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There are few businesses that will always be in demand. A moving company falls under that category. Whether it’s across town or across the country, consumers hire moving services for packing and transporting their household items on a daily basis.
Who is this business right for?
If your entrepreneurial spirit is looking for an industry that is stable in any market, starting a moving company is a sound choice. While you’ll need a few things to get started, the overall start-up costs are fairly low. And, since almost 80% of moves are in-town, the overhead costs are even lower. The job does require some heavy lifting, but the interaction with clients and personnel ensure no two days are alike.
What happens during a typical day at a moving company?
As the owner of a moving company, your daily tasks will require part muscle and part brains. Depending upon the client’s needs, you’ll be carefully packing items and transporting them from one location to another. While demand is high, it’s also highly competitive. You’ll spend part of every day on a marketing strategy, which should include social media posting, gathering information necessary to bid on local contracts, following up with client inquiries, and following up with clients.
What is the target market?
Typically, moving companies have a revolving door of customers. While a large percentage of people move each day, few are consistent repeat customers. Those looking for long-term stability seek out local businesses, who regularly require items moved from one location to another.
How does a moving company make money?
Revenue is generated from each move. Many companies offer services above and beyond moving furniture from one location to another. Each additional service increases your earning potential. Exact price will be determined by the level of service required and the miles logged for that particular customer, or the hourly cost for smaller, local moves.
What is the growth potential for a moving company?
Typically, moving companies choose to remain small, serving a small radius of customers. If you’re thinking larger scale, there are a number of businesses that have found success by franchising their enterprises and/or expanding their services. If partnering with a national franchise is part of your business plan, companies such as Two Men and a Truck and Little Guys offer wonderful franchising opportunities.
What are some skills and experiences that will help you build a successful moving company?
Your most critical skills for a successful moving business is personnel management and delegation of tasks. Whether on the phone or in person, much of your day will be spent interacting with customers and your moving team, so interpersonal skills is a must. Understanding your market will assist you in building a solid marketing and sales strategy. Movers need a decent amount of strength to move larger objects/furniture.
What are the costs involved in opening a moving company?
Start-up costs for a moving business are fairly low. Your first purchase should be a van or truck. Aside from transportation, you’ll just need a few basic items, which will set you back approximately $1,000-$2,000:
- Moving dollies
- Moving pads
- Furniture belts
- Moving boxes
- Packing and wrapping materials
Read our moving company purchasing guide to learn about the materials and equipment you'll need to start a moving company, how much to budget, and where to make purchases.
What are the steps to start a moving company?
Once you're ready to start your moving company, follow these steps to ensure that your business is legally compliant and avoid wasting time and money as your business grows:
- Plan your business. A clear plan is essential for success as an entrepreneur. A few important topics to consider are your initial costs, your target market, and how long it will take you to break even.
- Form a legal entity. Establishing a legal business entity prevents you from being personally liable if your moving company is sued.
- Register for taxes. You will need to register for a variety of state and federal taxes before you can open for business.
- Open a business bank account. A dedicated checking account for your moving company keeps your finances organized and makes your business appear more professional to your customers.
- Set up business accounting. Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
- Obtain necessary permits and licenses. Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
- Get business insurance. Insurance is highly recommended for all business owners. If you hire employees, workers compensation insurance may be a legal requirement in your state.
- Define your brand. Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
- Establish a web presence. A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers. Save 15% when you create a business website with Weebly.
Select your state below for an in-depth guide on completing each of these steps in your home state.
Should you consider joining a franchise?
Joining a moving company franchise can be a good option for entrepreneurs who prefer to use a proven model rather than start from scratch. While joining one can mean slightly higher initial costs and less control, a quality franchise offers great benefits such as initial and ongoing support, marketing assistance, and brand recognition.
Opening a moving company franchise typically requires $90,000-$700,000. Larger moving company franchises typically cost more, while more niche favorites often have lower startup costs.
Interested in joining a moving company franchise? Check out our favorites.
Where can I find a business mentor?
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
How to promote & market a moving company
Start by developing your brand. Design a logo that best represents you and will evoke trust. Include your logo and contact information on employee uniforms and the company moving truck. An user-friendly and intuitive website, as well as social media accounts are also critical components to your marketing strategy.
Recommended: Get started with local advertising for your business with a $300 credit from Yelp.
How to keep customers coming back
Be sure you’re listed in all local business directories and become an accredited BBB moving company. Join moving associations such as [International Association of Movers (IAM), who provide a wealth of information and assistance for their members. My Moving Reviews is also an invaluable resource for moving companies of all sizes. Treat your customers (and their belongings) with respect and care, as word of mouth goes a long way in this line of work.
How and when to build a team
Unlike other businesses, you cannot run a moving company alone. Your reputation hinges on a solid team of employees. They will be packing and moving both heavy items and fragile family heirlooms. Carefully vet each candidate to ensure honesty, integrity, and a solid work ethic.
State & Local Business Licensing Requirements
Many states require moving companies and/or moving vehicles to be registered with the state’s department of transportation.
Moving companies operating across state lines also need to register with the US Department of Transportation.
In addition, certain local licensing or regulatory requirements may apply. For more information about local licenses and permits:
- Check with your town, city or county clerk’s office
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
Maintain Personal Asset Protection
Don’t think that just forming an LLC, or any other type of business, will save your personal assets in case of a lawsuit or other matter by itself.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your LLC is sued. In business law, this is referred to as piercing your corporate veil.
Two of the simplest steps that will protect your business, and yourself, are to:
Open a business bank account
- This separates your personal assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment later on.
Moving businesses should consider requiring clients to sign a service agreement before starting a new project. This agreement should clarify client expectations and minimize risk of legal disputes by setting out payment terms and conditions, service level expectations, and intellectual property ownership. Here is an example service agreement.
Recommended: Rocket Lawyer makes it easy to create a professional service agreement for your moving business when you sign up for their premium membership. For $39.95 per month, members receive access to hundreds of legal agreements and on call attorneys to get complimentary legal advice.
How much can you charge customers?
Moving companies typically charge on an hourly basis and per mover. Standard costs are $25-$30 per hour per mover. When moving longer distances, many companies charge based on mileage and weight.
What are the ongoing expenses for a moving company?
Monthly overhead costs are relatively low compared to many businesses. Most start out running the company out of their homes, moving to a warehouse location when the business has grown significantly.
Your largest expenses will be payroll and payroll taxes. Vehicle maintenance, insurance, and fuel costs come in a close second. Other than that, all you need is a phone line, website support, and a regular marketing strategy.
How much profit can a moving company make?
Business owners who are willing to put in the extra effort to build their business have reported profits of more than $49,000 in the first year. Moving companies who focus on winning contract bids with local businesses make significantly more, reporting earnings upwards of $450,000. Your profits are directly tied to the amount of services you offer, how much you put back into your business, and your goals for long-term growth.
How can you make your business more profitable?
Companies who have reported higher earnings offer more than basic moving services. If your goal is to expand your business’ profits, consider including the following in your business plan:
- Charge additional fees for homes with stairs
- Bidding on contracts with local businesses