Why are more small businesses using flexible storage solutions?
As a business, you need somewhere to store your products, equipment and documents. This can be in a warehouse or storage space that you hire on a flexible basis, but many leases are for a fixed term and you will be charged for the whole of the rented space even if you only use a small part of it. Conversely, you may find that you have too little space and this is causing inefficiencies in your business.
Most Small Businesses store their excess Inventory, equipment and documents in a warehouse or storage facility on a long term basis. But nowadays most businesses are utilizing flexible storage spaces rather than commit to a traditional long term warehouse lease which may have more space than is required by the business owner. This is also very ideal for most seasonal businesses. For example, a lawn mowing business in winter will have little equipment but in peak season they will need more space to store lawn mowing equipment and other gear, Flexible storage spaces help businesses such as this store their excess stock, equipment and other business documents during
Inventory management challenges
There is another form of storage commonly referred to as ‘Seasonal’ or ‘Semi Permanent’ storage. Such storage would be suitable for a lawn mower / equipment hire company for example, who is a non player during the winter months but a peak time player in the summer. Conversely an E-commerce retailer of Christmas decorations for example, would need to build up stock prior to the Christmas period and then dispose of the majority of stock post Christmas in the subsequent sales.
There are more ways of using storage these days and often it is used on a flexible basis. No business owner wants to be paying for unused square meters of warehouse space and also no business person wants to run out of storage for their stock during peak times. Flexible storage is often now set up on a varying basis to meet a business’s changing needs.
Scale up your storage requirements during the times of year when you are carrying more stock and scale back during the times of year when you are carrying less stock. So if you are a retailer of lawn mowers and other gardening equipment then you would store all of your winter tools in off-season and an online retailer of Christmas decorations would build up their stock of items throughout the autumn and then store them all in a flexible storage facility throughout January and February when they are out of season.
Flexible storage is only cost effective if inventory has been accurately forecasted for the following months, the business however will save a lot of money not having to pay for excess storage space as demonstrated by Melbourne retailer who saved 40% off his annual storage costs by matching his storage space with his stock as opposed to storing for peak periods.
Document storage and compliance requirements
Storage of physical documents can also be a problem. Documents often need to be stored for long periods of time to meet compliance requirements of organizations such as tax departments and lawyers. However, there will also be a large volume of documents that are frequently required to be retrieved and need to be stored in a cost effective manner without using up valuable office space.
Whether documents are required to be stored for long periods of time for tax or legal reasons or are required to be retrieved on a regular basis storing them in an office is not ideal. When storing documents for long periods of time the ability to retrieve individual documents quickly at any time is critical. This can be achieved by labeling the outside of documents that are stored together, including a detailed list of all the documents contained in the box. Frequently used documents are best to store in a digital format such as a scanned image, to free up space in filing cabinets. It is essential that the external storage facility that you choose has the appropriate access controls, climate management and security systems in place to protect sensitive information.
Storage of inactive files and documents creates a problem to free up space in the office and to comply with record retention requirements. If active documents are stored externally then there are times when files will need to be retrieved from storage. It is very important to have a system in place to manage the retrieval of documents from storage. This can include the correct labeling of storage boxes as well as maintaining an up-to-date inventory of all files stored. In some cases it may also be worth while to consider digitizing frequently accessed active documents prior to storage.
The security of important documents is a major concern for any business. There are many ways to store your important documents but not all are created equal. You will need to consider a few things when looking for a storage solution. These include the climate control of the storage facility, the type of access that you will require and the level of security that the storage facility offers.
Scaling with business growth
Business storage can play a unique role in the growth of a business. A business requires storage for a variety of things such as products, equipment and documents. The amount of space that a business requires for storage can change greatly over time.
Fixed term contracts for storing goods can be a major problem for businesses in rapid growth phases. An example of this problem is that of a business that leased a large warehouse for a 2 year term. However within 6 months the business had grown so much that it required more space. In order to move to alternative premises the business would be required to pay a large penalty to break the lease early. This would mean that the business would be operating less efficiently until the time that the penalty was no longer applicable.
Businesses with growing storage needs can now choose from a variety of storage facilities that can be hired on a flexible basis to suit their changing storage needs. Businesses can add space quickly and easily as needed, for example to store a large quantity of products for a short period of time for a launch. When the stock of products is reduced, they can reduce their space requirements and start saving money immediately.
Access to the stored items is another factor that businesses must take into account when choosing a storage solution for their business. This can range from 24/7 access to your stored items to scheduled access to your stored items at set times of the day or week. The business must choose a storage solution that will allow for the required level of access to their stored items in order to operate efficiently.
Cost considerations and hidden savings
Yes, storage from a flexible provider can cost more per square meter than storage from a traditional warehouse but the benefits of only paying for the space you need, when you need it far out weigh these costs.
Traditional warehouses require a security deposit for the use of space to cover the cleaning of furniture etc. This can be a large amount of money. Then there is the long term lease that usually requires you to take a minimum amount of space. Other costs such as utilities, security, and maintenance of the property are usually added on top of the space rental. And don’t forget the insurance for the storage space. This can cost a lot depending on the location of the warehouse and the facilities required.
Also other costs are generally packaged by a flexible storage facility provider in one monthly fee (e.g. security, utilities, cleaning, pest control, insurance). For many businesses with fluctuating storage requirements this can work out to be even cheaper than renting a fixed amount of traditional warehouse space.
On the other hand, the business does not have to manage the warehouse lease. The storage provider becomes your warehouse landlord. The business does not have to spend time negotiating a lease, and then manage the warehouse, dealing with maintenance issues and facilities management. The storage provider does it all for you.
See also: From Bell Curves to Syllogisms: How Quantitative Logic Shapes Academic Arguments
Making the transition work
To make a switch from fixed storage to flexible storage, a systematic plan needs to be made prior to the transition to store and retrieve items in the best way. Items will need to be sorted between items that require easy access and items that can be stored in less convenient storage. An accurate and up to date inventory of the items to be stored must be created along with a retrieval system for retrieving stored items. All items are to be clearly labeled to enable easy identification and to ensure that items are always returned to the correct location.
It is also essential to have systems in place to manage your new storage. This includes a detailed inventory of all items in storage, how you are going to retrieve items from storage and how you will manage your new storage space on a day to day basis. This includes correctly labeling all items and having a clear and effective retrieval system in place. By having these systems in place before you move into your new storage facility, you can ensure that your business is able to operate as efficiently and effectively as possible from the very start.
Treating your storage space as a variable resource and planning your storage requirements is critical. You will need to review your current storage usage and set up your systems for managing your inventory and retrieving items that you are storing. All items need to be correctly labeled and you will need to have a full inventory list of the items that you are storing. Also, your staff will need to understand the new system for accessing the items that you are storing. Use your storage space wisely and help your business succeed by not treating your storage space as a fixed cost.
