How to Make Money in Self Storage!

Veteran

Congratulations! You survived many years of operating your storage units. Hopefully you're in the black and your operating somewhere between 90 and 95% full all the time. Now the question is: how do you become more profitable?

The S.W.O.T. analysis for a storage unit facility looks something like what follows:

Strength

A strong perceived need to store possessions, limited availability, low sensitivity to price increases, and a high likelihood of long-term customers.

Weakness

Cost of increased inventory (adding more units), a limited amount of additional products to supplement income, Real estate restrictions on what can be built and how much of it can be built, threat of being sued for improper liquidation procedures or damage to personal property stored at your facility.

Opportunity

Expansion through acquisition of mismanaged facilities, improving efficiency through the use of technology, upgrading perceived security and charging a premium, adding additional services, potentially adding different units or different types of storage.

Threats

Litigation, local ordinances, aging facilities, online reputation.

In what follows; let's talk about how to possibly maximize the strengths and opportunities and how to probably minimize the weaknesses and threats.

Strength

Fortunately for those of us in the business there's a psychological principle that states the perception of a loss is roughly twice as great as the equivalent gain. What this means for us is that people will tend to overvalue, by at least a factor of 2, the opportunity to keep their possessions rather than liquidate them and replace them later or just live without them. This is a contributing factor to the low sensitivity to price increases once you have a customer. From the customers perspective the relatively safe storage of their possessions is weighted against a 2X estimation of their value at a minimum PLUS the opportunity cost of all the labor, effort, and time it will take remove them from your facility and place them someplace else. The exception to this is someone who is completing an upgrade in their normal housing.

Weakness

A major impediment to expanding our business model is the high cost of additional inventory. Essentially there are only two ways to expand our business: either new construction or acquisition. A case could be made for alternative storage solutions such as low-cost shipping containers, but these tend to be a bit unsightly and may be off-putting to some higher grade customers as well as local laws may prohibit them, so be careful if you choose that path. I'm not saying that they are ineffective; There is the pre-manufactured route as well, but the ROI on these can be a bit extended for my tastes. Acquiring new storage units or at least new to you storage units is my preferred method. Especially in America, the threat of litigation is real. You should have your contract reviewed by an attorney familiar with your state and local laws, keep the best records you can, and avoid storing personally identifiable information, or PII, such as Social Security numbers.

Opportunities

If you have the capital and patience it is likely that there are some mismanaged storage unit facilities in your local area that are just begging for new ownership. Additionally there may be properly managed storage unit facilities in your area whose owners got in when the industry was new and are now ready to retire. My experience has been that these original pioneering entrepreneurs are not always technically savvy, and many have literally decades of paper and pencil records storage boxes. This makes their businesses unattractive to buyers.

You also have the opportunity to increase your revenue by offering additional services such as battery charging for vehicles periodic starting of vehicles selling packing supplies and locks or just increasing the rent. using electronic documents and electronic signatures, if legal in your state and local area, greatly reduce the footprint on your time that running your business used to have. with 6Storage software this can all be handled remotely with or without a phone call. Personally I have customers that have been with me for over a year that I have never met. They found me online, reserved their unit, I made one phone call to set up an electronic document and they pay through their account every month. This cuts my contact time from literally 3 + hours per customer to as little as 10 minutes. This is what I believe makes Self Storage so scalable.

Threats

Litigation is probably the single biggest threat that the self-storage operator encounters. This is why 6 storage always recommends that you have your documents and processes reviewed by an attorney familiar with your local laws. The next threat we believe you encounter, especially if you use the acquisition model, is aging facilities. Another potential high maintenance item in an order facility are the door springs. The last threat we want to talk about is your online reputation. You can also somewhat offset this by having a competent website.6storage will help you by creating your own website. This perception can help mitigate the threat of litigation.

Personally I find the best part of the self storage business is the flexibility it offers in the from the investment of my time. We all only have the same 24 hours in a day no more or no less. The more profitability I can squeeze into the same 24 hours the better. Yes I represent 6Storage software, and yes I use their product, and yes that product makes me a lot more productive. I can definitely scale my business. I can definitely speed up my business. It just makes my life easier and more profitable. I don't think you will not be able to find a better product anywhere close do their pricing. The best part is you can try them out side by side with your current provider or start from scratch with a 60-day trial offer- no obligation at all. Even if you decide that 6Storage is not for you, you will still have the opportunity to compare what is available for $29.99 a month vs. what other companies are charging up the $400 a month for. Call today and join the only self storage software company that has capability of providing management software on six continents.

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