Preparing for Self Storage Growth in 2025 – Part Two

Announcer (00:03):

This is the Self- Storage Podcast with the original Self- storage expert, Scott Meyers.

Scott Meyers (00:10):

Hello everyone and welcome back to the Self- Storage Podcast. I’m your hostess, Scott Meyers, and in today’s episode we are going to be doing a part two on planning for 2025. So it is October, and at the time that we are recording this, we are looking forward to 2025. We’re not taking our eye off the ball for 2024, but it’s about this time that you should be thinking about setting the goals and plans for 2025 because that means if there is additional headcount, resources or even time that needs to be carved out for these initiatives, there’s things that need to be in place, including a budget to accomplish those goals. And the time to do that is not December 31st. By then, it will be too late and you’ll be well into Q1 not having come any closer to achieving the goals you set for the year, and now you have to achieve them in that nine months instead of 12.

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So if you didn’t listen to episode one, I would go back as I laid out the framework for what it looks like to be able to put in place not only your plan, but the one page plan. And so that’s what we’re going to be focusing on in this episode is putting together the one page plan. And it is a one page plan, although it ends up being two pages. This is the plan that is going to be communicated to your staff, to the folks that are going to make this happen. So it needs to be very concise, very clear, and should provide their input. Now, depending upon the size of your organization, if you’re growing and scaling and it’s just you in an assistant, well then it’s going to be you who is going to hold yourself accountable to this. But it doesn’t mean that you don’t need a plan because you have to have milestones.

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There has to be accountability, and there just has to be an semblance of order for this all to happen. It’s not going to happen by magic. You cannot throw a handful of eggs, a few cups of flour, some sugar, brown sugar and chocolate chips into a bowl, mix it up and assume that everything is going to turn out all right, because typically it doesn’t. You may still eat what you found, but you may not like what comes out of the oven, and that does not happen without a precise recipe for success. So that’s what we’re going to be focusing on in this episode. As we’re now filling out our one page plan, it’s very important that we bring forward the core values and get an understanding of what does our culture look like and what are our core values? Because this is going to be the sheet.

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This is going to be the plan that you’re going to work from on a regular basis, whether this is in your weekly meetings or a portion of this, or at the very least on a monthly basis that you and your core staff are going to be looking at. And they should be able to. If you have a strong culture, core values and a mission statement, each and every person that is involved in achieving and carrying out the mission and the vision of this organization, they should be able to state what the core values are that allows for this all to happen. So until your folks run around, not as exact clones of you, but they should understand you to the level that they understand why it is that we’re doing what we do. Otherwise, if folks aren’t on board, if they’re not really attracted to you as a leader and a visionary or the mission, well then they’re going to find somewhere else to go work because it isn’t about the money.

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It isn’t about flexible schedules. We find the folks that you want to drive your business forward, they want to be on mission, they want to be a part of something that is growing and is something that is going to be great. And yes, monetarily a reward does go a long ways for creating some additional motivation, but that’s really just for goodwill. At the end of the day, people that are continue to get up in the morning and strive for something greater, even if it isn’t their own organization, it has to be something that is worth their while. So that starts with you as the leader sending forth your core values. So an example of core values. What might that look like? Well, it should be a little more than just, well, we work hard, we persevere, we stay humble, and we do the right thing, although those are all solid, but it should look a little bit more personal than that.

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And what does that really mean in terms of the folks that in every seat on the bus in your organization, these folks should have these core values and that’s what you hire based upon as well. So as you are seeking folks to hop on the bus and to put into the correct seat, these are the attributes that are core values within our organization and people that embody this type of behavior and have these as their own internal core values as part of their own personal constitution. So once we have the core values in place, now it is time to set not only the long-term vision, but then to bring that back down to a midterm vision. And then what is it going to look like for the year? What are you going to focus on and achieve during the next year? So long-term vision could be, if this is something you’re aspiring to do is that you’re out of the business and you’re in the owner’s box, which means that using a football analogy, you’re up in the owner’s box, you’re not on the field calling the shots anymore and doing the day-to-day, it could have a revenue number behind it that your business is producing for you.

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It could have an amount of facilities that represents, and maybe those two are different or independent, or you feel that on average the number of properties that you have in your portfolio divided by the average revenue is going to get you that revenue goal. Whatever that looks like. Here’s the place to put this in to the long-term vision, and they could be goals. It is a vision, but they’re really the goals. And then alongside of that, what is the amount of money say that you want to give to philanthropic organizations for charity or to start your own foundation? This is your long-term. What are you doing this for? The midterm vision could include things such as, I need to hire A COO, I need to hire a fractional CFO that is going to help me get to the level that I need to be. Or maybe it’s A-C-M-O-A chief marketing officer as well.

