to sell to a private hauler, take sealed bids, or dispose of the property? The event includes 15 minutes of Q&A with Greenberger. For more information and to register, visit www.insideselfstorage.com/webinars.

Before going public in Australia, Storage King may pursue a listing in Britain, where it has 20 stores, the The Sydney Morning Herald reports. In the United Kingdom, upcoming legislation would allow the creation of real estate investment trusts (REITs), which would suit the group. The size of the U.K. storage market is close to £10 billion and is considered large enough to accommodate a specific storage REIT market. In Australia, storage REITs are unlikely because only two companies dominate the sub-sector, Millers Storage and Storage King. Last years sale of 18 Storage King Facilities to Abacus Storage Fund left Storage King founders David Scanlen and Michael Tate to concentrate on managing the remaining 110 independent operators franchised under Storage King in Australia and New Zealand, and the 20 now in Britain. For more information, visit www.storageking.com.au.

LoknStore Group PLC, one of the leading companies in the U.K. self-storage market, announced interim results for the six months ending January 2006. The company operates 21 freehold and leasehold storage centers in the Southeast. Turnover increased by 10.2 percent to £4.28 million. Operating profit rose by 59 percent to £510,975. Profit before tax increased 102 percent. The company opened two new large freehold stores in Hampshire and Kent, adding 16 percent to total capacity. The new facility in Farnborough is LoknStores first purpose-built site. For more information, visit www.locknstore.co.uk.

Edinburgh, Scotland-based Armadillo Self-Storage struck a deal in April worth nearly £2 million to buy Dundee, Scotland-based Asterix Storage, The Edinburgh Evening News reports. Armadillo, run by entrepreneur Alister Jack, made the acquisition as part of a nationwide expansion drive. Formerly a foundry near a busy ring route, the Asterix facility has 42,000 square feet of storage space and will bear the Armadillo name. The £1.9 million purchase comes just weeks after Armadillo, under the banner of Edinburgh Self Storage, shelled out a seven-figure sum for a former depository building in Glasgow. Armadillo is also expanding its south of the Scottish border with the purchase of a site in Stoke-on-Trent, Staffordshire, England, for an undisclosed sum.

Given time, all computers fail. They may run for years without a hiccup or may crash within months of purchase. You can protect yourself by copying and storing data in a safe place. Many businesses dont want to spend the money or time to properly protect data, but given the investment made to create it, and the possibility that it could be lost forever, the price of proper backups is well worth the money.

Manufacturers of hard drives, motherboards and even Pentium processors realize their products will eventually fail, so they attempt to calculate how long they will last by determining a mean time between failure (MTBF) range for each. This gives you some idea of how long your computer will last, but there is no guarantee. Regardless, if you have a disaster-recovery plan, proper backups will save you from complete devastation.

Media Choices

Backing up data requires copying files from a PC to an external media at a remote site. The external media choices vary by benefits, drawbacks, costs, storage capabilities, ease-of-use during backing up and restoring files, and portability. Some devices are a combination of a drive and storage media, such as an external hard drive, while others have a drive and removable tapes or disks, such as an Iomega Zip drive or CD-RWs.

When creating a disaster-recovery plan, envision the worst by asking yourself, If my business burns to the ground, will I be able to restore my data on another computer and get up and running in an acceptable amount of time? If you use a drive and removable disk, and only store back-up disks offsite, does your other computer have capability to read those tapes or disks?

For back-up media, you may choose any of the following:

• Floppy disks 
• External hard drives 
• Rev drives 
• Zip drives 
• Tape drives 
• Optical drives 
• Flash drives 
• CD-RWs 
• DVD-RWs 
• Remote computers 

Floppy disk have a low MTBF and, therefore, arent the best choice for backups; other choices should be evaluated by cost and how much data can be stored. My favorites are CDs and external USB hard drives because they back up data quickly and can be used with almost any computer for data recovery.

Schedules

To save data, the simplest method is to drag and drop the files or folders you want to backup to the removable media. This should be done daily or weekly, depending on how important you value your data. Even a safer method is to let automated software execute backups. Microsoft has included back-up software with every version of Windows since Windows 95. There are also third-party software vendors with excellent products for backing up data.

A still safer plan is to back up data every night with a media rotation once a week. For most people, it isnt practical to move saved data to an offsite location every night. Instead, you can use the same back-up media for a week, move it offsite, and rotate to a second media device.

In this way, if the building burns down, you lose less then seven days of data because you have last weeks backup offsite. If the computer crashes because of a virus or hard drive failure, you lose less then 24 hours of data because you have last nights backup in the office.

