Rick Crumley has spent the past 17 years working in the communications industry. He has spent five years in the self-storage business, including a partnership with Eddie Bell running Lubbock, Texas-based Magnetic Marketing as well as two storage facilities in Texas. Crumley and Bell's newest venture, yourstoragenamehere.com, is a website-development and hosting service specializing in complete and interactive websites for self-storage facilities. The company is an offshoot from Magnetic Marketing, best known for its Rent Reminder Magnets™ now used by thousands of storage facilities nationwide.

Inside Self-Storage is now pleased to present an interview with Rick Crumley...

What background do you have in the storage business?

I've been involved in all phases of the self-storage business, including design, construction and facility operation. In fact, the sample storage facility you see when you visit yourstoragenamehere.com is our latest facility, the South Loop Storage Zone in Lubbock, Texas. I've also attended many of the industry trade shows and seminars, both as a vendor and facility owner.

How is the Internet currently being utilized by the self-storage industry?

Most storage facilities now have listings on directory-type websites. These sites guide potential renters to a list of available facilities, usually by searching for a city or zip code. These directories are very useful, and it is important to be listed with them. Other facilities have their own websites, which would include the larger operators and chains.

How do you see that changing over the next one to two years?

I still have contacts in the communications industry, and I'm hearing a lot of information about phone and cable utilities devoting vast amounts of resources to what they call "the last mile," which means providing digital or high-speed access to individual homes or offices. It's already available in the form of cable modems, and ISDN and DSL lines in a lot of places. Many companies are battling now to establish their presence on the Internet because they know consumers will use this resource. In the next couple of years, I think self-storage operators will also need to establish their own personal presence on the Internet because customers will soon just expect them to be there.

How did the idea for yourstorage namehere.com come about?

We've personally used the Internet for years to do research and conduct business, and we understand what an important tool it can be if used properly. The idea for our service came about while developing websites for our own storage facilities. In doing research, we discovered the majority of self-storage facilities, excluding the big chains and franchises, do not have websites. Also, most of the operators that are on the Internet do not even own their domain name.

Why does a storage facility need a website?

Most potential customers want information before making a purchase. They look in the Yellow Pages, usually call the storage facilities closest to them, then make a decision to come out and rent based on what they've learned. This is not likely to change; however, they can only call during business hours. A storage facility with a good website is open 24 hours a day. Your site can be the perfect sales pitch every time, and you can offer timely specials that change with your demand. No Yellow Pages ad can do that. We have designed storage websites structured to give customers--and potential customers--the information we know they want based on our own experience as facility operators.

What services does the company provide?

A good website requires a lot of information to be useful. We've set up a process to collect that information, using simple step-by-step forms, tips and instructions. With this information, we design and publish a facility's site on the Internet. We also reserve the facility's domain name (or Internet address) so, just like a phone number, they basically own it. And, finally, we host and handle updates to each site, which will be available on our servers for all to view 24 hours a day, seven days a week, 365 days a year.

How are your web-design services different from others?

There's an abundance of excellent web-design companies to choose from out there. However, most don't know anything about your business, so you're paying for them to learn. They also design for a wide variety of companies, so they start with a blank page when designing a site. On the other hand, we know the storage business. We know what information a site should include and have designed templates to speed up the implementation of the site. You still have control over the colors and styles that give your site personality, but why re-invent the wheel? By doing this and utilizing technology, we can give our customers effective, well-designed Web sites for a lot less than they would expect to pay elsewhere.

Why not just use one of the existing storage directories that are available for free? Why invest in a full-fledged website?

I think directories are great resources for potential tenants, but most directories are designed to help locate you from a distance. We know the average storage customer lives within a three- to five-mile radius of our facility and will never use the Internet to look us up. They will, however, visit a website address they've seen in the Yellow Pages or heard about in an ad, especially if it's afterhours and they can't call around. And to get the most effective use out of a website, you need to include all the kinds of information a potential tenant is wanting when they look you up. For example, our websites provide an online tour. This is accomplished with pictures and short descriptions showing off your facility step by step, just as you would if they had come out to your office. We know from experience that the chances of closing the rental are much greater if the customer visits the property, but if they can't, why not give them the next best thing?

Another very important reason to have your own website is to control your own domain name. Abcstorage.com is an example of a domain name. When you register a domain, you own it much like a telephone number. And just as dialing a telephone number is the way you can be reached by phone, typing in your domain name on the Internet is the way someone reaches your website. So you can see that it's very important to control your own Internet address, especially if you plan on putting it in printed advertising.

How is a storage website promoted once it's on the Internet?

We submit each site to all the major search engines on the Internet. We suggest registering a site with all the storage-related directories available. Most are free, and you can include a link to your site. However, the most important thing for a facility to do is list its Internet address in all of its advertising, such as Yellow Pages, business cards, fliers, signs, radio and anything else you can think of.

How does a website differ from regular advertising like the Yellow Pages?

A website is interactive and provides space to give customers useful information that a Yellow Pages ad just doesn't have. The tour I talked about before is one example of a feature you can offer. Another good example is showing unit sizes. You can list sizes in a Yellow Pages ad, but that doesn't mean a whole lot to some customers. On your website, you can show them you have 5-by-10s and that the units are about the same size as a large walk-in closet. They understand--it's something they can visualize. Finally, it's very easy to change a website. If your office hours change--no problem, just update your site. If you have a particular unit size that's not renting, offer a special discounted rate to see if that helps. Need to run a special in April for university student summer storage? Just add a coupon to the site. The possibilities are endless.

Are storage websites expensive to implement and maintain?

We've set up a system to design a site and register its domain name for a low one-time setup fee. We then provide hosting and make any monthly updates requested for about the cost of what most facilities charge for one of their smaller rental units. We also offer affordable rate structures for facilities with multiple locations.

What does the future look like for self-storage and Internet marketing?

The future looks very bright for the Internet and storage facilities that learn to utilize it properly. I think in the very competitive storage market of today and tomorrow, it's what you do better than the facility around the corner that will justify higher rental rates and help you maintain high occupancies. And I think a well- organized website providing useful information to your customers is one small, inexpensive part of doing it better.

By Jeff Kinder

If it wasn't for the Academy Award nomination for the song "Blame Canada," from the grunge animation flick South Park: Bigger, Longer & Uncut, most Americans probably would not have even thought about their neighbor to the north at all in the past several months. Americans seem to either ignore Canada completely or make broad assumptions about the country with which they share the world's largest undefended border, and then fill in the blanks with stereotypes of Doug and Bob McKenzie or Robes Pierre.

But we self-storage professionals have proven time and again we are not like most people. Many of us have been thinking about our free-trading partner to the north as a potential market for our products. As an American who has lived in Toronto for three years and, along with my Canadian partner, The Rose Corp., has an interest in a six self-storage facilities in Ontario, I'll try to share a little perspective on our industry from a trans- border view.

Know Your Territory

Meredith Wilson said it best at the beginning of Music Man when the traveling salesman kept repeating the mantra, "But you've got to know the territory." It is true that Canada is a democratic nation of laws that define a stable commercial environment where capitalism thrives and the primary currency is the dollar, where 90 percent of all residents live within 100 miles of the United States border and most speak English (although not necessarily as their first language), where there is a "Free Trade" agreement with the United States, and where you can watch the Today show in your hotel room in the morning.

