The foundations you need to scale: Chris Bryan, Blue Self Storage

This transcript is auto-generated, so it may contain errors.

Gavin: Hello and welcome back to our latest episode of Scaling Self Storage. Today I’m joined by Chris Bryan from Blue Self Storage, he’s the CEO there. Chris, welcome, thanks for coming.

Chris: Thank you very much, thanks for having me.

Gavin: So we’re just going to dive straight into some questions. Let’s start, tell us a bit about yourself and how you got into self storage.

Chris: I think I fell into self storage like most people in this industry seems to have over the years. And it all started, I started working for an entrepreneur, an industrialist in South Wales who had around 10 businesses at the time, predominantly manufacturers, but a range of other businesses, commercial vehicles, IT businesses. And I was a finance manager in the accounts department. I was quite young, didn’t really know what I wanted to do with my life. I got an older brother who was the finance director, he was doing really well. So I thought, right, you know, I need to do something, that’s what I’ll do. So I started off on a journey to become a chartered accountant and didn’t end that journey.

So I’m a failed bookkeeper. But I was actually very, very fortunate. So the entrepreneur that I worked very closely with for a number of years, it was coming up to a pay review one year. And he, I went into that review actually thinking, I need to tell him that I’m not an accountant, it’s not what I want to do. And he was an ex-teacher, so he was very, very, he prioritised developing people. He was very good at seeing things in people. And he’d obviously seen, probably before me, that I wasn’t cut out to be an accountant either. So before I had the opportunity to raise it, he said to me, you’re not an accountant. I’d like you to focus more on the commercial side of the group of businesses and also property.

So we held quite a lot of property. So I started working on the commercial real estate a lot more. And one of those, we had a big, we still have got a big industrial site in Cardiff where we operated a couple of factories from, manufacturing plants. And somebody long before my time at some stage had put some containers on the ground to generate some revenue on some of the surplus land. And that’s how we found ourselves with what was then known as Cardiff Self Storage. So yeah, so it was a fairly good quality setup, but in reality, the containers had been put there, left, you know, the same number of containers using the same layout for many, many years.

And it was generating some nice revenue, but organically, there was no real work put into marketing, certainly very, very little digital presence at the time. So I’m going back to 2014, 15, but as I say, it was, it was a nice cash generating business, which was on some surplus land and which is quite typical in the, certainly in the external self storage space, that’s for sure.

Gavin: So 2014, 2015, you had one site almost by accident.

Chris: Yeah, absolutely. Containerised self storage.

Gavin: Okay. So, so once you, once that started, then what, where did you go from there?

Chris: So it started off by just targeting some growth on the one site. So I say we operated as Cardiff Self Storage. We had at the time around about 200 containers rented, predominantly 20-foot containers. We did have some 40-foot, but very little. And it was just a very simple offering, you know, one price for a 20-foot container, no discounts. And one of the first thing, or two things we did actually, but one of the first things we did was we introduced a range of sizes. So at the time, containers in the UK were typically offered on a 20-foot basis. But we started bringing in smaller variants and trying to open our target audience, if you’d like, to a wider market.

And so we started introducing 10-foots, 8-foots, and 6-foot containers, which worked really well. You know, it was a very different type of user. So looking back at our business domestic split at the time, we were very heavily weighted towards business customers. Introducing the smaller containers appealed to a lot more domestic customers than we previously would have, because they were cheaper people, domestic customers, very often don’t require 20-foot containers worth of space. So that opened our target market, you know, pretty well.

Gavin: Was this all still on the same site?

Chris: All on the same site, yeah. And at that stage, we didn’t have any plans to expand into any of the sites. Alongside that, we redesigned what was probably a 10-year-old website. You know, PPC and SEO was just starting to heat up a little bit. So we put a little bit of work into that at the time. We thought it was a lot of work. And it probably was for, you know, sort of 2015, 2016. But looking back now, you know, it was actually very, very simple what we were doing. So we managed to get that site. We doubled the occupancy in that site over a two- or three-year period. It’s a two-year period, I think by 2017, we had circa 400 to 500 containers rented.

And that’s when we really then started looking at the opportunity to expand that business, you know, across more sites. And we had to rebrand. We couldn’t expand into, you know, Newcastle or Bristol with the name Cardiff Self Storage. So we went through a big rebrand process in 2019. And the idea was to then start opening remote sites, centrally managed sites, as we like to refer to them as, across the UK.

Gavin: With the base in Cardiff?

Chris: Always the base in Cardiff, yeah. You know, we had a, and we still have, we had a good group, a good core team in Cardiff, which, although we’d only sort of, you know, dabbled in Self Storage, they, a lot of them had worked on it for many, many years. So we had some good capabilities and experience in Cardiff. And we wanted to use that. The initial idea was to, to create sort of hub and spoke models around the country. And I think we’re probably just about getting to the stage where we now do have a couple of clusters of sites. But it’s taken us, you know, it’s taken us the best part of six years to get to that stage. We thought that we could go out and do that pretty quickly, which was probably a little bit naive in reality, you know, looking back and in hindsight.

But yeah, so we, we opened our first expansion site, if you like, in, again, in Cardiff, about seven miles from our existing site in June, 2020, 1st of June.

Gavin: So that was your second site then, opened in 2020?

Chris: That was our second site, yeah.

Gavin: And what was it about, what was it about the first site that sort of made you realise it’s time to go to more sites? Did you kind of, did you reach capacity there? Or was it just, the opportunity is big enough here, we can do, we can keep growing this and open up more sites?

