BizActually Podcast Ep. 2

Mircea Cornelison00:00

Hello, and welcome to the BizActually Podcast, where we dive into what it's really like behind the scenes to build, manage, and grow a successful small business with real-world examples, cases and stories.

I'm Mircea Cornelison here with my co-host Terry Cornelison, who's spent over 40 years building, managing and advising businesses in the U.S. and around the world.

Today, we're following up our last episode with two more real examples of how your competitors can help you shorten your learning curve and thrive in your industry, whether you're just starting out or you're already in business and could use a serious boost.

You can also find our show notes and transcript for this podcast, plus some bonus resources on our website. Just follow the link in the description or check us out at bizactually.com/podcast/ep2.

Okay. So that's two examples of startup situations, right? How about an existing business owner? Can you still talk to competitors if you're in business already is that still reasonable?

Terry Cornelison01:03

Sure, sure, sure. Yeah. When I go in and take over a business or helping someone do a turnaround or, expand their market share or something. One of the first thing we do is to find competitors and talk with them. So it works, in every situation.

Let me give you an example from probably in the late, late eighties in a small university town, Moscow-Pullman area in Northern Idaho, Eastern Washington. They have two universities, University of Idaho in Moscow, Washington State University in Pullman. Total population in the area with the universities is about 50,000, small area.

And so they have the universities as one of the main sources of the industry there. They bring in a lot of trade, their parents come there, the students are there. So that's kind of the mainstay of business. And the hotel conference and convention center business is pretty strong.

So there was a quality and conference center that was built by a couple of brothers who wanted to invest in that business, in the area. And about a year and a half after they went in, the business was doing really well during the winter. But in the summer it was no occupancy. They had very high occupancy when...

Mircea Cornelison02:10

Students are gone. Faculty...

Terry Cornelison02:14

Right, so in that area, all the hotels and conference centers do well during the season. When, when the students are there during the fall and spring semester, they got football games, they have all kinds of events going on. Parents are visiting and, you know, it's just a booming economy all the way around. And the hotels of course benefit from that.

So they make money, those what, seven months, eight months and that neighborhood anyway. And then during the summer, it's like a ghost town. They have some students there, but there's nothing going on. Maybe 4th of July, something happens. But aside from that, people aren't visiting, it's not a destination place.

It's not a place where a resort, it's a college town. So the owners had built hotel conference center. And then they had a general manager came in, didn't have any experience in the business, but he did a really good job. And he had an opportunity though, to go, full-time working with his church and now they're looking for somebody to take over, but not just to take over, but to figure out some way to make this thing profitable, more profitable. So that they, you know, they're struggling. They're making a profit, but it isn't enough, to make it worthwhile. They know they can do better, but they've got to solve this problem of low occupancy during the summertime. And low cashflow. So you know, they hired me to come in and do it like a turnaround.

Mircea Cornelison03:30

What does a turnaround mean?

Terry Cornelison03:32

You know, it can range what it basically means is your business is either struggling, stuck, or actually on the verge of bankruptcy. Anywhere in that range. I mean, it could be a very pretty minor, "Hey, I'm just not making enough money to make ends meet, and I can't figure out how to, how to fix that," to you know, "It was doing great, and then everything just stopped. I don't know what happened," to "I just, haven't got enough money to pay my bills anymore. The bank is saying they're going to call my loans in and I have to liquidate the business, lose everything," Anywhere in that range, you just call it a turnaround.

It's like, alright, let's get going, like you back your car up and go in another direction to find the path out of wherever you are.

Mircea Cornelison04:13

So they call you in to do a turnaround, get this thing, moving in the right direction. What happens?

Terry Cornelison04:18

See if I could see if we could together. So yeah, came in.

They like I said, the previous general manager had a lot of good ideas. In fact, he had actually brought a tour bus in of senior citizens from Seattle, I think to come in during the summer for one week or three or four days and took them out to visit some farms and up the Snake River. And they really liked that.

So that's one thing he had done. And I mean, it only helped out for three or four days or a week, but it was a good idea. So he left, went on full time with his church and that idea was in my mind, of course, let's pursue that. And I did. That's another story. And it worked out really, really well. But we're talking now about competitors and how they can help in your business as well.

