By Harley Rolfe

The dilemma is that a commodity business like self-storage doesn't breed "hard-nosed" marketers. Yet the day may arrive when marketing is a necessary discipline in the successful operation of a storage facility. Without the pressure of performing under fire and the promise of a career payoff for the victors, few people brought up in the self-storage industry have marketing credentials, and people who do know something about marketing are not likely to be well-grounded in the industry. Both are blind to each other's specialties. So how do we engineer an amalgam between the two?

The real question is whether the self-storage operator will go to the marketing information source or the source will go to the operator. Since the need is generated within the operator, I believe he must search out the marketing source.

A Change in Scale or a Change in Kind?

In the same way that our government sponsors a War College to teach the practice of armed conflict, there is also a study of how to prosecute one's business in the face of competitive conflicts. But a number of storage operators don't buy the idea that there's very much to marketing. They risk trying to conduct their business in a new competitive environment as if nothing significant has changed. Yet, we know that when all the operators in a commodity market are so oriented, nasty price wars result. We talked about those dynamics a couple of columns ago.

For most people, self-storage has been a pretty benign business, and the addition of competition doesn't seem like it will change things all that much. What goes unrecognized is that when a competitive squeeze arrives, the character of the market (behavior of sellers and buyers) changes. So how can a self-storage operator determine what the real marketing McCoy is? Let's discuss the three sources of marketing information:

1. Academia: The business schools conduct a dual program. There is the teaching role, ministering to the needs of business students in learning the marketing process as one of the major functions--and costs--of business. The other is the broader search for methods that generally make the marketing process more efficient. For instance, 50 percent of the price of a product at retail goes towards marketing. (That's somewhat misleading because marketing includes distribution and transportation costs, plus the promotion expenses you would normally expect.) It relates to all those things that are post-manufacturing.

The current marketing darling--the Internet--makes those academic guys drool as they try to divine what role it can play in improving efficiency. These institutions are often instrumental in proposing suitable legislation to improve the operation of markets. Other movements that get their attention are the move toward "big box" retailing (Home Depot), supermarket evolution (Super Wal-Mart), mall retailing, etc., and the issues involved in maintaining and improving market efficiency--a major component of which is the encouragement and preservation of competition.

2. Professional or career marketing: This is the job of the marketing practitioner. He usually has formal training (see above) in the marketing process with specific courses in the mechanics of marketing (product planning, market strategies, market/sales research, new-product introduction, assessment of markets, (such as competitive conditions, demographics etc.), media selection, sales channel determination and the like.] These people have a solid exposure to the academic side, but also develop a good dose of the practical or grimy side of active market experience. The job of the professional marketer is to sell stuff for his employer--usually in competitive circumstances. I count myself in this category.

Let's stop a minute. Notice that the objectives of the academic folks and practitioners are contrary. While the first group is looking out for what is best for society or the public, the next group's mission may be at odds with the general good. What is good for any group may not always be good for each individual. Professional marketers are mainly preoccupied with the welfare of an individual supplier. The academic side loves competition as a means to foster the best interests of society. The practicing marketer only has eyes for his employer or client. He helps them thrive in whatever market situation they find themselves to defy the ravages of wide-open competition.

3. Anecdotal: Also less respectfully called "gadget" or "whiz-bang," this is marketing information that is mainly bright ideas. "Joe tried this. It worked for him. It will work for you, too." It tends to be somewhat sensational rather than a studied evaluation of what and how to apply a proper set of business techniques, but it is often quite interesting. At the moment, the only self-storage-specific material in this category is a book by Fred Gleek, entitled Secrets of Self-Storage Marketing Success--Revealed! In addition to the book, Mr. Gleek publishes a regular self-storage marketing newsletter and has conducted a number of seminars. He is the only person providing this type material for the self-storage owner.

Family Jewels

Now the question becomes, "Which do I need and why?" Here my bias shows. It's a matter of how you define your ownership/manager role. I suggest that the most intimate, proprietary aspect of your (or any) business is how you succeed in a competitive market. Nothing can be as vital as how you are besting your rivals. The "how" of success in a competitive market is the "family jewels." To be dependent on others for those basics is perilous.

Me? Puzzled?

I wrote my book and do these columns to try to fill in the blanks. Frankly, most people that have reviewed the book say it is too much to ask an operator to absorb. I'm puzzled. How people with thousands or millions of dollars at stake can seriously say that the material is "too much" when their choice is to be subjected to tough price competition and, perhaps, lowered facility valuation, baffles me.

By knowing the principles underlying effective marketing, you can identify the predictors of market success and compose or choose approaches that have an excellent chance of fruition. For consistent marketing success, you need to know why programs work. What are the driving principles that make them go. Knowing those principles allows you to make discerning choices from among often-quixotic options and recommendations.

Who's the Coach?

The analogy I often use cites the role of a coach vs. the players on his team. The coach knows the rules, can analyze the opposition, knows the other coaches' tendencies, knows the strengths and weakness of the various players on both sides, and has knowledge and an approach to the game he has honed over the years. He can develop a game plan and show his team how to get the job done. His players do none of those things. They study the game plan as designed by the coach, practice the drills necessary to fully use the plan, then, on game day, execute. If things don't go right, they don't adjust the plan, the coach does. So the question for you is: Are you the coach or a player? If the latter, then who's the coach?

Missed some previous issues? Check the web at www.hardnosed.com.

Harley Rolfe is a semi-retired marketing specialist whose career includes executive-level marketing positions with General Electric and AT&T. He also owned lodging and office facilities for more than 20 years. Mr. Rolfe holds a bachelor's degree in economics from Wabash College and a master's degree in business administration from the University of Indiana. He can be reached at his home in Nampa, Idaho, at (208) 463-9039. Further information can also be found in Mr. Harley's book, Hard-Nosed Marketing for Self-Storage.

By Pamela Alton

As the on-site manager of a storage facility, you have many responsibilities: telephone sales, customer service, showing and renting units, maintenance, outside marketing and daily management duties, to name a few. One of the duties probably not covered in your facility policy and procedures manual is interacting with your supervisor, district manager or facility owner.

Some managers many never see or hear from their supervisor. Others feel like they almost live with them. No matter which is true for you, there are basic rules in dealing with your superior.

