Chuck Barbo, former Chairman of Shurgaurd Self Storage, discussed his management philosophy.
He believes in empowering the people closest to the customer. For example, he let his managers determine rental rates, discounts, etc.
This sounds like a fine strategy but you would absolutely need two things:
- Adequate controls or monitoring so that you would know if a rogue or misguided manager was messing things up.
- A fairly robust training program for your on-site staff. (On a personal note... I don't think my company, Crescendo Properties, is quite there yet, although we are getting much, much closer as we tighten up our operations.
Chuck discussed his success in building up a European presence with Shurgaurd. I imagine international development is still a huge opportunity as long as one is committed to staying in the market long enough to build awareness of the product and allow time for consumers to adopt it. In web 2.0 technologies (like blogs and wikis) we have begun to move from "what is it" to "what can I do with it" to "I have a problem identified and am looking for solutions". I suppose the same transition has to happen to self storage when it is first introduced to a new culture.
The last point he made was that he regretted the time and energy he spent developing stores in small markets like Pocatello, Idaho. Rental rates are low, but construction costs are more or less the same as major metropolitan areas with rent levels twice and three times as high. In my experience owning and operating properties, the geographic redlining outlined above is most relevant to development. An acquisition, if purchased at the right price, can be very profitable even if it is a secondary market.