Chris: Just the opportunity, yeah. So we didn’t reach capacity there for a number of years, actually. And because of the size of that site, we were able to add containers modularly, you know, over a long period of time. And that went from 200, I’d say 200 odd containers rented in 2015 to, at our peak, we were around 770 containers rented there. I think, I’m pretty sure we were the biggest container site in the UK at one stage. We’re not anymore. I believe that Clear in Hereford, Clear Storage, Ali Goodwin, I think, you know, she’s done a tremendous job there in building a great facility and I’m pretty sure they’re bigger than us now. But yeah, it was just opportunity.

We felt that, I always used a supermarket analogy and I think Fred touched on supermarkets, which is quite interesting as your last guest. When we were assessing the industry and particularly what I call external operators, at that point in time, you know, going back to nine to ten years ago, container operators in the main were quite low quality. There were some operators out there who were doing a really good job, but they were predominantly low quality offerings. And going back to supermarkets, you had your, you know, you had your big purpose built that everybody knows, your Big Yellows, your Safestores, who would be your Marks and Spencer, your Waitrose.

But most of the container operators would have fitted more into your sort of your local convenience store. And we thought there was a real opportunity for a good quality external operator to sit in the middle of that and be sort of your value proposition, such as your Lidl or Aldi, where, you know, we know that there are, again, similar to supermarkets. We know there are people who will only ever shop in Marks and Spencer and Waitrose, and we know there are people who will only ever shop in your Lidl or Aldi. But actually, there’s a number of customers which would shop in either depending on convenience, location, price of a certain item or availability of a certain item.

And I think it’s very similar in self storage where by offering a good quality external site, I think there are customers who would have previously only ever considered purpose built buildings who now will consider it an external or a container operated store their goods. And that was in that thinking sort of started in 2018, 19, I think where we are today in the industry, there are, you know, there are a number of very good high quality external operators out there now. And I think the gap has closed between your, you know, between your purpose built and external offering as a result of that. And standards continue to increase. You know, we are, I like to think that we at Blue Self Storage push standards in the industry, but there are a number of other operators out there who keep us on our toes.

And, you know, they’re striving to achieve exactly the same thing, which I think, you know, from an industry point of view, I only see the benefit in that in reality.

Gavin: Yeah. And so you opened your second site then in 2020?

Chris: Yes. 2020.

Gavin: And now, how many sites are you at today?

Chris: So we’ve opened our eighth site this morning.

Gavin: Okay, wow, congratulations.

Chris: Yeah, so we’ve, we took a long time to get the first, or not a long time, but we took longer than anticipated to get the first few sites open. And, you know, we’ve opened four sites in the last 18 months. So we’ve doubled the number of our sites in the last 18 months. But what that also means, if we sat here two years ago and you asked me, you know, it had taken us four years to get four sites, which was slower than we wanted. And I think when you look at the reasons why that is, it was my fault. I think I was, I had a few specific target areas where I thought would benefit from our type of offering and product. And I focused too much on those areas and focused trying to find suitable sites in those areas.

And what that meant is I was very blinkered to good quality opportunities in other regions and other locations. So I think we’ve changed our views on potential sites since then in recent times. And, you know, we will now look at opportunities throughout the UK and we will qualify those based on individual site quality as opposed to just location. My mentor used to say, out of all bad comes good. And I think when you look at the, you know, the first, what was slower than we wanted four years, actually a lot of good come from that. Because what it did really allow us to do was spend time refining our, the processes around the sites. So, you know, our technology, our marketing, our team allowed us to build, you know, a really strong team.

And when I, in hindsight now, when I look back, would we have been ready to open four sites in 18 months, this time four years ago? I don’t think we would have, you know, we’ve learned a lot, we’ve made a lot of mistakes. We continue to make mistakes, but I would say that we make far less mistakes than we did four years ago. So, yes, we didn’t grow as quickly as we wanted to in the first few years. But I think we’ve caught up now and, you know, as I say, our eighth site opening today and we’ve got a couple more under offer in the pipeline ready for 2027 already. So we’re seeing a lot of opportunities out there now. Yeah, so, yeah, we’re pleased.

I think, yeah, we’re pleased with where we are today.

Gavin: And are you running, is Cardiff the hub and then are the other sites, are you running the other sites you’re buying, are they unstaffed, sort of automated sites? Or have you got a combination there? You mentioned you’ve got some clustered together.

Chris: Yeah, all centrally managed at the moment. So Cardiff is our only staffed site, if you like.

Gavin: And then how do you feel about like a site that’s maybe 300, 400 miles away from Cardiff? Is that something you can cope with that? You can manage that?

Chris: We can now. So our further sites away from Cardiff is Newcastle, which is around 300 miles, and that was a learning curve for us. You know, we’ve had, we had issues there at the beginning. We took over that site. So that was an existing facility, albeit quite smaller. I think we had 50-something containers occupied, and it had a lot of container storage on the site. So we took it over. We got rid of the caravan storage on site because we wanted to expand the self storage model. And we’ve grown that up to, that’s now over 200 containers and operates consistently at between 93% and 95% occupancy. But as I say, we have had issues in terms of distance.

What we do to not just mitigate risk, but also to make it easy for us to manage is we forge relationships with local contractors. We use our customers, which is a really good initiative. You know, we, we, and we do this now across our newer sites as well, where when you open a site, there’s not a huge requirement for turning units over quickly because typically we’ve got, you know, we’ve got plenty, we’ve got plenty of space. So we use the initial couple of months period to assess what business customers we come in. You may have, you know, a cleaning company, a facilities management company, a general builder. And we now will typically contract our customers to maintain and look after our sites as well.