So I was working on the tour business, but the first thing I did was all right. I don't know anything about this business. I do know the part about getting people to stay in your hotel, but if there's nobody there, how do you get them to stay in your hotel? And if they don't stay in, you're not making enough money.

So it's one of these really kind of...

Mircea Cornelison05:22

This is a small town,

Terry Cornelison05:23

Yeah, small town. If people aren't traveling through, on and the wayto some place, this is it. So, and they usually have somebody to stay with this is it. If they're just, you know, not looking after the college students or coming to some event. Anyway. So I, thought, okay, well, first place, let me go talk to the other hotel owners in town.

So I went to all of them, and basically, they were all just fine. They were, I mean, nobody could offer any insights. They just weren't very interested. They were very nice people. They welcomed me. We were the kids on the block. They'd been there for a lot of years, they had figured out, you know, to keep their costs down so that they, they had the same problem as everybody else did summer was like their vacation time.

They didn't have the incentive to, you know, they were making enough money, not, as they wanted that, but as they needed. These two brothers who created the conference center, they built that thing to make return on their investment. So just getting by was not in the cards for them. So the local people, although they were very nice and helped me learn how things operated there.

I didn't get much understanding from them on how we might solve this problem. So, what I did really was I just went to the yellow pages and I found all the hotels in about a 300 mile radius. And I didn't go through a whole 300 miles, but I've tried to choose hotels that were in similar like college towns, conference centers not a tourist location, something similar to us so that I could go visit them and ask them, how are they getting by, you know, what's going on in their business.

So I just hopped in the car, made that list and then figured my route out. And then I just hopped in the car. And actually every town I stopped in, if there was a hotel that looked somewhat successful. I pulled in and went in and talked to the owner and I must have visited, in a week's time, 60-70 hotels. Talked to the owners, managers, front desk people, even when I encountered the housekeepers, the maintenance people, I had conversations with them. I learned unfathomable details about the hotel business you know, from all those perspectives. And I'm talking to the housekeepers, I'm saying, "So what's it like being a housekeeper here?"

I mean, they, you know, they were really friendly. And so we just had a few minutes, and I talked to them while waiting for, you know, a meeting with somebody, you know, who's the general manager or the front desk manager and just having a conversation and say, well, "What's it like?" I mean you know "What are guests like here?" And they say, "Let me tell you." All right.

Most of our guests are wonderful, but. Rock groups, especially punk rock, hard rock, you don't want them. I mean, okay. So I'm not saying that I'm not going to accept those, but I'm just learning that from these people who have to clean up after them, they just have this thing of they're out there with all the energy, they come back and they dissipate that energy by destroying everything in the room. So caution

Mircea Cornelison08:16

Nothing against any rockers out

Terry Cornelison08:19

In fact, since then I had many, I had ACDC, I had numerous rock bands, come to WSU and stay with us. And I had, literally, I had no problems with them at all. I think one of the main reason we didn't have a problem is that I had a fantastic staff who really engaged with them and with everybody, but engaged with them. And I think they may have felt a little bit guilty if they had, you know, messed everything up. They weren't perfect, but they were really good.

Never had anything like it was described to me in many of these situations, but they did alert me to the fact that, hey, I gotta, at least have some conversation with you guys when they come and stay with us and make them feel welcome and, you know, go a little bit over what I would normally do to engage and kind of bond with them and my staff so that we had a good experiment.

So we had a lot of good experiences, but the fact is that, I learned a lot from the housekeepers with a lot of other details too, about the kinds of shampoos and how they refill them or what kind of mattresses actually last and also with sheets and things, the quality. Also general management told me these things, but these guys who have washed this every day and who changed those beds every day could tell me, "We just got these new mattresses, like three months ago, and they're already destroyed now, these in room 7 we got those three years ago and they're still in great shape.

It's worth the extra money to get those, you know. So you learn things like that. But the general managers and the front-end managers were also extremely helpful. Things that I learned during that trip, just turned our hotel in Pullman around on a dime.

I came back. Implemented some basic things and we were profitable from day one.

One thing that I found out was, this will blow your mind, but in a little hotel that I would see along the way, I would stop in, and they would have just by, when you go to the clerk's desk or the hotel clerk desk to sign in, then next to it, they would have this little rack with candy bars and gum and you know, different things in toothpaste.

