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By Kimberly Lekman, Esq. | Legally reviewed by Tim Kelly, J.D. | Last reviewed September 22, 2022
This article has been written and reviewed for legal accuracy, clarity, and style by FindLaw’s team of legal writers and attorneys and in accordance with our editorial standards.
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One thing you can be sure of is that people will always be moving in and out of their homes and offices. If your business dream is to help with these moves, these ten steps can help you start a moving company that can be profitable and legal.
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To build a successful moving company, you need to create a plan before starting the hard work of packing boxes and moving furniture. A business plan is a formal document that serves as a roadmap for your business. It should include market research and financial projections. The contents of your business plan will vary depending on your business goals and preferences. But there are a few topics every business plan should cover.
Your business plan should contain:
You might choose to start small as you launch your moving company. You could begin by making local moves for friends, acquaintances, and neighbors to build a good reputation. If you are moving customers from home to home within the same town, you can make several trips with your pickup truck. Once you become profitable, you might upgrade to a larger vehicle and lease a commercial office location. Before committing to a lease, make sure local zoning laws allow moving companies in your chosen area.
Your pricing structure is another critical part of your business plan. Depending on your location and customer expectations, you might fare better by offering low prices than premium services. You will need to research your competitors' prices and offerings to find out which strategy is the most effective. The pricing structure for a moving business can get complicated because of the many variables involved. You will need to charge more for long-distance moves and large estates than you will for simple local moves. Make sure to provide for these pricing factors in your business plan.
After you have created your pricing structure, you can start to figure out how to become profitable. Consider all of your expenses against the prices you have calculated. This information will help you to determine how much business you need to do before you become profitable. This is called a breakeven analysis.
As you conclude your business plan, make sure to think through contingency plans for any roadblocks you believe your company might face. For example, how will your business cope with an economic slowdown? Or how would you handle customer dissatisfaction? Consider any other potential problems specific to your business and location to form backup plans.
Your marketing plan will form part of your business plan. This is your opportunity to get creative and figure out the right ways to reach your customers. Before creating your marketing plan, you need to decide what services you will offer and your pricing structure. You probably established these details in your business plan.
Another good place to gather information about the moving industry is your state's movers association. For a list of state movers associations, visit the Federal Motor Carrier Safety Administration. If you choose to join your local movers association, there are several benefits involved. They often offer moving business forums, marketing assistance, and industry education.
You will want to think of a business name that describes your moving services and is easy to remember. With that in mind, you need to make sure that your name is unique. You should conduct a thorough search to make sure that your name is available. It would be best to ensure that no other moving businesses or similar companies are using the same name as yours. This is important to avoid claims that you are infringing on another company's trademark. If another business sues you for trademark infringement, you may have to change your name and pay damages.
To avoid this legal hassle, you should search the internet for similar names. Next, search the United States Patent and Trademark Office's (USPTO's) trademark database for similar registered trademarks. Finally, visit your local secretary of state or similar state agency website to search for registered business names. With adequate research, you can be relatively confident that your name does not infringe on another business's trademark.
There are certain restricted words that you will not be allowed to use in an LLC's name. These usually include words that might confuse consumers into thinking that you are a government agency. You should not use words that imply that you have an affiliation to a bank, university, or other entity either.
Once you are satisfied that your business name is unique, you should check to make sure that you are following all of your state's other naming requirements too. There are certain restricted words that you will not be allowed to use in an LLC's name. These usually include words that might confuse consumers into thinking that you are a government agency. It would be best if you did not use words that imply that you have an affiliation to a bank, university, or other entity either. Most states require that limited liability business entities include a reference to their legal structure in their name. You should check with your secretary of state or a similar state agency to learn more.
All businesses have a legal structure, whether they choose one or not. If you open a business by yourself, the default business structure will be a sole proprietorship. If two or more people own it, it is a partnership by default. Your business will remain a sole proprietorship or partnership unless you take action to register it as a different type of legal entity.
