It\u2019s often said that you should \u201cmeasure what you manage\u201d and \u201cinspect what you expect,\u201d but what if you\u2019re not sure how to do that? Reviewing management-software reports can be overwhelming for self-storage operators due to the abundance of information available. With so many options, it\u2019s difficult to know which data to seek and how to interpret it. Here\u2019s some guidance on the process, including the information you can glean and how to apply it.<\/p>\n\n\n\n

Know the Goal<\/h3>\n\n\n\n

The first step in reviewing management reports is to set your expectations. Evaluating information for the purpose of raising rates, checking for theft, understanding move-ins and move-outs, or determining occupancy requires unique reports and a different \u201clens\u201d for looking at the numbers. Decide what you want accomplish before you dive in.<\/p>\n\n\n\n

The second step is to verify the data. Reading a report with faulty figures is a waste of time at best. At worst, it\u2019s misleading for major company decisions.<\/p>\n\n\n\n

Understand Unit Rates vs. Tenant Rates<\/h3>\n\n\n\n

The facility unit rate (also known as the street rate) and the tenant rate (the amount paid by each individual customer) are separate numbers in most self-storage management programs. The system should allow you to set a rate for each tenant that\u2019s different from the unit rate. For example, if the street rate on your 10-by-10 units is $100 per month, but Mrs. Jones only pays $90 per month, then the unit rate is $100 and the tenant rate is $90. The difference between the two is called a \u201cvariance.\u201d<\/p>\n\n\n\n

Operators often make two common mistakes regarding these rates:<\/p>\n\n\n\n

1. Confusing the unit rate with the tenant rate.<\/strong> Let\u2019s say you want to give a tenant a $5 per month discount. If you accidentally adjust the unit<\/em> rate instead of the tenant<\/em> rate in your software, you\u2019ll not only eliminate the variance, you\u2019ll change your gross potential revenue. What\u2019s more, the next tenant to move into that unit size will pay the lower rate by default.<\/p>\n\n\n\n

2. Failing to adjust <\/strong>all<\/em><\/strong> units when there\u2019s a price change.<\/strong> Each unit of the same type and size should have the same price in your management software. This unit rate can change daily or hourly, but it should be consistent. If the unit rate on your 10-by-10s changed from $95 to $100, change it for all units of that size.<\/p>\n\n\n\n

Understand Occupancy Rates<\/h3>\n\n\n\n

When unit rates are correct, your gross potential revenue and economic occupancy will also be correct. Some owners prefer to focus on unit (or physical) occupancy, but it\u2019s more important to focus on economic occupancy. What\u2019s the difference? The former is a measure of how many spaces are filled; the latter is a measure of money in bank.<\/p>\n\n\n\n

For example, let\u2019s say your self-storage facility has 10 units at a unit rate of $100 per month. If all 10 of them are rented at the full price, your unit and economic occupancy are both 100 percent. But what if you have four units rented at $100 per month and another four at only $50 per month? In that case, your unit occupancy is 80 percent, but your economic occupancy is only 60 percent.<\/p>\n\n\n\n

\n
• Four units rented at $100 per month = $400<\/li>\n\n\n\n
• Four units rented at $50 = $200<\/li>\n\n\n\n
• Eight units rented = 80 percent unit occupancy<\/li>\n\n\n\n
• $600 income per month = 60 percent economic occupancy<\/li>\n<\/ul>\n\n\n\n

  You want to watch the gap between unit and economic occupancy. Some managers try to be slick and lower the unit rate to make economic occupancy look better. This is a mistake. Make sure unit rates are competitive. It doesn\u2019t help to rent 10-by-10s for $100 when the rest of the market is charging $175. High tide raises all ships.<\/p>\n\n\n\n

  Reports to Review<\/h3>\n\n\n\n

  Unit rate, tenant rate, variance, unit occupancy and economic occupancy are all key numbers to review for revenue management, audits and the health of your self-storage facility. To this end, there are several management reports you should periodically review. Here\u2019s a breakdown of each and the helpful data you\u2019ll find.<\/p>\n\n\n\n

  Exceptions.<\/strong> A great report to look for \u201codd\u201d activity is the exceptions report. If the staff changes an address or unit price, deletes charges or payments, or does anything out of the ordinary, it\u2019ll show here. Verify that any changes of address have written proof from the tenant, research deleted charges and payments, and review any unit changes or unusual events.<\/p>\n\n\n\n

  Credits issued.<\/strong> As a former manager, I know how hard it is to hear sad stories from tenants who can\u2019t pay their bill, and how tempting it is to waive late fees. Create a policy around waiving fees or issuing credits, and then review the credits-issued report to ensure each staff member upholds it.<\/p>\n\n\n\n

  Discounts.<\/strong> Staff can be overly reliant on discounts to move in new tenants. Most management-software programs have a report to summarize all discounts given along with a detail of reductions by tenant. Review these to ensure they\u2019re valid. If discounts are given to military personnel or students, check for a valid ID on file. If they were for a set period of time, make sure they\u2019ve expired in the system.<\/p>\n\n\n\n

  Management summary.<\/strong> Someone other than the site manager should walk through the property at least quarterly, though monthly is better. Print a map or walk-through report and check that all rented units have a tenant lock, all empty units have a company lock or no lock, all late units have an overlock, and all unrentable units are marked as such. Smart owners make sure their inventory (units) is always accurate.<\/p>\n\n\n\n

  The management summary gives a snapshot of the company and can alert you to problem areas such as low deposits, high receivables, low move-ins or a lack of changing rates. Use the management-history report, if available, to dig deeper into the numbers and determine if they align with expectations.<\/p>\n\n\n\n

  What\u2019s Your Story?<\/h3>\n\n\n\n

  Learn to look at reports as the story of your business. They aren\u2019t just numbers on a page. They\u2019re telling the tale of what happened. They summarize the decisions and attitudes of you and your staff.<\/p>\n\n\n\n

  For example, reports show that an auction was held because bad debt and move-outs both increased. If move-ins increase and revenue collected stays the same, unit rates may have been lowered. If the staff is weak at collections, unpaid charges and credits issued will be high. When the staff doesn\u2019t believe in selling tenant insurance, you\u2019ll see a low number of customers buying it.<\/p>\n\n\n\n

  Set an expectation before looking at the reports, and then review the numbers to see if they tell the story you expect. Don\u2019t just look at one number and move on. Look at multiple figures and make sure they\u2019re all moving in the right direction. Each decision will affect an area of the business, and the reports and numbers are connected.<\/p>\n\n\n\n

  Magen Smith is a former self-storage manager turned certified public accountant (CPA). Her company, Magen Smith CPA LLC, helps storage operators understand the financial side of their business. Services include monthly financial management, bill-pay functions, revenue management and strategy. She also offers a curb-appeal checklist available for download and has created an online revenue-management course complete with checklists, cheat sheets and guides. For more information, e-mail magen@selfstoragecpa.com; visit <\/em>www.selfstoragecpa.com<\/a>.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

  Your self-storage facility\u2019s management data reveals the story of your business. It isn\u2019t just numbers on a page. Here\u2019s advice on which reports to pull from your software and what all the figures tell you.<\/p>\n","protected":false},"author":1,"featured_media":1244,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_uag_custom_page_level_css":"","footnotes":""},"categories":[1],"tags":[],"class_list":["post-1229","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"acf":[],"yoast_head":"\n