This rotation schedule involves swapping the media once a week and reduces the hassle. But, if you choose low-cost CDs, DVDs or magnetic tape for backups, you can skip the rotation, move the newly created media offsite once a week and purchase new media as needed.

Costs

The cost of your disaster-recovery plan is based on the type of media you choose, whether or not you purchase third-party back-up software, and how you decide to store the media offsite. If you already own a CD burner, plan to store your backed-up CDs in a previously purchased fireproof safe, and decide to use the free Microsoft back-up software installed on your Windows XP computer, the total yearly cost is $17 for one backup per week. You can purchase a 50 pack of CD-R disks for $17, which can back up 700MB data once a week for nearly a year.

Or, you can hire an outside consultant to install a high-end Quantum CL 800GB tape back-up device, purchase back-up software and store the media at an offsite media-storage company. Start-up costs the first year would be about $9,600; consecutive years would cost approximately $1,000.

These two examples represent the extremes; your companys cost will probably fall somewhere in between.

Remote Data Servers

An alternative approach is to use a remote data server. Some software packages have built-in features to automatically back up data onto the software companys remote servers. Also, several web-based companies (www.xdrive.com, for example) provide similar services for a monthly fee, starting at approximately $10 a month, depending on the amount of data you want to store.

The advantage is you wont need to purchase any hardware or software, or have to worry about moving the media to a remote site. The drawback: You dont have direct control of your data. The service is generally used as a redundant method to your local media backup; it costs a bit more, but may be worth it.Testing, Testing

Its critical to test backups at least once a month. If you dont, the disaster-recovery plan may be insufficient. For your own protection, take the extra step to verify stored data is readable and usable on another computer that uses compatible software.

Your next computer crash should not catch you by surprise. Knowing it can happen anytime, you must protect your business with a well thought-out disaster-recovery plan. 

Tredd Barton is owner of Tredds Software Solutions, which has been developing self-storage software for nine years. The company specializes in small-business applications. Customer support is $198 a year and includes two software upgrades. For more information, call 724.484.7801; e-mail [email protected];  visit www.tredd.com. 

After reading this column, many readers ask, How can I safely change a provision in my lease with existing tenants? Sometimes operators want to create an entirely new lease and wonder how to switch over customers.

You first need to consider whether the new clause substantially changes the relationship between you and the tenant. If youre just altering office hours or slightly modifying rules and regulations, the process is simple. Major revisions such as amended liability language are more complicated, and you should follow my suggestions for introducing a new lease.

Minor Revisions

Most self-storage leases are month to month, renewing the day rent is due. When introducing small changes, you can send a notice to the tenant at least 30 days before the next rent-due date. In instances where your leases are first-of-the-month, notification should be 30 days before the first of the next month; for renewal dates, a 60-day notice is preferable.

Make sure youre not trying to change the terms for tenants under an extended lease. Your notice should specifically describe the amendments you wish to make. Dont just say, We are changing three rules and regulations.

Print the new clause as follows: 

Please be advised that effective on [date], we are modifying your lease with XYZ self-storage to change or amend the lease in the following manner:

(1) Rent as delineated in provision ___ of the lease will be increased to $___ per month; (2) We are changing office hours as follows: ___. Then add, This change to the terms and conditions of this lease shall be deemed to have been accepted by you when you pay rent on the next due date.

If you are increasing rent, and the tenant begins paying it, you have successfully obtained his approval. Anyone who does not accept, in theory, will vacate the premises before the end of the 30-day period. Those who notify you of their objection should be asked to leave. Of course, sometimes youll make revisions that have nothing to do with rent, and assent will be a little more difficult to ascertain.

You may wonder whether tenants should return your notice letter with their signature. I say no, because it appears youve given them a choice about accepting the terms without having to leave. Plus, many tenants will fail to respond, and what are you going to do about them? Notice with implied assent is more effective.

Big Changes

For a new lease or substantial modifications, the procedure may be more problematic. The first step is easy: The average self-storage stay is about six months. When you start a new lease program and begin signing up new tenants, youll painlessly convert 50 percent to 60 percent by attrition. Unfortunately, the remainder cant simply be notified by mail that the lease has changed. Youll need proof of their acceptance.

How do you get these folks to pay attention to you, and to stop by the office to sign a lease? My recommendation is to start with a contest. Send out a letter saying you are updating records and modifying leases, and youll need everyone to come in and give their signatures; you understand its inconvenient, so those who sign will be entered into a drawing for an attractive prize.

Youll find you have a better response if you dont raise rents at the same time. State in your letter the new lease doesnt include a rent increase. Tenants generally are happy to hear they wont be paying more, and wont be too concerned about the other terms and conditions. Kiosks also can help convert tenants by presenting the new lease before acceptance of the next rent payment.

