Magic Revenue Finder
By analyzing your revenue in your specific area, you will discover improvement ideas that wouldn’t have occurred to you by looking at your storage operation; as a whole. These areas are a framework for thinking about how to grow revenue.
Management reports are not only those produced by your property management software. Think through key performance indicators that will best help you execute your revenue enhancing initiatives. If your property management software doesn’t have a report or a method to track a desired performance indicator, track it separately. Here are 10 ideas on how to grow your revenue:
Control Unrentable Units An unrentable unit represents unavailable revenue. Paying attention to unrentable units allows you to get them back into revenue production sooner. Know why unrentable units are not rentable and what it will take to bring them back into production. Task someone on your team to get the unit back online with a budget and timeline.
Increase Occupancy The goal is approximately 94% occupancy. If you are regularly 100% full on a unit type, then you are pricing your available inventory too low. Below approx. 94% occupancy you are better off filling units even if you lower price or increase concessions.
Increase Rent Collected Per Occupied SF Since you have a finite amount of space, to increase revenue over time you need to increase the amount of revenue you generate from each square foot. This can mean charging more to new customers, charging more to existing customers, or reconfiguring your unit mix to allow you to rent space at a higher price per square foot. Also consider converting parking space to enclosed storage space when that will earn greater revenue per square foot.
Tenant Insurance Increase the number of units covered by the tenant insurance or protection plan. More units covered means more revenue. In addition, you can increase the average selling price for your tenant insurance sales or tenant protection plan. Your revenue from tenant insurance or protection plan sales is a function of the number of plans sold multiplied by the price. Increase the price and you increase your revenue, all else being equal.
Increase Late Fees Late fees are revenue. Benchmark against the public company operators. Make considered decisions about the circumstances you will allow a fee to be waived.
Increase Administrative Fees Administrative fees are revenue. Benchmark against the public company operators. Make considered decisions about under what circumstances you will allow a fee to be waived.
Increase Ancillary Income Cell tower income, merchandise sales, truck rental, etc. can all increase revenue.
Decrease Late Fee and Other Revenue Waivers Controlling how fees and other charges are waived can increase the amount that you deposit as revenue.
Decrease Move-In Promotions Move-in promotions reduce your revenue. High demand and limited available inventory may give you an opportunity to increase revenue by reducing your move-in incentives.
Decrease Bad Debt and Reduce the Number of Days a Unit is Past Due Before it is Sold (Not Less Than the Minimum Required by Law) Aggressively collecting past due rent during the FIRST 30 days increases the amount of payments you will receive. Processing lien sales as quickly as possible returns a non-revenue producing unit back to revenue production.
The difference in value is 10%. Every little bit counts!