Starting a new business has never been a simple task. It requires an awful lot of planning, organization, tedious legal matters, and of course, resources. Not to mention that starting a new business takes time and energy. Moving companies are no different.
If you have always wanted to start a moving business, but you may be wondering, “Are moving companies profitable?” Don’t worry. The great thing about moving companies is that they will always be in demand, no matter the region. The fact that 14% of the U.S. population moves at least once every year proves it. Due to such a high moving rate, starting a moving company will pay off in the long run.
Building a moving company startup isn’t about one big move, but a series of planned, gradual steps. This article will help you figure out how to open moving company, as well as how to run a successful moving company that will stand the test of time.
1. Make a Detailed Business Plan
Every project realization starts as an idea, just like every business starts as a vision. Before you get into the complicated matters, you need to sit down and create a detailed business plan.
Creating a business plan for small moving company starts with asking yourself a series of questions. For example, what kind of services are you planning to provide? How many trucks are you going to buy? How many employees are you going to hire? How many moves will you be organizing on a monthly basis? How much money are you willing to invest in the company? The exact details of your business plan should depend on your ultimate goal.
After you take the time to determine what kind of moving company you’d like to run, you will need to research the industry and see what your future competition has to offer. The technical stuff, like choosing a name and logo for your moving company and deciding where it will be located, comes next.
2. Start Small
There is a common misconception that you have to come into the moving industry prepared and equipped with big moving trucks and warehouses. But this isn’t the case.
You can always start as a small company that specializes in local relocation projects. Smaller moving companies require a lot fewer resources, and they’re easier to manage. For a moving company startup, one moving van is enough to begin with. Once you break even and start to earn a profit, you can purchase more moving vans and work your way up.
To what extent you’re planning to grow your moving business depends on your ultimate goal. You can remain a local moving company, or you can expand your horizons and aim for long-distance moves or even international moves.
3. Consider the Ongoing Expenses
When starting a new business, many people only stop to think about how much money it will cost them to get the company up and running. They often forget to consider ongoing expenses.
Moving company startup costs include the van or truck and all the necessary moving supplies and equipment. Other costs incurred during the startup process include research expenses, insurance, license, and permit fees, technological expenses, and similar. You’ll need to set aside enough money to pay for all of these expenses when you first start your company. If you want to take out a loan, you will need a business plan for small moving company expenses.
Now, let’s talk about the ongoing expenses that come with owning a moving company. These include payroll, insurance rates, fuel costs, monthly overhead, taxes, vehicle maintenance, etc. Don’t forget about the money you’ll need for your company’s website, as well as a budget for a regular marketing strategy.
4. Tackle the Legal Stuff First
One of the most boring parts of starting a new business is the legal matters. That being said, they should be taken seriously. You’ll need to decide on a legal entity. To be more precise, you will have to make a decision whether your moving company will be a limited liability company (LLC), a sole proprietorship, a partnership, or a corporation.
A limited liability company is a good business structure for moving companies because you, as a business owner, won’t be held liable should your company get sued. If you’re going to start a moving company by yourself, the legal structure will be a sole proprietorship by default.
You must not forget to register for all the necessary taxes, but we’ll get to that later.
5. Moving and Transportation Permits and Licenses
You won’t be able to open a moving company without first obtaining all the necessary moving and transportation permits and licenses. Many business owners aren’t sure how to get moving contracts. To operate legally, you will need a federal license, a state license, and a local license. Note that if you want to provide long-distance moves (from one state to another), you will also need to get a license from the Department of Transportation.
Once you figure out how to get moving contracts, you’ll be legally allowed to purchase moving vans or trucks. Keep in mind that you might also need a commercial driver’s license. The exact licensing requirements depend on the state where you operate.
6. Hiring Enough Employees
The good news is that when you first open your moving company, you won’t be required to hire staff. However, when you start to get your first clients, it won’t be possible for you to do everything by yourself. Depending on the size of the company, you’ll need to determine exactly how many movers you’ll hire. It’s good to start with three or four movers.
Be careful about the people you hire for your company. They need to be reliable and trustworthy, or it will reflect poorly on your business. In addition, your movers need to be in good physical condition since they will be hauling boxes and moving heavy furniture all day long.
You’ll need other people on your team. Someone should be there to handle the legal matters and make sure the taxes are paid, like a bookkeeper. You can also hire someone to do your marketing for you, or you can just outsource this job.
7. Get a Good Insurance Policy
If you’re wondering how to run a successful moving company, a good insurance policy plays a major role. In order for your moving company to operate legally, you need business insurance. The reason you need an insurance policy is in case your movers damage your customer’s property. An insurance policy also covers lost items, injuries, and accidents. It also protects you and your business from potential lawsuits.