And there's a little area here just sitting there, it takes up almost no counter space and I'd say, well, "Hey, do you make any money off this stuff?" "We make a thousand dollars profit a month" just these little candy bars here". And I said, "How do you do that?" I mean, I always go down to the seven 11, if I'm in a hotel and they have this stuff because they always charge too much.

That's the trick. You know, if they charge 50 cents at the 7-Eleven, we charged 65 cents. Well, nobody's going to go down there for 15 cents. They will buy from us. They learned that because repeat customers come in here and they know we're not trying to rip them off. So they come in and they'll buy, you know, two or three of these and these, once they get comfortable after the first stay with us and they come back, realize, "I know the price of that, everybody knows the price of that. And this is almost the price of that".

So we're making the thing is we've got a lot of volume in that because we, we don't try to gouge everybody double or triple the price.

Mircea Cornelison11:17

Just a little way to bring in more sales with huge margins.

Terry Cornelison11:21

Right. You're not going to, you know, it's not going to make me a million dollars, but hey, this is a thousand dollars net profit, a month. And it goes right to the bottom line because there's a lot operating expense associated with you. Haven't added one expense for having that there, you know, it's, we can get an expenses later on how to categorize them, but basically you're running your hotel and you just have this unused space on your counter and you don't have to hire anybody to manage that space.

You don't have to pay any rent on the next space. You know, there's no extra electricity for that space. There's nothing. So there's no additional expenses. If there are, it's like two or three cents. There's nothing.

Mircea Cornelison11:59

Just the cost of those cookies, candies...

Terry Cornelison12:01

You buy the candy, you sell it.

And that difference goes right down to your bottom line. That's your net profit, right? So after visiting a number of hotels and each one of them tells me how much money they make from that, and a thousand was a pretty common number.

Well, I was thinking, well, why don't you just use more counter space? Well, because over time you realize they've tried that, but this size, this is basically, and these are the options that people like. Hershey's bar, Snickers bars, you know, certain kinds of gum, you know, they're, they're things that sell over and over and over they're hot items.

It's not worth, you know, they've tried other things. So I don't have to try setting up my entire counter worth of different selections. I know now. I've learned that from somebody else. So I just set up shop and like I said, from day one, my entire trip was paid for itself on the first month.

Mircea Cornelison12:49

You're not taking advantage of them, but they did all this work and they're happy to share information with you, if you show the initiative to go and reach out to them in a friendly way.

Terry Cornelison12:57

But here's the thing, when I got to the towns that I had marked that were similar to ours, where they had universities, you know, was really more interested in, I mean, I was interested in what they had to say, and they were conference centers as well, and I noticed that almost all of them had some kind of gift shop.

Most of them were fairly small because they didn't have the big lobby, but they had a little gift shop and I asked them how that was going, and these guys are saying they were making a thousand dollars or more a month from the gift shop. And the reason is they're in a college town and people who come their, parents especially, but anybody coming, staying at the hotel, they get a t-shirt, but they don't buy that many things from these stores because they always cost a little more than they could get them somewhere else. You know, go to the university. They are $40 at the university for the sweatshirt. The at the hotel conference center, but they still make a thousand dollars, a month, with this little shop because they have a good selection of what people normally want when they come to those events. They pretty much buy the same stuff over and over again. They buy sweatshirts and t-shirts and certain kinds of gifts or things that are... memorabilia.

So I'm learning that. I come back and they have built this gigantic lobby in there, which is just open space, couch, fireplace, all this.

And I'm thinking this is a gold mine. So I talked to the owners. I said, you know, all we have to do probably for a couple of thousand dollars, we can build, just put a glass windowed wall here and here, and make a little space, maybe a third of that large area and put in a gift shop. And, you know, they thought it was a good idea, and we thought, well, let's give it a try. So I went up to the university, and I talked to them and looked at what their prices were and asked them what their, best-selling items were. We're going to be in direct competition with the university, but they're telling me everything. They're saying, "Yeah, oh, we're great. Happy to have you selling our stuff, and promoting the university and get our name known out there and making people feel good about us. And they come back here and they...", you know. So they had no, no, "Hey, wait a second. If we tell you, people are going to stay with you. They're going to buy, they're going to come up and buy from, from us".