But it is also true that Canada is a parliamentarian confederacy with a Queen, has a strong socialist party that is currently in power in several Provinces, deals in loonies and two-nies, extends all the way to the North Pole where it shares a large border with Russia and Scandinavia, is a unique multi-cultural mosaic instead of a melting pot, is a signer of the North American Free Trade Treaty (better described as the thousands and thousands of pages of trade-by-this-set-of-rules-treaty), and has an entire Ministry (Cabinet-level position) dedicated to minimizing America's influence on its culture. If you are looking at Canada for your next acquisition or development, you've got to get to know the territory.

Be Prepared

Before you even start to worry about the market, city or province where you are planning on doing business, you will need to understand how that "free"-trade agreement and associated tax treaties really work. Depending on how you structure your companies on both sides of the border, you will be paying 5 percent to 25 percent of your earnings to the Canadian government as withholding tax, just for bringing it back across the border. Unlike the way most Americans view withholding as a temporary payment pending the filing of a return, when the Canadian government withholds from you, the money is theirs and you are without.

There are many organizational options from which to choose in trying to minimize your taxes. There are federal corporations, provincial corporations, provincial unlimited liability companies, limited partnerships, etc. They all have their quirks relating to liability and the way you may already be structured in the United States. Spending a couple of grand with a large, cross-border accounting firm will be frustrating, but worth it.

Once you are comfortable with how you are set up, you've got to get to know the territory. Canada's major cities are not virgin frontiers for the conquering self-storage crusader. There are already sophisticated markets and operators that are growing and trading as in U.S. cities. U-Haul is there. Public Storage is there. Shurgard came and went. (What did they know that I don't?) There are also several Canadian operators that have multiple facilities and an appetite for growth. So what are the opportunities for us entrepreneurial carpetbaggers in Canada?

We all struggle with our own concepts of "underserved" and "overbuilt" when it comes to markets. If Las Vegas was the standard, every other market in North America--except for Phoenix--is grossly underserved. Like most U.S. cities, the major Canadian cities may have specific trade areas or pockets of opportunity. They have also experienced the effects of new competition mitigating everyone's results. At the risk of gross generalization, spreading cultural prejudice, reinforcing stereotypes or being otherwise politically incorrect, I will say that given self-storage is an event-driven business, Canadians are less mobile, have fewer life-changing events and should, therefore, require less storage per person than similar populations in the United States.

Once you have developed or acquired your property, you've got to get to know the territory. Although unemployment is higher in Canada than the United States, it is still relatively low. Your payroll costs will be higher in relation to your revenues. Some provinces are very labor-oriented, and your total payroll costs will be significantly higher. If you thought your electricity and snow-removal bills were high in New York, you'll just love winters in Quebec.

Some provinces charge a Provincial Sales Tax on storage, some just on merchandise. Some collect for the Federal Goods and Services Tax (GST). Some have a unified tax. Some provinces even tax the tax. Once you are done paying taxes on your transactions, operations and profits, you will run into the harsh realities of Capital Taxes. That's right: If you happen to have any money left after going through the tax gauntlet, you are taxed for the privilege of putting it back to work. To the uninitiated, it sometimes appears that one level of government is taking a dollar from you, paying itself 25 cents to pass on 50 cents to another level of government, and nobody is quite sure what happened to the other quarter. OK, so it's not really that bad, but regulatory compliance and your overhead are more expensive.

Partner Up

If you are going to do business in Canada, you need someone who knows the territory. Financing is a whole other ballgame above the 49th. There are only six big banks to choose from, and none of them are looking for a significant exposure to storage. There are a few Schedule B banks that each have their specific mandates and niches. Heller is there. Merrill Lynch is there. Finova is there. But conduit lending is still in its earliest stages and the concept of non-recourse loans is just coming into focus. The Rose Corp. in Toronto, Swan Corp. in Calgary, and other boutique financial houses are the best options for mezzanine financing. But all of them are looking for local integrity, because they know it is a whole other country. Get a partner or operating principal who is on the ground and can help you navigate your way from A to Z.

Operations and marketing are as unique as each trade area. There are no Canadian self-storage laws that define our industry. There is some legal precedent within the appellate courts that give self'-storage operators some degree of direction in their rental agreements. Delinquent tenant procedures are a combination of landlord/tenant, mechanics and storage lien, and common law. Particularly in Quebec, where you need to mix in a little Napoleonic Code, we all live close to the edge in dealing with our delinquent tenants and getting our spaces back. The ethnic diversity found within the mosaic culture of Canada gives operators an opportunity to target specific markets in rentals, and recruiting and requires operators who want to truly maximize their top line to really get to know the territory.

I hope nothing I have said has deterred anyone from coming to Canada and experiencing for themselves the wonderful things the country has to offer. The song "Blame Canada" only works because there is no other society more blameless. The cultural mosaic only works because of the unique tolerance and celebration of diversity that exists above the Great Lakes. The cities are clean. The streets are safe. The water is blue. The American jokes are funny. It may even be a place where you want to do business. Enjoy Canada for what it is: a whole other country. And, if after you have done your homework and gotten to know the territory you decide you want to do business there, come on up. The competition is waiting for you.

Jeff Kinder is the president of Advantage Advisors, LLC, and principal in The Advantage Group. Advantage owns and operates self-storage facilities in the United States and Canada for its own account, and is a fully integrated acquisitions, development, financing and management-services supplier to the self-storage industry, helping individuals, corporations and asset managers maximize their self-storage investment.

Mr. Kinder has been in the self-storage business since 1986. He worked for National Self Storage and Public Storage for 11 years in operations management and marketing. In 1991, he moved to Toronto, to serve as vice president, operations, for Canadian Mini-Warehouse Properties, Ltd., heading up the Public Storage subsidiary, and in 1997, he started Advantage Self Storage™. For more information, call (301) 774-0243; e-mail [email protected].

By Kenneth Carrell

The old real-estate adage "location, location, location" remains especially true when it comes to self-storage. With the costs of buildings fairly standardized, it's the cost of the land that can make or break a project. And the ability to squeeze one more square foot out of a piece of land can make all the difference in whether a project will "pencil out" or fall by the wayside; so design becomes extremely important in maximizing the use of the site.

The design team for your project should be brought in as soon as possible, sometimes before you even start looking for properties. The design team can sometimes see problems or advantages without ever having to put pencil to paper. But even if you don't have a design team ready to go, are trying to decide on someone to do your project, or feel you don't need a design professional to help you get every last square foot from a property, there are still some general guidelines you can look at to help you decide on a piece of property.

While the following list hits some of the important ideas to keep in mind when looking for a property, it should not be considered a complete list by any means. Just as every individual is unique and special, so is every piece of property. Two properties side by side can still be very different when it comes to design considerations.

Topography

The first and most significant design consideration of a project is the topography of the site. The single biggest cost of a project can be the grading. Even sites that appear to be flat will sometimes have a significant amount of grading to do. And while hillside locations will obviously require more grading than flat areas, each type of project has its own special advantages. While the cost for a level piece of ground is probably going to be more, the grading will generally be less involved. While a hillside site will require more grading, you can sometimes use the site itself to allow access to upper floors of buildings rather than using a mechanical means of access.

