Diversification Into Self Storage Can Only Lead to Success
Extra Space Storage | Storage Industry News Blog By Winnie Hsiu Tuesday, December 20, 2011
Anyone that has taken a business class has studied some business models that claim doing or making just one thing—but doing it very well, not just good—is the way to go. While there is some merit to that, there is another theory that more businesses, self storage and otherwise, have been known to embrace—diversification.
Diversification is simply having your business involved in more than just one thing; it could be two, three, or 100. The idea is to not have the success or failure of the business predicated on the viability of a single product. However, on the flip side, diversify too much and your business may find that it does a lot of things okay (and who wants to pay for okay?).
It helps if the additional services and product lines are complimentary. For example, a number of self storage facilities in the United States have partnered up with moving companies or developed that as a branch of their own business. Other businesses have found success by adding self storage to their business.
Take McCarthy’s Removals in the UK for example. They got in to the self storage business a couple of years ago after spending 40 years as a removal company. When they noticed that the decline of the housing market, they knew they needed to diversify their business in order to insure its survival.
“Previously our business was firmly rooted to the housing market, and in watching this decline, we realised the need to adapt our offering to reflect the emerging storage trend. Thankfully, whilst the housing market slowed, our storage facility has gone from strength to strength,” said Mike McCarthy, managing director of McCarthy’s.
The family now has a 150,000 square foot facility in Leeds, and has recently added another 30,000 square foot one.
“There is no doubt that our diversification into the self storage sector has made the family business created more than 40 years ago a very different operation. The storage industry has weathered the current financial climate and is one of few business models to prosper despite the recession.”
In the U.S. diversification into the self storage industry has led not only to more success, but recognition from the White House. Meathead Movers started out in 1997 as a way for some high school buddies to make some cash. Over a decade later they are still going strong and have expanded into the self storage industry as well.
They were recognized by the White House on its Empact 100 list as a business that has impacted the economy favorably (with revenue of at least $100,000) and is run by business persons under 30 years of age.