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Written by: Carolyn Young
Carolyn Young is a business writer who focuses on entrepreneurial concepts and the business formation. She has over 25 years of experience in business roles, and has authored several entrepreneurship textbooks.
Edited by: David Lepeska
David has been writing and learning about business, finance and globalization for a quarter-century, starting with a small New York consulting firm in the 1990s.
Published on November 24, 2021
Investment range
22,750 - $106,800
Revenue potential
$104,000 - $416,000 p.a.
Time to build
1 – 3 Months
Profit potential
$41,000 - $83,000 p.a.
Industry trend
Growing
Commitment
Full-time
Key considerations to keep in mind when opening your moving company:
You May Also Wonder:
How much should I pay my moving employees?
The average hourly rate for a mover is $12-$15 per hour depending on location. You want to find reliable workers who will stick with you, so you should consider paying on the high-end to boost employee retention.
How profitable is a moving company?
The profitability of a moving company can vary depending on factors such as location, competition, pricing strategy, efficiency, and the volume of business. However, a well-managed moving company can be profitable due to the consistent demand for moving services.
How do I market my moving company?
Market your moving company by utilizing online platforms such as a professional website and social media, implementing search engine optimization techniques, listing your company on local directories, leveraging customer reviews and testimonials, offering referral programs, and networking with real estate agents and other industry professionals.
How do you scale a moving company?
Scale a moving company by investing in additional resources such as moving trucks and equipment, hiring and training more employees, expanding your service area or offering specialized moving services, implementing efficient operational processes, leveraging technology for scheduling and logistics, and maintaining a strong focus on customer satisfaction to generate positive word-of-mouth and repeat business.
How can I differentiate my moving company from competitors in the market?
Differentiate your moving company by emphasizing factors such as excellent customer service, reliability, efficient handling of belongings, transparent pricing, insurance options, specialized services like packing or storage, eco-friendly practices, and showcasing any industry certifications, awards, or affiliations that demonstrate your company’s professionalism and trustworthiness.
How can I establish relationships with real estate agents and other industry professionals to secure consistent business?
Establish relationships with real estate agents and other industry professionals by attending networking events, offering special discounts or incentives for referrals, providing educational materials or seminars on moving-related topics, participating in local community events, and maintaining regular communication to stay top-of-mind when they encounter clients in need of moving services.
No business comes without pros and cons. You should consider them carefully to decide if a moving company is right for you.
The US moving industry has recovered from the pandemic slowdown, and demand is unlikely to decline anytime soon. The average American moves about a dozen times in their lifetime, according to the US Census Bureau.((https://www.census.gov/topics/population/migration/guidance/calculating-migration-expectancy.html))
Trends in the moving industry are:
Challenges in the moving industry include:
Startup costs for a moving company range from about $20,000 to well over $100,000, with an average of about $65,000. Assuming you don’t already have one, your largest initial expense will be the truck. It’s a good idea to keep costs low by purchasing a used truck and building out your fleet with newer models later.
You’ll need a handful of items to successfully launch your moving company. Here’s a list to help you get started:
| Startup Costs | Ballpark Range | Average |
|---|---|---|
| Setting up a business name and corporation | $150 - $200 | $175 |
| Business licenses and permits | $200 - $300 | $250 |
| Insurance | $100 - $500 | $300 |
| Business cards and brochures | $200 - $300 | $250 |
| Website setup | $1,000 - $3,000 | $2,000 |
| Initial marketing budget | $100 - $500 | $300 |
| Moving truck | $20,000 - $100,000 | $60,000 |
| Moving supplies | $1,000 - $2,000 | $1,500 |
| Total | $22,750 - $106,800 | $64,775 |
Your per-hour costs for a local move should come to about $60, including overhead and labor, and you should be able to charge $100 per hour, resulting in a 40% profit margin. Moving companies generally pay their workers $12-$15 per hour while charging their customers twice that amount per worker hour.
If you’re able to do five four-hour moves per week, you’d bring in more than $104,000 in annual revenue and $41,000 in profit, assuming that 40% margin. As your brand gains recognition and you add another truck, sales could climb to 20 moves per week. You’d also need to rent a commercial space and hire more staff, which would cut your margin down to about 20%. With expected annual revenue of $416,000, you’d still come away with a tidy profit of more than $83,000.
There are a few barriers to entry for a moving company Your biggest challenges will be:
Now that you know what’s involved in starting a moving company, it’s a good idea to hone your idea in preparation to enter a competitive market.
Market research will give you the upper hand, even if you’re already positive that you have a perfect product or service. Conducting market research is important, because it can help you understand your customers better, who your competitors are, and your business landscape.