The topography of the site can also be useful for advertising your project. Someone driving by your facility will see your project for months or years without ever needing to rent a space. But, if one day they do need to rent a storage unit, they'll know you're there. They're more likely to go to your facility since they know where you're located. The topography of a site can sometimes allow customers to see the doors of the storage spaces from the street, so people will know what you are without ever having to see a sign. On the other hand, sites with good street visibility sell for more money than the site that is tucked into the back corner.

Security

The second and equally important design consideration is security for the facility, which can actually be assisted by the site topography. When you have a steep site, sometimes a low fence is all you need to keep someone out of the property. Flat sites might need to use the buildings or fences for security. One of the advantages of using the buildings for perimeter fencing instead of providing a separate fence is keeping your costs down. This also has the side benefit of maximizing the lot coverage in many instances, but other factors can sometimes force you to provide separate fencing.

Traffic

Another factor to consider in site design is traffic, not only in getting to and from the site, but also on the site itself. Obviously, the biggest concern is to provide access from the street, especially to someone driving a rental truck. You want to get someone onto your site with the least amount of trouble. Where possible, you want to minimize the number of left turns to get onto your lot. When someone driving a 24- foot rental truck causes a 12 car pile-up in front of your property, your neighbors won't be real happy with you.

You also want to minimize the number of entrances to the facility. Ideally, one entrance to the site should work in most cases. This will allow for the manager and your security system to control vehicle traffic onto the site. This will allow for the maximum security possible while still allowing ease of use for your customers.

Exposure

While visibility to passing traffic has some advantages, in many instances, it shouldn't be the major consideration in site selection. Although visibility from the street can help let people know that you're there, when someone starts looking for a place to store their possessions, they don't necessarily need to see your facility. Advertising can take the place of visibility in many instances. But that's not to say you shouldn't consider a location that has good visibility. When someone is looking for a storage space to rent, they will remember your facility and probably check you out first.

Buildings can be your best advertising as well. Someone driving by and seeing a lot of roll-up doors isn't going to confuse your facility with a McDonald's. And while some jurisdictions don't want roll-up doors visible from the street, you can always design the exterior of the buildings to enhance the feel of a storage facility. When you can't use the design of the building to help passing traffic figure out what type of a facility you are, that's when you take into account your signs. Some locations allow pole signs, while others won't allow them at all. Can you use the building walls for additional sign area? If the project backs up to a major road or highway, you want to get a sign on it.

The Powers That Be

The local jurisdiction involved in the project presents yet another design consideration. This is where everybody who's anybody gets their say in your project as well. Whether it's the state, county or city that controls the design of the site, government officials can have a more than significant impact on your site. The jurisdiction controls not only setbacks and zoning, but things like lot coverage and floor-area ratio. You could have an ideal site, but if it's not zoned for self-storage, you might be out of luck. This is also where your neighbors, nearby businesses and just about anybody else gets their say in your project.

The jurisdiction will also tell you where you can come onto the site, how many cars need to be able to stack in front of your gate and countless other little things regarded as important. While your project may be on a major street and the layout of the drive would work extremely well there, the jurisdiction may require you to change the layout to suit other needs and safety concerns.

The local planner may also tell you how they want the building to look or not look. While most jurisdictions allow you to do pretty much whatever you want within reasonable guidelines, some places do everything but draw the actual plans. Most jurisdictions require the buildings to present an attractive appearance to the street while structures hidden by buildings can be constructed out of just about anything. They will also tell what exterior materials are allowed and what materials aren't.

Drive Aisles and Spaces

The design for moving vehicles around the site can either maximize the use of the site or waste a lot of space. Flat sites only require minimum drive-aisle widths, and vehicles can pull up next to their space. But add in some up-and-down slopes and, all of a sudden, the situation changes. Slopes can't exceed certain percentages or trucks trying to drive up a hill are going to come sliding right back down--not good if it's your building at the bottom the truck runs into.

When laying out drive aisles, the typical widths can vary from 20 feet to as much as 40, with 25 feet being about average. Once you get the vehicles on your site and moving around, your customers need to be able to get into the spaces they just finished renting. Although it is possible to walk 300 or 400 feet to your storage space carrying boxes, you'll find that those spaces won't lease nearly as fast. Most of the time, you try to keep people from having to walk more than 100 feet or so to their space. Any more than that and it's too much work. They can go down the street to the other guy who has easy access and rent from him.

While it's rarely difficult to pick out a site to build your project on, it can be difficult picking out just the right site. And while the ideas presented here should not be considered an exhaustive list, keeping them in mind while picking out a site can save you a lot of grief down the line. Because, while the site you choose may be the least expensive part of your project, the wrong site could make it the most costly.

Ken Carrell is principal of Kenneth Carrell Architect, based in Aliso Viejo, Calif. His firm specializes in self-storage as well as other types of commercial architecture, and is licensed in several states. For more information, call (949) 716-0114.

Stamp of Approval

The No. 1 hurdle developers face today is obtaining approval. The cities have a more stringent approval process and the developer needs to ask all kinds of questions to minimize problems that will show up later. Developers need to know the step-by-step process in attaining various approvals--site plan, drainage, curb cut, sewer system, architectural, parking variance (if needed), and so on. The mistake of many developers is the tendency to achieve the approvals one at a time. Instead, they should be submitting approvals concurrently to minimize construction delays.

The approval process takes an average of six months to one year. In some communities, it can take years. If you are not familiar with the approval process, it might benefit you to hire a local professional familiar with the town board (i.e. former city attorney or city engineer) who can easily expedite the process. This sounds expensive, but it can save a lot of time and may be the difference in achieving the approval.

Once you have planning approval, you may want to submit separate building plans for each phase so you can easily expand your facility without having to go back to the city for approval. Nothing drives an owner crazier than having no units to rent and the city holding up his next phase of development.

Remember: Planning approval does not mean that you have a building permit. You have to submit your plans and get the actual building permit to know for sure what you can build. Some problems that can arise when getting the building permit include orders for additional fire walls and sprinkler systems.

Lease Up

How fast will I rent up? This is a very important question all new developers ask. Before I answer, I ask them two questions: 1) Are you visible from a main street?; and 2) Will you be in the Yellow Pages the day you open the facility?

Believe it or not, about one-third of new developers are not in the Yellow Pages the day they open. If you are not, you will rent up half as fast as you would otherwise. Customers might know where you're located, but won't call you for a price because they cannot find you in the book. They end up calling a competitor.

It sounds like an easy mistake to avoid, but you will have to do a fair amount of planning and possibly have to gamble on putting an ad in a book before you actually know for you will be building at that location.

For example, if you plan to build a self-storage facility this summer, you would have had to put your advertisement in the Yellow Pages by the end of November 1999 (each city has different cut-off dates). The book comes out in April 2000. If you missed that cut-off date, your project that is completed on Sept.1 will not be in the Yellow Pages until April of 2001; thus, the project will be slow in renting up. If you are building in a poorly visible location, you might not rent at all. This is the most critical thing you can do to ensure the facility will get off on the right foot.

Avoiding Management Headaches

As an owner of a self-storage facility, I have come to find out that a number of my management problems were built into my project. If I want to minimize my management headaches (everyone's dream), I need to design them out in the first place. The site-planning process is critical to avoid possible mistakes in the development of your project.

