How to Reduce an Unavoidable Expense and in Turn Better Your Company – New York City Business

Let’s see, where do I start when naming business challenges unique to the wonder metropolis called New York City?  Let’s begin with competition.  You’re definitely not the only one doing what you’re doing.  Especially if you’ve drawn attention to yourself with that thing called success.  What about our beloved friend Taxes?  New Yorker’s may earn good money, but no one’s fatter than a starch-suited politician.  They suck it all up!  Then there’s the great and infamous Transportation.  Have you ever driven in New York City for anything at all?  $10.00 tolls, two miles in two hours, no parking (or standing in Yankee lingo), maniac taxi drivers and relentless NYPD ticket junkies.  Lacking for dramatic memories?  Get behind the wheel in The Big Apple.

Then there’s one challenge that is seemingly inescapable… Space.  It’s either too small, too expensive or not the right fit.  Businesses in New York City pay more for office space than anywhere else in the world.  Demand is high, supply is low and employees are intimate due to extremely tight quarters.  So what do you do when you need more space but can’t afford a bigger office?  The following scenario is frequently played out.

The Scene

A start up finds new space in Manhattan.  After three, six, eight months the office is piled high with inventory, supplies, furniture, tech equipment, records, anything and everything.  Business is growing at a steady clip and the Owner decides to hire an additional sales person.  What’s the problem?  Where to put them?  Here’s what happens next:

Boss:  “Susie (receptionist/assistant), look up storage online and find the best price.  Make sure it’s close enough to drive back and forth.”

Susie:  “Sure boss.  The cheapest one I found is on 16th Street and 10th Ave for $$ per month.”

Boss:  “Is that really the cheapest?”

Susie:  “Yes Sir”

Boss:  “Okay.  Now reserve a moving truck and hire temp labor so we can move some of this stuff out of here.  The new salesman starts Monday and we’ve gotta make room for his desk.  Oh… and order a couple hand trucks and a few dollies.”

Susie:  “Boss, my boyfriend has a truck… why don’t we just do it ourselves?”

Boss:  “No way, fuggedaboudit!  I can’t take that risk.  God forbid someone gets in an accident or breaks his or her back from carrying this heavy stuff.  Just too much liability.”

So Susie does as she is told.  The truck is rented, temp labor is hired and the stuff is moved to a self-storage facility two miles away from the office.  Problem solved.  Space is freed up, the new salesperson starts and business rolls right along.  While the immediate issue has been resolved, there are two crucial components that are scarcely considered or ignored all together – Long term costs and operational efficiency.

Challenges of Using Self-Storage In Business

As the act portrays, when a business starts running out of space the instinctive response is, “Find a storage unit and move this stuff out”!  After all, what other alternative is there?  Storage is what it is, a place to put stuff when there’s no more room.  There is an alternative and I’ll reveal it later, but first I want to explain why self-storage is an inefficient and expensive solution when used for business purposes, especially in New York City. 

The Main Questions:

1.       How will material be moved to and from your office to the storage unit?

·        What form of transportation will be used?

·        Who will do the work?

·        How often will the unit be accessed?

·        How much time does each trip take?

·        What is my liability risk?

·        What is the cost in dollars, time and lost productivity?

2.      How will material be tracked and organized?

·        How will items placed in storage be accounted for?

·        What method of organization will be used, i.e., handwritten log, excel spreadsheet, labeling?

·        When retrieving from or adding items to storage, how is each item tracked and accounted for?

·        Who will be responsible for this?

·        To what degree will disorganization affect my business?

·        How does this quantify in dollars, time and lost productivity?

3.      How will you maximize the investment?

·        Are we utilizing every square inch of the unit I am renting?

·        Have I considered the need for more space in the future?

·        Will standard self-storage be an effective solution as my business grows?

·        How will this issue affect my bottom line and day-to-day efficiency?

Storage is rarely, if ever, broken down in such detail.  I mean let’s get real, business leaders are busy racking their brains about more important things.  Especially these days.    Namely staying in business.  Sadly, because storage lacks extravagance when compared to flashy software programs and arousing marketing campaigns, it gets written off as one of those unavoidable expenses like water coolers and toilet paper.  Ah the misfortune… if only people treated it as wonderfully as it treats them. 

In all seriousness, if a company were to combine and quantify the dollars spent in this area, the impact on the bottom line would be shocking.  Costs include:  Storage rent, employee reimbursements, vehicle rental, fuel, payroll time, temporary labor, equipment purchase or rental, parking, citations, tolls, insurance and more.  Not to mention intangibles like down time, lost productivity, liability and the overall impact on business efficiency.  Storage related issues are simply more crucial to New York City companies than most take time to realize.

