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November 10, 2015 | by admin
Remember when Amazon just sold books? Jeff Bezos and company eventually took diversification to ridiculous new heights - and saw profits skyrocket. Perhaps there's a lesson in there for the portable-storage industry.
Many NPSA members have companion businesses in addition to their portable storage work. Partnering businesses can be a smart move.
“It will make you a more valuable vendor,” says Ira Eckstein of Hale Trailer Brake and Wheel. “It gives you more reasons for a customer not to say no to you. The more avenues of revenue you have, the more chance for new opportunities to happen.”
Portable Storage and ... What?
NPSA members have a variety of companion businesses. For some, the portable storage piece was an add-on to an existing business. For others, they started with containers and branched out.
“Our companion businesses are semi-trailer sales and rentals and leasing, and we do some maintenance as well,” says Rick Honan of AT&S. “We feel they're complimentary because they give us access to a different client base than containers.”
Jeff Medley of Atlas Portable Space Solutions has two companies. “One is a machining company, and one is the container company,” he says. “They aren't competing against each other ... but I'm trying to use my machining company in my container business. I'm trying to find a proprietary product that I can make for the container industry.”
Then, there's O'Bryan Transport. “It's a long story,” says Andrew O'Bryan. “Our main business is a barrel company. The trailer leasing spawned off of that years ago. Now, we do semitrailers, rentals, freight around town - those are the two support companies, trailer rental and local cartage.”
And Hale Trailer Brake and Wheel? “We are a dealership, so we sell new and used trailers, we do retail repairs on trailers, we sell parts for trailers and, last but not least, we rent trailers,” says Ira. “Years ago, we tried selling utility trailers and it was not a successful course of business for us. Not all attempts at expanding your product line will be successful.”
Many folks in the portable-storage industry find success with modification, portable toilet, or self-storage companion businesses. It seems the first step in building a successful partner business is taking advantage of what you've already got - whether it be space, customers, or equipment.
“If you're calling on the type of business that may use containers, I think a good companion is something those businesses might also have a need for,” says Rick.
Jeff concurs. “It all depends on what the customer is looking for,” he says. “We got into modifications because I already had the capabilities with the machining business. It was a natural fit for us - we already had the equipment. On-site storage is another good companion if you've got the space for it. We do on-site storage now at our facility. We had customers come and ask us if they could store on-site - that's how we got into it. That's how we got into modifications, too - people asked for it.”
But the customer requests have to make sense - and make the most of what makes your business unique. “If you don't utilize your resources and current customer base, that'd be like having a trailer rental business and deciding to put a McDonalds out front,” says Andrew. “Sure, you're gonna make a profit, but you're not taking advantage of what you've got.”
“There's not really a challenge - it's the timing,” says Andrew. “It always takes care of itself, but you do worry.”
No business is without its trials. But partnering a business with portable storage can be more of a balancing act than a challenge. “There's not really a challenge - it's the timing,” says Andrew. “It always takes care of itself, but you do worry.”“Our challenge is having enough focus to not let one business be ignored,” says Rick. “And maybe even focus more on the most profitable operations ... sometimes, the ‘sexy' things aren't necessarily the most profitable. Like building homes out of containers - we do a little bit of that as well, and it's a good companion business, but it can be extremely time-consuming. A lot of times they're fun to work on, but the time takes away from your more profitable business.”Then, there are logistical challenges. “I guess the biggest challenge I've found is just mass,” says Jeff. “When we started out in the machining business, we were dealing with parts I can put in my hand. Containers are a whole different scale. We built a new building to do modifications inside. We had to - we were doing work outside, but it was very seasonal, and challenging because of the climate.”
It seems that the benefits of companion businesses outweigh most disadvantages. “I find it an advantage, not a challenge,” says Irv.
Advice for Making a Match
There are many ways to get started with a new companion business.
“NPSA is a great thing in that it gets you help with these things,” says Andrew. “There's not a person who's gone to the convention and not had three ideas come up in their minds. You sit next to a guy, and he tells you what he's doing, and you think, ‘I could do that.' And you can do that, because you're talking to people from all over the country.”
Those who have been there, done that have words of wisdom for NPSA members considering companion businesses.
“I would say that they need to make sure that the portable storage can run and grow itself,” says Rick. “Have enough “There's not really a challenge - it's the timing,” says Andrew. “It always takes care of itself, but you do worry.” equipment and employees. I wouldn't branch out until you have enough of a critical mass with portable storage for that to happen.”
“It's got to be complementary to the business, obviously - it can't take away from your core business,” says Jeff. “For us, we just continued our customer service. If it's a value-add for your customers, it's worth doing ... I could have turned the customers away, but what makes us different than anybody else? Somebody else is renting the same clean, functional container. We just have to be different somehow, and it's not always price.”
Finally, don't be afraid to look outside of the box for inspiration.
“Say you have a mini-storage property and people only pay the rent once a month,” says Andrew. “So, how busy can the secretary be? You're paying her by the hour, so you want her to be as busy as possible. So, you start a packaging company - there's a reason why lots of those are tacked on to mini-storage. The one down the road from me? Hell, she wrapped my Christmas presents! She figured she might as well hire three or four more girls and offer present wrapping. She utilized what she had.”
No matter how you diversify your business, keep the big picture in mind.
“We have four sources of income,” says Irv. “Each one feeds off the other. Cross-selling is normal. It makes us stronger.”
Becky Brown is a freelance writer quickly learning all about the storage industry. You can reach her at [email protected]
Categories: Business Management
November 10, 2015
November 10, 2015
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