By Cary F. McGovern

Small records-storage accounts have two unique attributes. First, they are the easiest to handle; and second, they are by far the most profitable. The question has always been how to attract these small accounts without high sales costs. This article discusses high-yield/low-volume accounts.

Business records are defined as proof of completion of a business transaction. Every business and nonprofit organization has them. In the universe of your potential prospects, the number of small-business clients exceeds the number of large clients by 100 times. Traditional commercial- records businesses have not even scratched the surface of the small-business base in any market due to the cost of marketing.

Small records-storage clients can be defined as those with up to 200 boxes. These clients abound and are more likely to come into your self storage center than to any commercial records center in your market. These clients also have the lowest rate of retrieval, generally are the least trouble and require very little care and handling.

So whats the secret? How can you get these without traditional sales calls and salesmen? This is the conundrum that has faced the industry from its inception. Today we have several factors that make this an ideal opportunity for self-storage operators. In last months column, I wrote about records storage lite, a concept that allows the operator to simplify his records-storage operation and maximize square-foot yield. (To read this article, access the online article archive at www.insideselfstorage.com.)

Small-Business Packages Defined

A small-business package is a bundle of records-management services that costs less than a typical 10-by-10 storage unit and has value to a business client beyond simple storage. I recommend developing at least three alternative packages:

• The Economy Package may include storage of up to 50 boxes, one box retrieval per month and will-call service.
• The Business Package may include storage of up to 100 boxes, five box retrievals per month, box-level indexing and will-call service.
• The Professional Package may include storage of up to 200 boxes, 10 box retrievals per month, box-level indexing, file retrieval and a courier-delivery option (for an additional fee).

These three options are simply examples, and the pricing for these packages can be different in a variety of markets throughout Canada, Europe and the United States. Regardless of your specific pricing structure, there are some key components that make small-business packages attractive to clients.

Value-Added Benefits

Small businesses have very little time to properly manage their records. They have little storage space, no expertise, and no real desire to deal with the growing mess. Boxes are stored hither and yon with very little organization. These businesses are looking for you and your services, but they dont even know it!

Off-site records storage adds significant value to the integrity of business records because clients cannot access records unless they have the authority to do so. This avoids the ever-present danger of document tampering, damage or loss. This ethical and physical barrier has been used to prove the authenticity of business records in court and to regulators.

Another issue all businesses face is storage space. With a small-business package, companies can now have an incremental perunit cost for additional boxes. They never need additional rooms or floor space in their offices. As a matter of fact, if you provide appropriate levels of service, they may be able to send more records off site rather than adding additional filing equipment to their own facilities.

The Value to Self-Storage

Small-business packages combined with records management lite allow self-storage owners to provide a simplified service. This adds product diversification to your business, lengthens your contract terms, and provides three to five times the per-square-foot of traditional records storage.

The quest in self-storage records management has been de- fined: develop a low-cost service package that is simple to execute, is highly valuable to business clients, and has elevated profit margins. This is not an easy task, but the method I prescribe has been proven by hundreds of facilities. In some cases, yield exceeds that of traditional records management by three or four times. The best part is, its simple.

Self-storage facilities have significant walk-in traffic, with some percentage represented by small businesses in any market. You have the opportunity to sell these prospects records-management services. You just need something to offer and know how to present it.

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

By Amy Brown

When constructing a new facility or expanding a current one, it is critical to include insurance in the planning of the project. Construction sites involve unique risks that may not be included in a standard business-insurance policy. It is important to research the potential hazards of a project prior to breaking ground.

Facilities under construction are vulnerable to damage from the elements and other threats. For example, they are an easy target for thieves looking to steal tools or materials left on site. They may also increase an owners risk of liability. Construction sites are considered attractive nuisances. That is, they contain items and conditionssuch as machinery, dirt piles, open pits, tools, and building components and materialsthat make them appealing to explorers. Liability could be placed on the owner or controller of the premises in the event of an accident, regardless of whether the person was trespassing.

Storage owners should take precautions to safeguard their construction sites. The best way to avoid accidents is to block access to the site with a locked fence and signs that indicate trespassing will not be tolerated.

