Steve Wilson looked outside his own business for a recession fix. He hopes he found one in a high-risk venture.
Self-storage is high on any list of industries decimated by the recession.
It makes sense, considering fewer people are moving and fewer people are buying stuff — the lifeblood of any self-storage facility. “I don't think anyone is doing too good,” industry veteran Steve Wilson says.
Yet Wilson, who runs 10 self-storage facilities on the Gulf Coast through Sarasota-based Hide-Away Storage Superstore, is doing what so many successful entrepreneurs do: taking risks and experimenting with new ideas.
Wilson is about to open another facility in Sarasota, Xpress Storage, that is built around one major deviation from the industry norm: It isn't manned by a manager or salesperson who rents storage spaces to customers.
Instead, an ATM-like kiosk called an Insomniac controls the Xpress Storage units. The Insomniac machine, built into a customer lobby the size of a few phone booths, allows customers to rent units, make payments and update their accounts 24 hours a day using secure access codes. The concept is used in Europe, some states in the Midwest and a few places in North Florida, but Wilson's Xpress Storage is one of the first ones of its kind on the Gulf Coast.
“If there was ever a convenient storage location,” says Wilson, who first saw the kiosks three years ago in Indiana, “this is it.”
Plus, there are some potentially palpable benefits, beginning with reduced staffing and lower overhead.
Still, the project is a considerable risk for Wilson, who built Hide-Away into a $12 million dollar business by 2006, with locations in Sarasota, Bradenton, Fort Myers, Naples and St. Petersburg. Revenues at the 33-year-old company have since dropped in lockstep with the industry downturn, falling 27% to $8.8 million in 2009.
For starters, the first Xpress Storage, just east of Interstate 75 on Fruitville Road, cost $3.1 million, including the land purchase and construction. Wilson's financial partners in Hide-Away balked at the opportunity, so he was forced to seek out other investors. He ultimately put a few hundred thousand dollars of his own money into the project, in addition to funds from about 10 investors.
One more risk: The Xpress Storage, which totals 35,000 square feet of storage space, is small by design, so it can remain convenient and low maintenance to operate. Most other self-storage facilities, including Hide-Aways, are at least 70,000 square feet, with multiple floors. That allows owners to maximize the rents compared to the price of the land and the construction.
“This is a high-risk thing we are doing here,” says Wilson. “But I believe in this. I think this is the future of self-storage.”
So much so that Wilson is already planning Xpress Storage's expansion. He is exploring three sites in Manatee, Sarasota and Hillsborough counties, reasoning that if the Fruitville Road location is a success, he will be ready to open new ones quickly.
Wilson also put Insomniac machines in four Manatee County Hide-Away storage centers, for an added customer resource, not a human being replacement. He buys the machines from a company in Phoenix.
Even with his enthusiasm behind Xpress Storage, Wilson is still determined to steer Hide-Away out of the recession. The key tactic there, he says, has been cutthroat cost cutting. That includes everything from buying more energy efficient light bulbs to finding new software.
Says Wilson: “There's not a thing we didn't look at.”