By Ed Clement
"Your Self Storage Planning - Site Selection - Design-Build" by Marc Goodin
Chapter 16
We are going to start by assuming you have a trained manager who has perfected the basic skills to operate and market a self-storage facility. Secondly, we assume your goal is to make more profits vs doing ok or being full. And the answer is: it depends on 3 things.
How detailed is your Manager's Operations Manual is. How Detailed your Managers Sales and Marketing Manual, Management Software Manual, Training Manual, and Hiring Manual and how detailed is your yearly marketing plan is?
If your manuals, systems, marketing, and training are not detailed or up to date you will be spending an extra 20+ hours a week answering basic questions, putting our fires, preparing manuals, and not getting better or making maximum profits. Or worse there are no questions or fires that you know about to correct, but profits are not anywhere as fantastic as they could be.
The third item is how well your manager follows directions and your manuals and systems. The importance of following directions/systems/manuals should be a major consideration in every hire. And then as long as you do not waiver from requiring mandatory items like the use of scripts and that daily and weekly marketing be done, this should not be a problem (again assuming you have the manuals and systems in place).
You will be spending most of your time doing 5 major items.
1) Regular communications with your manager.
2) Doing things, a typical manager does not do.
3) Working on planning and marketing items with your manager.
4) Assisting your manager with first-time items.
5) Doing things, you love to do or things your manager just can’t or won’t do. Each one is important. All are a must for top profits. Let's take a look at the time for each item. Certain items will occur every week and others will be minimal every week but up to several hours when they do occur.
Item 1) Regular Communications: (3 hrs./week)
More communication with your manager is the main item that will lead you to higher profits.
It is good practice to have a weekly onsite meeting for a couple of hours with your manager to review the past week, the upcoming week, and marketing. If you can’t meet in a given week you can have multiple planned weekly calls.
Your job is to continuously encourage, educate, train and motivation your staff. One to two hours a week is the minimum. Reviewing and responding to a manager end of day email to you is a must to get more done and keep on track. Top owners in any given area also spend time being part of the local community in one fashion or another and this takes directed time every week.
Item 2) Owners Responsibilities: (100 hours a year = 2 hours if weekly) As an owner there are a host of items that are not often delegated to the managers. Some could be
weekly like calling in payroll and paying the bills, but the vast majority are not required weekly when the hours are taken together, they can add up to over two hours a week.
Reviewing/addressing/improving your monthly reports and statements takes time every month. This would include financial reports, occupancy reports, variance reports, planning reports, marketing reports, banking statements, and website reports that take several hours a month to review and several more to address for maximum profits. Dealing with certain issues with the company attorneys, accountants, and bankers will be done by the owner.
Owners are always going to be responsible for training and keeping the staff accountable to your operating and marketing systems and platforms. When staff skips the basics, new training is required. Your manager will take care of many problems and even the tough tenants but sometimes a decision is so big you will want to be a part of it and sometimes the best way to address a renter’s concerns is with a call from the owner.
A good manager will do a yearend review and update the monthly marketing calendar and may even develop goals and a marketing plan for the upcoming year, but a team effort including the owner is required for the best results.
Item3) Planning & Marketing: (1 hr./week)
You have done your yearly planning and that big picture is a huge step in the right direction, but it will take many weekly actions, manager reminders, midcourse corrections, and even new ideas for maximum profits. For example, we love to put out a couple of dozen small US flags on July 4th, Labor Day & Veterans Day. Without a reminder by the owner to check the quality, quantity, and exact dates the flags are to be put out they can easily be forgotten. The same goes for all the Holiday and seasonal marketing. I learned the hard way that reminders are required.
Last year I by asking my manager how the visits/emails/mailings went to the campgrounds for RV storage. Even though they did a super job the previous year and it is in the monthly calendar, they skipped it and we lost out on a dozen rentals. I believe for every hour the owner spends on planning and marketing they will be paid back multiple thousands of dollars. Remember the average rental is over $1000.
Item 4)– Managers Guidance: (1 hrs./week) It is just impossible to put every situation and every little detail in a manual so there are areas that require the owner’s guidance. Also, many things only happen once or twice a year and managers forget the answer is in the manual.
Item 5) You Like to Do, or Manager Won’t Do: (1 hrs./week) If you’re lucky it is an hour a week of things you like to do or help out with. You may enjoy doing landscaping or a regular deep dive into the data. It may sound odd but my wife GP likes calling the late people. She says they owe her the money so there is no reason for them not to have paid. If you are unlucky, it could be calling the auction people because you will get 90% of them to pay before the auction vs 80% payment when your manager calls. Often managers were not told when hired the importance of doing the local community one-on-one marketing and they simply object so the owner must do it.
If you add up the hours above, you get 8 hours a week minimum. Many owners are not even putting in 4 hours a week, but they get away with it because their facility was built over 10 years ago, and they do not have nearly the mortgage a new facility will have. And for some, they are satisfied making $100,000 plus a year profit and are simply not willing to take the time to develop high-end operations, sales, and marketing systems that would result in much, much higher profits.
So many people incorrectly believe self-storage is an investment that does not require hands-on work. The reality is so many people work 40 to 60 hours a week and will never make the profits a self-storage will. If you are not willing to put in the time to become an expert so you can develop and build the systems, platforms, and manuals you need to run a top-notch facility you may be better off buying self-storage stocks; have a management firm run your facility or be a part self-storage franchise.
For a free copy of Marc's book, "Your Self Storage Planning - Site Selection - Design-Build"
Email me at ed@storageauthority.com
Ed Clement is a franchise director at Storage Authority. One of his passions and responsibilities is helping franchisees find land by sharing how to find land both online and offline. Ed has a strong background in real estate, investment banking, and management consulting. He is available at Ed@StorageAuthority.com or 727 946 0745 to answer your questions and share the Storage Authority Franchise opportunity.