And yeah, that’s worked really well. I think that was, that was an initiative from one of our, from our storage manager. Yeah. And she’s implemented that really, really well.

Gavin: So is that the, is that, would you say that’s the key to making those sort of sites work is finding the right people, local people to, I thought, is there anything else that’s, that’s kind of helped you succeed in that way? Because it is, to go from 50 to 200 let units is, is quite an achievement from so far away.

Chris: No, I wouldn’t say that’s the key. I think that’s the key to running a, a good quality, clean and tidy site. I think the key to, to going into, you know, whether it be 300 miles or whether it be 50 miles away, when we’re going into new areas and locations, we really try and embed ourselves into the local community. And we, we work quite hard to be a local storage provider and that’ll continue whether we get to 18 or 80 sites, you know, around, around the UK. I think by making sure that we embed ourselves in the community, it really helps us in terms of filling the sites, it helps us getting our name out there. And there’s various strategies we use for that.

We always engage with a local charity to give free storage. We always sponsor a grassroots sports team, you know, whether it be, I think we’ve got, we’ve got football, rugby, cricket, girls football, netball, a dancing team. So doing that, I think really, really helps get that local feel. The other thing we will do is we engage with local schools. So one of the initiatives the team run is Halloween’s coming up now. So we do a pumpkin carving competition. Very, very simple. We donate pumpkins to a local school, let them hold a carving competition. We supply a prize for the winner and then we judge the, you know, the winners and the carving. Very simple, but actually what you’re doing is…

Gavin: I presume then you get a picture in the local paper or something like that, yeah.

Chris: You know, you know, or their school newsletter as an example. But it goes beyond just completing marketing activities. You know, I think our team are very, very good and they do care about the communities in which we are operating in. You know, we do a lot of work for charities on each of our sites. So we’ll do annual litter picks on all of our sites. We hold food bank collections for each area we operate in. And so, you know, it’s not just around marketing. They do care. And, you know, it shows in the way they operate on a daily basis.

Gavin: How do you think about that sort of marketing? Because you can do PPC marketing. Yeah. Very easy to measure. Yeah. You can look at it at the end of the year. It’s delivered this. Whereas the sort of marketing you’re talking about there, you can’t do that. You know, it’s not easy to measure. How do you, like, how do you prove it’s worth doing this stuff? How do you feel about the difference between measuring, like, PPC marketing spend versus the sort of stuff you’ve just talked about there? Where, you know, you can see that it probably is important and probably will pay back, but you can’t see the direct payback. How do you balance that with looking for ROI?

Chris: I don’t think we look for ROI in our community-led initiatives, if you like. You know, it is, we are in a fortunate position where we can give back to the community. And we’re going into locations where nobody’s heard of Blue Self Storage. Nobody knows who we are, what we’re about, yet we’re expecting them to trust us with their possessions. So, yeah, I don’t think we do look for ROI. I think we do genuinely go in and want to give back to the communities, which we’re hoping will support us to grow the business and have an efficient operation for many years to come. So, yeah, I think there are certain things we do which we can measure, and it may be sort of exposure on local social media groups, as an example, whereby, you know, we know that it would cost us X amount to have a very direct exposure into a particular area.

Whereas, you look at what we spend on these initiatives and the exposure that gets on social media is probably the best example, and it’s far greater. But, yeah, it’s not, that’s not what it’s about. Otherwise, I think it would be very difficult to justify.

Gavin: Yeah, yeah, yeah. Okay. Thinking about your sites then, as you’ve kind of, you’ve gone from one to eight sites, and you’ve, you know, we were chatting before, you’re trying lots of different things, and even just from the marketing point of view and building up a local presence. What’s one change at an existing site that you can say has made a real difference to your business?

Chris: So, I think if we’re looking at an individual site, something we changed quite recently, and we’re still monitoring the results of it, but so far they’ve been very positive, is whilst we centrally manage all of our sites, we’ve recently put in a site champion for each site. So, each site will have a different member of staff as a site champion, and so far that has really heralded good results, because what we’ve seen is that, firstly, it creates a little bit of healthy competition within our storage team, because they’ve now all got their individual sites. So, as an example, we’ll see an online booking come through, and it’s a competition as to whose site that’s for, and whoever’s site that is gets excited.

But actually, it really ensures that whilst each of our sites are centrally managed, there is somebody taking accountability for every single one at that level, and they really care. You know, as I said earlier, we’ve got a really good team in this business, and they do care, so we give them a bit of autonomy over how they can potentially grow the occupancy on the site, and they like it, they enjoy it, they see the fruits of their efforts when occupancy does start increasing. And, yeah, as I say, very early days with that initiative, but I think to date it’s been very successful.

Gavin: And because you’ve been growing, you’ve seen lots of sites develop over time. What tells you when a site has given you everything it can?

Chris: I’m not sure any of our sites have ever given us indications that they’ve done all they can. I think the opportunities change. So, you know, when we first start off, we are really focused on occupancy levels. And then following a period of maturity, you’re then focused on revenue management and, you know, dynamic pricing. But then I think other opportunities will present themselves in terms of whether your unit mix is correct. So there’s always an opportunity to change that unit mix.

Gavin: Do you do that often?

Chris: We do it. I wouldn’t say often. We used to do it more regularly than we do now. I think we’ve now got more experience in terms of forecasting where the demand will be on a certain site. I think credit to our operations director, Dean. He’s very, very good at designing sites. He’s also very good at keeping on top of how we can push it further. So, as I say, that may be a case of we change some unit sizes if there’s strong demand for one size. We’ve recently started introducing ancillary revenue streams. So things like your parcel lockers. We’ve got those across our portfolio of sites now. And, you know, if you look in monetary terms of these lockers, it’s not a huge amount.