The first aspect of the site plan to examine is the layout of the office and gate system. I suggest you use only one gate to get in and out of the project. This provides security for both you and the customer because it forces the customer to drive past your office to enter and exit. The gate should be located so a customer can get into the office without going through the gate. This is a very customer-friendly feature that ensures the customer is not intimidated by the office (note photo 1). The gate should also be no larger than 20 feet wide because it should open and close as quickly as possible to avoid cars tailgating each other.

The second aspect of the site plan to consider is the layout of the buildings. If you are building in snow country, you want to construct the buildings running north and south. This ensures that the snow and ice are melted during the day. If the buildings are running east and west, the north side of the buildings will have ice and snow build-up because the sun never shines directly on that side. If the layout of your facility has to be east and west, than make sure to purchase lean-to buildings with the water draining to the south side.

Improper water drainage is the classic construction problem found at self- storage sites. Typically, sites do not have enough pitch in the asphalt to properly drain the water. If water does puddle, this will damage your pavement and, in snow country, you have just made yourself a skating rink. Typically, you want to have the center of the driveway 1 foot below the finished concrete to make sure the pitch is adequate. The water should at least have a one percent to 2 percent slope down the length of the building to avoid any ponding. If you are using catch basins, these also should be installed 1 foot below the finished floor height of the foundation. A large number of projects out there have the catch basins too high.

To minimize any damage to the buildings, a 6- to 8-inch bollard should be installed on all four corners of each building. The bollard should be 4 feet below grade, and 4 feet above ground and filled with concrete. The bollard should be place 12 to 16 inches from the corner of the building. It will protect the building corners from damage by cars and trucks that cut the turning radius too tight around the buildings. It will be cheaper to install all four of the bollards than it will be to fix one corner of the building.

I have just mentioned a few of the classic mistakes I continuously see in the field. Take the time to study out the possible self-storage problems by talking to existing self-storage owners, or look at their sites to see if you see any errors you want to avoid. Every time a developer designs a new project he tries to learn from past mistakes and improve the function of his project. Of course, each new project is a little different from the last, and you can run into new problems you didn't think of originally. Every project has some mistakes that were built-in--you just hope they are small enough so you can live with them.

Jamie Lindau is the sales manager of Trachte Building Systems, a Sun Prairie, Wis.-based manufacturer of one-, two- and three-story self-storage building systems as well as doors, partitions and corridor systems. For more information, call 800.356.5824.

I recently returned from a positively awesome trip down to Supai, the Havasupai Indian Reservation located just southwest of the Grand Canyon. It's an eight-mile hike down to the village from Hualapai Hilltop, and another two miles down to the sacred Havasu Falls, an oasis of aquamarine water and limestone pools--truly one of the most extraordinary excursions I've ever taken.

In August of 1997, these "people of the blue-green waters" suffered flash flooding so devastating that more than 350 residents and about 300 tourists had to be ferried out of the village, mostly by helicopter. Debris driven by the flood smashed sewer and water lines, damaging buildings, paths and bridges. This was the third such flood the reservation had withstood in one decade. And not only did the Havasupai face the challenge of rebuilding what was lost, they had to address the problem of what to do with the wreckage. Talk about starting from square one.

When you talk about development and site selection for self-storage, you're certainly not talking about the resuscitation of a complete ecosystem. But you are talking about planning. In today's development climate, it is more critical than ever to execute the appropriate research when selecting a facility site and design. You need to think about environmental issues, permits and zoning, topography, street access, driveways, traffic. You also need to consider studies conducted by market-research experts on the viability of your proposed location, as well as the sentiments of the local government toward self-storage. All of these elements tie into a facility's success.

This issue's focus on site selection and development begins on page 18 with Harold Leslie's suggestions for "Getting Started" on a new self-storage business. From there, Kenneth Carrell discusses maximizing the potential of your self-storage site and Jamie Lindau highlights some common development pitfalls to avoid. Finally, Jeff Kinder offers a unique perspective on the plausibility of development in a foreign market: Canada. While international outlets become increasingly popular among the more ambitious and daring developers in this industry, differences in procedure, financing and government should be considered before heading for the border.

The plot for self-storage success is fairly sophisticated for what the uninitiated would probably consider some pretty unsophisticated buildings; however, without research and planning, you're not just at square one, you're more like a square behind. The residents of Supai Village managed to restore their community, but they also incorporated some elements of prevention in anticipation of future disasters. Have some foresight. Be prepared. You offer your tenants a haven of sorts, too. Insure it with the proper planning and practices.

Best Wishes,

Teri L. Lanza
Editor
[email protected]

By Barry Morris

Virtually any industry, including self-storage, has its benefits and pitfalls. But rather than simply taking the bad with the good, Christopher Capozzoli thought it would be better to take the bad and make it better.

Capozzoli, a Boston-area real-estate developer, opened his first self-storage facility 12 years ago. After a few years in the business, he concluded that many self-storage software products available at the time left something to be desired. The only way to change that, he concluded, was to create a product that would fill the void. This was the genesis of MicroTask Inc. "Being in the industry and seeing what was out there, I took it upon myself to start this company to try to bring better technology to the industry," he says.

Burlington, Mass.-based MicroTask was founded in 1996, and its principals--Capozzoli, the company president; Stephen Davis, vice president of sales and marketing; and Chad Nale, vice president of engineering--collectively have more than 20 years' experience in the self-storage industry. Additionally, the company's engineering team has more than 50 years of experience in the development of Windows- and Internet-based applications.

MicroTask's newest solution for the industry is referred to as SOMS (Self-Storage Online Management System), a completely Web-based facility-management application. "With our new software there will be a centralized database at our facility, set up as an ASP (application service provider), and each facility will run its software over the Internet," Davis says. "This way they have a centralized database, so now a national operator or multi-facility operator can get detailed, up-to-the-minute information on any particular facility or group of facilities, regional or national, from any computer with Internet access."

Focusing on the Internet

Even with today's strong product offerings, the single-facility software needs of the multi-facility operator often go unmet. This is causing a change in MicroTask's dynamic from that of a software-package producer to, as Davis calls it, a "Web-centered company." "Single-facility-based software really wasn't conducive to running multiple facilities," says Davis. "Each facility was an independent island, and there was no integrated database. Even the major vendors have had a hard time figuring out how to consolidate information from all their facilities."

While SOMS seems to be what large multi-facility operators have long dreamed about, Davis says that even small-facility operators can benefit in several ways. "One, they (often) have a problem with software and upgrades. With us, they don't have to worry about installing software, upgrade problems or ever paying for upgrades," Davis says. "As soon as they sign on to the system through a standard Internet browser, they have the latest version of the software--the installation issues go away. Tech support becomes much easier because the technician has the capability of seeing exactly what the user is doing, almost as if looking over the user's shoulder. Also, most facilities never adequately back up their data, so if something goes wrong, their data may be old. With us, it's backed up automatically at various times during the day."

Testing of SOMS was to begin in late May or early June, according to Davis. Once testing is complete and SOMS is introduced to the industry, the company will discontinue its Stor-Rite™ software package. Also contributing to MicroTask's new Web-centric approach is eSTORIT.com, the company's self-storage industry portal. The site has an active search engine listing more than 30,000 facilities in the United States, and offers the capability to rent units from any listed facility directly via the Internet.

Similar search engines now on the Web don't level the playing field between small- and mid-size storage operations and their larger competitors, Davis says. "To get information on a particular locality, you've got to go four or five pages deep into some sites, and on each page you see banners from the national competitors. The feeling for the independents was that 'people are going to click on one of those banners well before they ever get to see our listing.'"

