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How to Start a Moving Company
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Starting a moving company can be a rewarding endeavor, but it requires careful consideration of several factors. With an initial investment ranging from $50,000 to $200,000 or more, it’s crucial to have a strong business plan in place. Skills such as physical stamina, organizational prowess, and excellent customer service are essential to succeed in this industry.
While the average profit margin for moving companies is between 10% and 15%, it may take some time to break even, especially considering the potential challenges of vehicle maintenance, managing peak moving seasons, and ensuring customer satisfaction. By being aware of these factors and adequately preparing, you’ll be well on your way to building a successful moving company. Let’s discuss the details of starting your own moving company.
Considerations Before Starting a Moving Company
| Initial Investment | Estimated startup costs can range from $50,000 to $200,000+, including trucks, equipment, and initial advertising. |
| Skills Required | Physical stamina, organizational skills, customer service abilities, knowledge of logistics, and basic business management skills. |
| Demand | Consistent demand due to housing shifts, employment relocation, downsizing, and upsizing. Higher demand during summer months. |
| Location | While centrally located warehouses are advantageous, easy highway access is crucial. |
| Hours | Typically regular business hours, but flexibility is needed for long-distance moves or specific client requests. |
| Permits and Licenses | Required permits often include a business license, DOT number, and mover’s license. Specific requirements may vary by location. |
| Profit Margin | Averages around 10% to 15%. |
| Challenges | Vehicle maintenance, managing peak moving seasons, customer satisfaction, and potential liabilities and damages. |
Benefits of Opening a Moving Company
In 2019, about 31 million Americans moved their home or office — that’s about 10% of the U.S. population. Ongoing demand can translate into a stable career with good job security.
A moving company can also be recession-proof. When the economy is good, people move to bigger homes and offices. When it’s bad, people downsize to condos and smaller office spaces.
Plus, startup requirements are fairly low. To start your own moving business, you don’t need an advanced degree, a metric ton of experience, or a costly storefront. You can get rolling with basic moving equipment, moving trucks, and a website.
How to Start a Moving Company Checklist
Knowing your startup’s path to success can help you start your moving company with all the right turns. Use the startup checklist below to help you get your new business on the road.
1. Create a Business Plan
Your moving company will need a business plan. In as little as a few pages, your business plan explains how your company will run and grow, and can be essential when seeking outside funding. It’s a crucial step for first-time business owners, and it gives you the best path toward success, and away from critical mistakes.
When writing a business plan, consider including the following information:
- Company description: Explain what services your moving company will provide, and build out SMART goals for tracking progress.
- Market analysis: Explain the area’s supply, demand, opportunity, and trends.
- Competitive analysis: Who are your competitors, and how will you differentiate?
- Management overview: Explain who will be in charge of overall operations, day-to-day moving jobs, and business development.
- Products and services: List out specific services your moving company could provide, such as packing, unpacking, or appliance preparation. Will you charge per hour, per day, a la carte, or through packages?
- Marketing plan: Who is your target market? Families? Companies? Local? Interstate? International?
- Sales and service strategy: Will you have a sales team? If so, how will they sell your moving services? What customer service will your company provide to keep clients happy or resolve problems?
- Financial projections: Break down the funds you have, the funds you need, and the funds you expect to make. Consider how far out to forecast as well, such as one year, three years, or five years.
2. Choose a Business Structure
When you launch your new moving business, you need to decide how to structure it. Business owners in the moving industry often pick between a sole proprietorship or a limited liability company (LLC). If you want some help forming your new LLC, hiring a business formation service can take care of this responsibility for you.
3. Name Your Business
Do you have a business name in mind? Moving companies can have fairly simple names, like Flatrate Moving, or Two Men and a Truck. Wondering how to name your LLC? In most states, the name must include “Limited Liability Company” or “LLC” in its title, and another company can’t already be using the name. You can get around printing LLC on all your marketing materials with a DBA as the name for your moving company.
Name your moving company
Enter your desired LLC name to get started
4. Register Your Business and Open Financial Accounts
Once you’ve selected the name for your own moving company, register your business structure with the state. This usually means filing LLC formation documents and paying any filing fees. A business formation service can also take this off your plate.
Go to the IRS website and request an employer identification number (EIN). Your EIN is required to open bank accounts, apply for a loan, pay employees, and pay taxes.