An Alternative Geared Toward Business – Physical Asset Management

As I said in the beginning, doing business in New York City presents many unique challenges.  In the last five years, metropolitan storage companies have developed  innovative solutions to help businesses free up valuable office space, maximize offsite storage investment, eliminate down time & lost productivity, avoid liability and markedly improve operations.  Designed around business needs and driven by service, I introduce Physical Asset Management.

Pricing

Physical Asset Management is based on actual space pricing.  With actual space pricing, a business pays for only the space each item occupies in a corporate storage center on a cubic foot basis.  So, if you store a conference table that is 20 cubic feet, at the standard rate of $0.40/cuft, you pay $8.00 to store that table.  You’re right; it’s impossible to store anything for that cheap.  Companies offering PAM set minimum storage rates at around $50.00 per month.  That’s at least 30% less than the smallest self-storage unit in New York or New Jersey.  The difference is 40-50% if renting space in New York.  No kidding. 

How does Physical Asset Management pricing differ from Traditional Self-Storage?  With traditional self-storage, the quantity of space is predetermined and the price is fixed, regardless of whether or not all of the space is needed or actually being utilized.  This is how many businesses throw away thousands of dollars a year without even knowing it.  However as Physical Asset Management gradually grows in popularity, business leaders are discovering it to be the superior corporate storage solution.

Material Management & Accountability

How is everything handled and managed?  At the time of pickup, a representative of the company (customer) is present to instruct the storage vendor as to how each item is to be labeled and/or described.  Every item is given a unique description (noted in writing) before being loaded on a truck and transferred to the corporate storage center.  Most of these facilities are based in New Jersey due to less expensive real estate.   

Upon arrival to the facility, each item is bar-coded, located in the storage center and scanned into a web-based inventory database.  Additionally, digitals photos can be taken of all or specific items as per the clients request.  After every item is processed, the new client is given a username and password where their material can be accessed 24/7 via the web.  That’s right, the Internet, and that’s right, the Internet is free.  An attractive perk that comes with the service. 

With the online database the client can review inventory, request deliveries/pickups, edit item descriptions, view digital photos, generate reports, etc.  Many companies use it as a stand-alone inventory management system or as a supplement to their already dedicated inventory program. 

Now keep one thing in mind as I describe these features… all of it is free and included in the storage rate, which as I said is at least 30% less than the cheapest self-storage unit.  I know it’s hard to believe.  That is why I have to repeat it. 

How does this differ from traditional self-storage?  It’s real simple.  Self-storage offers no such thing.  No database, no barcodes, no photos, etc.  You do it all your ‘self’.

 
Transportation – Pickups & Deliveries

With Physical Asset Management a company never has to lift a finger, i.e., rent vehicles, hire labor, use own employees, risk liability, etc.  Apart from savings and a free database, this is another aspect that offers substantial value to a business. 

In most cases, PAM vendors offer new clients free initial transfer of material from wherever their stuff is currently stored, i.e., self-storage, warehouse, office, owners garage, etc.  I already described the process once it arrives at the storage center.

When you need something how do you get it?  Good question.  Easy answer.  Items are delivered by a uniformed, bonded employee.  Requests for delivery (or pickups) can be made online, by phone, fax or email.  Turn around is typically 24 hours with rush and scheduled deliveries available. 

I know… you’re thinking a service like this has got to be outrageous in cost.  Not at all.  The truth is storage companies make their money in renting space.  Why else are there as many self-storage facilities in New York City as there are pigeons?  And what do they all sell?  Only space.  Physical Asset Management companies look to only cover their costs when it comes to transportation.   

 
Conclusion

Designed uniquely for businesses and driven by service, Physical Asset Management is becoming popular among New York City companies.  Just recently, a prestigious hotel on Fifth Ave was able to slash its budget 32% releasing $24,800 for allocation to more mission-critical areas.  At the same time, they freed up substantial property space and  accounted for every single item via barcodes and the Internet.

A small cosmetics designer based in Manhattan cut costs $1,200 a month by simply moving its inventory from a self-storage facility in New York City to a Physical Asset Management Center in Clifton, New Jersey.  In addition to storage savings, the company was also able to eliminate the hassle, expense, lost productivity and liability of moving stuff around themselves. 

Looking to cut costs and improve your business?  Are you fully optimizing every square foot of your office?  Is storage already in your budget?  Did anything is this article apply to you?  If so, a little attention could save you thousands and make your business better.