A Business Development Guide
Over the past 15 years, many owners and operators within the self-storage industry have experienced such a rapid growth with a rudimentary genesis; they’re suddenly poised to the beckoning sound of sophistication calling their name due to a portfolio that blossomed into the size of King Kong.
A jolting realization suggests that additional staffing is needed for the expanding enterprise perpetually evolving into an empire. Occasionally, such growth presents potential shifting at the base where pier and beams are needed to help support a stronger foundation, metaphorically speaking. These foundational shifts can be a slow creep and do not emerge overnight; if you are encountering growing pains, cheer up, because it is a good problem to have and you are not alone. Sometimes it is best to step back, take inventory, and implement some of the proven operational pillars for added stability. This article reveals a mosaic of underlining elements that will cultivate a retrofit plan specifically designed to meet your business goals.
Modus Operandi
The Latin phrase, “Modus Operandi”, means operating mode. It is an important subject to begin with, so I will prime the pump here by asking a few important questions. What are the binding forces you value that support the company’s culture? To take you a little deeper, are you empowering leadership to extend these same values, either with new or existing staff? Once again, what is important to you will be important to the rest of the company, but some soul-searching may be in order if you don’t know what to uphold.
Set your team apart by discovering exactly what helps the group function at a healthier pace. This will help you conjure a mission statement, mantra, or company credo and build up the overall morale of the team. I have been a part of some major revolutionary real estate booms over the past decade, working for both the REITs and within the private sector as an operations guy. I can honestly say that my productivity level has always been at its pinnacle while locking arms with employers that had a barometer in context of mentorship, empowering missional values, and healthy budgeting practices in place. There needs to be a true sense of direction before there can be any sense of achievement. My rambling point is that it’s imperative to sculpt a vision that embodies character traits that propel you closer to your goals; fabricating your missional values is a good avenue for creating company culture.
Intelligent Investing
All business entities have the end game in mind to experience prudent, if not ground-breaking, returns. In this very simplicity, it is easy to stumble over this next point. It is a tremendous practicality, extremely crucial, in creating a long-term model which provides a solid bedrock. The answer is usually right in front of us and, unfortunately, this one major factor can’t be taught in college. Yes, the answer I refer to is your colleagues.
We all desire for our work to be satisfying at the end of the day. Whether your co-workers admit it or not, each person, from all walks of life, with in your organization, craves opportunities for both professional and personal fulfillment in life. I know I do. This includes a healthy work and life balance with open doors for upward mobility. I want to feel good about coming in to work every day, where I can flow in my unique design as I contribute to the bigger picture, becoming more efficient in a creative way that best serves others around me. As a business owner or leader, we should exemplify organizational balance by placing the just of our emphasis on people over product. Having a good product is substantial, but investing in the people who daily grind it out, owns equal, if not further, merit. If loyal relationships are not being forged, the result can and will be counter-productive. Should this dynamic linger unchecked, you can surely count on spending more money and time on bringing new staff up to speed due to high volume turnover. Intentionally fostering these relational values up front will produce quite the adverse effect and will set the pace for positive energy, providing a swift and clear lift off for the morale of your team.
Originality
When I attend many of the self-storage conferences, a commonality I frequently hear that is said amongst even the pros, is essentially: “Take what the REITs are doing and do what they do”. Or, “If it works for them, as successful as they are, it will work for you”.
Personally, this is babel to my ears. Quite frankly, I don’t agree. If you chase your energies emulating a formula that another competitor has rolled out, where they have found success, it does not necessarily translate to you having the same result by copying the pattern. Potentially, it could have an opposing reaction and undercut creative power from the talented individuals with whom you have surrounded yourself. Methodologies for pioneering are innovative in nature. Do your team a favor and lay hold of the cutting edge. Capitalize on and draw out your team’s individual skills and talents. This will exploit intelligence on a good level and bring about original discoveries that no one else in the self-storage field is doing, conducting as a vehicle for overall motivational drive. Keep in mind, organizational balance is key, which means that I am not suggesting there are never any parallels you draft in your operational approach. Occasionally, we can learn from others, and we do not necessarily need to reinvent the wheel. I am, however, strongly suggesting that you try shaking things up by breaking out of the echo chamber and discovering your own original concepts.
Ignite
If the engine is the inner most central processor that moves a vehicle, certain essentials on the business front need to ignite in the chamber if we want a smooth drive up the incline. For internal combustion to occur, this next key aspect will help shuttle you to your desired destination.
The measure of time and thought spent on fine tuning the annual budgets is a disciplined practice that will serve as a reference for anticipated growth and keep your feet on fiscal track. Yes, it is a no brainer to frequent your historic, present, and trending financials, yet, even more so, a well projected budget in place navigates the pace of your progress, or lack thereof. Your budget creation is comparatively a conductor’s steady sway of the baton, acting as a living metronome, leading the symphony through the musical journey which gives it tempo and vigor. Likewise, our goals need to be measurable and synonymous with the budget. If your pulse rate is too low, you may need to exercise; if it is too high, dieting may be in order. The take away here is devising a measurable benchmark, something to give you cadence; otherwise your bearings will become quickly disoriented. Budget creation is the catalyst that will reveal operational insights from your variances, becoming fuel for our journey like a sail in the wind.