Builders Risk

Builders-risk insurance is a specialized policy designed to cover the property-loss exposures associated with construction projects. This coverage protects the owners investment from direct physical loss to the storage buildings during the progress of construction. Coverage may be written for the completed value of the project and can be extended for facilities under expansion. Buildings under construction may be included, and then endorsed to finished operations.

The insurance-requirements section of the construction contract should specify who is responsible for purchasing the builders-risk insurance and exactly what coverages to include in the policy. In some cases, the builder may be responsible for providing coverage. In others, it may be the storage owner/developers responsibility.

It is important to read and understand the details of a builders-risk policy, as such policies can vary significantly. Property coverage will depend on the wording of the Property Insured and Property Excluded sections. Both should be read carefully to understand what is covered, as well as the amounts, limits and restrictions.

Property covered by a builders-risk policy can include all fixtures, materials, supplies, machinery and equipment to be used in the construction. Scaffolding, false work, fences and temporary structures may be also covered. It is important to know where property coverage will take place, as there may be limits on property that is off site or in transit. Some policies may exclude theft, wear and tear, ordinance or law, machinery, testing, workmanship or materials, design error, collapse, flood, earthquake, etc.

Knowing what perils are excluded from the policy will help an owner avoid surprises if a loss occurs. It also provides him the opportunity to purchase any available endorsements for additional protection.

Disclaimer: This article was written as a guideline to aid in minimizing risk in self-storage facilities. The information contained in this document is intended to be of general interest and does not address the circumstances of any particular individual or entity. Nothing in this document constitutes legal advice, nor does any information constitute a comprehensive or complete statement of the issues discussed or the laws relating thereto.

Universal Insurance Facilities Ltd. offers a comprehensive package of coverages specifically designed to meet the needs of the self-storage industry. For more information, or to get a quick, no-obligation quote, call 800.844.2101; e-mail [email protected]; visit www.vpico.com/universal.

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Protect Yourself With Insured Contractors

During facility construction, accidents resulting in property damage or injury to tenants, employees or the general public can happen, even with the most reputable company. Hiring contractors with proper insurance coverage is a good way to protect your facility from vendor-liability exposures.

The best way to prevent blame is to take appropriate measures when hiring contractors. Seek out reputable firms that are licensed, bonded and insured. Get references from business associates or friends who have had good experiences. Request from the contractor a certificate of general-liability and workers-compensation insurance.

A certificate of insurance is evidence the vendor is insured by a financially stable company and carries adequate amounts of coverage for the service being performed. It should contain information on the insurer, insurance agency, types of insurance, policy numbers, effective dates, limits, certificate holders and any special provisions. Check to see the vendors policy limits are at least equal if not greater than those for your facility and the policy effective dates are current. Hiring licensed professionals with proof of insurance may drastically reduce your liability in a vendor-related claim.

By RK Kliebenstein

Some people are fortunate enough to have the Midas touch when it comes to selecting self-storage sites. The rest of us, however, need concrete guidelines and a lot of luck. What would constitute the ideal storage site? One that is:

• Properly zoned for self-storage use
• Rectangular
• Affordable
• On a corner of Main and Main

The site would also have:

• A willing, cooperative seller
• 10 acres of land
• Ingress and egress at both ends of the property
• Higher than average incomes
• Better than average density
• Minimal competition, or competition that is full, high-priced, first-generation or otherwise inferior.

The Scientific Approach

In the case of most development, the site will fall short of the mark in one or several of these categories. There are several search tools available to developers who are willing to make a greater than average investment in locating good sites. Keep in mind, however, that even the most sophisticated tools do very little if you do not have proper staff, experienced in self-storage, to operate them.

Demographic Applications and Services. There are demographic software programs that allow you to create layers and filters to search areas according to specific parameters. These criteria might include population density, income, land availability, traffic count, zoning, cost and size. To my knowledge, no single application catalogues all of these factors. One could be created, but it would be time-consuming and require data from a number of dissimilar sources.