Letter of Employment

When you accepted your current position, your owner or supervisor should have drafted a Letter of Employment that spells out your job duties, compensation package and goals he wants you to achieve at your facility. This is the critical first step in setting up an honest and open communication policy with your superiors. If you currently don't have such a letter, perhaps you should discuss this with your employer and ask that one be drafted.

Job Duties

Obviously, when you were hired, your job duties should have been discussed with you, and any questions you had should have been answered for you at that time. Periodically, you should review these duties with your supervisor. If you are bored and can handle more responsibility, ask for more things to do. If you are overwhelmed with your current duties, discuss how you can get them done by reorganizing your time or prioritizing your tasks. Perhaps ask for some outside help with maintenance or marketing duties. Your supervisor many not know you need help unless you talk about it.

Goals

Try to set aside several times a year to discuss your personal and business goals for the next year, quarter or month. Set your goals high enough to make you stretch, but achieve those goals. Don't allow yourself or your supervisor to set unattainable goals you can't achieve. This will only serve to de-motivate you. Your goals could be increasing occupancy by 2 percent to 5 percent each month, decreasing delinquency levels, overseeing cosmetic repairs at your facility or designing a monthly marketing program. They could be personal goals, such as attending computer classes, Spanish classes, graphic design for your ads and brochures, joining a community club to expose your facility to another market while enjoying the company of people with similar interests. Whatever the goal is, discuss it with your supervisor.

Communication

Communicating on a regular basis with your facility owner or supervisor is a must. Not only does it help you with problems or situations that arise at your facility, but communication will also help you know if you are doing a good job or if there is room for improvement. One of the ways to communicate daily with your home office is to call in your deposit from the day before every morning before 10 a.m. This gives you the opportunity to discuss any problems or answer any questions you many have with your supervisor on a regular basis. Open communication can stop minor problems from exploding into major headaches.

Manuals

You should have been given a company policy and procedures manual to read and discuss at the time of being hired. This manual should have covered such issues as lunch breaks, paydays, holidays, dress code, emergency procedures, lien and auction laws, collections, etc. If you can improve on your company's current manual, offer suggestions. If your company does not have one, purchase one or several that are available on the market today and work with your supervisor to draft a customized version for your facility.

Philosophy and Mutual Respect

You and your supervisor should have similar philosophies with respect to the management of your facility. During your job interview or during your probationary period, these philosophies should have come up for discussion. You will obviously not agree with your facility owner 100 percent of the time. If that is the case, you should discuss your differences openly and honestly. In order for everyone to do the best job possible for the facility, there has to be mutual respect from both parties. Make an appointment with your supervisor to discuss your concerns. Write them down to help keep you focused. Role play with your spouse or assistant manager so you will feel comfortable discussing those "unpleasant" issues.

Time to Move on?

If you feel you can't discuss issues with your supervisor or owner, that you won't be heard, that you resent being micro-managed (after all, why did they hire you if they're always going to second-guess your decisions?), then speak up and tell your facility owner how you feel. Remember: It's not what you say, but how you say it that is the key.

There are times when nothing you say or do is good enough for your supervisor. You are in a lose/lose situation, and that is not a good place to be. If that is the case, perhaps it's time for you to look for a different company that has goals and philosophies that are similar to your own. You are not doing yourself, your facility or your supervisor any favors by doing a minimal job. Get your resume together and begin looking for a fresh start.

Pamela Alton is the owner of Mini-Management^®, a nationwide manager-placement service. Mini-Management also offers full-service and "operations-only" facility management, training manuals, inspections and audits, feasibility studies, consulting and training seminars. For more information, call (800) 646-4648.

Rick Crumley has spent the past 17 years working in the communications industry. He has spent five years in the self-storage business, including a partnership with Eddie Bell running Lubbock, Texas-based Magnetic Marketing as well as two storage facilities in Texas. Crumley and Bell's newest venture, yourstoragenamehere.com, is a website-development and hosting service specializing in complete and interactive websites for self-storage facilities. The company is an offshoot from Magnetic Marketing, best known for its Rent Reminder Magnets™ now used by thousands of storage facilities nationwide.

Inside Self-Storage is now pleased to present an interview with Rick Crumley...

What background do you have in the storage business?

I've been involved in all phases of the self-storage business, including design, construction and facility operation. In fact, the sample storage facility you see when you visit yourstoragenamehere.com is our latest facility, the South Loop Storage Zone in Lubbock, Texas. I've also attended many of the industry trade shows and seminars, both as a vendor and facility owner.

How is the Internet currently being utilized by the self-storage industry?

Most storage facilities now have listings on directory-type websites. These sites guide potential renters to a list of available facilities, usually by searching for a city or zip code. These directories are very useful, and it is important to be listed with them. Other facilities have their own websites, which would include the larger operators and chains.

How do you see that changing over the next one to two years?

I still have contacts in the communications industry, and I'm hearing a lot of information about phone and cable utilities devoting vast amounts of resources to what they call "the last mile," which means providing digital or high-speed access to individual homes or offices. It's already available in the form of cable modems, and ISDN and DSL lines in a lot of places. Many companies are battling now to establish their presence on the Internet because they know consumers will use this resource. In the next couple of years, I think self-storage operators will also need to establish their own personal presence on the Internet because customers will soon just expect them to be there.

How did the idea for yourstorage namehere.com come about?

We've personally used the Internet for years to do research and conduct business, and we understand what an important tool it can be if used properly. The idea for our service came about while developing websites for our own storage facilities. In doing research, we discovered the majority of self-storage facilities, excluding the big chains and franchises, do not have websites. Also, most of the operators that are on the Internet do not even own their domain name.

Why does a storage facility need a website?

Most potential customers want information before making a purchase. They look in the Yellow Pages, usually call the storage facilities closest to them, then make a decision to come out and rent based on what they've learned. This is not likely to change; however, they can only call during business hours. A storage facility with a good website is open 24 hours a day. Your site can be the perfect sales pitch every time, and you can offer timely specials that change with your demand. No Yellow Pages ad can do that. We have designed storage websites structured to give customers--and potential customers--the information we know they want based on our own experience as facility operators.

What services does the company provide?