But actually, you’re getting exposure to your sites because you’re getting consumers who are using these lockers coming to sites, seeing your product. And in terms of industry awareness, which we know is still relatively low in this country, albeit it did see quite a substantial increase in the last industry report, seeing our product is exactly what we want across the board. And, you know, whether it be for people looking for self storage now or in a year or two years, it is driving people to our sites. And therefore, you know, we get a real secondary benefit of having those over and above the, you know, the monetary value that we receive in rent from.

So, yeah, I think we’re always and continuously looking to push sites on more and more. But the opportunity does change. Yeah, I don’t think any of our sites really have indicated to us that we can’t go any further with them.

Gavin: Yeah, yeah. Still plenty of room to grow.

Chris: I think so. Yeah.

Gavin: And what would you say to an operator who’s got one site and is looking to grow their business? Is there any advice for someone in that situation you were in six years ago, six, seven years ago?

Chris: I think look at how scalable your operations are before you start looking at taking on new sites. And I would go as far as saying scale up your operations earlier than you’d maybe expect to. Get that right, get, you know, get the right people. People is the absolute key to our business and which is quite a strange thing to say about, you know, a company that we’re growing using remote sites. But actually, you know, our team are critical to what we do. And I think going into, if we were going today from one site into two, I would be spending much more time looking at my digital strategy, the team of people we’ve got, our processes. And, you know, we’ve done it to a degree, but we’ve certainly had to adapt as we’ve grown because we didn’t do enough of that work in advance, I would say.

Gavin: Okay. Okay. Great. And is there a common belief in self storage that you would disagree with?

Chris: Yes. I think one of the biggest misconceptions for me in this industry is that self storage is passive income. Yeah. You know, I often see self storage compared to other property investments. And there are some operators out there who will invest in a site and they will sit back and let it generate, you know, revenue and cash for them without spending a lot of time on the business and without pushing it on to its nth degree. And that’s absolutely fine. But I think the misconception that self storage is a property business is quite rife. I often see self storage compared to other property investments. And don’t get me wrong, there are operators out there who either, you know, have been in this business a long time or go into this business with a view of building a facility and sitting back and generating revenue and cash.

And there’s no doubt that you can achieve that, but I think to really get what you can from a self storage facility or a self storage business, it is very, very hands-on and very operational. You know, gone are the days where you open a facility and it fills up and remains full or remains at, you know, 90, 95% occupancy and just ticks over. It is a competitive landscape. And I think in order to make sure that you’re staying one step ahead or even keeping up, really, there’s a lot of work to do. You know, there’s a lot. You’ve got your digital strategy is huge. You know, any self storage operator in this industry now has to be working on their digital strategy.

You’ve got the people, you know, again, people are the asset of this industry. You know, and we had a discussion earlier, not just in our business, but across this industry generally, you know, there’s just so there’s so many good people. There’s people that are willing to give you time, willing to share their experience, share their mistakes. But all of that takes a lot of time to come together. And, you know, so you cannot just sit back and expect to optimise your profitability in this industry. You have to be working on it. This is an operational business. Self storage, you know, there’s no doubt about it. Self storage is operational. Yeah.

So, yeah, I think that would be my biggest misconception. Yeah.

Gavin: Why do you think it sticks around? Is it because it sort of works a little bit for some, like it works enough for some people to kind of be relatively passive? Or is it?

Chris: I think you can make money if you’re sat back and just enjoying the revenue coming in. Yeah. But you’re never going to make anywhere near as much as you.

Gavin: You’re not optimising.

Chris: Absolutely not. So, you know, and as I said earlier, if that’s what people want to do, that’s absolutely fine. But I think the misconception is that that is all you have to do to make a lot of money. And it’s not, you know, it’s not the case. And maybe, you know, through COVID, the first couple of years of COVID, maybe between 20 and 22, customer acquisitions become pretty easy because demand is just so high. But, yeah, we’re not in that, we’re not in that era anymore. And, you know, you have to fight for customers. We’ve had to spend a lot of time, 2023 onwards, we’ve really had to focus in on customer acquisitions. Yeah. To a degree that I never thought we would have to in this industry, actually.

You know, you look at the focus now on the digital side of our business and we’re working with, you know, conversion rate optimisers. And we’re really honing in on, you know, the marginal gains now of our digital presence. And I think we sometimes look at our business today as we’re an e-commerce business who happens to offer self storage. And, you know, that, I would say, only really started to happen in our business two or three years ago. But in order to make sure that you’re achieving those marginal gains is something that you have to do. Yeah. But it’s interesting. I think there’s a lot of new opportunities in this industry continuing to present themselves.

And, you know, you’ve got to work hard to keep on top of them. And, you know, it’s important to watch what others are doing. But I think it’s more important to focus on what you’re doing yourself. Yeah. Yeah. You know, there’s a lot of guidance out there. There’s a lot of people that can help you. There’s a lot of suppliers in this industry who, you know, they’re very prominent. And part of the SSA is an example. So there’s access to them through the association. And they will all give you time and share their knowledge with you. Yeah. Don’t get me wrong. They’re doing it to try and generate sales themselves. But, you know, these are real experts in their fields.

Gavin: So you were chairman of the Self Storage Association for, was it four years?

Chris: Two years as chairman.

Gavin: Two years, yeah. Sorry. For a new operator, somebody coming into the industry, new, what’s the benefit of looking at the SSA? What does it do to help?