Capozzoli currently operates two self-storage facilities in Massachusetts and plans to open three others elsewhere in the Eastern United States--including one in Florida--within the next 12 months. These properties provide a natural proving ground for MicroTask's products. "We test a lot of our ideas (in Chris's facilities) before we even approach anybody," notes Davis. "For instance, we were testing confirmed reservations and rentals online for at least four or five months with Chris's properties before we implemented it in eSTORIT.com, with great success."

Capozzoli's continual goal with MicroTask has been to be a mover and shaker, venturing into areas others may be hesitant to enter. "We bring a unique flavor to the industry," he says. "We know where technology is going, where things are moving, and we can make those technological decisions as to what fits best with this industry.

"Outside this industry, everyone's talking 'B2B' (business to business). We're trying to bring a business-to-business model into this industry through the web. By doing that, I think we're not only opening up a great opportunity in this industry, but also bringing a great peace of mind."

By Harold Leslie

In today's market, it is more important than ever to do your homework before investing in a new self-storage project. Unlike the early days of self-storage when you could build a project and expect it to prosper with little or no market study, today you must take an educated approach to your project planning or risk losing large amounts of your hard-earned money. So, plan to spend at least $3,000 to $5,000 to develop information that allows you to make the right decisions--whether to stop or go forward with a project.

Some areas of the country are now overbuilt, with too many available square feet of storage and too few consumers. There are many resources available to the prospective self-storage owner that can tell you whether a site would be profitable, or if it is one that would fail.

I recommend using demographics/ market-research companies and consultants that work in this industry to tell you who are the available customers in an area, what is their mean income, what is the daily traffic count past the location you are looking to develop, what are the statistics and, if an area is growing, how fast. Also important is information on existing storage facilities (prices and occupancy). These facts will guide you, not only in the initial choice of facility location, but it will give insight in preparation of unit mixes, what size facility to build and how much you may be able to charge for your available units. Many market-research companies offer packages tailored to the self-storage market.

One useful source of information is the Inside Self-Storage Factbook. This is published annually each November and contains information on financing, real estate, development, marketing, consulting and other aspects of the self storage business. Also available is MiniCo's Self-Storage Almanac, an annual, statistical abstract containing information on topics such as unit mix, rental rates throughout the country, construction costs, population traits and more. It may not give you the exact information you need for your specific site, but it can give you an overview of self-storage industry statistics nationwide. If you have no previous self-storage experience, you may find both these publications to be most informative.

Another available tool is the use of industry experts. Attend the trade shows that are held throughout the year. There are self-storage development seminars and workshops held regularly, sponsored by several of the major industry publications (including this one). Watch for events in your area of the country. While attending, make good use of the experts available to you. Listen to the speakers and talk to other attendees. Keeping up with the changing trends of self-storage will allow you to build a facility that will meet the needs of your customers 10 years from now, not just today.

Site Selection

Once you have determined where your project should be located, there are some other important aspects to consider. A "good site" for self-storage should be:

1. Located on a major traffic artery.
2. Located between dense multi-family residential areas and retail locations.
3. Located on the "going home" side of the road, if possible.
4. Zoned for self-storage use by virtue of being eligible for a special-use permit.
5. Depending upon population, the nearest competitor should be no closer than 3 miles. If this is an urban site, it can be as low as 1 to 1.5 miles.

When looking to purchase a parcel of land, you must know what you can pay and still be cost-competitive. I use the 66 percent rule of thumb developed by Bruce Manley and Buzz Victor, two of the founders of the self-storage industry. (See "The 66 Percent Rule.")

Also, the building-to-land ratio of your project, including water retention, drives, setbacks, etc., must be in excess of 40 percent. For example, a site of three acres (130,680 square feet) must produce a minimum of 64,272 square feet of rentable storage.

Of course, in the process of purchasing a parcel of land, you will need to use a good title-search company that will find any recorded easements, highway right-of-ways, utility easements and service-access easements that you would need to be aware of before purchasing the land and planning your buildings.

Another factor to be aware of before signing the contract on a parcel of land is the state of the land itself. What kind of business was there before? You should invest in an environmental assessment before making a commitment on the land, particularly in urban areas. A professional environmental and geo-technical assessment will include several key components:

• An inspection of the physical characteristics of the property and surrounding area, including topography, geology and hydrology.
• A review of all reasonably ascertainable historic records.
• A review and inspection of the current condition and uses of the adjoining properties to identify the presence of any environmental conditions or regulated activities that may have a negative impact on the property.
• A review and inspection of the current condition and uses of the property, including compliance with appropriate regulations.
• Soil borings collected using a geoprobe drill rig. These samples are to be carefully handled and tested in a laboratory for the presence of harmful contaminates.
• A full written report completed by an environmental-evaluation firm including conclusions and recommendations.

While it may sound somewhat extreme to go through all of this, it can save you from becoming responsible for cleaning up a toxic-waste dump left by a prior owner, or being stuck with a piece of land that you cannot build on economically (or at all) due to poor soil conditions. Also, be mindful that it will be difficult (if not impossible) to obtain financing on a substandard site.

Permits and Zoning

There are issues to be reckoned with that relate to community acceptance of self-storage. Many areas are now requiring elaborate architecture or expensive facades to make the facility blend with existing structures and surrounding architecture. Zoning and planning boards must be approached with an eye toward education in the advantages of having adequate self-storage available in the community. Following are some benefits you can point out while presenting your case for allowing a self-storage project to go forward:

• Self-storage operations are quiet. It's a good buffer.
• It creates very little traffic.
• It has no impact on utilities.
• It has no impact on schools.
• It provides good tax revenues.
• It's a community service.

You will also need to be informed on the community standards for construction, such as allowable coverage on your land, building set backs, parking requirements, minimum drive widths, sign limitations and setbacks, landscape requirements, water use and storm-water management, etc. The better informed you are about these issues before you buy a piece of land, the better you will be able to design your facility correctly the first time, without costly changes after plan review.

Site Design

After you have settled on where you will build, you must design the facility. Look for an engineer or architect who already has experience in self-storage. The unique requirements of storage projects, both in current building techniques and in conformity to codes, can be tricky. You want someone designing your facility who already knows which hoops to jump through. You do not want to have to pay while this person learns the ins and outs of self-storage. There are special code requirements for building separation, fire codes with special requirements for storage, and certain mandatory requirements as to hall widths and maximum travel distance between exits, etc.

When you have a preliminary plan ready, you will have to take it before the building department for permitting. In most cities and towns across the country, it would seem that most bureaucrats disseminate misinformation and inaccuracy. We have found that, in many cases, municipal employees feel it is their job to be adversarial rather than helpful. This is particularly true when it comes to providing answers that require interpretation. The following tips help to approach the bureaucracy.

• Be courteous.
• Be honest about what you do and do not know.
• If you cannot make the progress you want to make on your own, consider the services of an attorney, architect or engineer. But again, anyone you choose out of those three disciplines must have previous self-storage experience; you do not want to be the one paying to educate them.

After you have selected a site and had preliminary drawings made, you must bear in mind that, realistically, the occupancy rate of your facility after 18 months of operation must exceed 80 percent to achieve stabilization. If you fail to select a viable site, you may find yourself paying the mortgage out of your own pocket. If that continues for more than 18 or so months, you may find your financiers looking over your shoulders in a most unpleasant way.

