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Thread: Are the "Mom & Pop's" businesses slowly fading?

  1. #1
    hstalling is offline Junior Member
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    Default Are the "Mom & Pop's" businesses slowly fading?

    I recently read an article where an industry leader spoke about how the "Mom & Pop" self storages are becoming few and far between as the giant self storage operators gobble them up. After reading and seeing this sort of thing a couple times, it got me thinking.

    As someone who is seriously looking into starting a business in the self storage industry, I wonder what everyone's thoughts are on that point?

    To me, I believe it is still a good investment to get into but then again I may be misinformed.

  2. #2
    Terry Campbell is offline Junior Member
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    Default Re: Are the "Mom & Pop's" businesses slowly fading?

    We have seen the 'Mom and Pop' start ups slow down over the last few years, but a lot of that was due to available financing and general lack of confidence in the economy and it was a good time for the big boys to buy up a lot of the mom and pops. The last part of 2012 showed, for us, an increase in that sector of the market starting or adding on to their existing facilities. If you do your homework and do it the right way in the right location with the right management, you can still be successful as a smaller operator.
    Terry Campbell
    Vice President Sales and Marketing
    BETCO, Inc
    800-654-7813 704-872-2999
    Fax 704-872-3099
    www.betcoinc.com

  3. #3
    dakselfstorage's Avatar
    dakselfstorage is offline Senior Member
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    Default Re: Are the "Mom & Pop's" businesses slowly fading?

    As a M&P owner. I have come to the conclusion that everything has a price tag. If the price is right I will sell. My kids tell me why not keep it and after the bank loan is paid in full in 2024 we would have an extra $7000 per month income. My thought is pay me big now.
    joelmcminn, astro, Reebee and 1 others like this.
    Joe Krezdorn
    DAK Self Storage
    Leesport, PA 19533
    www.dakselfstorage.com

  4. #4
    SMSSId's Avatar
    SMSSId is offline Senior Member
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    Default Re: Are the "Mom & Pop's" businesses slowly fading?

    Quote Originally Posted by hstalling View Post
    I recently read an article where an industry leader spoke about how the "Mom & Pop" self storages are becoming few and far between as the giant self storage operators gobble them up. After reading and seeing this sort of thing a couple times, it got me thinking.

    As someone who is seriously looking into starting a business in the self storage industry, I wonder what everyone's thoughts are on that point?

    To me, I believe it is still a good investment to get into but then again I may be misinformed.
    I don't think M&P's are going to fade-a-way. What you are hearing is when thing were booming a lot of people thought the golden egg would go on forever. They failed to do their due diligence and the thought was let’s just build it and they (tenants) will come. Don’t forget the unpredictable, the guy around the corner that has the same ideas you have.

    Some of the reasons the biggies are buying facilities, it’s cheaper to purchase an existing facility than build new and anticipate the rent-up period. Example: In our area six facilities that were built after 2004 have sold, all at 20-45% below construction cost. Four were purchased as a package by one of the biggies, another one sold in 2006 for 1.3 mil and just resold for 950k and one through bankruptcy.

    I agree storage can be a great investment. Regardless of which way you decide on going, your rent-up is still only the difference between move-ins and move-outs. And the facility that has the higher quality facility and amenities will receive the higher benefits both in tenants and income.

    Just my perception and thoughts.

  5. #5
    308-VLD is offline Junior Member
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    Default Re: Are the "Mom & Pop's" businesses slowly fading?

    No business will "fade away" if the location is good and you manage/advertise your facility well.
    astro and Lydia like this.

  6. #6
    MisterJim444 is offline Senior Member
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    Default Re: Are the "Mom & Pop's" businesses slowly fading?

    hstalling:
    I have been involved in this industry for the past 28 years. Yes, many individual owners and multi-property businesses have been consolidated by the REITS and other large national and regional private companies. In the major SMSA's the "bigs" do control the industry, but when you go out to the suburbs and certainly rura lareas, small business folks still control the majority of the industry.

    As an over-all industry percentage, small operators are still predominant. One reality that is making many of the REITS (Extra Space, CubeSmart & UncleBob's) appear even larger is their successful third party management operations. Facilities owned by individual entrepreneursor groups of investors are being operated as 3rd party management properties under the Flag of one of the bigs. The REITs may not own them, but the net effect is the same since the general public doesn't know the difference.

    I havebeen accused over the years of being an optimist. Guilty as charged; because I still feel that our industry is one of the best real estate investments that can be made and one of the premier entrepreneurial businesses on the planet. We still have one of the best gross revenue to total payroll ratios of almost any business.

    Keep us posted on your entry intoself storage.
    MisterJim444
    Last edited by MisterJim444; 2nd January 2013 at 10:01 AM.
    stoho, astro, Gina6k and 4 others like this.
    Learning Never Ends, But Will Time?

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    Steve_hajewski is offline Senior Member
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    Default Re: Are the "Mom & Pop's" businesses slowly fading?

    I think it is hard to build a new facility in an urban area without deep pockets, but the mom and pop businesses that we deal with every day show no signs of fading. And many of our customers who start small tend to come back and build bigger and bolder facilities when they are ready to expand to multiple locations. The mom and pops just stay under the radar.

    Steve
    geraldine1051 and Lydia like this.

  8. #8
    Satyra From PhoneSmart is offline Senior Member
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    Default Re: Are the "Mom & Pop's" businesses slowly fading?

    When the economy took that nose dive, a lot of small business ran scared, sold out, but then again there were some that just couldn't sustain. I've seen consumers buy from mom and pop businesses simply because they are local owners, and adding value to communities. Some people prefer good old down home customer service vs. todays commercialized customer service. Now days you run into associates that a nice because they have to be in order to stay employed and pay their bills. Those are the one's that grin at the customer with a fake smile and as soon as they leave they talk about that customer. Customers can sense that. Customers know when good service is a choice or an obligation. That's why some customers prefer mom and pop business, because with mom and pop establishments good genuine customer service is most of the time what keeps the business alive.
    Robkiser likes this.

 

 
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