Chris: I think the SSA is a great provider of information. You look at the available information for a potential new entrant into this market in terms of operational processes, legal advice, access to people. And again, I go back to this industry. The businesses I work across are in a number of different industries. But none of the industries I work in are anything like self storage. Everybody is so open and genuine in advice they will give you in this. Well, not everybody. Most people in this industry are very genuine in the advice that they will give you. You know, we were speaking earlier. We host competitors at our sites probably on a monthly basis.

And they’re open with us and we’re open with them. We show them what we’re working on. We show them our products. You know, we don’t give them the secret sauce to everything. Of course not. But typically, everybody is willing to help. And I think it’s very, very different. And from the SSA’s point of view, the events that they’re putting on, that allows new entrants. Or to be honest with you, not just new entrants. Because, you know, I’ve been in the industry now for coming up 15 years. And I still get a hell of a lot of benefit from going to these events, talking to people, sharing experiences. And it’s really, it’s driven a lot of good relationships for me.

You know, both professional and personal, actually, over the years. But, you know, I can call competitors that operate within a three to five mile radius of some of our sites and ask them how our business is. And they will tell me genuinely. You know, they’re not just going to tell me that everything is rosy all the time. Because, you know, it’s not. We do face, you know, more difficult periods sometimes. And I do the same with those. I would be open for those. Yeah, it’s a very, very supportive industry.

Gavin: Yeah, yeah. Is there a growth decision you’ve made in your business that felt right at the time that didn’t work out? So I suppose I’m asking, have you made any mistakes? What mistakes have you made?

Chris: How long have we got? I think the biggest one is going back to what I said earlier about limiting our site searches to very specific geographical locations. Yeah, it just didn’t work that way. I mean, the perfect site very rarely presents itself. You know, there’s normally some sort of compromises that you have to make. And I think we would say we, it was me. You know, the responsibility was solely mine. I was very focused on finding perfect sites. And for that reason, it did slow our growth down. And I think in hindsight, if we could go back, I would certainly be more open to opportunities, not just outside those locations, but the model of the site that I was trying to find.

You know, I would go to, I’ve got relationships with a number of agents and I’d be going to them with very, very specific, you know, I want one and a quarter acre. You know, it has to have a population of 50,000 in a two mile radius and, you know, has to be roadside. And if it’s not, I don’t want to hear any other options. And yeah, I think, I think that would be the biggest, the biggest mistake.

Gavin: Okay. Okay. And as you’ve grown, what have you also found yourself having to let go of or delegate or just stop doing yourself in order to kind of let the business grow?

Chris: A lot of things, and I’ll be honest, it’s something I wasn’t very good at, probably still not the best at. And I found difficult because going from developing the business plan for Blue Self Storage in 2018 to opening, you know, our eighth site today, I can’t have every decision come across my desk. And that wouldn’t, not only is that not efficient, but that wouldn’t be for the best of the business either. So when we had one site, you know, I was over every piece of data, every decision made. I knew the customers personally. I knew what was going on. And the big change there was, was bringing in Dean, our operations director in 2019. So just as we were rebranding and just as we were really deciding that we were going to push on with that growth strategy.

And Dean works in a very, very different way to me. So I am, I will analyse data. I will, I will look at your ROIs. I will be looking at, you know, how we can, what we can make and how. As Dean looks at it from a point of view of very often the customer, the customer journey, the quality. And therefore, bringing Dean in and having, you know, it created diverse thinking and we don’t always agree on the way forward and everything, but it does mean that we challenge each other. We will debate, you know, whether we should or shouldn’t do something. Sometimes we have to agree to disagree and just, and we go with one option and test it out. And if it’s wrong, you know, one of us has to hold our hands up.

But bringing Dean in and having him challenge my thinking on, you know, a very rigid growth strategy, I found it challenging. And, you know, I think it took some time for us to get to know each other and get to understand how each other work. But I think ultimately what it comes down to is I just had to step back and just let Dean and the rest of the management team just get on with it. And, you know, everybody remains accountable, which I think is huge. But ultimately, you know, we’ve put together a diverse team to enable different thinking and challenging. And, yeah, I think typically that works quite well for us.

Gavin: You talked a bit about, and you talked about their quality. Yeah. And you talked also about just raising the quality of external storage in the UK and how it has increased over time. How do you maintain quality across eight sites, especially as some of them are maybe quite far away? How do you keep an eye on that and make sure that it’s standardized across the business?

Chris: I think in terms of maintaining the quality is there today, again, going back to relationships with local contractors or customers, we will ensure that members of our team are visiting sites on a, you know, quite a regular periodic visit, regardless of how far they are away, because that’s important. I think, you know, you can get local maintenance contractors to come in and look at the sites weekly, monthly, quarterly, but ultimately they’re never going to understand the exact quality and standard that we’re driving as a business. And the other thing is we’re constantly pushing the standards. We’re always looking for improvements. And, therefore, to keep that consistent across all sites, it means that we’re having regular improvements.

But it also means that we need familiarity and we can’t expect our, you know, we can’t expect external stakeholders to really understand that. So one of the key things for us in terms of driving standards in the external storage industry is trying to find things that other people are not doing. And it’s becoming more difficult. The quality in this industry has substantially increased over the last five, ten years. You know, when I look back at the first expansion site we opened in June 2020, the differentiator on that site at the time was painting our containers two-tone. And the reason behind that, we had a big debate in the board meeting about it.