There will always be holdouts. About nine months after youve started your new lease program, youll be down to the bunch who wont respond in any way. At that point, you have to make a choice: You must either terminate the tenancy of those who wont sign, or live with them until they end their relationship with you.

You made substantial and wholesale changes to your lease for good reason, not just to aggravate your tenants. And you felt it was important enough that you paid a lawyer to write it up. I wouldnt want to continue with a percentage of my tenants leaving me exposed. This is, of course, your choice and a business decision.

To Mail or Not to Mail

Im not in favor of mailing out new leases for signature and return. Its better to have everyone come into the office. First of all, youll witness their signature (or your kiosk will take pictures of tenants and capture their John Hancock digitally). You want that kind of authenticity with any lease renewal. You dont want to be in a situation where a tenant later alleges he wasnt informed and didnt assent.

Second, not every tenant reads your lease. If people actually come in, you have the opportunity to explain the most relevant changes, just like when you reviewed the lease with them originally.

Changing your lease isnt terribly difficult, but its time consuming. It takes planningand a little inducement to convince people to visit with you and sign. Again, natural attrition will take care of the majority of tenants. For those who dont cooperate, you have a simple business decision whether they remain on the old lease or move out. 

Jeffrey Greenberger practices with the Cincinnati-based law firm of Katz, Greenberger & Norton LLP, which primarily represents owners and operators of commercial real estate, including self-storage. This column is for the purpose of providing general legal insight into the self-storage field and should not be substituted for the advice of an attorney. Mr. Greenberger is licensed to practice in the states of Ohio and Kentucky, and is the legal counsel for the Ohio Self Storage Owners Society and the Kentucky Self Storage Association. He is a regular contributor to Inside Self-Storage magazine and the tradeshows it sponsors. For more information, call 513.721.5151; e-mail [email protected]. 

The challenges for companies operating multiple facilities can be boiled down to three key concerns:

• Generating new business 
• Reducing operational costs 
• Maintaining high levels of customer satisfaction 

One way to tackle all these challenges, as well as embrace todays attention-getting technologies is to take your business online.The E-Commerce Solution

Implementing an e-commerce solution generates additional business by reaching a wider audience. It leads to improved customer satisfaction and reduced labor costs while improving rental efficiency. For customers, it doesnt get any better! They can conveniently complete their transactions from home or office. Its a win-win situation for all concerned.

A good e-commerce solution integrates with your website, which is how it targets a broader audience. The system should be user-friendly and easy to navigate, with a step-by-step approach that provides information on facility locations, unit sizes and availability, prices and special promotions. The goal is to allow customers to make intelligent and informed decisions. Consider the following options.

• Online Reservations: If prospective tenants are looking to rent a unit in the future, they can reserve it online without having to visit the facility. A quality system will help them decide what size or type to rent. After making a reservation, they can visit the office at their own convenience to complete required paper work.
• Online Rental: Tenants can complete all required paperwork online.
• Online Account Review: Accounts may be accessed to view details of charges, remaining balances, payments, daily activityreducing billing discrepancies.
• Online Payment: Credit cards accepted! This allows tenants to make the payment on time, conveniently, avoiding late-fee charges.
• Call-Center Integration: With a secured log-in, call-center employees can access the website to check pricing, space availability and promotion information for callers, as well as rent units and take reservations.

A Case StudyHeadquartered in Columbia, Md., ezStorage Corp. owns and operates 36 facilities in Maryland and Virginia. The company is expanding rapidly, adding four to five sites to its portfolio annually. Its had a website reservation system for more than a year. Based on the steady growth in online traffic and new rentals generated from the website, ezStorage recently decided to provide online capabilities for tenants to rent units, review accounts and make payments.

In a recent interview, Kevin Radcliffe, controller, discussed the companys e-commerce plans. Below is an excerpt of the interview:How important is it for a self-storage business to go online?

The Internet has changed the way consumers shop. Ten years ago, many people didnt have access to the web and, if they did, they were limited in what they could do. Five years ago, most people had dial-up connections and used the Internet for research, maybe doing some comparison shopping. Today, many have high-speed connection and do a lot of shopping online.

We have found most of our business comes from walk-ins, but a growing number of our customers are coming because of the Internet. Although we still have some locations that derive virtually no business from the web, we believe a good online presence is an integral part of any successful business plan.At what point should a company consider online reservations and rentals?