A good website requires a lot of information to be useful. We've set up a process to collect that information, using simple step-by-step forms, tips and instructions. With this information, we design and publish a facility's site on the Internet. We also reserve the facility's domain name (or Internet address) so, just like a phone number, they basically own it. And, finally, we host and handle updates to each site, which will be available on our servers for all to view 24 hours a day, seven days a week, 365 days a year.

How are your web-design services different from others?

There's an abundance of excellent web-design companies to choose from out there. However, most don't know anything about your business, so you're paying for them to learn. They also design for a wide variety of companies, so they start with a blank page when designing a site. On the other hand, we know the storage business. We know what information a site should include and have designed templates to speed up the implementation of the site. You still have control over the colors and styles that give your site personality, but why re-invent the wheel? By doing this and utilizing technology, we can give our customers effective, well-designed Web sites for a lot less than they would expect to pay elsewhere.

Why not just use one of the existing storage directories that are available for free? Why invest in a full-fledged website?

I think directories are great resources for potential tenants, but most directories are designed to help locate you from a distance. We know the average storage customer lives within a three- to five-mile radius of our facility and will never use the Internet to look us up. They will, however, visit a website address they've seen in the Yellow Pages or heard about in an ad, especially if it's afterhours and they can't call around. And to get the most effective use out of a website, you need to include all the kinds of information a potential tenant is wanting when they look you up. For example, our websites provide an online tour. This is accomplished with pictures and short descriptions showing off your facility step by step, just as you would if they had come out to your office. We know from experience that the chances of closing the rental are much greater if the customer visits the property, but if they can't, why not give them the next best thing?

Another very important reason to have your own website is to control your own domain name. Abcstorage.com is an example of a domain name. When you register a domain, you own it much like a telephone number. And just as dialing a telephone number is the way you can be reached by phone, typing in your domain name on the Internet is the way someone reaches your website. So you can see that it's very important to control your own Internet address, especially if you plan on putting it in printed advertising.

How is a storage website promoted once it's on the Internet?

We submit each site to all the major search engines on the Internet. We suggest registering a site with all the storage-related directories available. Most are free, and you can include a link to your site. However, the most important thing for a facility to do is list its Internet address in all of its advertising, such as Yellow Pages, business cards, fliers, signs, radio and anything else you can think of.

How does a website differ from regular advertising like the Yellow Pages?

A website is interactive and provides space to give customers useful information that a Yellow Pages ad just doesn't have. The tour I talked about before is one example of a feature you can offer. Another good example is showing unit sizes. You can list sizes in a Yellow Pages ad, but that doesn't mean a whole lot to some customers. On your website, you can show them you have 5-by-10s and that the units are about the same size as a large walk-in closet. They understand--it's something they can visualize. Finally, it's very easy to change a website. If your office hours change--no problem, just update your site. If you have a particular unit size that's not renting, offer a special discounted rate to see if that helps. Need to run a special in April for university student summer storage? Just add a coupon to the site. The possibilities are endless.

Are storage websites expensive to implement and maintain?

We've set up a system to design a site and register its domain name for a low one-time setup fee. We then provide hosting and make any monthly updates requested for about the cost of what most facilities charge for one of their smaller rental units. We also offer affordable rate structures for facilities with multiple locations.

What does the future look like for self-storage and Internet marketing?

The future looks very bright for the Internet and storage facilities that learn to utilize it properly. I think in the very competitive storage market of today and tomorrow, it's what you do better than the facility around the corner that will justify higher rental rates and help you maintain high occupancies. And I think a well- organized website providing useful information to your customers is one small, inexpensive part of doing it better.

By Jeff Kinder

If it wasn't for the Academy Award nomination for the song "Blame Canada," from the grunge animation flick South Park: Bigger, Longer & Uncut, most Americans probably would not have even thought about their neighbor to the north at all in the past several months. Americans seem to either ignore Canada completely or make broad assumptions about the country with which they share the world's largest undefended border, and then fill in the blanks with stereotypes of Doug and Bob McKenzie or Robes Pierre.

But we self-storage professionals have proven time and again we are not like most people. Many of us have been thinking about our free-trading partner to the north as a potential market for our products. As an American who has lived in Toronto for three years and, along with my Canadian partner, The Rose Corp., has an interest in a six self-storage facilities in Ontario, I'll try to share a little perspective on our industry from a trans- border view.

Know Your Territory

Meredith Wilson said it best at the beginning of Music Man when the traveling salesman kept repeating the mantra, "But you've got to know the territory." It is true that Canada is a democratic nation of laws that define a stable commercial environment where capitalism thrives and the primary currency is the dollar, where 90 percent of all residents live within 100 miles of the United States border and most speak English (although not necessarily as their first language), where there is a "Free Trade" agreement with the United States, and where you can watch the Today show in your hotel room in the morning.

But it is also true that Canada is a parliamentarian confederacy with a Queen, has a strong socialist party that is currently in power in several Provinces, deals in loonies and two-nies, extends all the way to the North Pole where it shares a large border with Russia and Scandinavia, is a unique multi-cultural mosaic instead of a melting pot, is a signer of the North American Free Trade Treaty (better described as the thousands and thousands of pages of trade-by-this-set-of-rules-treaty), and has an entire Ministry (Cabinet-level position) dedicated to minimizing America's influence on its culture. If you are looking at Canada for your next acquisition or development, you've got to get to know the territory.

Be Prepared

Before you even start to worry about the market, city or province where you are planning on doing business, you will need to understand how that "free"-trade agreement and associated tax treaties really work. Depending on how you structure your companies on both sides of the border, you will be paying 5 percent to 25 percent of your earnings to the Canadian government as withholding tax, just for bringing it back across the border. Unlike the way most Americans view withholding as a temporary payment pending the filing of a return, when the Canadian government withholds from you, the money is theirs and you are without.

There are many organizational options from which to choose in trying to minimize your taxes. There are federal corporations, provincial corporations, provincial unlimited liability companies, limited partnerships, etc. They all have their quirks relating to liability and the way you may already be structured in the United States. Spending a couple of grand with a large, cross-border accounting firm will be frustrating, but worth it.

