Boston Business Journal
ENTERPRISE

Storage on the move
Early entry, evolving business model has Store To Door delivering steady growth
Author: Bill Archambeault - Journal Staff
From the May 14, 2004 print edition

WOBURN -- The way Jim Wayman sees it, the mobile self-storage industry is on the verge of experiencing what happened to the pizza-delivery business more than 20 years ago. Consumers are becoming more familiar and comfortable using mobile self storage, and competition is growing rapidly as a result. But the increase in visibility and acceptance more than outweighs the arrival of new rivals on the scene for companies like Wayman's Store To Door LLC.

"Ten years ago, there was no industry. Today, it's exploding with people getting into it. Because the public is getting used to seeing self-storage delivered, it's booming," said Wayman, president and CEO.

"Competition is good and the threat of competition is good," he said. "We've been in business long enough to pick our niche and know where we're going." Like most mobile self-storage firms, Store To Door brings large crates to a person's home or business site, which are then filled with furniture, clothing, files or whatever, then hauled off to a secure storage warehouse. Store To Door also acts as a mover, shipping the crates, which it calls "vaults," across the country and even internationally. The Woburn-based company, which also has offices in Illinois, Maryland, upstate New York (two locations) and northern Virginia, is doing more than $7 million in revenue and growing about 15 percent a year, says Wayman.

The firm is seeing strong growth in storing business files, which accounted for roughly 5 percent of Store To Door's business when it started six years ago, to roughly 40 percent now. Wayman foresees the business storage component accounting for half of his business soon. The company has also been innovative, developing a disposable shipping crate that is strong enough to survive even international travel with 300-pound test corrugated paperboard an inch-and-a-half thick.

The company found that it was costing too much to ship back the empty permanent crates, so it devised the one-way model. Wayman started the company at a time when there weren't many like it -- he had been running a records-storage firm called Safesite that he sold to Iron Mountain Inc., the Boston-based records-storage company, in 1997 for $25 million. Safesite had 14 locations and 450 employees when he sold. "They came to us with an offer we couldn't refuse," Wayman said. After waiting out a noncompete clause, Wayman used the proceeds from the sale to launch Store To Door with no help from bank loans. Along with his business partner, Store To Door chairman Tom Golisano, they invested about $10 million in the company.

Unlike Iron Mountain, Store To Door focuses on smaller companies,. such as doctors' offices and law firms. The industry has now grown to the point where Store To Door and several other mobile self-storage firms are launching an industry trade group called the Mobile Self-Storage Association. The group is setting up a web site, establishing its bylaws and launching a membership drive. Randy Weissman, a member of the executive committee and spokesman for the MSSA, estimates there are maybe 70 companies nationwide offering mobile self-storage. And even though the Boston area is relatively well-represented, it's nowhere near a saturation point, he said. "The East Coast is underdeveloped in regular self-storage, probably because of things like property values," Weissman said. "And it's not a cheap business to get into. It takes a lot of working capital."

Wayman, who estimates a startup mobile self-storage company has about a $2 million barrier to entry, says he's learned a lot in the past six years and has been able to reduce the amount of guesswork involved in opening in new markets. Figuring out how much space to rent, how long to rent it for and when to buy a warehouse or build your own all had to be learned, he said. When he started the company, it required roughly $100,000 a month in revenue to break even. Now that number's about $55,000, he said. He's gotten a better handle on renting warehouse space, and once a new market is established, his strategy is to buy or build the space. Store To Door is currently building a $7 million, 70,000-square-foot warehouse facility in Sterling, Va. But business is doing so well that Store To Door has reduced its advertising expenses from $150,000 a year, primarily in yellow-pages advertising, to about $50,000 a year now. He does rely on an outside sales force, however, part of the 50 employees the company has in all.

Between capturing more business in his existing markets and expanding the company's line of services, Wayman sees mobile self-storage delivering solid results. "I think you could say we'll double, easily, in the next five years," he said.