A moving company typically needs liability insurance and auto insurance. Some companies also need cargo insurance. Consider working with a local agent to get the right coverage.
Opening business bank accounts keeps your personal and business finances separate. Also consider working with an attorney to draft a standard services contract for customers.
At this stage, many moving companies also register the company’s domain name so they can set up a business website. If you’re using social media platforms such as Facebook or LinkedIn to market your moving company, you can set up those accounts, too.
5. Determine Your Business Costs
Costs for procuring and maintaining one or more moving trucks will generally start at several thousand dollars per truck, depending on factors such as size and condition. Other durable and consumable supplies may cost a few thousand dollars.
Ongoing costs may include payroll expenses, payroll taxes, and insurances, such as health insurance, liability insurance, and vehicle insurance. Also budget for a website and other marketing, such as printing business cards or running ads.
How do you fund your startup costs?
- Bank loans typically require a business plan, collateral, credit checks, and other financial paperwork.
- If friends and family believe in your startup chops, they may be willing to loan varying amounts to help you get started. Back up that trust with written contracts so everyone is on the same page — and to avoid any bad blood.
- Business credit cards can give you immediate buying power, but be aware of interest rates.
Federal loans through the Small Business Administration (SBA) have a lengthy process, but they can be a solid path for startup capital.
6. Purchase Equipment For Your Moving Company
Equipment your new moving company may include:
- Moving vans and/or trucks
- Moving dollies and blankets
- Furniture belts
- Boxes and packaging supplies
- Ratchet straps and tie downs
- Crates
- Bins
- Pallet jacks
- Ramps
Before you buy equipment, talk to another moving company owner or employee to ask about essential gear. Stay within your budget, and consider starting with the bare essentials. Take a look at the equipment that professional movers use in a list from Olympia Moving.
7. Market Your Moving Company
A marketing plan can move your startup toward success by helping you attract potential customers.
It’s a smart play to start with a simple Wix or Weebly website. These prepackaged options are relatively inexpensive, easy to maintain, and present a professional appearance.
You can also post useful content to social media accounts, complete with pictures of current jobs and testimonials from happy clients. Moversville has a great piece on writing moving company social media posts that get traffic and build client lists.
Joining online directories such as Google My Business and YellowPages can help more people find your local moving company too.
Don’t forget word of mouth. Ask customers for referrals — and reward those who refer you to another client.
Types of Moving Company Businesses to Start
When it comes to your moving company, there are different types of moving businesses you can start as well as niches you could specialize in based on the opportunities around you. Consider:
- Residential movers
- Corporate movers
- Small-scale movers, who only do moves for apartments and condos
- Structural movers (relocating large buildings)
- Premium movers, who specialize in the secure transport of high-value items
- International movers
- Moving company franchise, where you develop the business model and work with others who pay in franchise fees in order to operate a business under your brand
Bottom Line
A moving company is a type of business that can be easy to start. There’s a low barrier of entry, startup costs are minimal, and moving services are always in demand. Starting any new business can take time to get off the ground, but with some patience, the opportunity to grow into a successful moving company is there.
Moving Company FAQs
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A business formation company can make setting up your business a breeze.
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Since a moving company is fairly easy to start, the biggest challenge is often competition. As you complete jobs, it’s a good idea to ask customers for referrals and encourage them to review your work. Review sites can sway a potential customer’s decision, so adding positive reviews to your profile can help set you apart from competitors.
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On average, movers charge between $55 to $320 per hour, with the national average landing at $100. Additional fees can be added outside a certain radius. Moves that are more than 50 miles outside of the city, for example, can increase by $20 to $30 per hour. Any specialty or oversized item that needs to be moved can be quoted separately, such as a hot tub, high-value art, pool table, or playground.
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The standard rate is $100 an hour, and most smaller moves are quoted at four hours. Each move can bring in about $400. However, that’s not all profit. Estimate about $100 for gas, repairs, and depreciation on your truck. Plus, you’ll need to pay employees.
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A moving company can be set up to generate passive income as well. Your business can reach a point where you simply manage it, or minimally manage it, and have others do all of the heavy lifting. It could take a few years to reach this scale, but it’s something to keep in mind for your long-term business plans.
Disclaimer: The content on this page is for information purposes only and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.
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