They had none of that. It was like a win-win. They're coming to WSU, for example, they're getting WSU stuff. They're out there spreading the word about WSU. It all helps everybody.

Mircea Cornelison15:20

So business owners not locked in total war with each other.

Terry Cornelison15:23

It's friendly competition. And of course we helped them in a lot of ways back and forth too, because, I learned their inventory, had a list their inventory, and when people would ask about things, "We don't carry that, but the bookstore has that. And just talk to Eileen when you get up there and she'll help you."

So it became a two-way beneficial street. But, here's what happened: first of all, we did two things, I put a little rack up there, very nice. We built a very nice little rack with those items, on the counter, and that just automatically made more than a thousand well, in the summertime, like $300 or $400 a month. But in the winter time, it would make you know, $1,000 to $1,500.

Of pure

Mircea Cornelison15:57

profit.

Terry Cornelison15:58

Pure profit. Pure net profit before taxes. Yeah. But then the other place started out the first month of the college season. It made us like $2,000. I mean, it was like. Okay. That took care of our summer. Those two things alone that I learned from that trip put us in a profitable position overall for the year just by implementing those things.

Mircea Cornelison16:22

These numbers are back in the eighties.

Terry Cornelison16:24

But that's, that's only on the income side. On the other side I learned. And then I, I took numbers, and I called and talked to these people and developed relationships with some of these people that were really friendly and helpful on my trip. Competitors.

And when I talked to them, I said, "You know, I wrote down the name of that place, but you know, I'm not sure which model that you all are using that really works for the mattresses and the box springs". So I, you know, developed a relationship with them and the bedding and all those things that that stuff turns over. In every given year, there's so much of that stuff that you're now replacing, replacing, replacing. Well on the cost side, just by knowing what is the good quality which lasts three years instead of three months, you can just start to calculate the savings there. So it isn't instant savings, but when you start going over time dividing the total costs over time, it's very significant savings so that you have a larger profit margin.

Mircea Cornelison17:21

So not only are you learning things to help increase your sales, you're also learning tips and tricks, insider secrets to cut your costs, which ultimately just increases your bottom line net profit.

Terry Cornelison17:33

Yep. But then there's another thing. When I'm talking with the front desk clerks and the housekeepers and the maintenance people, I just have conversation with them. And I'd say, "Can I buy you a cup of coffee. Again. if the general manager allows me to talk with them, then we might just go back to the laundry room or to wherever their little office is in the laundry room.

And I'd just talk to them about things. And, and "How's life? How's working here? And I learned a ton of stuff about, okay, what they like and what irritates them about their job, the way the place their treatment. You know, just all kinds of things. There's a lot of practices in the industry that it's a slow week, then you just bring a couple of people in and they do more work, but you have to have it done in the minimum amount of time. I mean, there's, just a lot of cost-cutting, measures by the owners, but what happens is the help then they're pretty clever. And they figure out that management doesn't really care about them. So they figure out ways to not do their best jobs either. It's just human nature.

So instead of cleaning a room in 15 minutes or 20 minutes they're taking 25 to 30 minutes there's a lot of things you can do in a hotel room, let me tell you, that I learned as one of the employees that costs money to the owners and the managers. That is just a way of getting, even for being treated, let's say badly or , in an uncaring way.

So learned a lot of that, which I, you know, I don't try to do that, I don't ever try to treat my employees in any other way than how I would want to be treated, but seeing from their eyes, how they view different management measures really helps you to make sure that you're proactive in that and that you engage them.

And certainly you engage your housekeeper and your maintenance manager in decisions about those areas. So if you're going to do something to make a change in product supplier or any kind of situation that will affect housekeeping, if you bring your housekeeper into that discussion, it just goes a long way into developing this feeling like we're all a part of this team

Mircea Cornelison19:47

They're going to give their best effort and treat the customers above and beyond.

Terry Cornelison19:51

And you know, I've been places where I got to know the local managers of the hotels in the Moscow-Pullman area. And I'll be talking, having a coffee with the manager, "Oh yeah, we're replacing all the, heaters in the rooms now."

And I said, "Well, how's that going? What are you using?"