There are different types of insurance policies. You would benefit from general liability insurance, as well as auto insurance. You also need to have cargo insurance, which protects you in case any of the items get damaged in the process of moving. In addition, since you’ll be hiring staff who will do heavy-lifting, you should get worker’s compensation insurance.
8. Develop a Pricing Structure
Once you figure out how to open a moving company, the next step is to develop a pricing structure. This is where things get tricky. You need to find the perfect balance between overcharging and undercharging. You don’t want to charge more than your competition (unless you have something better to offer), but you still need to generate enough revenue to cover ongoing expenses.
Before you establish a pricing structure, write down all your monthly expenses. These can include vehicle maintenance, advertising campaigns, payroll, insurance expenses, fuel, packing supplies, and the like. When you get a clear idea of how much money you’ll need every month, set a fair pricing structure that will keep your business going.
Note that the Department of Transportation imposes certain restrictions on how much you’re allowed to charge for moving services.
9. Design a Great Website
Today, everything is online. In fact, it’s more likely customers will find out about your business on the internet than by to word-of-mouth. That’s why you need to take the time to design an engaging website.
The main point of a website is to generate quality leads. It also gives you the opportunity to provide your target audience with information about your moving company. A website is also a good place to let your customers ask you questions and reach out to you with concerns.
You should hire someone to design your website. They will know how to choose the right website layout that’s mobile friendly, add contact information and forms, integrate social media outlets, and add the right SEO-friendly keywords.
10. Don’t Forget About the Taxes
Something no employer looks forward to is having to deal with taxes. When you figure out how to get moving contracts, the next step is to register for federal and state taxes. This is done by applying for an employer identification number (EIN). You can do this online, and it’s completely free.
Depending on the type of business you have (LLC, sole proprietorship, partnership, etc.), you’ll have to pay different taxes. To apply for federal and state taxes, you will also need to open a separate bank account. This also allows you to separate the company’s assets from personal assets.
You can do taxes by yourself, hire an accountant or a bookkeeper, or outsource someone to do the taxes for you.
11. Create an Effective Marketing Campaign
A good marketing campaign can help your moving business grow and bring in new clients. You can always use traditional marketing tools, but you’d benefit more from digital marketing strategies. These include search engine optimization (SEO), content marketing, ad retargeting, geo-targeted advertising, blogging, pay-per-click advertising, and social media marketing.
Make sure to use social media outlets in your marketing campaign. This can help you increase brand awareness, drive traffic to your website, and attract new customers. Another good idea is to take advantage of Facebook and Instagram ads.
If marketing isn’t your strong suit, you can always outsource a digital marketing specialist or a social media manager.
12. Establish a Loyal Customer Base
Forming connections is an essential part of growing a business. If you stay connected with former customers, it will help you get referrals, which are very valuable to a moving company. It’s much easier to get new customers if your old ones are satisfied with your service and how you communicated with them along the way.
It’s not only important to stay connected with your former clients, but you can also partner up with lead providers, online brokers, suppliers, real estate agents, etc.
13. Making Your Business More Profitable
Are moving companies profitable? Yes, they are. But in order to generate a profit, you will need to estimate how much revenue the moving company will be required to make. It’s also important to keep track of all of your expenses.
To make your moving business more profitable, you can charge additional fees for packing and unpacking services. If the home has stairs, or if the movers have to transport boxes down three of four flights of stairs in a building, this can also incur additional fees. Some moving companies also charge for storage in case your customers need their belongings to stay somewhere until they’re ready to pick them up.
14. Be Prepared for Problems
Owning a moving company comes with many challenges. Instead of always focusing on the negative, you should view problems as opportunities to learn new things and overcome obstacles. Furthermore, once you experience an issue for the first time, you will know how to handle it the second time around.
15. Always Focus on Improvement
One of the biggest tricks of how to run a successful moving company is to focus on how to improve your service. There are different ways to do this. Always estimate your company’s growth and listen to what your customers have to say. Make sure to respond to customers’ feedback and answer their questions honestly. Focus on areas that need improvement.
Owning a Moving Company
Starting a new business can be fun and exciting, but it also comes with a lot of stress and unforeseen issues. When it comes to moving companies, there’s a lot of work that needs to be done before it becomes successful. Keep in mind that running a successful moving company isn’t achieved overnight, but one step at a time.
If you’ve just opened a moving company and you can’t seem to get any leads, feel free to contact us, and we will help you attract new customers.