Research moving companies in your area to see what they offer. Are there services you could offer that other companies don’t? Perhaps there are no “bargain” movers and you could provide a low-cost alternative. Or you could go to the other end of the range and offer a whole suite of specialty moving services, which might include packing and unpacking or securely packaging valuable items such as art and antiques.
To increase your revenue, you can add services beyond just moving, such as:
The average hourly price for a local move is between $80 and $200. In the beginning, you may need to be at the lower end of the range until you build brand recognition. For long-distance moving, you could charge $250 per hour or more. The average price for packing up a home is $1,000, but of course, it varies widely.
Once you know your costs, you can use our profit margin calculator to determine your mark-up and final price points. Remember, the prices you use at launch should be subject to change if warranted by the market.
Determine your target market based on your service offerings and desired brand. Do you want to be a bargain or a high-end mover? If you choose to be a bargain mover, your target demographic is likely to be college students and young professionals. You might market to them on Instagram and TikTok, rather than Facebook.
In the early stages, you could keep costs low by running your business from home, assuming you have a place to park your truck. But as your business grows and operations intensify, you’ll likely need to hire workers and rent out an office or warehouse. Find commercial space to rent in your area on Craigslist, Crexi, and Commercial Cafe.
When choosing a commercial space, you may want to follow these rules of thumb:
Here are some ideas for brainstorming your business name:
Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these.
Finally, make your choice among the names that pass this screening and go ahead with domain registration and social media account creation. Your business name is one of the key differentiators that set your business apart. Once you pick your company name, and start with the branding, it is hard to change the business name. Therefore, it’s important to carefully consider your choice before you start a business entity.
Here are the key components of a business plan:
If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist to create a top-notch business plan for you.
Registering your business is an absolutely crucial step — it’s the prerequisite to paying taxes, raising capital, opening a bank account, and other guideposts on the road to getting a business up and running.
Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business!
Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you are planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to moving services.
If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state.
Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your moving company will shape your taxes, personal liability, and business registration requirements, so choose wisely.
Here are the main options:
We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using an online LLC formation service. They will check that your business name is available before filing, submit your articles of organization, and answer any questions you might have.
Choose Your State
The final step before you’re able to pay taxes is getting an Employer Identification Number, or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN.
Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.
The IRS website also offers a tax-payers checklist, and taxes can be filed online.
It is important to consult an accountant or other professional to help you with your taxes to ensure you are completing them correctly.
Securing financing is your next step and there are plenty of ways to raise capital:
Bank and SBA loans are probably the best option, other than friends and family, for funding a moving business.
Starting a moving company business requires obtaining a number of licenses and permits from local, state, and federal governments.
Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), health licenses and permits from the Occupational Safety and Health Administration (OSHA), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits.
You may also need state-level and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more.
You could also check this SBA guide for your state’s requirements, but we recommend using MyCorporation’s Business License Compliance Package. They will research the exact forms you need for your business and state and provide them to ensure you’re fully compliant.
This is not a step to be taken lightly, as failing to comply with legal requirements can result in hefty penalties.
If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.
Before you start making money, you will need a place to keep it, and that requires opening a bank account.
Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your moving business as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.
Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account.
Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.
Here are some types of insurance to consider:
As opening day nears, prepare for launch by reviewing and improving some key elements of your business.
Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks. We examine several of them below.
You may want to use industry-specific tools such as MoveitPro, SuperMove, and elromco, to help with scheduling, estimates, marketing, and more.
Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism.
You can create your own website using services like WordPress, Wix, or Squarespace. This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech-savvy, you can hire a web designer or developer to create a custom website for your business.
They are unlikely to find your website, however, unless you follow Search Engine Optimization (SEO) practices. These are steps that help pages rank higher in the results of top search engines like Google.
Here are some powerful marketing strategies for your future business:
Unique selling propositions, or USPs, are the characteristics of a product or service that sets it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your moving services meet their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire.
Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your moving business could be:
You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running a moving business, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in a moving company for years and can offer invaluable insight and industry connections.
The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in moving services. You’ll probably generate new customers or find companies with which you could establish a partnership. Online businesses might also consider affiliate marketing as a way to build relationships with potential partners and boost business.
If you’re starting out small from a home office, you may only need a few employees. But as your business grows, you will likely need workers to fill various roles. Potential positions for a moving company would include:
At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need.
Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed, Glassdoor, or ZipRecruiter. Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent.
Very few people enjoy moving. But relocation might be necessary because of a new job. Others move to find cheaper housing and live in a place with a lower cost of living. As a mover, you can lift their burden and end their stress with your outstanding services. This is an industry that will never go away because people will always need to move!
With a moving company, you have unlimited potential to grow and make healthy profits. And now that you have all the information you need, you’re ready to make the move and launch your successful moving company.
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