"Well, I found a guy..." Then I realized that they never talked with their maintenance man at all. And I know most of them by now because we all hang out together we'd spent some time together.

That's another story, but I got all the hotel managers together. Met them individually. We'd have coffee once a week. Talk about how we could do things for all of our betterment and things like that. But I got to know most of their housekeepers, their head housekeepers, and their maintenance people, because I would be asking them to help my people out in the beginning and then we'd be helping them out. So it's that kind of family thing. But I would be talking to the maintenance manager for that hotel, where the guy is replacing all his equipment few days later and he's not in a good mood. And so, "My general manager, I don't know, what's he's thinking, but he bought this crappy stuff that I know does not work, will not last."

Mircea Cornelison20:52

He lives and breathes this stuff. This is his domain.

Terry Cornelison20:54

So he's the one who has to maintain it, and he wasn't even brought into the decision. So I'm just saying, this is a really rewarding experience that I had. One of the best as far as full spectrum, where I learned so much. Both on the profit and the cost side and the employee management.

So I entered the hotel business and hotel conference business, not having a clue of the inner workings. I knew business, but I didn't know about them. So here's the deal. I know enough about, you know, just from my life experience dealing with people and solving problems in my everyday life, like most of us do. So I just put those tools to work here. And I said, okay, I don't know somebody is bound to know or otherwise all the hotels would be bankrupt. You know, somebody has got to have figured things out. So I just found those people and asked them, "Hey, what have you figured out? And what have you figured out"? And then put that together. But at all levels, the owners, the department managers, the housekeeping managers, the housekeepers, the front end people, you know, just talked to enough of those to get a sense of how it all fits together and brought that back and started implementing those things.

And that's, that's the other part of the equation. If you bring it back and say, "Yeah, sounds a good idea. Maybe we'll do that next year..."You know, if you come back and you've found something that has potential of working, now is the time to get started on that. You know, we, I came back, we started construction on our little gift shop within probably 48 hours.

We looked at it, the potential of it, said why not? And had it built in, had it, you know, I was, back and forth with the university and the owners got the contractors there and got them going, and the front end manager looked after that. Within, I don't know, a week or two, we had it stocked people were buying things. We were making money.

Mircea Cornelison22:44

Okay. So didn't you have another client in Moscow-Pullman area who opened up some kind of a self storage business and had also success with reaching out to his competitors?

Terry Cornelison22:52

Yeah, actually he was a and he had property, right... his farm came right up to the edge of the community. It was a Pullman area.

Mircea Cornelison23:00

And you spent some time there working for the SBDC as a business advisor and with lots of businesses in that area.

Terry Cornelison23:05

Right, this is during that period. So he was living just outside of Pullman, had a farm out there. And he came to me to talk about, he had a piece of property, a little piece of his farm that he wanted to build a storage facility, a self storage facility and, okay, these two communities, Moscow and Pullman each had their own universities. And I think the whole area was around 50 thousand. They because they both had universities, students are always needing self-storage, so it's a good business in that neighborhood. So we came in, we were talking and I said, well, I, you know, from my viewpoint, it kind of looked like, well, we got a lot of storage facilities here.

I'm not sure if we need another one. And so we had a little conversation. I said, "Well, let's take a look. Let's do a saturation study and see what...

Mircea Cornelison23:49

And what is a saturation study?

Terry Cornelison23:50

You know, it's just it's pretty simple, basic first look to see if there's a need for a particular business in an area. For example, again, Moscow-Pullman area, 50,000 residents there , they have X number of storage facilities. What capacity do they have for storage facilities? For example, I think they had, let's see 18 storage facilities at that time in the Moscow-Pullman area. I thought, wow, that's plenty, maybe too many.

But we did this saturation study. And it looked like according to those who were providing the statistics and analysis, that Moscow-Pullman, a community with that characteristic of having two universities, there, could support like 28 storage facilities, of the size that they had.

Mircea Cornelison24:35

So, some basic calculations taking into consideration population and other industry trends.

Terry Cornelison24:40

Yeah. So the main thing is if the study shows that your community could support, let's say 20 storage units, and you already have 28, then you're going to have to take business away from one or more, maybe everybody, to be successful in your business.