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I expect to have X number of dollars in revenue. This represents X number of properties in the portfolio, and I will have given this amount of money away to the philanthropic organizations that I support, or I’ve already started up my own. So having the long-term vision in place and the midterm gives you these targets to shoot for and gives you an understanding of whether you’re on track or not, usually at the end of the year. So now let’s peel that back and let’s look at the focus. And so in our one page plan I show for 2025, here’s our focus and they’re kind of to-dos and their accomplishments or the rocks as we talked about the previous episode. So that may mean that I need to hire a new acquisitions person who’s going to go out and hit the phones, send the mailers out, talk with the brokers and find deals for us.

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I may want to revamp the entire construction process, whether we’re bringing it in-house or how we handle project management and what is that mixture, the correct ratio of our folks that are on staff that manage, oversee and handle the construction side of the business versus giving it all to somebody else, a third party with minor oversight on our part. If I’m raising private equity, is it time now that I need to hire somebody who is creating those relationships and doing the same types of activities that our acquisitions person is doing except they’re just acquiring capital, they’re acquiring limited partners, our folks that are wanting to come alongside and partner with us, whether it’s at the individual level or what we call the retail level, meaning individual investors that have 50, a hundred, $150,000 to invest in multiple projects, or are we seeking the institutional money and are we going after the family offices, the hedge funds, the private money funds that can write a bigger check that will allow us to grow faster or take advantage of some of the other projects that maybe previously we weren’t able to take advantage of?

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This could also include how you plan to address property management. Do you already have it in-house and are you looking to go third party or vice versa? Is it a third party right now? You want to have a little more control. And so you were thinking about starting your own property management company to internally manage the facilities that you own, not necessarily as third party for somebody else, but you’re going to bring all of that expertise and you’re going to handle it all on your own, so to speak, not on your own, but building that out within your organization and becoming more vertically integrated. Could it be a mover, a promotion? You’re going to transition your operations manager into more of a COO role and he or she’s going to be able to roll out these initiatives at a grander scale on a grander scale across multiple facilities and not take her out of the day-to-day, but to have her build out a team underneath him or her that is going to be able to keep up with the expanding operations piece to the business as you continue to grow and add facilities to your portfolio.

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It could be some other simpler tasks such as complete the company handbook and put it into one place now so that it is much easier to update those standard operating procedures and while at it, make sure that it is online in a share file folder system, whether that be in Microsoft teams, whether you’re using another type of project management platform utilizing HubSpot, A CRM that also has houses, this type of data, whatever that looks like, it needs to be in a place where it can be a shared file that other folks can update and add to and delete as well. And that could also mean that you’re going to implement a technology review at all of your facilities to determine are we utilizing the best pieces of technology out there that that will allow us to be able to reduce payroll, reduce some overhead and increase efficiencies anywhere in the process, and then roll out to all of our facilities.

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And so those are just a sampling of the focus. Some of the projects, some of the things that you want to accomplish that is going to drive the organization forward in the coming year. So now it’s time to fine tune, and if you haven’t even created these, it’s time to create your KPIs, your key performance indicators because these are some of the goals that we’re going to look at again on a quarterly basis, on a monthly basis, on a weekly basis, and then measure that against our performance and also measure the performance of the person who’s responsible for achieving that KPI or achieving the goals that are set forth. Does that include things such as qualified leads? Let’s say I want to see 2000 leads come across our desk in our organization this year of opportunities to be able to look at, well, that is one KPI and there’s a whole lot that goes into that, which means behind IT appointments that are then set off of those.

(10:30):

Well, I’d like to see 50% of those qualified leads that have come in. I like 50% of the time my acquisitions manager is touching those because it means that they were qualified, truly qualified leads offers made realistically 200 to 250 on that number. And again, these are hypothetical numbers. These are not numbers in our organization, these are not numbers in an ideal organization. I’m just utilizing some numbers as a benchmark or a place depending on the size of your operation. But more importantly, the fact that you should have a number that you’re striving for on an annual basis so that you can then peel that back to a monthly basis. So let’s say offers made, you would like to see, well, 800 offers that are made this year or 200 or 20 offers made. If you’re getting further down the path, depending upon your due diligence, maybe you fine tune that a little bit more so that you’re only sending out so many offers or maybe you’re just not at that level to send out a thousand offers in a year’s time.

(11:25):

And then of course behind that is how many deals then get across the finish line? How many would you like to bring in this year, 2 10, 20 facilities, whatever that looks like. We’re going to reverse engineer our marketing efforts, our acquisition efforts to get to the place where we’re sending out so many lois and purchase agreements to ultimately end up in this place where we have 2, 10, 20, 30 facilities that we have acquired this year. If you’re only buying existing facilities and or turnaround facilities, then you may want to set a KPI such as monthly cashflow per facility. And again, I don’t know that there’s anything that we’re striving for because I’m more looking towards the returns and making sure that we’re buying something out right than cashflow. But some of you are looking to replace an income and fire yourself from your job or your employer or to bring a spouse or partner home so that they don’t have to work for someone else.