There are a number of demographics services that can assist you in gathering data. The best are available online and integrate with mapping applications. Do not bother with those that are driven by ring studies. Markets are rarely circular (i.e., contained in a perfect radius). If there are any, I have yet to see them. There are a few sophisticated, GPS-driven mapping applications that allow easy data importing. The best two are MapPoint by Microsoft and Street Atlas USA by DeLorme.

Just a step down from the GIS interface is standalone chartography, which requires a dynamic link to demographic data. Adding zoning layers and parcel data will be labor-intensive but can be done. The better of these applications will permit you to import data, such as that collected from competitors in an area, from Access or Excel databases.

Computer Hardware. It would be very difficult to use any of these tools if they were only available through your desktop computer. The best solution is to create and gather the data on a desktop machine and network it via wireless connection to a laptop computer for field use.

The laptop should not just have wireless access but allow you to use the Internet even when youre not in a hot spot (like at Starbucks). I suggest a CMDA or similar wireless card. Your desktop and laptop machines must have at least 1 gigabyte of RAM (memory), 100 gigabytes of hard-drive space and fast processors. From there, you can weigh your options for size, weight and screen size. The desktop computer should have at least one 24-inch LCD or plasma display. If budget allows, have more than one. Wireless keyboards and mice are a given.

Digital Camera. This will help you compare features of various sites once youre back in the office. Again, you can debate the issue of physical size and added functions, but you need at least a 3.0 mega-pixel resolution and 1 gigabyte of storage. I personally opt for the Casio Slim Series, which offers form and function in a very small package. Transferring images from your camera to your computer is any easy challenge to address. The new cardto- CD direct transfer looks really inviting.

Transportation. This choice is governed by whether you have your own transportation or are traveling to markets where you must rent. A conversion van is my first choice. It gives you room to set up an onboard office and allows for easy placement of LCD monitors. The generators can provide continuous power. Give me an endless budget, and I would have that previously mentioned desktop computer networked into the van! If this dream machine isnt practical, a good compromise would be a comfortable vehicle with an inverter and plenty of 12-volt power.

Seat of the Pants

Even if you equip yourself with a techno-office and ride, there is still an important component missing. It doesnt even require electricity. It is the H factor, the most fallible of all: the human being. You can invest thousands (or tens of thousands) of dollars and still not be at the top of the game if you do not have experienced eyes and ears to collect, interpret and analyze your data.

There is something that just feels good about the right site; and an experienced professional will be able to create a self-storage success even on a less-than-perfect location. Instinct will tell him traffic patterns, site con- figuration, visibility, access, and site size and price are optimal. In the end, there is no technological substitute for the self-storage development and ownership experience.

Lets take a look at the perfect site selector. Well call this person Sam.

• Sam is 40 to 45 years old, mature enough to have been around the block, but young enough to have the energy to work in the field all day, and then head back to the office for desk time.
• Sam is physically fit, with 20/20 vision and excellent hearing. He/she is one of those blessed individuals with a built-in compass, the type who always knows which way is North, even in the dark and the rain.
• Sam has a doctorate in business administration and a masters in economics. It doesnt hurt that he/she also has a degree in chartography and accounting. For amusement, Sam teaches a Dale Carnegie course.
• The former mayor and chairperson of the city planning and zoning board, Sam comes from a politically connected family. Dad is the current chair of the zoning board; Mom is the head of permitting; and Tina, the sister, is the head loan officer at the largest bank in town. Lets not forget Tom, Sams favorite uncle, who is in charge of personal investments for Bill Gates. He has held this position since he retired four years ago as Warren Buffets personal financial advisor.
• Sam has developed at least five very successful self-storage properties, three of which he/she still personally owns and manages. Two were sold to a major self-storage company backed by an institutional investor, one of Sams former employees.

Do you get the picture? Site selection is easy if you are incredibly wealthy, politically connected or superhuman. For the rest of us, it requires sound research, reliable data, experienced assistance and all the right tools.

RK Kliebenstein is president of CEO of Coast-to-Coast Storage, a self-storage consulting firm that specializes in site selection and feasibility studies. For more information, call 877.622.5508, ext. 81; e-mail [email protected]; visit www.askrk.com.

