People move for all kinds of reasons, from starting a new job to pursuing love. However, they don't accomplish their moves across cities, states, or countries on their own. Whether they're moving a business or a household, most people hire a moving company for assistance.
A moving company is one of those businesses that will always be in demand. If you're looking to found a startup that will bring in consistent income, a moving service is a safe bet. Another benefit is that you don't need a formal education to start a moving company, so you can pursue this option without a degree. Find out how to start your own moving company below.
The First Moves for Establishing a Moving Company
Of course, if you want your moving company to be a success, you'll have to invest some time, energy, and money. Advanced planning is essential.
Write Your Moving Company Business Plan
A business plan can help you structure your moving company, helping ensure your new business is a success. You should draft this document before you take any concrete steps to start your company. The U.S. Small Business Administration (SBA) provides a sample template that you can use to structure your business plan.
Here's an overview of what your business plan should include:
- Executive description
- Company description
- Service and product description
- Market competition analysis
- Organization and business structure (e.g., will you operate alone or with a partner?)
- Marketing and sales plans
- Financial projections
- Funding request (if you plan to ask for external funding)
Define Your Target Market Focus
When you write your business plan, one of the first steps you'll have to take is to describe your service. For a moving company, the main question is whether you will provide long-distance moves or only local moves. Long-distance moving tends to be more complicated in terms of logistics but it can also be more lucrative.
You also have to determine whether you want to offer residential moving, commercial moving, or both. This will help you determine your potential customer base. When you're first starting your own moving business, it can help to cater to a niche target audience to stand out from the competition.
Set Up a Pricing Structure
Once you've defined your services and products, you can structure your price plan. It's important to set a clear price plan in advance because you will have to provide future customers with "not to exceed" estimates.
Local moving companies generally charge by the hour. This rate should cover the cost of the truck, equipment, materials, and manpower. The number of trucks and movers needed will impact the price. For example, a single truck and two movers may cost about $120 per hour. Long-distance moves must also take into account distance traveled, fuel use, and a significantly longer time span.
Further, note that rates vary between states and depend on details like the time of year. For example, it's generally cheaper to move on a weekday than a weekend and also more cost-efficient to move mid-month rather than toward the end of the month (when leases usually end). There are also local market trends. For example, in a college town, moving rates spike at semester's end.
A market analysis (which you should include as part of your business plan) can help you determine an appropriate price point. Research other moving industry professionals in your area to see what their fees are like. You don't want to overprice your services or you'll have trouble getting customers.
Determine Your Overhead Costs
You'll need to make some upfront investments to get the materials and equipment you need to run a successful moving company. Calculating your overhead costs will allow you to figure out how much startup capital you need. You can then add a funding request to your business plan and use it to approach lenders and investors to secure the liquidity you need for your moving company.
Here are some possible startup costs associated with a moving company:
- Moving trucks
- Packing materials
- Wages for movers
- Fuel costs
- Moving equipment (e.g., hand trucks, moving blankets, ramps, moving dollies)
- Business licensing fees
- U.S. Department of Transportation (DOT) fees
- Federal Motor Carrier Safety Administration fees
- Commercial insurance coverage (more on this below)
Moving Ahead With Your Moving Business
With your initial planning complete, you can move on to officially starting your business. Here's how to formally start a moving business.
Get the Licenses and Insurance You'll Need to Operate Safely
Licensing requirements for moving companies vary between states. For example, some states require a U.S. DOT certification for moving trucks or drivers. Other states may also require you to register your moving trucks and drivers at the local level with the relevant state public transportation commission.
Check your area's regulations to see what permits you may need to legally operate a moving company. You can check with your State Movers Association to see what requirements you need to fulfill. Further, if you opt to offer interstate moving services, you will have to register with the Federal Motor Carrier Safety Administration (FMCSA) and have a U.S. DOT number.
