Getting Started in Self Storage Series (7) – How To Put Your Self Storage Project Into Service 

You are getting ready to close on your first or your next self storage facility.

This is where I get the most nervous. If you think I was nervous during the due diligence period, you should see me now.

I am sure you are much cooler than I am.

How to take over and start running a self storage business is a big subject.

There is no right way because what you are to do depends on you and your business strategy.

As I have done in this series, rather than tell you what to do, I am going to discuss the spaces I think must be addressed and what I perceive as best practices today.

I also need to qualify myself here because as our company has grown, I have people much better than I am taking over facilities now. They are better than I ever was, and much of what I am saying here, I am reaching back and remembering what I did before our growth.

Prior to Closing.

After all the contingencies are removed and I am sure we are headed for closing, we spend the last week or two getting ready for that event.

The closing.

The goal is when the “Closing” happens, for the customers, it is a non-event.

If you have employees working there, you want it very smooth.

A lot can go wrong when a self storage facility changes hands. Here are the main thing’s to watch for.

1. You want the operating system correct and exact at the moment of closing.
   1. Use your vendor to help you set up the operating system and keep it accurate so that at the appointed moment in time, you turn it on, it is 100% correct. 
   2. Usually, our vendor loads it up for us, sends it back, then for the time between we get it back and we take over, this system runs parallel with the one the Seller uses. 
   3. At the closing moment, the old one is turned off, and the new one takes over.
2. The credit Card Processor.
   1. Noting has caused me more headaches than this. It shouldn’t be that hard to do, but my karma around credit card processors isn’t that good or something.
   2. It is best to have it ready to turn on at the appointed time, and make sure it connects with your operating system. Test it (then pray).
3. Employees.
   1. This is a big subject. Best practices are if you are going to keep or consider keeping the existing employees there before the closing, have them fill out an employment application.
   2. Run background checks on all the employees.
   3. Let them know, even if you are intent on keeping them on, that the first 60 or 90 days they are on probation. Use that period to see how well they work in your culture. 
4. Make sure your operating bank accounts are set up, deposit slips, checks etc. at the facility or wherever they are supposed to be.

The day of the Closing.

1. Immediately after the closing, have someone do a lock inspection.
   1. Make sure that there are no surprises (i.e. someone has run out in the night or something), and what is in the operating system is correct. If not, make the changes and adjustments.
2. Change locks on doors, and vacant units.
3. Do a closing the first day.
   1. Close out the operating system every day. That way the daily close will match the deposit slips. But especially that first day. You can see that everything is working correctly, your managers know what to expect, and they can see you or someone checking the close to the deposit.
4. Have employees sign and receive your employee and operational manual.
   1. From day one, set up with your employees what expectations you have and answer any questions. Remember, they are probably more nervous than you are.

First Thirty Days

The main thing I want to cover here is the culture you are going to create.

Now I know that you are most likely rolling your eyes and saying this is just a self storage facility, what culture?

But I am here to tell you, unless there are no employees, and even then your customers will experience some culture, there will be a culture evolving.

It is either going to evolve by default or design.

I suggest the latter.

Decide how much freedom to give your employees.

Are they rewarded for seeing issues, fixing them, then telling you about them? Or, do you want to be involved in every decision?

I am not saying which is best, although I have my own ideas. But, I am saying you must set up the rules, boundaries, and expectations for the people who work for you. Then, you must abide by what you create.

In other words, you can’t say you value a Manager solving problems on his or her own, then reprimand the Manager because you didn’t know about an issue they fixed before telling you.

If your employees know what they can and can’t do, and you are clear and consistent on your expatiations, you will be creating a positive culture for everyone to walk into, including your customers.

In terms of best practices here are my suggestions on what to do the first month:

1. Make sure daily close happens every day, and deposit happens every day.
   1. In a perfect world, the Manager closes out in the operating system, then puts a deposit into a safe on site.
   2. You or someone else takes a deposit to the bank a few times a week. It’s best if it is the person doing the daily close.
   3. Every deposit slip matches perfectly to the daily closes.
   4. Be sure to ask questions about transactions, how much cash, any discounts regularly. Even if you know the answers, you want to send the message every close, every transaction, and every dollar is being watched and accounted for.
   5. Each day you should be able to match checks, cards, and cash to the daily close.
2. Set up regular, twice a week, lock inspection reports.
   1. You should have the Manager do them, or a staff person. However, it is good for you to do them periodically, never with a routine anyone can figure out.
   2. In a lock inspection report, you check every unit and validate that the operating system and what is actually so match. They are either rented, vacant, or locked over. You don’t want one showing vacant in the system with a tenant in it.
3. Let the Managers know your exaptation’s about the facility. If you click here, you will see two documents. One is the facility take over checklist we use when taking over and doing what has been discussed in this article. The other is the inspection report our Operations Manager and Owner fill out when doing facility inspections.
   1. We want the Managers to know what we are looking for so they can have the facility up to our standards.
   2. You don’t, and should not use ours, but use it as a template to think through what is important to you, and how you want your facility perceived by the market.
   3. Whatever is important to you, that is what you should share with your Manager and employees as your expatiations.

We have just skimmed the surface, but these are some of the best practices today I see you begin to put your first facility into service.

Nothing I have said here is rocket science. But, if you start from the beginning doing things right, your self storage business will grow and prosper, and you will be creating True Wealth and a Fulfilling Career in the Self Storage Business.

For details on the monthly benchmark numbers we track, click here for the Five KPI’s (Key Performance Indicators) we track monthly with our Managers. We have covered this in other Episodes and Series, but if this Episode was timely for you, so will that eBook.

Thanks a lot, and next week I am going to be unrolling a new service I think we can offer you as you do the Preliminary Market study discussed in the First Episode of this series.

Keep me posted as to how you are doing, and thank you for being part of this community.