If you’re a self-storage owner, you owe it to yourself, your staff and your customers to perform routine audits of your facilities. It’s the best way to monitor and maximize performance. I recommend evaluating each property at least twice per year, possibly even monthly depending on the location.
A good audit will have four parts: an operational review, a financial review, a marketing review and a physical site visit. The goal is to identify any issues that are negatively impacting revenue. Let’s look at each section and what should be assessed in each.
Operational Review
This portion of the self-storage audit aims to ensure all policies and procedures are being followed by employees. It should also identify areas for improvement. Our industry is always evolving, and new products are constantly coming on the market to help operators better care for customers and secure more leads and rentals.
In this section, you’ll also review management reports, looking at move-ins and move-outs, credits and discounts, delinquencies and auctions, and more. You want to identify and analyze trends. Your property-management software should provide ample reporting options and data.
Financial Review
The financial portion is critical, though sometimes forgotten. If you’re paying the bills yourself, consider having an accountant audit your books annually. If you can, look at the books daily and perform a full financial audit for each facility monthly.
You should review a 12-month trailing profit-and-loss statement, the balance sheet and the general ledger. In addition, examine the bank accounts. Even if you have the most honest staff, mistakes can and will happen. It’s better for you or your accountant to catch them instead of the IRS.
Marketing Review
In this section, you’ll analyze your facility marketing. Start by looking at your social media platforms, and upload some fresh content and photos. Then check Google My Business, Yelp and anywhere else customers leave their reviews. I suggest reading and responding to all reviews—especially the negative ones—if your staff isn’t already doing so.
This is also a great time to check your website. You may want to make updates, or revive it with new images and content. Also, look for ways to improve your search engine optimization. Basically, you want to ensure your online presence is a true representation of your facility and adjust as needed.
Finally, even though online presence is paramount, you want to make sure your team is also taking advantage of local networking opportunities, such as attending local chamber of commerce meetings and participating in fundraisers. If they aren’t doing so, discuss the possibilities during the next step: the site visit.
Site Visit
The site visit is crucial to understanding the overall performance of your self-storage staff. In many cases, they’re responsible for managing and maintaining a multi-million-dollar asset. It’s up to you to hold them accountable! Below is a list of items to check. I suggest you keep these on a spreadsheet and mark them “yes” or “no” as you go, making notes for items that require follow-up.
Office
- Are the windows clean?
- Does it look organized?
- Does it smell fresh?
- Is the floor clean and in good condition?
- Is the counter clean and organized?
- Are brochures displayed neatly?
- Is it well-lit?
- Are the walls clean and uncluttered?
- Is staff wearing company uniforms?
- Do employees look clean and neat?
- Is the computer free of non-work items?
- Does the retail inventory match the report?
Restroom
- Are the toilet and sink working properly?
- Is it clean, organized and stocked with supplies?
- Does it smell fresh?
- Is the floor clean and in good condition?
Policies and procedures
- Are office hours clearly posted?
- Are vacant units clean?
- Are the overlocks correct?
- Are late fees current?
- Are all rental agreements signed and on file?
- Is the auction policy being followed?
- Are autopay forms available?
- Is the delinquency policy being followed?
- Is the maintenance schedule up to date?
- Is the petty cash correct?
- Do deposits match daily close?
Property condition/curb appeal
- Is the landscaping well-maintained?
- Are signs and banners in good condition?
- Are the grounds free of debris?
- Are the fencing and gate in good condition?
- Are the fences and walls free of graffiti?
- Are the driving surfaces free of cracks and potholes?
- Are fire extinguishers accessible and current?
- Is the dumpster area clean?
- Are poles and bollards in good condition?
- Are garbage cans clean and emptied?
- Are vehicles in outdoor storage in good condition?
- Are unit doors clean?
- Are door latches and springs in good condition?
- Are the hallways swept?
- Are cameras working properly?
- Is the property free of pests?
- Is the property free of mold and mildew?
Once the physical audit is complete, give a copy to your management team and work with them to fix any issues. I love performing the site-visit portion of a self-storage audit because it gives me an opportunity to connect with staff. For the most part, I find they’re taking excellent care of the property!
When You Discover Weaknesses
Sometimes an audit reveals problems. You might find erroneous deposits, missed phone calls, excessive discounts or other issues. Always pay close attention when any of these occur! It might lead to employee termination, especially if the person making the mistakes was already on your radar.
Many years ago, I had a manager who was making errors on her petty-cash form and deposits, neither of which were acceptable, so I was watching her closely. I decided to perform a site visit. When I arrived, she had gone to lunch and placed a sign on the door that she’d be back at 1 p.m. I waited for her to return. At 1 p.m., I saw her arm slide out of the office door and roll the pointer to 2 p.m. I waited longer. At 3 p.m., she was no longer employed with our company.
Some of you might be thinking, “If I fire my manager, who’ll run the office?” My question is, who’s running it effectively now? There’s no reason to keep a bad manager. We’re fortunate to have so many experienced candidates in our industry that there’s no need to settle. If you have trouble finding the right team, consider hiring a third-party management company to ensure your store is staffed with trained, capable employees. You can also leverage technology to help ease the operational burden.
Hiring an Auditor
Finally, if you don’t have the time to audit your self-storage facilities or you aren’t comfortable doing so, call in a professional! An auditor can provide an action plan to improve your operation and increase revenue. He can even identify unnecessary expenses and assist you with obtaining a lower property-tax assessment from the appraisal district.
If you decide to outsource, ask the right questions. Important information to know is how long the person has worked in the self-storage industry and what he’ll examine during the review. He should offer references and be able to report on the scope of work he’ll perform on your behalf. A good third-party auditor will perform all four audit components: operational review, financial review, marketing review and physical site visit.
Self-storage auditing allows you to to verify that policies and procedures are being followed, track maintenance projects, catch and deter employee theft, ensure unit inventory is optimized, optimize staff training, and more. It’ll provide important data you can use to determine the overall health of your facility and adjust where needed.
Denise Bowley is the owner of Self Storage Science, a provider of auditing, consulting and property-management services. She has 27 years of experience in the self-storage industry. For more information, visit www.selfstoragescience.com.