Insurance is an essential investment for any successful moving company. What happens if a moving truck is in an accident? You need insurance to cover damage to the vehicle, cargo, and any people involved. You may also want workers' compensation insurance to cover general employee injuries. For example, movers do a lot of lifting, which can cause injuries. Insurance also makes you more marketable. Many businesses or individuals won't hire a mover without liability insurance.
Establish Your Moving Business as a Formal Legal Entity
In addition to securing the specific licenses and insurance you need, you should also formally register your moving company as a legal entity with your state. Examples include a limited liability company (LLC), corporation, and sole proprietorship. Regulations regarding entity formation vary between states so check your local laws before proceeding.
Whatever type of entity you opt for, you will have to designate a name when you register your business. Choose your moving company name carefully. You will use your business's legal name on all formal paperwork associated with your company, including invoices and estimates. You will also use it for marketing materials, like the signage on your moving trucks, business cards, website domain name, and more.
Get Your Financial Paperwork in Order
Once your business is formally established as a legal entity, you should receive paperwork confirming your business registration from the state. You can use this documentation to open a business bank account. It's important to set up a separate account to receive customer payments and keep this money separate from your personal finances.
You can also pay employees out of your business account. Note that you will need an employer identification number (EIN) to pay your employees. This is similar to a Social Security number but it's specifically for companies. You can apply for an EIN directly through the Internal Revenue Service (IRS).
If you haven't already done so, take this moment to figure out which state and federal tax reporting requirements your company is subject to. This will depend in part on the type of legal entity you've established. For example, the filing requirements for an LLC are different from those of a corporation. Check with your state's Department of Revenue to get started.
If you're unclear on your tax obligations, consult a local certified public accountant (CPA) who handles tax issues. You don't want to get into hot water with the IRS because of a misunderstanding. You might even decide to enlist the regular assistance of a CPA to handle your bookkeeping and tax filing as your business grows.
Start Promoting Your Moving Company to Get Your First Clients
With the administrative elements of your business in place, you can start promoting your moving company. Start by defining your brand. This is basically your company's image - how people perceive it. Your brand image includes visual elements like your logo and content-related elements, such as the tone and verbiage of your marketing materials (e.g., your website).
With your brand defined, you can start implementing digital and traditional marketing tools like:
- Your website should include essential information like pricing and your service area. You can create your own site using tools like Wix or Squarespace or hire a pro to design your site via a platform like Upwork.
- Social media platforms like Instagram, Facebook, Twitter, and TikTok are great ways to connect with the community and share up-to-date information on promo offers and other current events.
- Online business listings on platforms like Google My Business and Yelp allow customers to post testimonials. These offer valuable "word of mouth" references for new customers and can help drive potential clients to your business.
With these elements in place, you can start looking for creative ways to spread the word about your moving company. WebFX offers marketing ideas for movers, like using referral programs or advertising coupons during the off-season. You might also want to invest in search engine optimization (SEO) services so people can easily find your site via search engines like Google.
Find Ways to Enhance Efficiency as Your Moving Business Grows
As you get more customers and your moving business grows, you'll want to scale up to meet demand. This can involve adding more vehicles to your fleet and hiring additional movers. As your business grows, you'll have to maintain streamlined and organized business operations. This is especially true when it comes to money management.
Your moving company will have to generate varied financial documentation, including estimates and invoices. Skynova can help make the job easier with easy-to-use business templates that you can tailor with your personal business information and in accordance with each customer's profile.
You can also use the Skynova software to keep track of your finances, creating a central hub for money management. Manage invoices, customer payments, deposits, and more using one centralized system. This will save you time, allow you to focus on your core business competencies, and further streamline your bookkeeping and tax-filing processes in the future.
Skynova Can Support Your Moving Business
Managing a moving business means staying on top of a log of (literally) moving parts. When you're tracking various movers and vehicles and ensuring customer satisfaction, the last thing you want to worry about is a money matter. Skynova helps minimize this administrative burden with user-friendly templates and a streamlined accounting software system.
Find out how Skynova can support your success as a small business owner.