Once you are comfortable with how you are set up, you've got to get to know the territory. Canada's major cities are not virgin frontiers for the conquering self-storage crusader. There are already sophisticated markets and operators that are growing and trading as in U.S. cities. U-Haul is there. Public Storage is there. Shurgard came and went. (What did they know that I don't?) There are also several Canadian operators that have multiple facilities and an appetite for growth. So what are the opportunities for us entrepreneurial carpetbaggers in Canada?

We all struggle with our own concepts of "underserved" and "overbuilt" when it comes to markets. If Las Vegas was the standard, every other market in North America--except for Phoenix--is grossly underserved. Like most U.S. cities, the major Canadian cities may have specific trade areas or pockets of opportunity. They have also experienced the effects of new competition mitigating everyone's results. At the risk of gross generalization, spreading cultural prejudice, reinforcing stereotypes or being otherwise politically incorrect, I will say that given self-storage is an event-driven business, Canadians are less mobile, have fewer life-changing events and should, therefore, require less storage per person than similar populations in the United States.

Once you have developed or acquired your property, you've got to get to know the territory. Although unemployment is higher in Canada than the United States, it is still relatively low. Your payroll costs will be higher in relation to your revenues. Some provinces are very labor-oriented, and your total payroll costs will be significantly higher. If you thought your electricity and snow-removal bills were high in New York, you'll just love winters in Quebec.

Some provinces charge a Provincial Sales Tax on storage, some just on merchandise. Some collect for the Federal Goods and Services Tax (GST). Some have a unified tax. Some provinces even tax the tax. Once you are done paying taxes on your transactions, operations and profits, you will run into the harsh realities of Capital Taxes. That's right: If you happen to have any money left after going through the tax gauntlet, you are taxed for the privilege of putting it back to work. To the uninitiated, it sometimes appears that one level of government is taking a dollar from you, paying itself 25 cents to pass on 50 cents to another level of government, and nobody is quite sure what happened to the other quarter. OK, so it's not really that bad, but regulatory compliance and your overhead are more expensive.

Partner Up

If you are going to do business in Canada, you need someone who knows the territory. Financing is a whole other ballgame above the 49th. There are only six big banks to choose from, and none of them are looking for a significant exposure to storage. There are a few Schedule B banks that each have their specific mandates and niches. Heller is there. Merrill Lynch is there. Finova is there. But conduit lending is still in its earliest stages and the concept of non-recourse loans is just coming into focus. The Rose Corp. in Toronto, Swan Corp. in Calgary, and other boutique financial houses are the best options for mezzanine financing. But all of them are looking for local integrity, because they know it is a whole other country. Get a partner or operating principal who is on the ground and can help you navigate your way from A to Z.

Operations and marketing are as unique as each trade area. There are no Canadian self-storage laws that define our industry. There is some legal precedent within the appellate courts that give self'-storage operators some degree of direction in their rental agreements. Delinquent tenant procedures are a combination of landlord/tenant, mechanics and storage lien, and common law. Particularly in Quebec, where you need to mix in a little Napoleonic Code, we all live close to the edge in dealing with our delinquent tenants and getting our spaces back. The ethnic diversity found within the mosaic culture of Canada gives operators an opportunity to target specific markets in rentals, and recruiting and requires operators who want to truly maximize their top line to really get to know the territory.

I hope nothing I have said has deterred anyone from coming to Canada and experiencing for themselves the wonderful things the country has to offer. The song "Blame Canada" only works because there is no other society more blameless. The cultural mosaic only works because of the unique tolerance and celebration of diversity that exists above the Great Lakes. The cities are clean. The streets are safe. The water is blue. The American jokes are funny. It may even be a place where you want to do business. Enjoy Canada for what it is: a whole other country. And, if after you have done your homework and gotten to know the territory you decide you want to do business there, come on up. The competition is waiting for you.

Jeff Kinder is the president of Advantage Advisors, LLC, and principal in The Advantage Group. Advantage owns and operates self-storage facilities in the United States and Canada for its own account, and is a fully integrated acquisitions, development, financing and management-services supplier to the self-storage industry, helping individuals, corporations and asset managers maximize their self-storage investment.

Mr. Kinder has been in the self-storage business since 1986. He worked for National Self Storage and Public Storage for 11 years in operations management and marketing. In 1991, he moved to Toronto, to serve as vice president, operations, for Canadian Mini-Warehouse Properties, Ltd., heading up the Public Storage subsidiary, and in 1997, he started Advantage Self Storage™. For more information, call (301) 774-0243; e-mail president@advantagestorage.com.

By Cary McGovern

In my last two columns, I described why records management is always cost justified and that self-storage is an easy mark for traditional commercial records centers as a source for new business. This article describes why every self-storage operation should offer records-management services. You have many options that range from very low cost and low maintenance to the more traditional high-maintenance, high-cost versions. If you do not offer records-management services you will continue to loose this lucrative business to your competition. It is your choice.

Two Absolute Truths

If there were two absolute truths in the records-management business, they would go something like this: 1) commercial records management is always cheaper and better than self-managing your records; and 2) the best source of new records-management customers is always self-storage. I have been working in the commercial records industry for more than 30 years, and if there was ever a truthful business statement, these are two examples. You notice that I use the word "always" in the above declarations. There is a reason for that: There is never an exception to these two rules.

For a moment, let's agree that I am correct. Then the question has to be, "Why aren't you offering the service?" For the last three years I have spent a great deal of my time educating the self-storage marketplace with some success. I must admit, though, that there is still quite a bit of misunderstanding by self-storage owners and operators concerning records management.

Always Cheaper and Better

In the May 2000 issue of ISS, I discussed the way to cost justify records management. It is very straightforward and quite simple. One of the problems with records management in most businesses is that it takes such a low priority and isn't important until there is a problem. When a problem arises, it is usually in the form of litigation or an audit. Records then vault to the highest level of importance immediately.

Managing records assumes that you know what you have, how to find it when you need it and when to get rid of it. Records management is inventory control. Inventory control presumes two things: First, you take an inventory, then you keep control. In the commercial records industry, inventory control is done as a regular course of action. It is simple when done by using an inexpensive method: bar codes.

Self-Storage Always Loses to Commercial Records

Since we can always cost justify it and it is less trouble for the customer, it is simple to get commercial-records business. Uninformed businesses always look to self-storage to get rid of their "stuff." They really do not know of any other way. You are close by, and storing with you gets their stuff out of the way.

