by Marc Goodin
This might sound a bit odd, but it is true. Let me show you the proof – the numbers. Let's say your managers work 54 hours a week and you pay them $18/hr. The total yearly managers pay with government taxes = 54 hours/week x 52 weeks/yr. x $18/hr. x 1.3 = $66,000 per year.
Let's say your facility rents 25 units a month or 300 units a year.
The mangers cost per unit rented is $66,000/300 = $220/unit. Yes, that’s correct it cost $220 for every unit rented. In other words, everyone who stays just one month cost you money.
The lifetime cost assuming a 12-month average stay is $220/12 = $18 per rental.
Would it be better to chop the rental rates by $18/month per unit, save the $66,000 and go with an unmanned facility? For some people, the answer is yes because they do not want to the responsibility of developing manuals, systems or training a manager well. But the answer is a clear NO for those who want to have an elite self-storage where profits can be double the average facility.
We hire managers to do all the work needed to rent one + extra unit a week for extra profits:
52 weeks/yr x 14 month stay x $175 month rent = $127,000 in profits every year. Even better because you are full and have to constantly raise your street and tenant rents you are making even more profits.
At Storage Authority we hire elite managers to run a $20,000,000 business. We hire managers to be superstars. The facility operation choices are bad, average, good, excellent, or elite. And if you are in the Excellent to Elite range you can charge 30%+ more than your competition. The Storage Authority job description certainly emphasizes high-end Sales & Marketing responsibility but also includes dozens of other items including taking out the trash, cleaning units, maintenance, light bookkeeping, off-site marketing, dress code, over-the-top customer service, and much more.
You will notice the “other guys” hire minimum wage order takers or clerks or sometimes customer service agents. The manager is the lowest common denominator. And the REITs do not even let them answer prospective renters' phone calls. And because their managers do not know how to sell they often offer a huge rent online discount.
An Elite manager ensures the following:
1) The office, units, and site (including landscaping) always present well, typically much better than the competition.
2) They are sales and marketing experts and as such will rent more than double the average manager. They open the door, take the prospect for a site walk, use a script, call the prospect by name 3 times, ask for the sale, overcome concerns, and ask for the sale again and again until they leave. And then call them back the next day and ask for the rental again.
3) They communicate/update the owner on a regular basis.
4) And finally, they are always learning and getting 1% better every month.
When a manager does these 4 things they are worth their weight in gold.
Here is the problem: The choice of being Elite is up to you the owner.
An Elite facility must hire an Elite manager (mindset, not necessarily self-storage experience). Unfortunately, Elite Management companies to not exist. No one cares as much as you do – you need to be part of the management team. An Elite facility must have proven elite operations, sales, and marketing manuals, systems, and Elite training. Very very few do. The owner needs to spend 8 hours+_ a week helping and coaching the manager. And the owner's time cuts in half once they have learned the business well and the facility is full.
No question it is hard work. But where else can you become a multimillionaire in 5 to 7 years from today for so little time? Not at any job I am aware of. And a Storage Authority Franchise can make your coaching job easier. We have the systems and experience from the trenches for oversized profits.
What about kiosks? - yes they are great and we include them in every new project. But they are terrible at renting units to people on the fence (40% of our customers). They are a service for after hours when the manager is not in the office and another rental option any time.
Here are some Kiosks shots from Open Tech Alliance.
Note for Managers:
Unfortunately, most managers are order takers, clerks, or at best customer service agents. And that is why they are also paid $12 to $15/hr. Business owners do not pay their staff based on how hard they work. People are paid based on how hard it is to replace them. So, to increase your value you must work smart. And to work smart you always must be learning. Reading, courses, and asking for help are steps 1. Step 2 is making a plan to be efficient and implement what you learned. Step 3 is good regular communication and accountability, so your team knows what you are doing, including the little extra things that make customers happy.
Do you want to have a 15-minute call to learn how Storage Authority helps improve the systems, sales & marketing, and profits at your existing facility? If you are building from the ground let's also review how we help you find land and get your facility built. Please send me an email or call me – no appointment is needed:
marc@StorageAuthorityFranchise.com or 860-830-6764
Get more information on Storage Authority Franchise at www.storageauthorityfranchise.com/opportunity3
Marc Goodin is the President of Storage Authority Franchising. www.StorageAuthorityFranchise.com
He owns 3 self-storages he designed, built, and manages. He has been helping others in the self-storage industry for over 25 years. He can be reached at marc@StorageAuthority.com or directly at 860-830-6764 to answer your franchising, development, marketing, sales, and operations questions. His best-selling self-storage books are available on Amazon.