Full Case Study-Self-Storage Business

As someone who has spent 30+ years building and growing my traditional self storage business in the southeast, I was always intrigued by the concept of “portable storage.” Being able to bring a storage unit [container] to the customer instead of asking people to load up their cars or a rental truck, drive to their local self storage facility and then off load their belongings into a self storage unit just makes sense on a number of levels to me. Making it easier for customers to do business with me just seems to exemplify what portable storage is all about.

Starting with a belief that the traditional self storage service model could be expanded and improved upon, I launched my own portable storage business some 12+ years ago. Besides the obvious customer benefit noted above, portable storage brings other benefits to my local customers not satisfied by traditional self storage such as:

  • Reduced amount of time [labor] spent by a customer getting their belongings into a storage unit as there is NO transfer of goods upon arrival at the storage facility
  • Reduced amount of handling [2x vs 4x] when using portable storage units correlates directly to reduced incidence of damage
  • No need for the customer to drive a rental truck in order to transport their belongings to the local storage facility
  • Nor a need to carry furniture up and down truck ramps when loading and unloading as portable storage units provide ground level access … no possibility of slipping and falling off a truck ramp
  • Customer can load [or unload] on their schedule, not confined to a pre-determined amount of time for a rental truck regardless of whether the truck is being provided by the local self storage facility or being rented directly by the customer

The expansion into portable storage as a self storage operator made sense as I felt it a reasonable capital investment for the perceived revenue opportunity. In addition, the expansion into portable storage [and moving] has had a positive impact on my self storage business overall as well. Some of the benefits associated with my addition of portable storage and moving to my then current self storage business were varied but impactful nonetheless:

  • Expanded my footprint while providing access to more potential customers within my marketplace given my service area was now up to 25 miles versus the traditional 3-5 miles from which most self storage operators attract their customers
  • Expanded my brand given that the businesses had the same first name
  • Provided my company with the ability to lower our cost of customer acquisition
  • Allowed for capacity expansion faster given that containers can be purchased in less time than a new building could be built to support market need
  • Enabled me to build a traditional storage warehouse [for less than a comparable self storage building] to operate the business instead of leasing which built a real estate asset in my portfolio
  • Accelerated my cash flow positively impacting EBITDA once the containers were fully depreciated
  • Provided the company with the ability to help charities during times of need while simultaneously promoting MY local brand in the community

As I look back and think of my container count today, I realize that my company has been able to add the equivalent of an additional 1.5 self-storage facilities in net rentable space for approximately 40% less upfront capital. To further support my thinking and expansion decision, as reported by various self-storage publications, 40% of all self-storage customers are ultimately moving whether locally, in-state or out of state … but they’re moving. I also took the time to talk to customers and listen to numerous customer call recordings and realized that of the 40% of my customers who are eventually moving; approximately 80% would be better served by a portable storage service. Finally, when I realized that I could profitably service AND attract storage customers from up to 25 miles away, as opposed to the traditional self-storage model, without “cannibalizing” my core storage business which in turn then helps me maximize on my local marketing spend … the dye was cast.

As time passed and the business evolved and grew, I began to realize that the visual gratification my managers got from seeing their properties rented out became an obstacle to the continued growth of the portable storage business. As on-site managers, the off-site coming & going of the portable storage units typically were not visible to them during a normal transaction, As a result, they didn’t seem to be as invested in the sale or the customer and as such a change in my sales / business model was required. The change … the company launched a small Call Center to handle all self-storage AND portable storage inquires and sales. The change in how we transact business today has helped both service lines but in my opinion, the Call Center sales model has had more of a positive impact on portable storage than my self-storage business.

As I fast forward to today, I firmly believe that my company AND my customers have benefited from having access to more than one type of storage service; at least here in my local market. And providing both self-storage and portable storage in my marketplace, provides cross selling opportunities that has benefited both services lines.

All that said, my and probably many of my fellow portable storage owner / operators biggest challenge remains educating our customers AND prospective customers on the many advantages associated with portable storage. And as with any service business, access to timely and well qualified portable storage specific leads not readily available today, will help accelerate our growth as we continue to look for ways to drive company expansion by means of portable storage [and moving].