So, make sure to do all of your homework before proceeding on an investment of what could easily amount to over a million dollars. Don't think you can do it on the "cheap." Paying a few dollars before you build may save you much more later in the development of your self-storage project.

Harold Leslie has been involved in the self-storage industry for more than 28 years and is considered one of its founders. He was instrumental in the early development of the Self Storage Association, and was a pioneer in the development of standing-seam roof systems and computer-aided design (CAD) use for unit mix and design. Mr. Leslie currently serves as president of Leslie Industries Inc., a design and engineering firm, which leads in the development of climate- control self-storage and has completed more than 50 million square feet of self-storage projects to date. Leslie Industries' European affiliate has completed more than 5 million square feet of building conversions to self-storage in Great Britain and the continent. He also is the owner of five self-storage facilities in the United States.

By David Wilhite

In any given year, during the months of June through November, an average of three hurricanes will strike the United States. In 1995, hurricanes accounted for more than 100 deaths and caused billions of dollars in damages. National Weather Service experts are in agreement that science will never provide a full solution to hurricane safety. The question is, how can self-storage facility owners operating on America's vulnerable coastlines protect themselves and their business operations from harm?

Since coastal areas are vulnerable to storms, facility owners located in those areas should enter each hurricane season prepared. Aside from such basic safety issues as having an evacuation plan in place and stockpiling emergency supplies, you should be absolutely certain you have appropriate insurance coverage in place to protect your business in case of disaster. Don't gamble on luck to protect you--the price you pay will be much higher in the long run.

Your first step is to secure adequate insurance coverage. In addition to protecting your business from hurricane- and wind-induced damage, a complete insurance package should also include loss-of-business-income coverage and extra-expense coverage to protect your finances in the event of a loss. (Smart shoppers, take note: Your best bet is to purchase property coverage on a special form basis, which also protects against hail, smoke, explosion and other perils, unless the policy specifically excludes them).

Once your coverage is in place, there are a several other steps you can take to prepare against disaster. If you own a camcorder, you can videotape the interior and exterior of your facility, describing each item as you record it. Be sure to store the tape in a secure location away from your premises. Alternately, you can prepare a list of your valuables with Polaroid photos. Either method can save a great deal of time and trouble when making a claim.

Once a hurricane watch has been issued, precautions should be taken immediately to protect your facility. Board up windows or secure them with storm shutters, and brace all exterior doors shut. Secure any loose objects surrounding the area, such as trash cans, signs, etc., so they do not become flying missiles. Unplug electrical items and shut off gas lines. Remember: Hurricanes moving inland can cause severe flooding, which brings attendant risks of fire and electrocution.

Above all, play it safe. Monitor the progress of the storm through National Weather Service advisories and be prepared to evacuate the area immediately. Hurricane warnings may be issued only hours before a storm strikes, so plan your time accordingly. Avoid any last-minute rush that may leave you stranded if disaster threatens, and stay calm.

After the storm passes, call your insurance company as soon as possible to report a claim. Avoid the temptation to sight-see affected areas--you may be mistaken for a looter. Carry valid identification, along with proof of residency and your business license. Drive carefully through debris-strewn areas, and watch for fallen power lines, especially in areas with standing water. Enter your business with caution. Don't use matches in case of gas leaks, and don't use electricity until your business has been checked out by the proper authorities. Remember, if the area in which your facility is located is heavily affected, it could take two to four weeks (or longer) before local roads are cleared and the area opened to the public. A catastrophic loss can deliver a knockout punch that can devastate your financial future. Don't put yourself at risk.

David Wilhite is the marketing manager of Universal Insurance Facilities Inc. Universal offers a complete package of coverages specifically designed to meet the needs of the self-storage industry, including loss of income, employee dishonesty, comprehensive business liability, hazardous-contents removal and customer storage. For more information, contact Universal at Box 40079, Phoenix, AZ 850067-0079; phone (800) 844-2110; fax (480) 970-6240; www.vpico.com/universal.

Michael Skrentny is currently president and part owner of Mystic Systems Technology Corp. (MSTC), a Scottsdale, Ariz.-based company that provides management software, access and alarm systems to the self-storage industry. He has been with the company since 1991.

Inside Self-Storage caught up with Mr. Skrentney to discuss his unique history in the self-storage industry, the development of MSTC as a company, the perceptions surrounding the launch of its Account Manager program, and his insights on the future of self-storage software. We are now pleased to present an interview with Michael Skrentney...

Now that we know some of your background, what were some of your earlier positions in the self-storage industry?

My first experience was as a manager for Shurgard Storage Centers in Washington state. That was in 1984 when Shurgard was raising capital through limited partnerships. I learned a lot from the experience because Shurgard was very focused on management and quality service. They were from the part of the country that brought us Microsoft and Nordstrom. They wanted to instill that kind of ownership mentality in their employees, and they were very committed to education. They quickly promoted me to regional manager and relocated me to Phoenix, to develop what was then a new market for Shurgard--managing, acquiring and assisting in the development of new properties. At the time, all of the facilities under my direction were computerized, and we used the MSTC Mini Manager as our system.

In 1987, I took a position as VP of operations with a relatively new up-and- coming company, Storage USA. They were in the business of developing high-quality storage facilities and from the very start began positioning themselves to be one of the top three operators in the industry. I was impressed that such a small company could have such drive and focus. We were definitely the underdog, but there was no question in my mind that it was only a matter of time before we reached our goal. We always approached things from the standpoint of "Will this work now?" and "Will it still work with 100 or 1000 sites?" Dean Jernigan was always willing to put the necessary resources toward any problem so that it could be solved in the best possible manner. Much of the groundwork we laid in those days is still in place today.

When I came to work with MSTC, we also had an affiliate company, Arizona Mini Storage Management, which managed the Storage Solutions facilities in Arizona. I was again VP of operations. I worked this position for several years while also working sales and management at MSTC. Later, when I became president of MSTC, we made the companies more independent and autonomous so they could each focus on their particular business.

How has this helped you in your career at MSTC?

I am fortunate enough to have had experience on every level of self-storage management, from on-site management, to supervising facilities all across the country, to writing and implementing policies for several major self-storage corporations. All the while I was also a customer of MSTC, so right from the start I was an outside advocate giving them suggestions on how to make their products more meaningful for the managers, management companies and owner/operators. Whenever we put something new into our program, we think about how it affects the people in all of those positions. Several other key persons in our organization come from the background of self-storage management, so we definitely have that part of understanding the business down pat. In addition, I am able to apply the fundamentals of teamwork to taking ownership and commitment to quality service in how we do business. They are the key elements of MSTC.

When computers first became available on the Macintosh platform, MSTC was one of the first software vendors. Explain its history for us.

MSTC actually started working on products in the early 1980s. At that time, one of the founders of MSTC, Tom Swanson, was an owner/operator in Tempe, Ariz., and had a desire to computerize his storage facility. He worked with some local people developing a product and then realized that this was something they could take to market; so, in 1984, Mini Storage Technology was in incorporated. Right from the start they had a customer-service philosophy, and were the first in the industry to offer 24-hour, 7-day-a-week, 365-day-a-year technical support.

