
Smart Self-Storage Operators Manage Revenues and Expenses
Cut staff? Self-storage typically employs small staffs, so this isn’t always practical. Cut salary? “An operator who says he will cut staff or compensation, he’s shooting himself in the foot,” says Stuart Wade, director of sales and marketing for AAAA Self Storage Management Group in Norfolk, Va. “Salary is a function of the environment and it’s not in the control of the operator.” Looking to find someone who will manage a facility for $18,000 a year plus an apartment won’t help either. Competent and aggressive salespeople represent the new breed of self-storage management during these competitive times, commanding at least twice that compensation.
But don’t despair. Managing expenses and improving revenue can indeed help you maneuver through tough times. It’s a matter of managing your facility smarter. Here are seven suggestions you can use to do that. 1. what about those office expenses?
You could stop mailing paper invoices and instead try e-mail. Or you could just stop invoicing altogether and give the new tenant a card containing the date payment is due, facility address, gate codes, and other pertinent information. This method, however, could trigger more late pays and delinquencies, which leads us to the next issue. 2. Stop the Freeloading To cut down on late payers, try to get them to sign up for automatic credit card payments. “That’s a smart way to go—it’s like an annuity,” Olson says. 3. Charge the Highest Rates on the Block 4. More marketing, Less Marketing
His start-up facilities spend about $15,000 a year on marketing, primarily on Yellow Pages ads, but only about $3,000 once they fill up. Consider low-cost public relations measures to keep your company’s name on the minds of area residents. These efforts can include becoming active in community events or offering vacant units for local clothing and food drives. This kind of involvement often leads to free publicity in local newspapers and on radio and television stations.
6. Save on Taxes Components such as electrical wiring, piping, HVAC, and even the parking lot and landscaping can be depreciated over shorter periods. Cost segmentation works best for facilities that have been built or acquired in the last 12 years since the potential to capture more depreciation allowances is greater during that period. A cost segmentation study costs about $20,000. 7. Communicate, Communicate, Communicate Many economists believe the economic downturn will be relatively mild and eventually good times will return. But in the meantime, it would be wise for self-storage owners and managers to take a closer look at their operations to see where they can squeeze more opportunies out of their facilities. David Lucas is a freelance writer and editor based in Phoenix, Arizona. He is also the News Editor for the Mini-Storage Messenger and Self-Storage Now! |