Obviously, it’s incurring additional costs. You know, what is it going to give us? Do we want to do that? And the reason we did do it was just so that somebody driving towards that site saw something different from what they were used to from other container operators. And at the time, it was very different. Now, there’s, you know, most container operators in the UK will use a two-tone container or custom paint of some variation. Whereas, you know, ten years ago, you either had light blue, dark blue or green, and that was pretty much all you would get. But it does become more difficult because there are a number of operators out there who are striving to achieve the same as what we are.

And that is, you know, the very best quality external product in this arena. So, something we’ve recently introduced on our, before today, our newest site in Rogerstone, which opened in June this year. We’ve started using a modular storage unit. So, we, rather than use shipping containers, we’ve used a product from a company called Boxwell in Colorado. And, for all intents and purposes, it is a container. It’s a 20-foot modular unit. But, actually, it’s purpose-built for storage. So, for our customers, I mean, firstly, they look more aesthetically pleasing. It looks like something that has been built for self storage as opposed to built to withstand, you know, wind and rain on the sea and ship products over.

But things like the roller shutter door, so we’ve, there’s optional, optional extras for different doors that you can choose. But we went with roller shutters. And, from a customer point of view, they’re far easier to use than a, you know, a heavy container door, which may have been closed for a number of years and therefore months, years. And, they get stiff. And, you know, they are difficult. You know, I find them difficult to open sometimes. So, if I am, then a lot of our customers are going to be experiencing the same, regardless of how well you maintain them. So, that has been our latest step, I would say, in terms of, you know, trying to do things differently.

And, so far, that’s working out really well that the customers seem to really like them. Before we built Rogerstone using that product, we introduced them to two of our sites. We’d done a bit of sort of A-B testing and allowed customers to actually choose between a shipping container and a Boxwell unit. And, 100% of the customers went for the Boxwell units. Yeah. So, that was, that was quite telling to us. And, I think that gave us the confidence and the comfort to push on and then do the full site in Rogerstone using solely that product.

Gavin: And, how many units do you have at that site?

Chris: That has got 146 rentable units over 101 20-foot modules, effectively.

Gavin: Okay. So, they’re divided up.

Chris: Yeah. Yeah. So, we offer 20-foot, 10-foot, and 5-foot options on that site.

Gavin: Have you ever looked at double-story or multi-stacking anything? Do you do that at any of your sites?

Chris: Yeah. So, our original site has double-stacked units. We’ve not done it anywhere else. And, we wouldn’t do it anywhere else.

Gavin: Why is that?

Chris: The way we’ve done it on our original site, so, this has been in place for, you know, 20 years now. So, there’s far better options available on the market today. And, you see your toppers, et cetera, which have got built-in walkways and built-in staircases. We effectively built our own topper units many years ago. We find them far more difficult to sell. And when you look at the return on putting, you know, buying the top unit and then compare that to the return that you yield on there, we struggle to get the payback.

Gavin: Okay.

Chris: That we require. Now, if you’re on a very constrained site, you know, in London, as an example, then there’s no doubt that that would be a good option. But, we just find that our sites, we’re better off investing that money into other things. And, you know, sometimes it’s a case of understanding that a site’s occupancy is as full as you would like it to be. Because, you know, gone are the days, I think, where you can get away with using portable stairs on a high, it wouldn’t be really classed as a high quality site. And, you know, when you’ve got unmanned sites as well, and therefore you’ve got customers having to move portable stairs around, you know, it is a health and safety risk.

Yeah. So, yeah, so we steer away from that. Yeah. Okay.

Gavin: Okay, so a bit of a change of direction now, I just want to talk about operations. Yeah. What numbers do you check most closely to know how your sites are doing?

Chris: I think it depends on where in the cycle a particular site is. So, when a site first opens, it’s all occupation. I wouldn’t look at revenue or pound per square foot on a new site until around month three. It’s all about filling the units and getting people in.

Gavin: So, you want to see, in that phase, you just want to see, is there demand?

Chris: Absolutely. In the local area or not? Yeah, absolutely. And I think once you get to sort of 30% to 40% full, which, you know, we typically expect to be there around three months, we would then start looking at your yield, what we’re achieving. And we wouldn’t be looking at trying to push that on at that time, apart from if occupancy grew far quicker than we expected, indicating that we were too cheap. But we would be looking at, you know, once you’re getting into three months, you’re starting to have a number of customers’ incentives expiring. So, therefore, you’re looking at, you know, are you churning customers? Are you retaining customers following the incentive period?

So, yeah. So, we would focus in the initial stages. We would focus on occupancy. And we would be looking at our acquisition costs on our PPC campaigns to see, you know, is that area as competitive as we thought? Is it less competitive? And then going into the stage of the cycle where your occupancy level has grown, as I said, we then start looking at your revenue. Not revenue management, but we would be focused on the revenue a little bit more until you get to maybe 60%, 70% occupied. Then we would start initiating some revenue management at that stage. Okay. And, yeah, I think my go-to is run rate, revenue run rate. If you ask me for one figure that I look at, you know, daily or weekly, it would definitely be revenue run rate.

Gavin: And so that number, so I understand, how is that number built up? Is that all of your customers’ monthly fees?

Chris: I look at it annually.

Gavin: Annually, okay.

Chris: So, I look at an annual run rate, yeah.

Gavin: So, you take kind of this month’s invoiced storage times 12?

Chris: No, I’d go further than that. So, I look at today’s. So, we’re seeing live data and we’ve built dashboards to see live data. I’d be looking at today’s revenue times 365, effectively.

Gavin: Okay, so the revenue that you’ve earned, so you’re sort of breaking down. If somebody’s paid on the first of the month for a month’s storage, you’re taking that day’s revenue by the year. Yeah. Okay, yeah, yeah.