(12:15):

Then there should be a cashflow number behind that that allows you to track what that monthly goal looks like in order to replace a salary in the household. Another KPI that many folks look at is a top line revenue or gross revenue, which is the amount of money coming in on a monthly basis across multiple facilities. I don’t look at this so much because each facility is different, even though our expense ratios, we know typically what those are, but that’s going to vary if it’s a value add project, and certainly if it’s a development project, then I’m not as concerned with gross revenue like many other companies are. However, when it comes time to sell, I definitely have a net profit number that I’m looking for and that is two x or greater on any facility that we purchase and or develop and or develop.

(12:57):

And on the development end, it should be closer to a three x or greater amount of net profit over the construction cost and the cost of the land that I purchase. But that’s only if you’re at that place where you’re buying, creating value and selling. And so the KPIs, yes, we want to list that here, but it isn’t an annual figure that we’re shooting towards because we’re not going to typically be buying and then turning right around and selling a facility within one year. Also, we don’t like the tax applications of doing that as well, so not so sure that that is something that we look at in this example, unless this is the first time or you’re a little further down the path in this process of going through and setting your goals for 2025 or the plan and you already have a sizable portfolio and you’re now in the process of exiting some of those projects because it is time to do so or you’re exiting altogether.

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And so you can only sell or will only sell if your net profit is X amount per property. And in that case, you could also add a net profit percentage on those properties as well. So this is a standard percentage that you are striving for on any project and you should know what you’re aiming towards before you purchase a facility. But that could also mean that this year we’re only going to exit properties in which we receive a 40% net profit percentage on otherwise we’re going to hold onto that property until we get to the place where we’ve lease it up a little more, the concessions have burned off, we’ve raised rates, we paid down debt, and then maybe look to sell next year or the year after that. Of course, money and time donated to your charitable efforts and your giving efforts also should be named here as well.

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How much money do you plan to give away and how many hours do you and or your team plan to spend serving and assisting others? We include that in our organization with regards to the goals that we plan for the next year. And our goal is really more engagement by our staff that are getting involved in our efforts. Not all of our efforts in home building and other areas trips, everybody’s trigger, but my goal would be to get as close as possible to 100% engagement of folks that are either contributing alongside of us or participating as an organization in our philanthropic efforts. And of course, I saved up for last probably the most important number, but after your philanthropic efforts, which is what is the amount of passive income that you have created for yourself? If you don’t have a goal of selling every three, four, or five years, the facilities that you’re going to keep and not plan to hold, what are you adding to that list?

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If you’ve identified a particular property or two or three that you’re buying this year, it is important to note how much cashflow it is throwing off right now and then what a goal is that you have so that you can reach your goals with regards to retirement if that is something that you’re interested in doing, or again, bringing a spouse or a significant to other homes so that they don’t have to work and can do it whatever it is that they would like to do with their time whenever they feel like it and with whomever they want to. Okay, so now that we have the high level KPIs and the goals set for the year, it’s time to break that down by month and then putting a KPI behind that, dividing by 12, which you set your annual goals and then assigning those KPIs to an individual within the organization who is responsible, not necessarily for carrying it out, but is responsible within our level 10 meetings that we have each week to report on the status of where are we with regards to achieving these rocks, the to-do items that we set forth.

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How closer are we to our goals in this area and the budget and or the goals that we had set up for this week, this month, or this quarter. So there has to be a reporting mechanism in place. Ours is, as I mentioned in episode number one, we follow EOS, the Entrepreneur Operating system, which is out born out of the book Traction by Gina Wickman. And there is a beautiful framework within that that allows us to go through the cadence of a meeting to discuss, first of all, good news, we share the good news that is going on in everybody’s life. Then we talk about the rocks and each and every person that has a rock assigned to them. All they need to state in this meeting is if they’re on track, if they are behind, or if they’ve already checked it off and completed.

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And if they are off track, then there’s time for a discussion during our discussion section. But there’s only reporting on these. Not everybody has to go into detail on the forward progress made within their rock unless they’ve either achieved it or they’re really, really stuck. But if it’s still in progress and they’re moving along, no problems, then that is all that needs to be discussed. At this point. We then move on to our KPIs, the weekly KPIs in terms of sales, the leads that had come in our cash conversion cycle. It could potentially be gross revenue, it could be the profit for the month. Some of these meetings are going to look different from week to week, and the first of the month is that meeting is going to look a little bit differently. We’re going to report some of these other monthly. So even if this is yourself, you have to have a framework.