But sooner or later, the volume grows and disorganization occurs. No one in the customer's business wants to go and search for records within a system that lacks organization. As time goes by, it gets worse and worse. The customer looks for a better way. Commercial records is the easy solution. It is cheaper, better and much more professional. Why would anyone want to do it themselves when you can hire someone to do it for you cheaper and better? Commercial records salesmen look for self-storage records customers on a regular basis. I recently spoke to one such salesman who has gotten more than two dozen accounts from one of my self-storage customer's operation before he began offering records-management services.

The Big Self-Storage Excuse

"Records management takes too much effort and I want to operate simply." This is what I hear from many operators and managers, but most of these folks are not aware of the various methods available to them. These methods range from very simple and inexpensive to very complex and expensive. Although there are several models, many entrepreneurs want to jump to the high end immediately because of the revenue projections. It is true to say that records-management revenue always is a minimum of three times that of passive self-storage. Lets review your options:

1. Traditional Records Management: High capital cost, labor intensive and approximately two to three years to break even. This also provides the highest levels of revenue and profitability in the long run. It usually requires a separate facility with a high ceiling, dense storage racking, and an intensive and relatively expensive sales campaign.
2. Boutique Records Management: This method is an offshoot of traditional records management. It implies a vertical market (i.e., medical or legal) and a packaged set of services designed for that industry group. This works well, but also requires relatively high costs for start-up.
3. Nontraditional Records Management: This method was specifically designed for the self-storage market. It requires very little new cost. It can be operated out of your existing facility using existing units. It presumes that you will outsource many of the activities. The net result is very little effort, very little cost and three times the revenue of each unit utilized for records management. It also ensures that you do not lose any of the business to traditional commercial records centers and improves your cash flow--forever.
4. Virtual Records Management: This method is by far the most misunderstood. It requires no additional expense, no work by your staff and no hassle. It requires that you enter into a business agreement with someone who will use your facility as his base of operation. You will lease him one unit at a time and provide access to work space. This agreement can be a partnership in a traditional sense, a resource partnership in the newer sense, or simply a lease relationship.

I have discussed each of these methods in separate articles. These are available at www.insideselfstorage.com (search the archive for my name) or at www.fileman.com. This site also includes many resources available to you at no charge, including the Revenue Calculator, which allows you to determine how much records-management revenue is available within any size unit or building.

Regular columnist Cary F. McGovern is a certified records manager and the principal of File Managers Inc., a records-management consulting firm that specializes in implementation assistance and training for new, commercial records-center start-ups, as well as marketing support for existing records centers. For more information, contact Mr. McGovern at File Managers Inc., P.O. Box 1178, Abita Springs, LA 70420; phone (504) 871-0092; toll-free (877) FILEMAN; fax (504) 893-1751; e-mail fileman@fileman.com; www.fileman.com.

By Kenneth Carrell

The old real-estate adage "location, location, location" remains especially true when it comes to self-storage. With the costs of buildings fairly standardized, it's the cost of the land that can make or break a project. And the ability to squeeze one more square foot out of a piece of land can make all the difference in whether a project will "pencil out" or fall by the wayside; so design becomes extremely important in maximizing the use of the site.

The design team for your project should be brought in as soon as possible, sometimes before you even start looking for properties. The design team can sometimes see problems or advantages without ever having to put pencil to paper. But even if you don't have a design team ready to go, are trying to decide on someone to do your project, or feel you don't need a design professional to help you get every last square foot from a property, there are still some general guidelines you can look at to help you decide on a piece of property.

While the following list hits some of the important ideas to keep in mind when looking for a property, it should not be considered a complete list by any means. Just as every individual is unique and special, so is every piece of property. Two properties side by side can still be very different when it comes to design considerations.

Topography

The first and most significant design consideration of a project is the topography of the site. The single biggest cost of a project can be the grading. Even sites that appear to be flat will sometimes have a significant amount of grading to do. And while hillside locations will obviously require more grading than flat areas, each type of project has its own special advantages. While the cost for a level piece of ground is probably going to be more, the grading will generally be less involved. While a hillside site will require more grading, you can sometimes use the site itself to allow access to upper floors of buildings rather than using a mechanical means of access.

The topography of the site can also be useful for advertising your project. Someone driving by your facility will see your project for months or years without ever needing to rent a space. But, if one day they do need to rent a storage unit, they'll know you're there. They're more likely to go to your facility since they know where you're located. The topography of a site can sometimes allow customers to see the doors of the storage spaces from the street, so people will know what you are without ever having to see a sign. On the other hand, sites with good street visibility sell for more money than the site that is tucked into the back corner.

Security

The second and equally important design consideration is security for the facility, which can actually be assisted by the site topography. When you have a steep site, sometimes a low fence is all you need to keep someone out of the property. Flat sites might need to use the buildings or fences for security. One of the advantages of using the buildings for perimeter fencing instead of providing a separate fence is keeping your costs down. This also has the side benefit of maximizing the lot coverage in many instances, but other factors can sometimes force you to provide separate fencing.

Traffic

Another factor to consider in site design is traffic, not only in getting to and from the site, but also on the site itself. Obviously, the biggest concern is to provide access from the street, especially to someone driving a rental truck. You want to get someone onto your site with the least amount of trouble. Where possible, you want to minimize the number of left turns to get onto your lot. When someone driving a 24- foot rental truck causes a 12 car pile-up in front of your property, your neighbors won't be real happy with you.

You also want to minimize the number of entrances to the facility. Ideally, one entrance to the site should work in most cases. This will allow for the manager and your security system to control vehicle traffic onto the site. This will allow for the maximum security possible while still allowing ease of use for your customers.

Exposure

While visibility to passing traffic has some advantages, in many instances, it shouldn't be the major consideration in site selection. Although visibility from the street can help let people know that you're there, when someone starts looking for a place to store their possessions, they don't necessarily need to see your facility. Advertising can take the place of visibility in many instances. But that's not to say you shouldn't consider a location that has good visibility. When someone is looking for a storage space to rent, they will remember your facility and probably check you out first.