In those days you actually leased the program, the computer and even the computer desk. If something went wrong with the system, they literally shipped you a new computer overnight. It was an Apple computer with two floppy drives and no hard drive. Believe it or not, MSTC was able to actually run a management program and a gate-access system all on that one computer, even when it was supposedly technically impossible. Granted, it didn't have the level of sophistication that we expect from our programs now, but for its time it was very innovative. At the time I was working for Shurgard and we had the MSTC gate-access systems also. I'll never forget the day that Millie Swanson came over to our facility in the heat of summer to troubleshoot a problem we were having with a keypad. It was well over a 110 degrees and there she was out in the middle of the sun on the hot asphalt with a long mop handle in her hand, trying to pull wires out to reconnect the keypad. We took a Polaroid picture and she looked like Carol Burnett doing one of her cleaning lady comedy acts. I wonder where that photo is. That really stuck with me that MSTC would go that far to serve its customers.

In the mid-'80s it became evident that the business world was moving from Apple to IBM-compatible computers and that DOS was here to stay. MSTC jumped on the DOS bandwagon in a big way and began the task of creating the Mini Manager II, which was a derivative of the Apple program but clearly better. At that point, they knew the shortcomings of the previous system and what it needed to do to be at the forefront of technology for this marketplace. When the program came to the market, people didn't want to lease their systems any more, so the approach was all sales. MSTC got out of the business of providing all the hardware and the desks, but stayed with the approach of offering a complete system. Now, however, you could do more than just lease it, you could own a license to the software. By the early-'90s, almost all Apple-based systems were converted to the DOS system. A very similar experience to what is occurring now with so many moving from DOS to Windows.

What significant changes have occurred to MSTC through the years, and how has it impacted the marketplace?

MSTC has always been at the forefront of technology. In the early 1990s, MSTC was the first to conceptualize and implement an alarm system that could be retrofitted into existing facilities because it employed the use of wireless transmitting technology in conjunction with other hardwired devices. This system came with individual door transmitters that could be wired to magnetic contacts or placed in passive infrared devices that required literally no installation. This meant that alarms could be rented out to customers who were willing to pay extra for them. Shortly afterwards, we developed 16-channel multiplexers that could also be utilized in the system. This allowed the system to be practical for new installations where all units were to be alarmed as well as for retrofits.

In 1995, my business associate, Kathy Trevillyan, and I also took over controlling interest in MSTC. It was our goal to reorganize it into a company that still cared about quality products and customer service, but that could hold pace with the way the world does business today. In 1996, we moved our offices and expanded our staff to help maintain consistent levels of sales and technical support. We began business planning using outside consultants, such as George S. May International Co., to help us identify areas that might need work. We also felt that the world would be going over to the Windows platform and we wanted to be at the forefront of that effort with 32-bit technology. So we started the process of defining the specifications for what would later become Account Manager for Windows. It was important for us that we keep the good things about the DOS Mini Manager II that made our company a success, but we wanted to stand on top and incorporate many of the things our customers had been telling us they wanted in a new system.

We began programming the Windows-based Security Manager in 1996 and Account Manager in 1997. We were expecting to release them both by summer of 1998; however, software development is not an exact science and the process took longer than expected. Meanwhile, in 1998 our programming staff (which consisted of three family members) decided that they were not happy with the direction of the company and they departed in October of 1998, leaving us with an incomplete program and some unhappy customers who were anxiously awaiting their new systems.

Recognizing the need to act quickly, we selected a software-development company that had a great deal of Windows- and Internet-development experience, to outsource the actual programming of Account Manager. We decided to turn a negative into a positive, and I began working with them on a daily basis. This gave MSTC a great opportunity to take a fresh look at Account Manager and make it even better than initially conceptualized.

The only problem we encountered was timing. It became apparent to us that we had to start over almost from scratch, and we were already late releasing Account Manager. So we did everything we could to speed up the process. We had up to five people working 10- to 24-hour days trying to accomplish the impossible. We learned an incredible amount during this process. All the while, many people in the industry were waiting to see us fail and spreading rumors that we were going out of business. Consequently, we released version 1.0 of Account Manager a little prematurely. We thought people would be happier to see the product partially functioning and that they would have the patience to go through the completion process with us. We were wrong, and we then recalled the product and began a more controlled approach to releasing the software in the fall of 1999.

That's quite a story. It's easy to see how perceptions can be inaccurate. Are there any thoughts you'd like to share with your captive audience?

We're here to stay! We've weathered a tough storm and come out stronger. It has made us tune into our customer base even more. After all, they have been frustrated; yet, we stuck in there day after day and listened to what they had to say so that we could be the best. We owe a debt of gratitude to thank all of our customers who have supported us and given us the strength to persevere. It is our business and our pleasure to serve such excellent people.

Windows development tools are holding the floodgate open for software vendors. Do you feel this makes the buying decision more difficult? How has competition affected your business?

We program utilizing Microsoft Visual C++ development tools. It is possible to utilize other development tools, but they do not all get the same result. Account Manager offers literally thousands of options of how to do business. It takes a lot of programming (source code) to support that much flexibility. I find there are a lot of systems out there, some of which are new to the marketplace, but few demonstrate the level of experience and depth of configuration that Account Manager has.

Just being "Account-based" makes its source code more complex than anything else. The word "account" as used in our system means that for each customer that rents units at the site, we establish an account you can enter the customer contact, billing and identification information into. In addition, you can have multiple contacts and multiple units in the account. For each account in the system, you actually customize all of your business practices so you can do business with them the way they want you to do business. We have over 15,000 programming hours in the system, and we plan to keep going strong.

Lots of companies will put a Windows product out there. There aren't any real controls in place to regulate software. That's one of the reasons why so many products come to market. Anyone can form a company, write a program, get a trade-show booth and an advertisement, and claim to be an expert. It's difficult initially to tell them apart. They all appear to do the same basic functions. It's the flexibility to conform to how you do business, the accountability of the system tracking controls, and the customer support that sets apart the better ones. I think you'll find that the more mature companies in the industry understand this, and if you evaluate the products you'll see some significant differences.

Developing a reliable, proven product is not easy from what you've explained. Is your newest Windows property management product, the Account Manager, bug-free?

Microsoft has certainly demonstrated that no successful product is bug free. At any given time, any software system has a list of known issues. It is the responsibility of the software companies to minimize the potential risk of any bugs by thorough testing and to respond quickly to any that are identified. A software system with no bugs is essentially a dead system and will soon be obsolete. We maintain a list of issues in our software, track the progress made on each issue, and then test the fixes prior to releasing a new version. We have released a new version of Account Manager at least once a quarter and intend to continue to do so through the year 2000.

So "buyer beware"? What advice would you give to a first-time builder of self-storage who is shopping for automation products?

Since we lack the equivalency of Consumer Reports in our market, it is important to educate yourself via seminars, publications, and relationships with management and consulting companies, as well as with the vendors who supply you with the products. Talk to other operators and learn from their experiences as well.

"User-friendly" is a term so often heard in software marketing. Is there truly such a thing as user-friendly software?

We decided that "user-friendly" means being compliant with Microsoft Windows. We designed our system to use all the standard menus, tool bars, wizards, task bars, properties sheets, drop lists and dialogue boxes you would see in a product developed by Microsoft. In this way, the computer operator is half way there just by learning how to use Windows. We find that people who are Windows proficient find the system easy to use, and those who only know DOS get frustrated. Until they learn Windows, they will continue to be frustrated. We recommend that everyone using our system should take a basic Windows class to learn how to maneuver around, and then they can take one of our optional training courses. In addition, our system has a very thorough online help system that will help the user find just about anything they need to know about the system.