Chris: And the reason why I find that important is because, you know, we had a very, very strong period of trading between June and August. It was the best three months that we’ve ever had. And if you look at the occupancy rate through that period compared to the revenue, the revenue doesn’t grow as much as the occupancy because people are coming in on incentives. Whereas, you’re now two, three months down the line from there and we are continuing to enjoy expiring incentives. And therefore, as long as we can maintain our occupation figures, our revenue continues to grow. So, I think we may have previously been a little bit too focused on occupational figures.

But, yeah, revenue run rate is number one for us now.

Gavin: That’s actually the same number we use in our business here in the software business because we refer to it as ARR or MRR, annual recurring revenue or monthly recurring revenue. Yeah. Depending on what number we look at. And it is a very, because self storage is actually the same sort of business. It’s a subscription business. Yes, yeah. And they’re trying to optimise for retention and lifetime value and all that sort of stuff. So, yeah, it’s the same metric, really, in a way, in self storage.

Chris: Yeah. And it’s also quite easy to compare over time, I believe. You know, I think, you know, if you’re looking at purely occupational figures, you know, we’ve grown substantially on one site. But then we’ve also had to add another two sites to match that growth. I think when we’re looking at our revenue, we’ve achieved now, if you look at our compounded annual revenue, our annual growth over, for over a decade, we’ve achieved 20 plus percent. And if we want to continue growing in the way that we certainly we have over the last 18 months, obviously, that becomes a lot more difficult.

Gavin: Yeah, because you’re growing 20 percent of a larger base.

Chris: And therefore, I think keeping focused on that element ensures that we’re continuing to push in the right way. Because I think, you know, we used to think about it. We’d love to add two to three sites a year. Well, over time, compounded two to three sites a year will eventually become, you know, quite marginal to the business in reality. Hopefully, hopefully we get to that stage. But if we if we continue to target ourselves with 20 percent compounded growth, then, you know, it means we’re doing pretty well as a business.

Gavin: Yeah. What whenever you open up a new site, what tells you it’s working? What’s the first figure? Is it not first three month phase where you see the occupancy numbers coming up or what is it you look for?

Chris: Yeah. Occupancy in the first three months. Yeah. I think it’s quite exciting when you open a site to see occupancy in the first two, three weeks. Yeah. Because if we’ve done our job.

Gavin: You can see then already correctly.

Chris: Yeah, you can. I think that does rely on how well we we sell the site before opening. Yeah. And I think, you know, as an example, we opened the site last April, which performed tremendously well, far exceeded our expectations. And then we opened another site in September, which although, you know, if you look at industry averages, we were we were probably just above the industry average. But it was way under what what we would typically expect. And I think we had to sit down and sort of be open with ourselves. And we determined that actually we become a little bit complacent. We opened the site in April and we did everything right. And it went exceptionally well.

And I think going into September site, we almost sat back a little bit and expected the same to happen again. And it didn’t. And we we recognised that two, three months into that site opening. And therefore, we took measures which we should have taken before the site opened or at least in the very early days. And it turned around and, you know, now it’s now it’s performing really well.

Gavin: And what were some of the areas where there was complacency? Was it in some of that local marketing?

Chris: Yeah. Predominantly the local marketing. OK. Yeah, I think we we we switched our digital, you know, our PPC campaigns, et cetera, on a little bit late. OK. But the local marketing is where we. Yeah. Yeah, is where we I wouldn’t say fell down, but we could have done better. Yeah. You know, we we didn’t go out there striking up relationships with with local businesses, local removal companies. We didn’t, you know, we didn’t go out leaflet drop into, you know, the local area. Yeah. Which previously we’d always done. Yeah. But actually something that that does help us understand is the things we’re doing work. Yeah. Because when we have then done those retrospectively, the numbers have grown as we’ve spent.

Gavin: Do you find there’s a better time of year to open a new site?

Chris: Absolutely. What? Yeah. I mean, we’ve opened sites the worst possible time. I mean, we’re opening one today. What is it? The 19th of October. That’s probably one of the worst times you could open a site in reality. But it’s taken a long time to get this site to to the stage it’s at today. Unfortunately, planning was was really difficult and building the site was was quite challenging as well. But yeah, I mean, you think now we’re at the tail end of October. You’re going into November, December. There’s not many people really want storage at that time of year. So we would we typically aim to open if we had a choice. I mean, it’s very difficult to to do this, but we would try and line up site openings between April and August if possible.

And our successful openings have always been during those times. But yeah, as I say, you don’t always have control, do you?

Gavin: No, you don’t.

Chris: And, you know, I’d much rather just open a site than just sit on it for. Yeah. You know, we could sit on the site we’re opening today until next April, but it’s not much good doing that in reality. Yeah.

Gavin: We were chatting earlier about Adrian Lee from Big Yellow. He said to me that they they would look at the summers. They’d kind of count the summers. Yeah. Like two, three summers. And you’d like to be at a certain percentage.

Chris: Yeah, that’s an interesting that’s an interesting way to look at it. And I would agree. And actually, it was Jimmy Gibson of Big Yellow a couple of years, maybe three or four years ago. I was at a dinner with him. It was one of the SSA’s dinners. And business was a little bit slow. And we were talking and he asked me how our business was doing. And I said, you know, a little bit slower than I’d hoped. And it must have been around May time, April, May, I would say. And the weather wasn’t too good. And he said, don’t worry about it. The sun will be out soon. And I think we only had sort of like three, maybe even two or three facilities at the time.