Buildings can be your best advertising as well. Someone driving by and seeing a lot of roll-up doors isn't going to confuse your facility with a McDonald's. And while some jurisdictions don't want roll-up doors visible from the street, you can always design the exterior of the buildings to enhance the feel of a storage facility. When you can't use the design of the building to help passing traffic figure out what type of a facility you are, that's when you take into account your signs. Some locations allow pole signs, while others won't allow them at all. Can you use the building walls for additional sign area? If the project backs up to a major road or highway, you want to get a sign on it.

The Powers That Be

The local jurisdiction involved in the project presents yet another design consideration. This is where everybody who's anybody gets their say in your project as well. Whether it's the state, county or city that controls the design of the site, government officials can have a more than significant impact on your site. The jurisdiction controls not only setbacks and zoning, but things like lot coverage and floor-area ratio. You could have an ideal site, but if it's not zoned for self-storage, you might be out of luck. This is also where your neighbors, nearby businesses and just about anybody else gets their say in your project.

The jurisdiction will also tell you where you can come onto the site, how many cars need to be able to stack in front of your gate and countless other little things regarded as important. While your project may be on a major street and the layout of the drive would work extremely well there, the jurisdiction may require you to change the layout to suit other needs and safety concerns.

The local planner may also tell you how they want the building to look or not look. While most jurisdictions allow you to do pretty much whatever you want within reasonable guidelines, some places do everything but draw the actual plans. Most jurisdictions require the buildings to present an attractive appearance to the street while structures hidden by buildings can be constructed out of just about anything. They will also tell what exterior materials are allowed and what materials aren't.

Drive Aisles and Spaces

The design for moving vehicles around the site can either maximize the use of the site or waste a lot of space. Flat sites only require minimum drive-aisle widths, and vehicles can pull up next to their space. But add in some up-and-down slopes and, all of a sudden, the situation changes. Slopes can't exceed certain percentages or trucks trying to drive up a hill are going to come sliding right back down--not good if it's your building at the bottom the truck runs into.

When laying out drive aisles, the typical widths can vary from 20 feet to as much as 40, with 25 feet being about average. Once you get the vehicles on your site and moving around, your customers need to be able to get into the spaces they just finished renting. Although it is possible to walk 300 or 400 feet to your storage space carrying boxes, you'll find that those spaces won't lease nearly as fast. Most of the time, you try to keep people from having to walk more than 100 feet or so to their space. Any more than that and it's too much work. They can go down the street to the other guy who has easy access and rent from him.

While it's rarely difficult to pick out a site to build your project on, it can be difficult picking out just the right site. And while the ideas presented here should not be considered an exhaustive list, keeping them in mind while picking out a site can save you a lot of grief down the line. Because, while the site you choose may be the least expensive part of your project, the wrong site could make it the most costly.

Ken Carrell is principal of Kenneth Carrell Architect, based in Aliso Viejo, Calif. His firm specializes in self-storage as well as other types of commercial architecture, and is licensed in several states. For more information, call (949) 716-0114.

Stamp of Approval

The No. 1 hurdle developers face today is obtaining approval. The cities have a more stringent approval process and the developer needs to ask all kinds of questions to minimize problems that will show up later. Developers need to know the step-by-step process in attaining various approvals--site plan, drainage, curb cut, sewer system, architectural, parking variance (if needed), and so on. The mistake of many developers is the tendency to achieve the approvals one at a time. Instead, they should be submitting approvals concurrently to minimize construction delays.

The approval process takes an average of six months to one year. In some communities, it can take years. If you are not familiar with the approval process, it might benefit you to hire a local professional familiar with the town board (i.e. former city attorney or city engineer) who can easily expedite the process. This sounds expensive, but it can save a lot of time and may be the difference in achieving the approval.

Once you have planning approval, you may want to submit separate building plans for each phase so you can easily expand your facility without having to go back to the city for approval. Nothing drives an owner crazier than having no units to rent and the city holding up his next phase of development.

Remember: Planning approval does not mean that you have a building permit. You have to submit your plans and get the actual building permit to know for sure what you can build. Some problems that can arise when getting the building permit include orders for additional fire walls and sprinkler systems.

Lease Up

How fast will I rent up? This is a very important question all new developers ask. Before I answer, I ask them two questions: 1) Are you visible from a main street?; and 2) Will you be in the Yellow Pages the day you open the facility?

Believe it or not, about one-third of new developers are not in the Yellow Pages the day they open. If you are not, you will rent up half as fast as you would otherwise. Customers might know where you're located, but won't call you for a price because they cannot find you in the book. They end up calling a competitor.

It sounds like an easy mistake to avoid, but you will have to do a fair amount of planning and possibly have to gamble on putting an ad in a book before you actually know for you will be building at that location.

For example, if you plan to build a self-storage facility this summer, you would have had to put your advertisement in the Yellow Pages by the end of November 1999 (each city has different cut-off dates). The book comes out in April 2000. If you missed that cut-off date, your project that is completed on Sept.1 will not be in the Yellow Pages until April of 2001; thus, the project will be slow in renting up. If you are building in a poorly visible location, you might not rent at all. This is the most critical thing you can do to ensure the facility will get off on the right foot.

Avoiding Management Headaches

As an owner of a self-storage facility, I have come to find out that a number of my management problems were built into my project. If I want to minimize my management headaches (everyone's dream), I need to design them out in the first place. The site-planning process is critical to avoid possible mistakes in the development of your project.

The first aspect of the site plan to examine is the layout of the office and gate system. I suggest you use only one gate to get in and out of the project. This provides security for both you and the customer because it forces the customer to drive past your office to enter and exit. The gate should be located so a customer can get into the office without going through the gate. This is a very customer-friendly feature that ensures the customer is not intimidated by the office (note photo 1). The gate should also be no larger than 20 feet wide because it should open and close as quickly as possible to avoid cars tailgating each other.

The second aspect of the site plan to consider is the layout of the buildings. If you are building in snow country, you want to construct the buildings running north and south. This ensures that the snow and ice are melted during the day. If the buildings are running east and west, the north side of the buildings will have ice and snow build-up because the sun never shines directly on that side. If the layout of your facility has to be east and west, than make sure to purchase lean-to buildings with the water draining to the south side.