But if, on the other hand, you can, that community can support 30 storage facilities, and there's only 15. Then you have quite a bit of population there that you can access without being required to take business away from your competitors. It's a lot easier to enter a market like that.

Mircea Cornelison25:14

So it's like a first step as you're assessing the opportunity.

Terry Cornelison25:17

There's lots of things to consider, but that's a good first step just to see, is there a need in your community in general? Right. So we did that and turns out that there was a need. We were like, we had like 60% of the capacity that should have been available for that community. So that was the first step. Then, okay, let's take a look at the trends of storage facilities and, it looked like over the years, storage facilities have been... self storage facilities have been very consistent. They're growing in need and it's a solid business. Then we looked at what is the return on investment?

So, and it looked reasonable compared to other possibilities that he could consider, including farming that piece of land. And it looked like it was a reasonable return on investment. So, you know, he invests the money in. The money he would get back from revenues and all the tax deductions even have, et cetera, all that considered it looked like it'd be a very reasonable investment for him to make.

All right. So then where to get started? And this is where we just start talking about, okay, "How are you going to do this? I mean, that really, this is where all business begins to get serious. How are you going to do this? So in the conversation. Telling him that, I think the best place to start is just to go out and talk to some of these guys who already have facilities here and, you know, see what the, what's it like to be in this kind of business.

And, maybe something that sounds really interesting and simple from the outside. But when you talk to people who are actually doing it, you may find things that aren't so inviting. Things that, all right, you know, I have other options with my money and my land, and this might not be something I'd like to be doing day in and day out.

So I suggested that he go talk to the others, these people who own these existing facilities. And he said, "Whoa, I don't think so. They're not going to talk to me. What are they going to... I'm going to be their competition." And I, so I said, "Well, wait a second. I have done this for a lot of years." I gave him story after story of myself and my clients... talking with competitors and getting invaluable information from them. He said, "You know, it's not that I don't believe you, but I don't think that's going to happen here. I know this community. I was born and raised here. I just don't think it's a possibility." So I said, "Okay, well, you know, let's put some numbers together and take a look to see what this is going to look like... this kind of investment is going to return on you... get some details down." So did that. And then that was the end of our meeting there. And he set out and I heard from him about two weeks later, he called me, made an appointment, came in the office and he said, "You're not going to believe this."

And I said, "What?"

"That I actually went out and talked to one of those storage facility owners and I was absolutely. I gotta tell you, I apologize for being, you know, so obstinate in this, because I talked to him and I mean, we sat down and talked for hours. I mean, we just, he told me everything about his experience from, from starting up and all the learning curves that he had, and the process. So that gave me the courage to talk to somebody else. And somebody else. I literally talked to every single storage facility owner in Moscow-Pullman before coming here today. And you know, I can't tell you all that I learned,"

Mircea Cornelison28:35

What are some examples of what he learned from those interviews?

Terry Cornelison28:38

Yeah. I mean, so things like I had me, I had no idea, but he's telling me that here's some stories that happen. Clients come in, they rent a unit for three months, pay three months in advance, put whatever in that unit. And then he never hears from them again? I didn't know that happened.

Okay. So the contact information that he has, can't find the people, what do you do? You know, how can you cut the lock off and take their stuff out and do what with it? You know, what are you...

Mircea Cornelison29:06

Legally. Can you do it legally?

Terry Cornelison29:08

Yeah. I mean, are you going to get thrown in jail or sued or something if you do that?

I mean, do you have to do a public notice or something to try to find these people before you do that? Okay. If you then...

Mircea Cornelison29:17

Can you auction the contents and collect revenue from that?

Terry Cornelison29:21

Yeah. I mean, I hadn't ever thought about something like that, but here's, here's what happens. I mean, okay, this is what he was learning from these guys. This really happens in the business. So what do you do? There are a lot of legal requirements that have to be in place. And those need to go in your contract, your beforehand, and many of those things, who's going to think of that? I mean, if you're entering the business on your own by yourself, without talking to competitors, you simply go in there and create a contract that sounds reasonable, but there are so many situations that can arise, and do arise, in this particular business that you need to have something in there. Otherwise here's what happens: you have this storage facility, you have so many units available. And for every day that a unit is tied up because someone isn't paying, but you can't even contact them to get them to pay. And you have no legal recourse for that, you're losing money. So that all goes into your bottom line.