Structured Communication
George Bernard Shaw, a famous playwriter from the late 1800s, stated “The biggest problem in communication is the illusion that you think it is taking place.” How true this is even for today. Communication is such a slippery thing, requiring effort and time on our part, but the result is always worthwhile. It unveils the floodgates of our thoughts and ideas that bounce around in the brain. It helps us prioritize tasks on a wiser level, leading us to time savings.
As leaders, we can get caught up in the weeds rather quick if we are not careful in our planning. If you find that you are constantly putting out fires from phone call to phone call, email to email, with little to no rest, it might be that you lack structure in your communications. This touches on the topic of time management as well, but, with a little intentional creativity, you can find resolution. If you see that you need to shift your focus on larger scale tactics for progressive reasons, you must set clear expectations with your crew by scheduling appointed times (weekly, bi-weekly, or monthly) for dialed in discussions on the important info. This will unlock your time to concentrate on the bigger picture. This approach nurtures healthy boundaries and your staff will have peace of mind too, knowing that you have empowered them to do their job on the day to day tasks. It may even help them grow in their own ability to problem solve. Applying structure in your communication fashions greater accountability onto your support staff as they keep good notation for conveying things that matter most for when they do have face time with you. I am not saying that you become unapproachable, should the phone ring with some high-priority item, but remember to keep organizational balance.
The more we strategize our communication patterns with an upward structure, the more we can proactively engage problem solving with a calculated response in our endeavors. The result is efficiency.
Accountability
Skill and good stewardship is the ultimate trademark of netting a good return on the investment. If we are not profitable, we might as well pack up and go home. Increase stems from having good product and good people in place who are accountable to each other and to the vision.
To compliment this, let’s turn our gaze on staying accountable to the formation of budgeted projections to attain the highest financial impact. It is always best practice to collectively review the financials ongoingly for missed opportunities and for praise purposes. Not one of us is smarter than all of us and sometimes reviewing last month’s progress or prior year brings light to the situation. This can teach us to celebrate our successes and learn from missed opportunities. The idea behind reviewing the profit and loss in a concerted effort with staff is to gain as many vantage points as possible for the sake of developing an effectual operations plan. Perhaps late fees on the income line are stale and have tapered off. Maybe an audit of the waived late-fee policy is in order. It might not be a people problem in as much as it is a policy and procedure problem. Consistently comparing your financials will help you leverage accountability tactics. Another example on the expense side is that noticing vendors conducting work on the property that are unapproved and stressing the repair and maintenance budget; maybe there needs to an evaluation of the P.O. process for accountability sake. You get the picture. Take the time to study the budget’s cause and effects. Hold yourself and management accountable in this area and it will influence your cash flow for an optimal impact.
Empower
The level of service I receive when I am conducting market surveys, while out in the field, draws a sad but true conclusion: Leadership invests little to no time in training their staff. Why is this? Is the apathetic approach intentional? I have tried to wrap my head around the matter and keep telling myself that maybe there is a blind spot regarding how to empower their sales staff. Have they allowed accountability to slip?
A thriving leader skillfully pulls good qualities out of their employees by meeting each individual where they are. The next time an asset in your portfolio is slipping on net operating income, it is always good to question if you have a “manager problem”. But, before you ask this, look inward, because you might just have a “mentoring problem”. We need to initiate a litmus test to know where each employee stands but also build upon that foundation by improving their over-all growth and development. This approach induces empowerment, challenging both the trainer and trainee like iron sharpening iron. Self-storage is a unique business model in that it is greatly manager centric. The success of your properties is extremely geared towards having a well-trained store manager in place. It only makes sense to develop a good training program to enhance your collection and conversion rate.
Fundamentally, our focus is on leasing units and collecting money on these units. If we have a manager in the pilot seat who has not been adequately trained with an effective sales presentation, it will be hard to optimize the potential of that property, stumbling over missed opportunity for value creation. On the contrary, if you adequately train management to have a skillful sales presentation, it will lead to sales, an occupancy boost, ancillary revenue climbs, and the overall asset value skyrockets. It’s a win for everyone! A poorly trained assistant can wreak havoc on profitability too, so be proactive when you hire a new manager by immersing them into your culture and sales training techniques. Be systems driven by implementing a thorough training process that possesses more life than your average standard operating procedures. Online learning management software modules are always good too, because they introduce multiple learning styles. Role play. Not everyone learns the same, so this is ideal for a broader appeal.
Strive to do everything you can to invest in your employee’s sales education. Your level of investment here can render significant growth for your employees and mature your business one employee, one property, one portfolio at a time. We should always be thinking of ways to empower others with new skills and brushing up on existing skills can polish the tarnish off as to see the sterling shine again!
Summary
As a leader, your level of long-term forethought toward infrastructure determines your financial future. It is my hope that, whatever role you play in this industry, you leverage the knowledge you have been given by extending it to others in your circle of influence while learning from others farther down the road. Business is largely a logistical game, constantly pulling us back with gravitational force to the basic building blocks. There are so many moving parts orbiting around these underlining elements that collectively culminate to give us a glimpse of what a thriving, growing organization looks like. I sincerely hope something positive on this page has captivated you that could potentially encourage your further progress.
Cody Reynolds currently serves as the district manager for The Sterling Group, a private equity firm specializing in revenue producing properties, and is highly regarded as an advocate for the ongoing training, growth, and development within the self-storage industry.