So very, very small. And I remember thinking the sun will come out. You know, does that really make an impact? It absolutely does. You know, and now we’ve got more sites. And in fact, myself and Dean had a conversation during the really hot period we had in August. And we were joking around a little bit. I actually think there’s an optimum temperature for selling self storage as well, which sounds bizarre. But, you know, and we do look at it in terms of the sun being out. We perform better. But actually, it can also be too hot. You know, we were getting in August. We were up to, you know, 30, 31 degrees. And people don’t want to be filling storage units in 31 degrees.

But they also don’t want to be filling storage units in, you know, 5 to 10 degrees. So actually, if you can, the optimum, I don’t know what it is, you know, the optimum temperature is probably between 17 and 24 degrees, I would say. And, yeah, if we could keep it at that, then we could do it again.

Gavin: So do you want to build some sort of dynamic pricing module then that just alters the price a little bit based on the temperature and the sunlight?

Chris: Genuinely, I think you could go into it at that level. You know, and I think you could also, taking it further than that, in using the temperature, you could look at times of the day where your prices change depending on the times of the day. Yeah, I really do think that. And I think dynamic pricing is an area where the UK industry still has a lot of room to grow. I think there’s a lot of opportunity. And, you know, we dabble with it. What we do is still pretty manual. We’ve built a system, a data collection system, which analyses our competition in local areas and, you know, tells us if somebody has introduced an aggressive incentive, as an example, which would alert us to consider, you know, what they have done and whether we want to copy it, to beat it.

And sometimes we sit back and do nothing. But we, as a business, are not really maximising potential through dynamic pricing. And I don’t think the industry is. You know, I’m sure the big players in the industry are. But I think outside of that, I think, yeah, there’s a lot to gain from that. It’s something we’re trying to understand better and trying to come up with a way that we can implement that in our business, ensuring that it is automated enough, but always with an element of, you know, human touch as a review, if you like.

Gavin: Yeah, yeah. Great. Okay. When an operator is getting ready to open up their next site, what advice would you give them?

Chris: Going back to making sure the operations and processes are scaled before opening the site, I think, is key. One thing which we, and we haven’t been caught by this, but we sort of thought about it late in the process is with the planning process in the UK today, it can take a long time from sourcing a site, acquiring a site to actually being in a position to open. I mean, our Gloucester site that we’ve opened today has been, it took two years to get planning for that. So we’re effectively three years into the process. Now, when we first assessed that site and completed a feasibility assessment, looked at the local market competition, we determined that, you know, that was a site we wanted to look at and we thought there was real opportunity there.

Three years down the line, things change, and therefore, I think it’s very important to reassess an opportunity at a closer time stage to opening than maybe was necessary in the past. Because I think, you know, the planning, and not everybody gets planning for external and container facilities, but if you are going through that process, it can take a hell of a lot of time. Yeah. And yeah, as I say, you know, you may, and this is something that we do, you know, when we do run a feasibility assessment on a site, we’re assessing the local competition and we’re calculating what revenue we think we can generate from a site. But three years down the line, you know, that could be very, very different.

Yeah. And actually, in this case, it was still relatively similar, but that could have changed and it could have made the site unviable. Well, I’d say unlikely, but, you know, you don’t want a very slow start because you haven’t reassessed the landscape.

Gavin: So make sure you reassess the financials and the plan. Yeah. In the time it takes to buy the site to getting planning and being ready to open.

Chris: Yes. Yeah. And as I say, it didn’t, it didn’t change dramatically for us, but it could have definitely in other, in other areas, I’m sure it would have.

Gavin: And is there any advice that you’ve been given by somebody else that, um, maybe even something unusual or anything that you think has made a difference to how you’ve run the business?

Chris: I don’t think it’s unusual, but it’s one of the things that when somebody tells you, you sort of, you know, slap yourself in the face moment. And it was Stuart Beavers from Safestore many, many years ago when, or it would have been in 2020 when we opened, uh, our Llanishen site, the first expansion site. And it filled really quickly and it got to November and occupancy was in the 90%. Um, and we’d sort of discussed the, whether we’d introduced the offering is too cheap and therefore that’s why it was full. It was very difficult to assess that properly because at the time there weren’t that many container operators in Cardiff. There’s a lot more now.

Um, but I was, you know, really excited that this site was, I can’t remember the exact figure, 96% full full. And, and I saw Stuart, uh, maybe in a conference, um, and he said, but why do you want to, why do you want your occupancy to be that high? I said, you know, it’s a new site. We’ve proved the model now. This is going to give us the comfort and the ability to, to go on and get more sites. And he said, no, no, you don’t want your sites to be that full. You know, yes, you want them to run at a mature level, but you don’t want to be 96% full. And it was, yeah, it was one of the moments where you think, well, yeah, why have we been chasing?

You know, why have I been so focused on high occupancy? So, yeah, I mean, it’s something that, that no doubt, or certainly most people in the industry will already know and understand. But, uh, before that conversation, it’s not, not something I’d ever considered really. Yeah. Yeah.

Gavin: I think it can feel a bit like a vanity metric or like it’s a feel good.

Chris: It’s a feel good metric. It’s full. And it did feel good until, until Stuart brought me back down to ground. Yeah. Yeah. I had to completely change the way I was assessing the performance. Yeah.

Gavin: Well, Chris, thanks very much for joining us. It’s been really great to hear your story. And, uh, yeah, thanks a lot.

Chris: Thank you very much.

Gavin: Thanks very much for listening to our conversation with Chris from Blue Self Storage. And we’ll see you on the next episode. Thanks. Thanks.