Managing cash flow is one of the most important responsibilities in any self-storage business. There are a variety of elements and metrics included in this task. Keep reading to learn some simple ways to manage cash flow and improve your operation’s financial health.

Every self-storage operator needs a playbook on how to effectively manage cash flow. The long-term success of the business depends on implementation and management of these strategies. Here are the top four to consider:

Number One: Strong and Accurate Accounting
Accurate and timely maintenance of financial records is vital for the success of any business. Choose an accounting software or service that works for you and is easy to implement. Many businesses use simple online portals. Here are a few of the most popular:

Implementing a robust set of accounting practices in the beginning will help you achieve long-term success. If you’ve been in business for a while and haven’t done it yet, there’s no better time than the present to take control of your accounting procedures!

In addition to daily accounting functions, consider conducting a quarterly review of your financials. This can give you some valuable insight into your operation and reveal areas for improvement. Last but not least, this can help you and your tax professional identify potential tax breaks and benefits to take advantage of.

Number Two: Maximize Your Rental Income
In the self-storage business (and basically ALL businesses), income is essential. Without a steady stream of rental income, your storage business is basically obsolete. But there are some things to consider when trying to maximize this number.

1. Conduct thorough market research in your area.
2. Set prices that are competitive AND attractive to potential tenants.
3. Regularly audit your rental income and vacancy rates and adjust pricing accordingly.
4. Invest in targeted marketing campaigns to reach new tenants and highlight your facility.

Rental income is also affected by the ease with which a tenant can pay their rent. If you’re not currently offering online payment options, now is the time to get into the game. Some platforms offer a whole suite and bells and whistles while others are considerably simpler.

For example, Rent Paid Online is a simple, no-frills solution for online rent payments. We offer online payments and the ability for tenants to input maintenance requests. We believe that simple is better and we have learned over the years that in most cases, that’s true!

Regardless of which platform you choose, online payments are not going away any time soon. If you want to get (and keep) tenants, this is an absolute must-have.

Number Three: Reduce Costs and Forecast Income
Next to increasing income, reducing costs is a great way to add to your bottom line. It’s not the first step to take, because increasing revenue will almost always have more immediate results. However, if you’re truly looking to maximize profits for your business, a full analysis of your current costs is a critical component. Here are some things to do in this area:

• Analyze Current Costs: Conduct a comprehensive review of all costs associated with your business. This includes facility maintenance, supply costs, payroll, utilities, marketing activities, and more.

• Improve Energy Consumption: Do your research on lighting – will LED lights save you money in the long run? How about motion-sensors that turn lights on and off? How is your HVAC system running and is it set at proper temperatures. Better yet – can it be set on a timer to avoid running too high during periods of low traffic in the facility?

• Enhance Your Maintenance Plan: If you have a maintenance plan, now is the time to dive deep and review every aspect. One of the key components of a solid maintenance plan is prevention. If you take care of the facility and have a routine checklist to follow, your equipment is more likely to remain in good repair for a longer period of time.

• Study Revenue and Expense Trends: If you have historical data for your business, study it! Learn when your income generally increases and decreases. Learn when energy consumption fluctuates. For most storage businesses, these numbers change with the seasons. Understanding them can help you create contingency plans for lower seasons, and a better pricing plan during higher seasons.

Number Four: Watch Your Property Taxes
Whether you’re in the market for a new storage facility, or you’re focused on operating one already, using a tax professional is a must. They can help make sure that your property is appropriately assessed and taxed. They can also help with proper cost allocation during closing.