How to Start a Moving Company

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Quick Reference

People are always moving, and that is not going to change.   Moving is hard work, though, and many people do not want to do all the heavy lifting themselves.  Starting a moving company could be a profitable business opportunity for you.

Business Overview

A moving company helps people or companies move items from one location to another.  They may also offer packing services.  They may work locally only or move items to other locations in the state or anywhere in the country.

Industry Summary

According to Move Buddha, around 31 million people move in the United States per year, and the moving industry size is $86 billion.  The industry has steadily grown about 3% per year.  There are about 7000 moving companies in the United States.

Related Industries

Home Staging

Industry Trends

The real estate market affects the moving industry and is expected to do well in 2021.  However, renters move more than homeowners, and the economy affects the moving industry.  When the economy is down, jobs are less available, and people cannot afford to move.  Millennials are moving less compared to previous generations due to limited job opportunities.

Target Market

Your target market will be people preparing to move.

Skills, Experience, and Education Useful in Running a Moving Company

There are several specific skills that you will need to open a moving company.

  • Experience.  Experience working for a moving business is helpful.
  • Business knowledge and experience.  You will need to have at least some basic knowledge of marketing, finance/accounting, and human resources.
  • People skills. You’ll need to be able to build rapport with your customers so that you retain them as customers and keep them coming back.

Costs to Start a Moving Company

Here are the typical costs you will face when you open a moving company.

  • Truck $15,000 + or more if you plan to acquire more than one truck
  • Moving equipment such as dollies, pads, blankets, packing supplies, tie-downs, furniture belts, and other items $1,000 – $2,000

Steps to Starting a Moving Company

Step 1: Write your Business Plan

After coming up with the idea, the next step in starting your moving company should be to write a business plan.  The business plan will make you focus on some important aspects of the business, such as who your customers are, how you plan to reach them, projecting sales and expenses, your value proposition to use for marketing, and more. You’ll also need to do some research to calculate exactly what your startup expenses will be, and what your ongoing expenses will be.

Not only will a bank require you to have a business plan if you need financing, but multiple studies have shown that having a good business plan increases the odds of starting a successful business. Writing the plan helps you to think through all the aspects of the business, and then serves as a guide as you begin.

How to write a business plan
Free sample business plans

Step 2: Name the Business

Finding the perfect moving company name can be challenging. Not only does the name have to reflect what you do and be appealing to customers, it also has to be available to use. You can check your state’s website to see if the name is available and register your name.  Your name should make you stand out, reflect your brand, and tell potential customers exactly what you do.

Step 3: Form a Business Entity

A business entity refers to how a business is legally organized to operate. There are four primary business entities to choose from, which include a sole proprietorship, partnership, corporation, and Limited Liability Company (LLC).  Each type of entity has its own pros and cons, such as liability exposure, costs, and administrative requirements.

RelatedComparison of Business Entities

Step 4: Select your Location

You need a location where you can house your truck or trucks, as well as all your supplies.  A location where you have a lot of visibility to the public is helpful, but not necessary.

Related: Choosing a business location

Step 5: Apply for Business Licenses and Permits

While there isn’t a license specifically for a moving company, a DOT number will be needed from the US Department of Transportation in some states.  In addition to registering for a federal DOT number, most states have a regulating agency that licenses trucks as well.

There will likely be general business licenses needed such as state tax ID number and an Employer Identification Number.  

Related: Common business licenses, permits, and registrations by state

Step 6: Find Financing

Coming up with a good business idea and having the skills to run it are one thing, but getting the funding to start a new moving company is another.  In order to get a loan, the borrower(s) will need to have good credit and be able to invest 15-25% of their money towards the total start-up costs.

Related: Finding the money to start a business

Step 7: Open a Business Bank Account

Keeping your business and personal finances in separate business bank and credit card accounts makes it easier to track the income and expenses of the business.

Step 8: Get your Marketing Plan in Place

A moving company will need to set aside a budget to cover marketing costs on a continuous basis. Common marketing techniques for a moving company include social media marketing and online advertising. Additionally, advertising in the newspaper classified sections and posting flyers on bulletin boards can be effective as well.

If you also perform other moving services, such as packing material and storage, be sure to include these services in your advertising.  By including more than one service, you can attract more customers and have the opportunity to provide them with a variety of moving services.

Related: Low-cost ideas to market a new business

Step 9: Get Business Insurance

A moving company needs several types of insurance for full coverage:

General liability insurance coverage can help protect you from third-party claims of bodily injury and property damage.

Professional liability insurance protects you from claims of professional errors or negligence that result in a financial loss.

Vehicle insurance to protect the moving vehicles.

Worker’s compensation insurance covers expenses like medical bills and legal fees that a business might face if an employee were ever hurt while working.

Cargo insurance will protect the customer’s belongings while they are in transport against damage and liability.

Insurance policies will vary. To get the most accurate idea of what to budget for insurance, request quotes from multiple providers. When comparing the quotes, consider not only the premiums but also how the plan exclusions, coverage limitations, and deductibles compare.

Related: Common types of insurance a business may need

Step 10: Hiring Employees

You will need employees to help you run your moving company.  Make sure that you select people with the right experience.

In addition to salary costs, your budget will also need to include other employee-related expenses. Workman’s comp insurance, unemployment insurance, and paid time off are common expenses that a business will need to cover when hiring staff.

Related: Hiring your first employee

Step 11: Set up an Accounting System

Setting up an accounting system for your moving company is critical to the long-term success of your business.

Staying on top of taxes not only keeps the business out of trouble with the government but the numbers can be used to track and monitor trends and cash flow in the business and maximize profits.

Related: Setting up accounting for your business

How Much Can You Potentially Make Owning a Moving Company?

The average local move costs about $1,000 but can be much higher based on the amount of items, mileage, and the number of movers.  If you do 2 moves per week at $1,000, you would make $104,000 per year in revenue.

Things to Consider Before Starting a Moving Company

Running a moving company or any business will have its challenges.  You need to be prepared and make sure that you know what you’re getting into.

Marketing and acquiring customers will be your biggest challenge and an ongoing expense.  It will take some time to build a brand and a customer base.

Determining how to price a moving business can be a challenge. If you have no competitors in your area, then it is difficult to determine the price of moving services, so research the prices of companies in areas similar to yours.

Make sure you maintain a cash buffer for slow times. Peak moving times tend to (but not always) happen more in the spring and summer and slow down at the end of the year.

Talk to other business owners for tips on starting a business and do your homework to determine costs.  Research other moving companies to see what they offer and what prices they charge.

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