By L. Bruce McCardle

I was recently reminiscing with an industry colleague about the good old days in the steel business. The punch line was, those days were about six months ago. To put things in the terms of Dr. Spencer Johnson, the cheese has not just been moved, it has become hard to find and very expensive.

Since the crisis in the availability and cost of steel, the daily routines of many self-storage suppliers have changed. Some things we used to take for granted are no longer. We have to work harder to accomplish what used to be simple to achieve. We have to pay more attention to every task. The industry has changed significantly, and to not make proper adjustments in the way that we think and conduct business would be detrimental to our companies and our customers. To continue doing business as usual would simply not be wise.

The bottom line is, you can put whatever spin you want on recent events in our industry, but no amount of catchy advertising or this too shall pass thinking is going to make this one go away. There are shortages and price increases in steel, concrete and lumber. Fuel surcharges are through the roof, and shipping has become a problem. At some point in the near future, interest rates will start to rise. Whether we like it or not, and whether we choose to recognize it as relevant, the commercial construction industry and its market have changed, and more changes are coming.

As I shared this list of woes with my colleague, a friend and customer of mine, his reply was, Thats your problem. I just need to get buildings from you. He makes a good point. The American public is still going to buy stuff and will still need to store it. And developers are going to continue to build. Selfstorage facilities are still a sound investment that provides a great return.

With all of this in mind, it is obvious the same old routine for selecting a general contractor is not going to cut it. To excel in our businesses in this altered market, a new attitude is a must. Therefore, a novel approach when selecting a general contractor for your self-storage project is paramount.

Such a Deal!

Instead of looking at theoretical or academic reasons for choosing a contractor, lets look at the most common deciding factor: price. Until about six months ago, every builders goal seemed to be to have the lowest price, usually topped off with an unreasonably short construction schedule. Customers said, I want the best, I want it cheap, and I want it fast. We laugh at this now, but it is exactly what was driving the commercial construction market. These days, however, with the costs of some materials having doubled and some lead times exceeding 12 weeks, this is no longer a realistic expectation.

I am always amazed when successful, intelligent businesspeople evaluate bids for construction and respond by saying, These three bids are really close, but this one company is 30 percent cheaper. Wow, am I getting a deal! Usually, theyre not. Even in this dynamic business environment, you still get what you pay for. If you shop construction as a commodity, you will end up with materials and labor. If you hire a general contractor to provide professional services, you will likely end up with money in the bank.

Dont Should on Yourself

Keep in mind the final result of the construction process will be a product you are going to have to live with every day, as long as you own the facility. How many times have you made a major purchase or completed a significant project, having skimped a little here, cut a corner there, or made do with something, and later thought, I should have . . .?

Of course you have a budget to consider. Also consider that paying for the services of a good general contractor can result in getting more for the money you spend. A contractor with experience in building selfstorage will save you time, help you avoid common mistakes, and assist you to planning and coordinating with other components of the industry that are key in making a facility work.

When hiring a general contractor, the most important thing is to make an informed decision. I shouldnt have to say it, but I am going to: Check as many references as possible, old and new. It surprises me how often owners choose their hired professionals without talking to those who have worked with them. Also check a contractors credit. Ask subcontractors and suppliers about their experiences working with the company. This advice seems basic, but many people tend to overlook the obvious.

A Wise Decision

Maybe choosing the right contractor has more to do with you than it does the service provider. Maybe there are some questions you should ask yourself before you start interviewing potential hires. Here are three key questions to address up front:

1. How much money do I have?

2. How much expertise do I have?

3. How much time do I have?

Most of you have careers or other businesses. You have family and friends and hobbies, and now you are considering whether you can be your own general contractor, build your own storage facility and save a ton of money. Over the years, I have watched a lot of people try to save money this way; usually, it costs them more in the end. General contracting is a profession and more than a full-time job. You may be very sharp and good at what you do, but think of how many years, how many hard knocks it took for you to get to your level of success.

Decide what expertise you can lend to the construction process and how much time you can truly commit. When you have honestly answered these two questions, negotiate with a contractor and determine what your contributions are worth. A construction budget should include more than materials and labor. If you are going to be involved in the project, decide how much you are going to do, where you are going to need professional services, and budget accordingly. You may find the time you take away from other endeavors will cost you more than you can save by doing things on your own.