As a startup moving company, a good way of structuring your business might be to form a Limited Liability Company (LLC) or a corporation. These structures may come with tax advantages and offer limited liability. Limited liability protects you from being personally liable if someone sues your business. So, forming a corporation or an LLC enables you to protect your home, cars, and other personal assets from business risks. LLCs are relatively easy to set up and have a less rigid structure than corporations. This makes them a popular business structure for small businesses.
To form an LLC, you need to:
If you form an LLC or a corporation, you must keep your personal and business funds separate. To avoid mixing your business finances with your personal accounts, you should open a bank account for your business. You should only use this account for business deposits and expenses.
You should not use your business account for any personal expenses. This is a necessary precaution if you have a limited liability business structure like an LLC or a corporation. If you mix your personal and business finances, you could lose your limited liability status.
When you first create your startup, you may not need outside funding. If you have a truck or van and are willing to put in some hard work, there might not be much to purchase when you get started. Aside from your vehicle, your main expenses will be:
If you choose to expand your business, you might want to make some purchases that will enable you to handle a higher volume of moves. As a larger moving company, you may need more spacious vehicles. You might want to rent a warehouse as well.
To finance your expansion, you could consider applying for a loan or seeking an equity investment. If you have a corporation or an LLC, you will probably need a banking resolution in hand to get a loan. A banking resolution is an agreement that you make with the other members of your company. It spells out your members' duties and responsibilities when it comes to banking tasks. An investor will probably ask to see your business plan and articles of organization or operating agreement before investing.
As a moving business, you may need several licenses to operate legally. Depending on your location and moving radius, you might have to get a federal license in addition to state licenses.
You can start a small moving company with a modest moving truck or an SUV. But if you plan on using a large vehicle, you may need to secure an overweight/oversize load permit. This requirement will vary by state. The USDOT maintains a list of state agencies to help point you in the right direction. As a large commercial motor vehicle driver, you will also need to secure a commercial driver's license (CDL). Contact your state licensing agency (most likely a department of motor vehicles) to find out how to get a CDL.
You may not need to hire staff when you first start your moving company. But as you grow and get more clients, you might find that you cannot do all of the moving by yourself.
A large part of moving business's success will come down to the skills and courtesy of the movers themselves. If you hire employees to represent your business, you should ensure they are careful with your clients' belongings and provide excellent customer service. You should have a good employee handbook and training policy to avoid injury and property damage. If an employee injures themselves, you will need to have workers' compensation insurance in place. Workers' compensation insurance is mandatory in almost every state.
To legally employ people, you need to get an Employer Identification Number (EIN). An EIN is a unique number that the Internal Revenue Service (IRS) uses to identify businesses. It is easy to get one, and you can even apply online. Even if you do not hire employees, you will still need an EIN to open a bank account and file your business taxes.
As a business, you will need to pay both federal and state taxes. The types and amounts of state taxes you will pay will vary by state. You should contact a business attorney or check your state website to learn about your state tax obligations. Your federal tax obligations will include income tax, employment tax, self-employment tax, and possibly excise tax.
All businesses need a good insurance policy to protect them against lawsuits and other risks. This is especially important in the moving industry. You will want comprehensive insurance coverage considering all of the heavy lifting, driving, construction, and other physical hazards involved.
A moving company takes on several liability risks. There is a risk of injury to workers and customers, but also a risk of property damage and automobile accidents. Finally, there is the risk of damage to the property that your customers trust you with. So, you will need several types of insurance to cover those different types of risks. Those insurance types include:
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As you are starting up your own moving company, you may have questions about legal structure, licenses, and more. A business attorney helps you form your legal structure, determine your licensing requirements, and answer your other business law questions.
Meeting with a lawyer can help you understand your options and how to best protect your rights. Visit our attorney directory to find a lawyer near you who can help.
Contact a qualified business attorney to help you navigate the process of starting a business.
We have a DIY option you can use to save time and stress.We help you:
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