Anyway. So he learned things like what to put in the contract and how to deal with that, those situations, but many other situations like that.

Mircea Cornelison30:27

Insurance?

Terry Cornelison30:28

Yeah, exactly. I mean, there's, all kinds of when you go into business, one of the things that you need to do is talk to an insurance agent and find out what kind of general insurance do you need to have for your business.

And then in your kind of business, what kind of specific insurance should you have to cover you in situations that might arise? So this is what he learned from these people, situations that might arise, where insurance for that particular situation would be to your advantage to have. Things like, okay, in Moscow, sometimes a storm comes through. You get a lot of snow and when that snow melts, you can't help, but have your whole facility flooded. You know, it melts and it's going to find a way into each storage units or at least those on the outside of your storage facility. So, you know, what kind of insurance do you need for yourself, but also what kind of insurance do you need to advise for your clients to have?

But that also brings up another point. He learned things about what's the best kind of sealant to use for the concrete floors that you have that keep as much of the moisture from seeping up, and ruining those boxes of books...

Mircea Cornelison31:33

And this was just an unused plot of his farmland. So getting this information upfront before he commits to construction was probably critical.

Terry Cornelison31:42

Oh, absolutely. Yeah. How to repair the land and then how to prepare the concrete, how to seal the concrete, other things too. Things that you can advise to your clients to make them more loyal to you and want to refer to you more business. Things like, you have locks that are available that are the best locks for that kind of facility.

And you can either offer them for rent or offer them for, or just recommend that they get this kind of lock. That makes a big difference. When you talk to people like that, when they come in, they kind of feel like you're looking after them and you're selling them a lock, which when they go down to buy it at the local hardware store, your price is within a few cents or a dollar of difference. So you're not trying to rip them off.

That's a big thing. Other things is, are there, you know what pallets are? Wooden pallets? Okay. So wooden pallets come with about four to six inches of clearance off the floor. So to recommend that you put wooden pallets there and even have wooden pallets available for either free or very inexpensive for those clients who want to use them, so that if there is a flood or if there is moisture seeping out that, you know, you've done your best to prevent that happening.

But if it happens, you're not going to have a problem because you're especially, you know, the boxes and all that things that could be hurt, furniture you know, that weeps up into the wood on the legs or into sofa or whatever.

Mircea Cornelison33:04

And that's a pretty cheap solution to this problem. You can have, a relationship with your local grocery store or distributor warehouse to get their unused or slightly broken pallets probably for free or cheap.

Terry Cornelison33:16

Yeah. So all of that...those are the kinds of things he learned and it wasn't that one storage unit owner told him everything. But he just listened and made notes and actually he had pages for us to talk about and then to, incorporate into his plan for opening his business.

Mircea Cornelison33:34

And my guess is he probably also learned how to deal with those really problematic clients.

Terry Cornelison33:39

Yes. And I won't go into stories now. But there are really some strange stories that happen in storage units and, basically just about everybody that he talked with had some kind of story that you wouldn't believe. But in the end, all of them said, it's a business that you ought to consider going into because those stories, those things happen. Actually, after you get moved through that, you look back on it and say, that was really an interesting experience.

Couldn't have believed that people would do things in this way, but in the end, the overall recommendation by people who've been in the business for years say it's worth it.

Mircea Cornelison34:15

So his competitors were encouraging him to get in.

Terry Cornelison34:18

Right. Right.

Mircea Cornelison34:20

So the main takeaway for this couple of episodes is don't be afraid of reaching out to your competitors. You might run into some that are going to be rude or just cast you off, but persevere, because you will find some that are perfectly willing to talk with you and help you shorten your learning curve because they were in your position. And they've encountered all sorts of struggles on their journey to grow and build their business.

So go out there, go online, try to find some of your competitors. Find some that you really like, you like their websites, like their business model. Make a list. And if you've got a phone number, that's the best way, pick up the phone, call them. If not, I mean, future episodes, we can talk about other ways to hopefully get in front of them without getting lost in their various email inboxes or their message inboxes. But definitely take that first step.

Terry Cornelison35:06

Yep, absolutely. And this is a rare case here where just everyone was super helpful. You're