Building Relationships

In business, our success is usually due in part to our ability to judge peoples characters. In choosing a contractor, you are about to enter a relationship. You dont necessarily have to like this person, and you probably dont want to choose someone who is just like you.

As in any relationship, there are going to be good times and challenging moments. Choose someone you feel you can trust, someone with whom you can be upfront, and who will be straight with you in return. Choose someone with whom you feel comfortable dealing. One of my mentors always said to new clients, I want us to be as good of friends when this project is over as we are now before it starts.

In the end, the lowest price wont ensure a contractor can address all the other essential issues. Look past the slick sales presentation, the we are better than them marketing, the weve been doing it this way for 40 years spiel, and the no problem reassurances. If it was my project, my choice for a contractor, subcontractor or supplier would be the one who said, The construction market is changing and can be really volatile right now. We are going to do all we can to stay on top of it, quickly adjust and respond accordingly, and keep you involved and informed at every step.

L. Bruce McCardle is the eastern division manager for Mako Steel Inc., a nationwide supplier and installer of self-storage buildings that draws more than 80 percent of its business from repeat customers or referrals. Mr. McCardle has been involved in the metal-building and construction industry for more than 20 years. Look for his presentation at the upcoming ISS expo in Miami. For more information, call 888.795.7594; visit www.makosteel.com.

Storage Planogram

By Bill Meyers

Self-Storage continues to evolve into a total service approach, and as a result, customers are looking for facilities that can do it all. Consumers want to save time, and they appreciate the advantages and convenience of one-stop shopping. If you begin thinking of your facilitys office as a retail store, you will be on the road to creating the services your customer desires while improving your bottom line.

When your storage prospects visit your facility, their decision to rent with you can be based on their first impression upon entering the driveway or office. How is your curb appeal? Is the parking lot free of debris, and is the office clean? What kind of impression does your security make? Finally, what is the status of your retail offerings? Your customers know you rent storage space; but you might also offer rental trucks and equipment, boxes for storage or shipping, locks, and packing and moving supplies. Why not have them organized like a miniature retail store?

Think about what the average consumer experiences when he enters a department or discount store: He sees a sea of merchandise, categorized by department, also called a planogram. In most cases, the customer does not directly enter the area in which he needs to shop. Depending on the store, he may pass the perfume snipers, the shoe department, mens or ladies apparel, or even the shopping-cart corral. This same concept will give your self-storage store an advantage you dont want to lose.

Now youre probably thinking, This guy has no idea how little space I have for all this stuff! On the contrary, I realize an average storage facility has limited retail space. However, a planogram approach can be your key to success as a storage merchandising professional. It is the best way for you to maximize the space you have available, and show customers your small-scale lock, packaging-supply and moving-and-storage departments.

By using a planogram, you create mini departments in which your customers can shop while in your office. An 8-by-6-foot floor or wall space can generate $12,000 to $24,000 annually. The same can be done with countertop displays or freestanding floor displays. Either method creates places for customers to browse.

For example, your lock department will show good, better and best choices customers can touch and see. In this way, you can help them decide on the quality of lock they need. If they intend to store with you, theyll need to pack and move their goods to your facility.

Why not show them your moving and storage supplies department, which might include protection kits for fragile items; covers, tarps and storage bags to protect large items; and tie-down products to secure things in transit? And your box department will contain more than just boxesit should also include tape, markers and labels.

Make your self-storage facility the neighborhood destination for moving, storage and shipping supplies. Your customers will tell their friends and neighbors where to go to purchase these items, and youll have people stopping in even if they dont need to rent space. Think about it: You are close to home; you have fast, easy parking; and they will find it easy to shop with you because your planogram is organized into clearly defined departments. By making the shift from office manager to retail-store owner, you become better at selling your core product: storage space.

Bill Meyers is an account manager at Supply Side Inc., which distributes packaging as well as moving and storage supplies. The company has developed merchandising programs for many leading companies including Storage USA, the U.S. Postal Service, Kinkos and Mail Boxes Etc. For more information, call 800.284.7357 or 216.738.1200; e-mail [email protected].