Improper water drainage is the classic construction problem found at self- storage sites. Typically, sites do not have enough pitch in the asphalt to properly drain the water. If water does puddle, this will damage your pavement and, in snow country, you have just made yourself a skating rink. Typically, you want to have the center of the driveway 1 foot below the finished concrete to make sure the pitch is adequate. The water should at least have a one percent to 2 percent slope down the length of the building to avoid any ponding. If you are using catch basins, these also should be installed 1 foot below the finished floor height of the foundation. A large number of projects out there have the catch basins too high.

To minimize any damage to the buildings, a 6- to 8-inch bollard should be installed on all four corners of each building. The bollard should be 4 feet below grade, and 4 feet above ground and filled with concrete. The bollard should be place 12 to 16 inches from the corner of the building. It will protect the building corners from damage by cars and trucks that cut the turning radius too tight around the buildings. It will be cheaper to install all four of the bollards than it will be to fix one corner of the building.

I have just mentioned a few of the classic mistakes I continuously see in the field. Take the time to study out the possible self-storage problems by talking to existing self-storage owners, or look at their sites to see if you see any errors you want to avoid. Every time a developer designs a new project he tries to learn from past mistakes and improve the function of his project. Of course, each new project is a little different from the last, and you can run into new problems you didn't think of originally. Every project has some mistakes that were built-in--you just hope they are small enough so you can live with them.

Jamie Lindau is the sales manager of Trachte Building Systems, a Sun Prairie, Wis.-based manufacturer of one-, two- and three-story self-storage building systems as well as doors, partitions and corridor systems. For more information, call 800.356.5824.

I recently returned from a positively awesome trip down to Supai, the Havasupai Indian Reservation located just southwest of the Grand Canyon. It's an eight-mile hike down to the village from Hualapai Hilltop, and another two miles down to the sacred Havasu Falls, an oasis of aquamarine water and limestone pools--truly one of the most extraordinary excursions I've ever taken.

In August of 1997, these "people of the blue-green waters" suffered flash flooding so devastating that more than 350 residents and about 300 tourists had to be ferried out of the village, mostly by helicopter. Debris driven by the flood smashed sewer and water lines, damaging buildings, paths and bridges. This was the third such flood the reservation had withstood in one decade. And not only did the Havasupai face the challenge of rebuilding what was lost, they had to address the problem of what to do with the wreckage. Talk about starting from square one.

When you talk about development and site selection for self-storage, you're certainly not talking about the resuscitation of a complete ecosystem. But you are talking about planning. In today's development climate, it is more critical than ever to execute the appropriate research when selecting a facility site and design. You need to think about environmental issues, permits and zoning, topography, street access, driveways, traffic. You also need to consider studies conducted by market-research experts on the viability of your proposed location, as well as the sentiments of the local government toward self-storage. All of these elements tie into a facility's success.

This issue's focus on site selection and development begins on page 18 with Harold Leslie's suggestions for "Getting Started" on a new self-storage business. From there, Kenneth Carrell discusses maximizing the potential of your self-storage site and Jamie Lindau highlights some common development pitfalls to avoid. Finally, Jeff Kinder offers a unique perspective on the plausibility of development in a foreign market: Canada. While international outlets become increasingly popular among the more ambitious and daring developers in this industry, differences in procedure, financing and government should be considered before heading for the border.

The plot for self-storage success is fairly sophisticated for what the uninitiated would probably consider some pretty unsophisticated buildings; however, without research and planning, you're not just at square one, you're more like a square behind. The residents of Supai Village managed to restore their community, but they also incorporated some elements of prevention in anticipation of future disasters. Have some foresight. Be prepared. You offer your tenants a haven of sorts, too. Insure it with the proper planning and practices.

Best Wishes,

Teri L. Lanza
Editor
tlanza@vpico.com

By Barry Morris

Some 150 years ago, pioneers with visions of a quick fortune swarmed the area of north central California, which is now Calaveras County, looking to reap whatever they could of the region's rich gold deposits.

In present-day Calaveras, another pioneer has established its own history. While this history doesn't date back to the mid-19th century, Calaveras Mini-Storage (CMS) of San Andreas, Calif., can trace its roots back to the early 1970s, when the self-storage industry was in its infancy and still largely unknown.

To experiment with the almost unheard-of concept, a local contractor in San Andreas built a few rows of cinder-block units at one end of town. These first units were built with additional height and extra-wide aisles, as standards for efficient use of space had yet to be established. Those were also the days before fences, gates, surveillance cameras and public restrooms were a part of the storage business, and the company sign and word-of-mouth were the only advertisements used.

In the mid-1980s, Diana Marler and her husband purchased CMS from its original owner. Marler now runs the business with the help of her manager, Sue Brackett. An expansion of what she calls "typical metal buildings" took place soon after the Marlers purchased the facility, and a second expansion was done three years ago. With the two procedures, CMS is now a 30,000-square-foot, 236-unit facility situated on 2.5 acres.

After being one of the area's first storage providers, there is now considerable competition, including two national franchises--"the big boys," as Marler calls them--establishing themselves in the area in the last couple of years. To compete with this, Marler is choosing to fight fire with fire by planning a third expansion. Another 2.5-acre parcel of land adjacent to the current property has been purchased, and the county has recently approved the plan. A contractor has been hired, and Marler is now in the process of buying the metal necessary for the buildings. When this expansion is complete, the facility's square footage will be nearly doubled.

Small-Town Feeling

In many ways, CMS remains one of the original breed of self-storage facilities. There are no climate-controlled units, and there are no individual door alarms--tenants are responsible for providing their own locks. "We feel that with our limited gate hours (7 a.m. to 6 p.m. daily), cabling in our fencing, a resident manager, lights and so on, our security is adequate," Marler says.

Woven horizontally into the facility's cyclone fencing, the hard-to-cut 1/4- to 1/2-inch cable prevents intruders from entering by cutting through the chain-link fence. "I've seen that cyclone fences can be cut and peeled back, and people can get in and out that way," says Marler. "This way, if they're going to cut any portion of this, they'd have to squeeze their body through those five strands of cabling. It's very difficult to cut--they'd have to chew on it for a long time."

Not everything about CMS harkens back to simpler times, though. Today's heightened security needs make video surveillance a necessity. The facility's current system consists of two cameras--one at the gate and another inside the office. With another expansion in the works, plans call for more cameras to be added around the property. "I think it's very important that we keep up on that," Marler says. She also expressed a desire to build a more sophisticated gate system once the expansion is complete.

