TSSA Communications

TSSA Communications Brom Hoban Antidote to a Down Economy: Stay Calm, Take Action hat do you do when the economy heads south? I am not an economist, but I do know how to follow directions. So I'll look to the experts on this one. While self-storage is in the relatively unique position of not being economically impacted by any one factor, operators can benefit from the same general measures as other businesses, whether they're smaller operations or national corporations. Experts agree that panicking and handwringing is certainly not the way to go. Instead, they say, focus on what you can do. "Sometimes difficult times make us look for new business avenues and new ways to cut costs and spending," writes T. Pettinger on Economicshelp.org. "Although it may be temporarily unpleasant, the important thing is not to panic but to try to make the best of any situation we find ourselves in." Topping the list of possible actions we can take is to aggressively control spending. This might mean cutting down on some of the frills, but now is the time to streamline costs. Consider where every penny of your money is going, and look for areas to cut back. Little things like coffee, sodas, and bottled water all add up. The idea is to minimize costs without compromising business. Another obvious area to focus on is borrowing. Controlling debt is imperative in a volatile economy. The last thing you want is to be paying interest, but by all means, pay existing interest on time; just beware of adding any new debt. W The next step is to look at ways to maximize revenue. Anne Ballard has a "Top Ten" list on page 14 that's a great place to start. One simple but sometimes overlooked action is to simply raise the rent. This has been proven to be effective, because even if you lose a tenant or two, as the units fill up again to your regular occupancy, your income will be higher. What about marketing? That's always a tough decision when money is tight. The answer is to look for methods that do not cost much. For example, you may want to reconsider traditional Yellow Pages advertising. In her article, "Surviving and Thriving in a Down Economy" (page 32), Elizabeth Sanchez quotes Alan Guinn, managing director and CEO of The Guinn Consultancy Group, Inc.: "Yellow Pages are rapidly becoming a dinosaur, a high-cost, low-yield opportunity. This is a controversial topic in the self-storage industry, with some operators agreeing wholeheartedly and others living and dying by the Yellow Pages. But economic down turns are a good time to be sure you are getting the most out of every marketing effort." Hal Moore's piece on Revenue Management (page 21) offers a comprehensive, methodical approach to maximizing your dollars, and should be studied, printed, and referred to throughout 2009. Doing well in a down economy means all people involved in operating the facility must pull together as a team. "In tough market conditions, it is imperative that everyone in the revenue stream be focused on getting the best rate for every unit from every customer," says Moore. "The challenge is to rent the right unit to the right customer at the right time for the right price." Make no mistake. This economy will test us. But by keeping our heads cool and sticking to the basics, we'll not only survive, but thrive. Brom Hoban TSSA Director of Communications We like to use photos and news from all over Texas in Self-Storage News. Please e-mail all articles/photos to: bhoban@txssa.org © 4 Copyright TSSA March/April 2009 · www.txssa.org

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