In its first 25 years, Matthews-based Morningstar Mini-Storage grew into a successful company, with 72 properties covering 5 million square feet of storage space in several states.
“Our idea was to build and hold everything,” said Dave Benson, 45, company president and son of founder and Chairman Stephen Benson, 73.
Then, in 2006, the Bensons made what turned out to be a momentous decision: They’d sell off all but three of their Morningstar properties to a leader in the mini-storage industry. That leader, Public Storage, bought out Morningstar’s business partner. Staying on wasn’t ideal because that meant taking on a more passive role in their own company, Dave Benson said.
Intentionally shrinking the booming family business wasn’t exactly the type of change the Bensons sought at the time. Turns out, going small for a few years would prove to be a smart and timely move – and a pivotal turning point for the business founded in 1980.
By luck and coincidence, Dave Benson said, the company sold off those properties during a high point in the economy and ahead of the recession that began December 2007.
Becoming a smaller company also allowed more flexibility in rebuilding – which was “a lot more fun,” Dave Benson said.
Earlier this year, Morningstar ranked 30th among the 100 largest self-storage operators in the U.S., according to Mini-Storage Messenger, an industry publication. That ranking came before Morningstar acquired nine more properties from a South Carolina-based company.
Growing back slowly: When Morningstar’s leadership team sat around a table in 2008, some wanted to discuss going back into full-growth mode quickly. But Stephen Benson urged caution. He predicted the recession could last a while. (It ended in June 2009.)
Drawing on Stephen Benson’s experience and staying true to the company’s founding ideals of operating well-run, well-built mini-storages, company leaders tempered their expectations for growth and proceeded slowly. When securing business loans to buy properties became difficult, Morningstar worked locally with banks it had turned to before. The company also dropped rates on storage rentals.
All that meant some slow years, and the Bensons said they made plenty of mistakes. In 2010, Morningstar bought two properties. In 2011, it didn’t buy any.
Back to boom times: Today, the Bensons have slowly grown their business back almost to 2006 levels. Buying properties all over the Southeast and renovating them to Morningstar standards, they now own and operate 64 mini-storage properties totaling 4 million square feet of storage space in the Carolinas, Virginia, Georgia, Florida, Ohio, Texas and Nevada, and nine marinas in the Southeast. This includes 10 properties in the greater Charlotte area, and Morningstar has plans to acquire 10-15 properties in 2013. The company employs about 250 people.
“I think our timing was good,” Dave Benson said. “We were lucky to be out at the peak (of the market) and cautiously back in when it went south.”
The Bensons’ tips for steering a small business through a recession:
• Follow world news. Seemingly unrelated items such as manufacturing indexes and crop news could affect your business. Revise your expectations for growth based on these developments.
• Pay attention to your competition. If the competitor down the street is dropping prices, you should, too.
• Be self-critical. “We’re always looking back and saying, ‘Are you sure this is right?’”