As we begin to close the books on 2007, we are embroiled in the sometimes agonizing task of preparing our 2008 budgets and forecasts. I have written many times over the years about my recommendation to make the budget-building process a team effort involving everyone in your organization. Once we have prepared the budget and set goals for the New Year, it becomes our budget. Then when performance measurements are examined, theres no excuse for a blank-stare reaction should the facility fall short of projected benchmarks.
One budget category frequently missing from a companys annual financial plans is a specific line item for manager education. Ive talked to countless storage owners over the years who say they support expanding the horizons of their employees, yet this verbal commitment is not matched with dollars.
The funds might be used for attendance at a state or national tradeshow, a special session sponsored by the local chamber of commerce, or to take advantage of the Web-based options available. Did you know presentations from top industry experts are available online to help train and motivate team members at all levels? These educational opportunities are so affordable that some managers are paying for their own classes in a personal effort to improve their skills and industry knowledge.
Its not enough to talk about making manager education a priority in the year ahead; you must invest in it and commit it to your budget. The future success of our industry is dependant on our being the best we can be. Improved skills backed with industry- and facility-specific knowledge will increase your bottom line. Also make sure the tools, like current versions of your operating software and access to the Internet, are up-to-date and available.
Educational efforts can be as simple as sharing your subscriptions to industry publications or supplying managers with their own monthly edition. Circulate articles of interest and get peoples feedback. You also might want to consider starting a book club that allows staff members to discuss different principles and concepts and how they can be implemented in your organization. Even a membership to a local Toastmasters Club can educate and motivate employees to new levels of performance.
Once dollars are budgeted, challenge employees to explore ways to spend their educational funds. All of this starts by simply adding a single line to your budget spreadsheet that reads manager education and commits to a specific dollar amount.
Concerned About Public Image?
The research released in the Self Storage Associations 2007 Self Storage Demand Study should have eliminated any doubts about the importance of your facilitys public image. The results mirrored the initial research work from 2005.
When customers were asked to indicate the way they first learned about the facility from which they rented, 41 percent of the respondents said while driving. Word-of-mouth was second at 21 percent, with line ad in the phonebook identified by just 19 percent. Still, I know the landscaping budgets of most facilities pale in comparison to the annual amount spent on Yellow Pages advertising. Its common for an owner to spend $20,000 or more annually on YP but to allocate only $2,500 to $3,000 toward keeping the business physically appealing to prospects.
Dont forget your image includes what potential customers see (or dont see) while driving by your facility at night, not just during the day. As winter approaches, the vast majority rush-hour traffic occurs in the dark in many markets. A few burned-out lights can quickly create a negative, almost rundown impression.
When you drive up to a business that has burned-out exterior lights, dont you wonder what else the business lets slide? Owners, when was the last time you drove by your facility at night?
Brightly painted parking lines on the pavement at the office entrance, painted curbing (once you start, you cant stop) and plastic-covered bollards convey the message to a potential customer that this is the place he can trust with his belongings.
Please dont forget about the dumpster area. One of Walt Disneys personal commitments to quality customer service was a zero tolerance for even the smallest piece of trash. He understood that a clean environment will breed an attitude, with all but the biggest litter bugs, that you always place your garbage in a receptacle.
Your office, public restrooms and managers appearance should all reflect your attention to the details of running a successful business. Even having the right selection of artwork on the walls, a clean bathroom with a positive aroma, and a manager who looks like a professional can complete the image of success, resulting in a 100 percent closing ratio with every walk-in. As part of your 2008 goals, constantly ask yourself, What can we do to improve our image?
Predications for 2008
As I close this last Thoughts From the Road column of 2007, I want to stick my neck out and make some fearless 2008 predictions:
1. Our industry will experience major public embarrassment with negative national media attention involving the sale of the belongings of a service member on active military duty. The Service Members Civil Relief Act is very explicit in its restrictions and penalties. A couple of wrongful sales in 2007 have fortunately received only local attention. I fear an uninformed owner or manager in a major TV market will produce a wave of negative media for all of us in 2008 by selling a service members belongings. If you dont understand this law, make it your business to get informed and prove my prediction wrong.
2. State legislation will be introduced to dramatically restrict our freedom to operate as we see fit. I foresee almost draconian limitations on operating hours and legislated mandates providing for customer background checks. Many of us will be targeted for blanket searches of customer units coupled with law-enforcement demands for periodic reporting of tenants and their units.
This legislative impact will include a growing list of individual communities with self-storage building moratoriums and restrictive zoning ordinances. While this will benefit existing owners, it will drive developers crazy when the land they own is subject to the political winds of no growth sweeping the country.
The only remedy to prevent my legislative predictions from coming true is having strong state associations with diligent members willing to step up and fight on behalf of our entire industry. Without this commitment of strength, we are doomed to face the coming legislative carnage.
3. I didnt want to cheat and predict dramatically higher real estate taxes in 2008, because many of us are already experiencing unrealistic and unjustified property assessments. Just because a couple of properties in California sold for a 5.8 percent to 6 percent cap rate doesnt automatically increase the value of a facility in Iowa or Missouri. Yet municipal assessors across the country are reading articles about record self-storage values and our taxes are spiking. Dont roll over and play dead when the new assessment comes in the mail. There are several qualified firms that will help you protest for a percentage of the savings they earn for you.
4. My final prediction is the class-action litigation community will discover self-storage with a vengeance in 2008. In addition to the existing attempts to legally rob us over issues of overstated unit sizes and insurance sales by managers, I foresee other attempts to add our industry as a notch in the belt of legal vultures looking for any business prey. I dont care how large your company is; none of us can take a go it alone attitude or think a frivolous lawsuit will simply go away because some level-headed judge will see the light.
I believe 2008 may go down as one of the most difficult legislative years in recent memory for our industry. I hope Im wrong.
ISS Expo 2008Dont Miss It
I look forward to seeing everyone at The Venetian Hotel Resort Casino in Las Vegas, Feb. 5-8, for the Inside Self- Storage Expo. This event promises to be one of the largest and most innovative tradeshows in industry history. Dont miss the chance to be part of it. Register now at www.insideselfstorage.com/expo.
Warmest wishes for a blessed holiday season!
Jim Chiswell is the owner of Chiswell & Associates LLC. Since 1990, his firm has provided feasibility studies, acquisition due diligence and customized manager training for the self-storage industry. He has served for a number of years as a member of the Inside Self-Storage Editorial Advisory Board and co-founder of the Self Storage Education Network (www.selfstorageeducation.net), which provides online manager and owner education. For more information, call 434.589.4446; visit www.selfstorageconsulting.com.
