Richard Allen from Active Supply & Design Ltd discusses why he thinks moving companies should consider the option of self storage.

Richard Allen, Sales & Marketing Manager for Active Supply & Design Ltd has been in the self storage supply business for long enough to have heard all the arguments for and against opening a self storage facility.  But even so, he really can’t understand why more moving companies don’t consider the option.  Here’s why.

Most moving companies have properties that can accommodate this proposition with many of them being under utilised.  Self storage in the UK has seen a dramatic rise in popularity in the last decade or so and the growth in the market shows little sign of diminishing despite the economic downturn. Empty warehouse space is often crying out for the addition of some self storage units but, with only an estimated 10% of removal companies offering this most popular service, most choose to put their heads in the sand and deny its competition and its opportunity.

The competition
If you are not providing self storage for your customers, in purpose-built self storage units, you are missing out.  Increasingly people are choosing self storage for business storage, for domestic items while they are waiting to move home, or for those overflow items that they can’t quite find room for.  “These people often leave things in store for years,” said Richard.  “They like the flexibility of an easy access store room and the security of having their own key. Self storage has become almost fashionable and many see it as an extension to their house or business.”

What’s more, if you lose out on the storage, what happens when those customers need a mover?  You’ll probably miss out on that too.

The cost argument
Cost frightens most people off, but it doesn’t need to.  “We always suggest that people build their facilities in phases.  This way they can start getting a revenue flow early on without having to spend outside their means.  When phase one is filling up and bringing in revenue, they can confidently move onto phases two and three.”

However, financing even a modest investment might be tricky for some.  But interest rates have never before been this low so in some ways this is the best time to be expanding.  Also the government is supposed to be helping small businesses and freeing up cash for investment.  Only last October we saw the launch of a new British bank, Shawbrook, specifically to provide finance to small and medium sized enterprises struggling to get funding from the UK's biggest banks. Shawbrook has promised to lend £250 million a year exclusively to small businesses and there have been calls for the bank to take a more traditional outlook to banking rather than the asset-based approach (you can have as much money as you like as long as you don’t need it) favoured on the high street. 

Fit-Out Costs
Active Supply & Design are very open to helping potential entrants to the self storage industry and can provide budget costs and projected revenues, initially over the telephone. Commonly, if the customer is attracted by what they hear in relation to these costs, Active, at the customer’s discretion, will visit the site and produce a formal quotation with no commitment or cost to their client.

Location
In the past self storage units had to be in visible positions on main through routes where there is a lot of passing trade.  It’s still true that these prime sites are the best ones to look out for but, if your place is a little more hidden, that’s OK nowadays.

The recent popularity of the internet has changed the criteria to a large extent, a good brand and search engine ranking claim to achieve over 70% of many facilities self storage enquiries. Even small rural operators who are operating out of converted chicken sheds are reaching capacity and returning nice profits.

Recession resistant
No business is recession proof but self storage has proved to be recession resistant over recent years.  Yes there was a slight dip in trading but, in general, self storage companies have done well and, those movers that have self storage, have been insulated from the worst of the downturn. Some of the main reasons for the continued success of the self storage product are:

1)     People who have storage because they can’t afford to move house.
2)     The house moving transaction process now takes longer.
3)     Business storage has increased massively.
4)     Rental properties have become more popular and expensive.

Something new
Most people shy away from doing something new.  But part of the service Richard’s company provides, is to provide help right from the start to guide you through the whole process. “We help with locating a suitable store, planning, marketing, deciding what rents to charge, estimating fill rates, and provide advice on technology such as security systems and monitoring equipment,” he explained. “Even if you have no experience in self storage there really is nothing to fear, we’ll hold your hand all the way.”

Richard also said that it is very strange that many moving companies place their customers’ goods in somebody else’s self storage unit. “It really is time they built their own.”

The UK market
The US led the rise of self storage and the received wisdom is that the market, even there, is not yet saturated.  By comparison, it is estimated that to UK market is running at only 10% of its potential.  In other words, there are still plenty of people out there who are not using self storage yet, who probably will be soon. Some areas are close to saturation but there are still many poorly serviced pockets of opportunity around the country. Much of the market will be taken up by the big specialist self storage companies, but a lot of it won’t.  Also, movers have an advantage because they get up close and personal with a large part of the market during the moving process.

Not every mover’s warehouse is suitable for self storage, but many are.  The main reason they don’t diversify is because of fear about the investment and lack of knowledge about the industry.  But there are very few companies that have embarked upon the self storage experiment and emerged disappointed.  If you are tempted to give it a try, get in touch with Richard by calling 01270 215200 or e-mailing richard@askactive.com.

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