Full Case Study-Portable Storage and Local Moving Business

As a business owner in a low margin, competitive industry, l am always trying to think outside the “box.” I routinely look for new opportunities to expand my company’s local brand [and reach], generate new revenue opportunities all while making sure that my organization has more than one moving or storage solution for my customers. It was that premise that lead me into portable storage. Simply put, I didn’t want to lose potential DIY customers to my competition because I didn’t have the service they wanted to buy!!

My next decision was a little more thought provoking … do I become a franchisee or dealer for another company or go out on my own promoting my local company name & brand. As an independent mover, I decided on the later. And so my company’s portable storage business was launched 12 years ago. As a footnote, I have come to realize that as an independent mover, I have probably had more flexibility to grow my portable storage business without the inherent conflict presented by a national van line.

Strategically, it was my belief that portable storage provided me with an opportunity to maximize the company’s marketing spend which ultimately reduces the organization’s cost per lead.  The company now has a service offering for anyone [full service or DIY] who calls in as a result of a current marketing campaign looking for a service specific quote. And allows my sales team to “up sell” certain portable storage prospects into a more traditional full service move depending on circumstances and move logistics. Although difficult to track, it is my belief that our branded containers have benefitted our more traditional moving and storage business. Consequently, when our containers have been offered to various community charities, we firmly believe these “mobile” billboards have helped enhance our image and reputation in our local market … a win / win for all.

As the company moves into our second decade of portable storage and moving service, I’m comfortable in making additional observations:

• If you provide services to a local military base, portable storage containers provide an excellent “vehicle” by which to store a member’s household goods on base during periodic base housing renovations projects. Or if not, these containers have become very popular with restoration / remediation companies should a homeowner’s items not need to be removed from the property for drying, cleaning, sanitizing, repair etc
• Based on my company’s averages … a portable storage customer stays in storage approximately 10% longer than a traditional full service move customer
• Although I had hoped that portable storage and moving service would be less seasonal than the traditional moving industry, they seem to mirror each other relatively closely
• In speaking with fellow movers also providing portable storage services, I understand that it has helped them generate additional add-on labor revenue. As a company, we have not pro-actively pursued this business to date; that will change going forward
• Operationally, my portable storage business was easier and less costly to start-up than a comparable full service moving division simply because Class A drivers are not a requirement nor do they need the same inter-personal skills as does a HHG driver … this type of driver is also easier to find & recruit

To that end, I would add the following financial data points to my general portable storage business observations noted above:

• My transportation [pick-up & delivery] revenue as a percentage of total portable storage service revenue runs approximately 16% on average assuming no change to local rates; typically this “component” is low margin
• I have aggressively amortized the containers only over a 6 year period to accelerate portable storage’s contribution to company overhead
• As BOTH a mover and portable storage operator, the discrepancy in portable storage generated revenue as opposed to perm storage is significant. Although a mover will typically generate more perm storage revenue per cf IF a customer is only occupying 1 storage vault because of “minimums”, the advantage quickly changes in favor of portable storage once the customer needs 2 or more storage vaults / containers. The storage revenue generated by my portable storage containers is .39₵/cf/mo while I only generate .23₵/cf/mo if the perm storage customer occupies 2 vaults and even less, .18₵/cf/mo if the customer needs 3 or more vaults for their storage needs … a significant revenue advantage for portable storage
• During my last financial review for both my moving and portable storage businesses, portable storage contributed as much as 65% to fixed overhead once the containers were fully depreciated, but has averaged approximately 36% over the last 5 years. I should note that these calculations included an expense for container depreciation

Although my company has been providing portable storage and moving services now for 10+ years, the industry itself is now much more mature. With that has come, at least from my vantage point, a greater level of customer understanding of the service provided, greater understanding of the service specific benefits to a given customer and overall market acceptance. While the traditional moving & storage AND self storage industries continue to stay focused on their core strengths and respective “value propositions,” it seems to me that portable storage provides a logical bridge between the two services; bringing some of the best elements of both in unison to the customer. As a business owner, I am more confident as time goes by, that my decision to expand my company’s service offering beyond traditional moving and into portable storage, was the right one for ME.