I think it really depends on where you do business and what competitive forces you are facing. If you are a small operator with little competitive pressure, you can probably wait, but from a customer-service perspective theres no reason why even a single-location owner doesnt offer the ability to make a reservation online. The cost of creating a simple website with basic reservation functionality is so low any company can do it. As far as offering a complete Internet-based, customer-service interaction with web reservations, rentals, account management, its up to the operators to judge when the time is right.What should be considered prior to taking online reservations and rentals?

First and foremost, you should check with legal counsel. Your lawyer should know what information your rental reservation system needs in order to complete the transaction. Next you should reflect on how business processes will change:

• Do the costs of the changes outweigh the benefits of offering a web-based rental system?
• Do you want it to integrate automatically with a point-of-sale system or will a manual integration suffice?
• What infrastructure changes need to be made?
• How will you drive people to the website?
• What data would you like to collect using the new system?

Why did you take your business online?We are constantly evaluating our systems and procedures for improvement. We see what other industries are doing and whether their advancements can be applied to our self-storage model. With the changes in the shopping habits of the general public, it was a no-brainer that we would go online.

Think of it this way: A customer decides to pay his bill from a secure portal on our website instead of visiting the office. Weve now allowed him to transact business on his termswhen, where and how he wants to do it. By doing this transaction in cyberspace, we have reduced our transaction costs; plus, by collecting data from customers online, we can learn more about our tenants. Finally, we have created a more secure transaction.

The culture at ezStorage is such that we are encouraged to challenge the status quo, and we believe technology is going to help take us to the next level.How does ezStorage and its customers benefit?

Simple: More customers, better service, less-expensive transactions, better internal controls, andlast but not least more information.Finally, how do think e-commerce will shape the companys future?

With the different geographical markets we serve, offering an interactive web-based experience is something we think is essential to long-term growth. Customers want it, so by complying, it will help us grow. 

Kat Shenoy is the president and CEO and Sachin Bhakta is the director of development of E-SoftSys. Headquartered in Blue Bell, Pa., the company is a total-solutions provider for the self-storage industry in North America, Europe and Asia-Pacific. Products include Self-Storage Manager and e-StorageOnline. Services include website design, development and integrating online rentals and call-center reservations into company websites. For more information, call 610.277.7457, ext. 5; e-mail [email protected] ;  visit www.selfstoragemanager.com . 

If youve ever prepared documents for delivery by U.S. Postal Service Certified Mail, you know how time consuming it can be. Filling out the green cards, taking the mail to the post office and waiting in line are only a few of the nagging but important tasks self-storage operators face monthly.

States require pre-lien sale notices to be delivered by certified mail. In most cases, two such mailings must be performed prior to cutting the lock and holding the auction. Unfortunately, it may be weeks before the green card confirming proof of delivery is returned.

A simple solution for processing certified mail is provided by ADS, of Cary, N.C. The companys Docutrail system provides a web-based means of eliminating many chores related to preparing certified mail, and it securely stores proof-of-delivery data electronically.

With Docutrail, business owners log onto the secure website to create and download a USPS-approved mailing label, complete with postage. In less than a minute the label and shipping contents are ready to be inserted into a distinctive green poly envelope that clearly identifies it as certified mail. The envelope may be given to the USPS letter carrier or dropped into a nearby U.S. Postal Service collection box.

The system eliminates the need to handwrite postal forms and make actual trips to the post office. In the interest of time management, its no longer tempting to wait until a batch of documents is ready to be taken to the post office either. Notices are sent in a timely manner, shortening the cycle between delinquency and payment or auction.Proof of Delivery

Proof of delivery as well as an acceptance signature is available from the same website shortly after delivery. This simple and easy process reduces the usual long wait time for return receipt. In addition, the shorter time to satisfy state statutes equates to quicker rental of your non-performing assetthe rental unit. For added assurance, data is archived, including proof of delivery and signature, on a secure site for up to seven years at no additional cost.

Market research indicates the self-storage industry is a perfect match for mailing needs and benefits, says Warren Willard, vice president of ADS. And, because there is no software to install, Willard adds, operators may use Docutrail alongside any self-storage management software presently being used without additional hardware or software investments.

Through monthly deposits, users prepay for postage, special certified mail envelopes and per-unit service fees. Fund transfers are posted electronically, and a detailed report of services is provided monthly. The concept of a click charge for each certified mail label used is customary in the industry and simplifies the accounting process with its pay-as-you-use-it method of service.

Most self-storage operators have realized the legal and financial implications of not handling delinquent rental situations in an exact and uniform manner can be costly. ADS serves the self-storage industry with a low-cost, effective tool to reduce potential risk. 

For more information about a certified mail solution, contact ADS at 888.462.1750; visit www.accountabledocs.com.