With an uncertain economy and a new year just around the corner, it’s time to look at how and where you are spending money—and cut some of the fat from the budget. After all, that old cliché “a penny saved is a penny earned,” is a cliché for a reason—because it’s true! Whether it’s marketing, operations, office supplies, energy, or some other culprit, there’s likely a profit-thief in your facility somewhere. Discover eight cost-cutting measures that will put more money in your pocket.
1. Write Down Everything.
You may not have a clue that you are wasting money, but it’s likely that you are throwing at least a few bucks down the drain every month. You can potentially save a bundle if you write down every single thing you spend that is business-related, says Jesse Mecham, founder of YouNeedABudget.com. It sounds simple, but the exercise forces you to address spending. It could be the water cooler, scheduled services that don’t need to be so frequent, or some other monthly cost that you’ve been paying mindlessly for years. “So many transactions are now on autopilot, subscription-based, etc., that we forget about them,” Mecham says. “Writing down every transaction manually goes a long way in raising awareness about where the leaks may be.”
2. Manage Your Energy.
Energy costs are soaring, so there’s never been a better time to manage your energy. “Have the local electric company come out and do a free energy audit to determine if there are ways that your energy costs can be reduced,” says RK Kliebenstein, principal of Coast-To-Coast Consulting in City of Atlantis, Fla. and co-author of How to Make Money in Self Storage. “Little things like turning off your outdoor sign from 1 a.m. to 5 a.m. or 11:00 p.m. to 7 a.m. can help, particularly in the winter when the daylight hours are short.”
3. Fine-Tune Your Marketing.
You can’t stop advertising. But you can fine-tune your marketing. Maybe that means cutting out your Yellow Pages ad if it’s not producing. There are other ways to get the message out, says Mark Roberts, managing director of Pragmatic Marketing in Scottsdale, Ariz. “Far too often businesses send out marketing that does not speak to the needs of the market, and send it to people who would never be a client,” he says. “Develop buyer personas. Speak to their needs in an authentic way. And use social media.”
4. Shop Credit Card Fees.
Did you know credit card fees are negotiable? Check with local discount retailers like Sam’s and Costco to see if you can save a few percentage points on credit card fees. “Look for the non-qualified transaction rates … that is where most of your transactions process, not the ‘swipe’ rate, where a smaller percent of self-storage transactions fall,” Kliebenstein says.
5. Check Your Real Estate Taxes.
Too few self-storage operators are keeping an eye on real estate taxes, according to Jim Chiswell, principal of Self Storage Consulting in Palmyra, Va. “Has your facility been singled out? It could be that everybody else in the industry saw a 15 percent increase in real estate taxes and your taxes went up 45 percent,” he says. “There are a number of national companies that will get involved in appealing your taxes for a percentage of what they save you, and you’re out nothing at the beginning.”
6. Raise Insurance Deductibles.
Depending on the region of the nation you are operating your facility—and the age of your facility—you may be able to raise your insurance deductibles with relatively little risk. “Consult with your producer to make sure that this will not have any other effects,” Kliebenstein says. “Changing from a $2,500 deductible to a $5000 deductible can make a big difference.”
7. Watch Those Office Supplies.
Office supplies can be a big money waster, says Ann Parham, CEO of Joshua Management in Bulverde, Texas. “We try to hold our managers to a budget, and purchases are approved only at the corporate level,” she says. “Counseling your personnel on how well they are doing helps motivate them to stay within budget.”
8. Time To Switch Banks?
You could be seeing major leaks with your financial services provider, according to Kliebenstein, so do a periodic audit that addresses these questions: What are you paying in service fees? Where can you get the most bang for your buck? Do they offer free sweep accounts to interest-bearing accounts to earn money? If you don’t like the answers, consider switching banks.