Internet technology is also another life-altering device in our society. How has MSTC applied Internet features in your business and in your products?

We use the Internet as our primary means of communication, even within our own company. In addition, we have created a website that allows our customers to easily contact us for sales inquiries, and support questions, and to make suggestions on product development. Several of our employees actually work from home several days a week and utilize the Internet almost exclusively to stay in touch. We utilize synchronization so they can log on and update their database to match the main one on our network. In the Account Manager, we utilize the Internet for corporate report transmittals and are expanding that to include credit-card processing and the mailing of customer invoices.

We also see the future as being one in which there will be a web-based approach to self-storage management software that will allow storage customers to check their balances and history, make changes to their account and make online payments via the Internet. From a corporate standpoint, the home office of multiple sites will actually maintain the server and host the database that the sites will log on to as browsers. This will allow the home office the ability to always have the most recent information at their fingertips making call-center reservations, rate management, audit controls, report timeliness and marketing decisions a snap.

What can this industry expect to see from your organization in the next three to five years?

Our big emphasis over the next few years will be to continue to refine the Account Manager to meet the needs of the industry, to introduce our new security hardware line and to develop and release a web-based enterprise version of Account Manager. All the while our focus will be to continue to improve our quality of customer service and to introduce innovative and leading-edge solutions for the industry.

By Harley Rolfe

The dilemma is that a commodity business like self-storage doesn't breed "hard-nosed" marketers. Yet the day may arrive when marketing is a necessary discipline in the successful operation of a storage facility. Without the pressure of performing under fire and the promise of a career payoff for the victors, few people brought up in the self-storage industry have marketing credentials, and people who do know something about marketing are not likely to be well-grounded in the industry. Both are blind to each other's specialties. So how do we engineer an amalgam between the two?

The real question is whether the self-storage operator will go to the marketing information source or the source will go to the operator. Since the need is generated within the operator, I believe he must search out the marketing source.

A Change in Scale or a Change in Kind?

In the same way that our government sponsors a War College to teach the practice of armed conflict, there is also a study of how to prosecute one's business in the face of competitive conflicts. But a number of storage operators don't buy the idea that there's very much to marketing. They risk trying to conduct their business in a new competitive environment as if nothing significant has changed. Yet, we know that when all the operators in a commodity market are so oriented, nasty price wars result. We talked about those dynamics a couple of columns ago.

For most people, self-storage has been a pretty benign business, and the addition of competition doesn't seem like it will change things all that much. What goes unrecognized is that when a competitive squeeze arrives, the character of the market (behavior of sellers and buyers) changes. So how can a self-storage operator determine what the real marketing McCoy is? Let's discuss the three sources of marketing information:

1. Academia: The business schools conduct a dual program. There is the teaching role, ministering to the needs of business students in learning the marketing process as one of the major functions--and costs--of business. The other is the broader search for methods that generally make the marketing process more efficient. For instance, 50 percent of the price of a product at retail goes towards marketing. (That's somewhat misleading because marketing includes distribution and transportation costs, plus the promotion expenses you would normally expect.) It relates to all those things that are post-manufacturing.

The current marketing darling--the Internet--makes those academic guys drool as they try to divine what role it can play in improving efficiency. These institutions are often instrumental in proposing suitable legislation to improve the operation of markets. Other movements that get their attention are the move toward "big box" retailing (Home Depot), supermarket evolution (Super Wal-Mart), mall retailing, etc., and the issues involved in maintaining and improving market efficiency--a major component of which is the encouragement and preservation of competition.

2. Professional or career marketing: This is the job of the marketing practitioner. He usually has formal training (see above) in the marketing process with specific courses in the mechanics of marketing (product planning, market strategies, market/sales research, new-product introduction, assessment of markets, (such as competitive conditions, demographics etc.), media selection, sales channel determination and the like.] These people have a solid exposure to the academic side, but also develop a good dose of the practical or grimy side of active market experience. The job of the professional marketer is to sell stuff for his employer--usually in competitive circumstances. I count myself in this category.

Let's stop a minute. Notice that the objectives of the academic folks and practitioners are contrary. While the first group is looking out for what is best for society or the public, the next group's mission may be at odds with the general good. What is good for any group may not always be good for each individual. Professional marketers are mainly preoccupied with the welfare of an individual supplier. The academic side loves competition as a means to foster the best interests of society. The practicing marketer only has eyes for his employer or client. He helps them thrive in whatever market situation they find themselves to defy the ravages of wide-open competition.

3. Anecdotal: Also less respectfully called "gadget" or "whiz-bang," this is marketing information that is mainly bright ideas. "Joe tried this. It worked for him. It will work for you, too." It tends to be somewhat sensational rather than a studied evaluation of what and how to apply a proper set of business techniques, but it is often quite interesting. At the moment, the only self-storage-specific material in this category is a book by Fred Gleek, entitled Secrets of Self-Storage Marketing Success--Revealed! In addition to the book, Mr. Gleek publishes a regular self-storage marketing newsletter and has conducted a number of seminars. He is the only person providing this type material for the self-storage owner.

Family Jewels

Now the question becomes, "Which do I need and why?" Here my bias shows. It's a matter of how you define your ownership/manager role. I suggest that the most intimate, proprietary aspect of your (or any) business is how you succeed in a competitive market. Nothing can be as vital as how you are besting your rivals. The "how" of success in a competitive market is the "family jewels." To be dependent on others for those basics is perilous.

Me? Puzzled?

I wrote my book and do these columns to try to fill in the blanks. Frankly, most people that have reviewed the book say it is too much to ask an operator to absorb. I'm puzzled. How people with thousands or millions of dollars at stake can seriously say that the material is "too much" when their choice is to be subjected to tough price competition and, perhaps, lowered facility valuation, baffles me.

By knowing the principles underlying effective marketing, you can identify the predictors of market success and compose or choose approaches that have an excellent chance of fruition. For consistent marketing success, you need to know why programs work. What are the driving principles that make them go. Knowing those principles allows you to make discerning choices from among often-quixotic options and recommendations.

Who's the Coach?

The analogy I often use cites the role of a coach vs. the players on his team. The coach knows the rules, can analyze the opposition, knows the other coaches' tendencies, knows the strengths and weakness of the various players on both sides, and has knowledge and an approach to the game he has honed over the years. He can develop a game plan and show his team how to get the job done. His players do none of those things. They study the game plan as designed by the coach, practice the drills necessary to fully use the plan, then, on game day, execute. If things don't go right, they don't adjust the plan, the coach does. So the question for you is: Are you the coach or a player? If the latter, then who's the coach?

Missed some previous issues? Check the web at www.hardnosed.com.

Harley Rolfe is a semi-retired marketing specialist whose career includes executive-level marketing positions with General Electric and AT&T. He also owned lodging and office facilities for more than 20 years. Mr. Rolfe holds a bachelor's degree in economics from Wabash College and a master's degree in business administration from the University of Indiana. He can be reached at his home in Nampa, Idaho, at (208) 463-9039. Further information can also be found in Mr. Harley's book, Hard-Nosed Marketing for Self-Storage.