“The thing about crape myrtles is, when everything else is struggling to survive, they are in their full glory.” ~ Monty Rainey
After a week of travel, I arrived home Friday evening to find the 25’ Catawba Crape Myrtle in my front yard in full bloom. Over the weekend as I worked in my yard and took notice of the condition of the various trees, plants and shrubs, I began thinking about why some plants thrive while others struggle in certain conditions. The answers are plentiful and varied and relate to things known as C4 carbon fixation, crassulacean acid metabolism, adaptions of the stomata to reduce water loss and a variety of other scientific explanations, but my purpose is not to get into a botanical lesson, my purpose is to examine what can be learned from nature in preparing for the hard times.
In the self-storage business, traditionally May and June are our peak months. These are the months when demand is highest and so should our rates be at a premium. Unlike plants facing summer heat and drought, this is the time when we must store up for the lean months ahead; November through February. If we view May and June as our peak months when rates are at a premium, we have to, I believe, take a slightly different view of the upcoming months of July and August and even into September as still premium months and still maintaining peak rates, but we must also be willing to seize every opportunity to store water for the drought ahead.
In other words, flexibility to customer demands must come into play, even if it means an introductory special or a reduced rate from the premium. My thinking is, as we face those lean months ahead and we know our occupancy will likely drop somewhat, it is better to have a space rented at a reduced rate than it is to have it sitting empty all winter. So my mantra changes from “Get the premium rate” to “Get the rental!” Please don’t read too much into that. Our goal ultimately is still to get premium rate on every rental. What I’m saying here is, we need to be cognizant of the fact that there will be lean months ahead and we need to never let a potential customer slip away, and now, while demand is still relatively high, the focus needs to be on a near 100% capture rate on that demand.
It’s also the time to concentrate our focus on alternative or secondary revenue sources such as moving supplies and insurance. It is still summertime and people are still moving. When that person comes in that is putting their home on the market, that’s the best time to make some big merchandise sales. The more revenue you can put into your Gross Operating Income now, the more that will show up on your Net Operating Income at the end of the year.
I’ve never been a big proponent of being 100% occupied. That means you have no inventory and are forced to send potential customers to do business with your competitors. But we know when school starts vacancy is going to increase, so come September, you’re going to have inventory to rent. If there is ever a time to reach, or even come close to reaching 100% occupancy, make it happen in July and August. Those extra rentals you capture now will carry you through the winter months.
During the glory days of Rome, Roman Generals, after a conquest, would ride through the streets of Rome to the cheers of onlookers with a captor beside them on the chariot whispering in the Generals ear, the reminder, “Victoria est fluxa” (victory is fleeting). We would all do well to remember that now as demand is at its peak. This won’t last forever.
Learn from nature. Store water resources now for the coming drought.