Marketing Efforts Escalated

In the beginning, the exterior sign and some word-of-mouth from loyal customers were the only advertising CMS owners felt they needed. But with increasing competition and other factors, a different approach became necessary. Today, CMS is prominently featured in Yellow Pages listings, and also advertises once a week in the region's daily newspaper.

But it doesn't stop there. It seems everyone who's anyone has a presence on the Internet these days, and CMS has now joined the ranks of cyberspace residents. The new site at www.calamini.com provides maps and contact information, describes unit sizes, security and other features of the facility, offers photos of the complex and provides special offers for those who mention the site. There are also links to local attractions and visitor information.

Though not done for marketing purposes, CMS has also added a major visual enhancement to its exterior. One side of the facility's original building, a 44-by-20-foot space known as the "Great White Wall," was deemed uninviting to customers as they drove up to enter and exit the facility. To add visual interest, Marler hired Jan Carpenter, a local artist known throughout the region for her window painting, to create a mural depicting the 49er Gold Rush era. Images of an old mining town, a horse-drawn covered wagon and a gold-panning prospector eventually emerged, covering the bottom half of what had been a starkly blank wall.

The mural's theme was obviously appropriate, but was especially so since the area recently celebrated its 150th anniversary. "I just suggested that theme, and Jan took it from there," Marler says. "From her sketches, I knew that she was the one for the job."

Customers Remain Loyal

Contrary to her fears, Marler has not experienced an exodus of customers caused by the presence of new, national storage operators establishing themselves in the area. "That was my big scare," says Marler. "I just thought I'd see customers going away in droves, and I have not. A good part of the reason for that is our manager, Sue Brackett. She's very well liked and respected here, and that really adds a lot of value to this company."

Local ownership is also important to keeping customers. Marler says CMS's business usually comes from within a five-mile radius, and the new storage businesses are both about 20 miles away in either direction. The fact that Marler chose to expand in the face of increasing competition shows the confidence she has in the San Andreas community and in her facility. "At Calaveras Mini Storage, we put our customers first in mind, and we want them to have a great experience while storing with us," she says. "After meeting their storage needs, we enjoy sharing those little extras that help make their stay a more pleasurable one."

By Barry Morris

Virtually any industry, including self-storage, has its benefits and pitfalls. But rather than simply taking the bad with the good, Christopher Capozzoli thought it would be better to take the bad and make it better.

Capozzoli, a Boston-area real-estate developer, opened his first self-storage facility 12 years ago. After a few years in the business, he concluded that many self-storage software products available at the time left something to be desired. The only way to change that, he concluded, was to create a product that would fill the void. This was the genesis of MicroTask Inc. "Being in the industry and seeing what was out there, I took it upon myself to start this company to try to bring better technology to the industry," he says.

Burlington, Mass.-based MicroTask was founded in 1996, and its principals--Capozzoli, the company president; Stephen Davis, vice president of sales and marketing; and Chad Nale, vice president of engineering--collectively have more than 20 years' experience in the self-storage industry. Additionally, the company's engineering team has more than 50 years of experience in the development of Windows- and Internet-based applications.

MicroTask's newest solution for the industry is referred to as SOMS (Self-Storage Online Management System), a completely Web-based facility-management application. "With our new software there will be a centralized database at our facility, set up as an ASP (application service provider), and each facility will run its software over the Internet," Davis says. "This way they have a centralized database, so now a national operator or multi-facility operator can get detailed, up-to-the-minute information on any particular facility or group of facilities, regional or national, from any computer with Internet access."

Focusing on the Internet

Even with today's strong product offerings, the single-facility software needs of the multi-facility operator often go unmet. This is causing a change in MicroTask's dynamic from that of a software-package producer to, as Davis calls it, a "Web-centered company." "Single-facility-based software really wasn't conducive to running multiple facilities," says Davis. "Each facility was an independent island, and there was no integrated database. Even the major vendors have had a hard time figuring out how to consolidate information from all their facilities."

While SOMS seems to be what large multi-facility operators have long dreamed about, Davis says that even small-facility operators can benefit in several ways. "One, they (often) have a problem with software and upgrades. With us, they don't have to worry about installing software, upgrade problems or ever paying for upgrades," Davis says. "As soon as they sign on to the system through a standard Internet browser, they have the latest version of the software--the installation issues go away. Tech support becomes much easier because the technician has the capability of seeing exactly what the user is doing, almost as if looking over the user's shoulder. Also, most facilities never adequately back up their data, so if something goes wrong, their data may be old. With us, it's backed up automatically at various times during the day."

Testing of SOMS was to begin in late May or early June, according to Davis. Once testing is complete and SOMS is introduced to the industry, the company will discontinue its Stor-Rite™ software package. Also contributing to MicroTask's new Web-centric approach is eSTORIT.com, the company's self-storage industry portal. The site has an active search engine listing more than 30,000 facilities in the United States, and offers the capability to rent units from any listed facility directly via the Internet.

Similar search engines now on the Web don't level the playing field between small- and mid-size storage operations and their larger competitors, Davis says. "To get information on a particular locality, you've got to go four or five pages deep into some sites, and on each page you see banners from the national competitors. The feeling for the independents was that 'people are going to click on one of those banners well before they ever get to see our listing.'"

Capozzoli currently operates two self-storage facilities in Massachusetts and plans to open three others elsewhere in the Eastern United States--including one in Florida--within the next 12 months. These properties provide a natural proving ground for MicroTask's products. "We test a lot of our ideas (in Chris's facilities) before we even approach anybody," notes Davis. "For instance, we were testing confirmed reservations and rentals online for at least four or five months with Chris's properties before we implemented it in eSTORIT.com, with great success."

Capozzoli's continual goal with MicroTask has been to be a mover and shaker, venturing into areas others may be hesitant to enter. "We bring a unique flavor to the industry," he says. "We know where technology is going, where things are moving, and we can make those technological decisions as to what fits best with this industry.

"Outside this industry, everyone's talking 'B2B' (business to business). We're trying to bring a business-to-business model into this industry through the web. By doing that, I think we're not only opening up a great opportunity in this industry, but also bringing a great peace of mind."