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You have to have a meeting format that you have with you, not only the visionary, but the integrator of this plan to determine whether you’re on track or not, and then seek assistance where you may be falling up behind or lacking in terms of your skillset or anything that is keeping your organization from achieving these KPIs. So after we have gone over our scorecard or looked at our dashboard and compared to all the KPIs that we’ve put in place for the year and that we’re reporting on whether it’s this week or at the beginning of the month on a monthly basis, next we move on to the to-do items. So did we check everything off from last week? And by the way, in the EOS traction format, there is no such thing as kicking the can down the road until the next week. A to do item means a to do item that is done within a week.

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It should only take a small amount of time. It certainly should be completed before the next meeting. So next, in our meeting format, we have the IDS session, which means that we are going to talk about ideas and discuss and handle any issues that come up within the week or any other initiatives or things that just involve the c-suite, the corporate executives to be able to discuss, to determine if there’s a new initiative that needs to be created that becomes a rock for next quarter or the following quarter. If there’s something that’s turned out to be a little more of a to do, and we ran into a wrinkle and there’s some things that we need to discuss, this is the time to do that. And this should be the lion’s share of the meeting, meaning the discussion time to discuss new initiatives, better ways of doing things, or if we’re having some significant stumbling blocks or issues to achieving our goals or our KPIs over the past week.

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And below that, then we discuss the to-dos. So what comes out of this meeting is the to-dos and a timeline as to when they’re going to be completed, and most importantly, who is going to be responsible for carrying this out and then reporting back next week or next month or next quarter after this to-do item or a larger project or a rock has been completed. And then at the end of our meeting, we take the temperature. So everybody rates the meeting on a scale of one to 10, and hopefully they’re in alignment. Usually they are. But if everybody else is at an eight and all of a sudden one person says they’re at a 10, it’s just like, oh, really? What caused you to think that this meeting was a 10 when the 2, 3, 4, 7 of us were all at eight to eight, eight and a quarter?

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And many times they may retract that or they may be pointing some attention to their cells because they shined and were overachievers, and that’s okay. ’em have the limelight for a minute before you then discuss what does a 10 truly look like here? And make sure that everybody is clear on the rating system. And if everybody’s at an eight and then one person at a four, whoa, hold on a second. Let’s, before we move on here, what’s behind that, Jill? What’s behind that? Jim? We need to understand the reason why somebody may be way off in left field with regards to the rating of the meeting. So what this does is this causes reason for your staff to want to strive to have a good meeting for everybody to be in that eight to nine range, if you will, because that means that everybody’s pulling the same weight, everybody’s up rowing in the same direction.

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And if we can all celebrate that, that’s a good feeling at the end when everybody’s up smiling if you’re on a Zoom call or some type of a video conference call. But also as we’re moving forward as a unit and achieving our goals that we’ve set forth for the organization. So over the course of these two episodes, we’ve just laid out the groundwork. I’ve just given you the framework as to what it looks like to be able to set your goals and to put together a one page plan to put together your annual plan for 2025. I can’t stress enough, first of all, if you’ve never done this before to do it. And then second of all, do it now. Now is the time as we’re sitting here at the time of the recording of this podcast, it is October to get everything in place to be, to put yourself in a position to have a successful 2025, yet you need to begin to put all of those things in place and begin to do it now.

(21:48):

So these are the types of things that you feel like, wow, I’m getting to that place where the organization is large enough that I don’t have a framework, I don’t have a solid plan, and I am looking to grow and scale. I am invite you to check out the self storage mastermind. These are the types of things and more at a high level that we are looking at as the folks that are in the mastermind are growing and scaling up their business. Most of you folks know or have come through our self storage academy to get into the business, and that’s where we teach people how to get from a zero to 55 miles an hour. But in our mastermind, that’s where we are growing and scaling and we help folks to get from at 55 to a hundred miles per hour in their business.

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This is where the A players are, this is where the connections are made. They access it to capital to deal flow and the best operating practices in the business, which is a mastering the one page plan like we just talked about. And the folks that we’ll share their one page plan in the mastermind, a few of them, we don’t have a session where everybody goes through their plans. But to be able to spot pick and have people share their plans and to work on these together and celebrate their successes, you can’t help it get better when you’re in a room of folks that are all rowing in the same direction. So if this is something that you want to do, go to self storage investing.com, click on the mastermind tab and then click on the button that says Apply now and have a conversation with one of our staff.

(23:03):

And you can come as my guest to the next mastermind. Just look at the dates, which one you’re available, and mention this podcast episode. And again, you can come as my guest so that you can be in the room with the best of the best in the self storage industry to talk about just these exact types of things. The best business practices by the best self storage investors on the planet, sharing community capital and deal flow in a format like none other. This is the original mastermind. We are the OGs in this industry. And if you want to grow and scale your business, this is the room you need to be in. So with that, this is Scott Meyers signing off. We’ll catch you on the next one. Take care everyone.

Announcer (23:41):

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