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How To Open a Moving Company in 10 Steps

People Moving Boxes

One thing a business owner 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 10 steps can help you start a profitable and legal moving company.

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1. Create a Detailed Business Plan

To build a successful moving company, you need to do the hard work of creating a business plan. A business plan is a formal document that serves as a roadmap for your business. The contents of your business plan will vary depending on your business goals and preferences.

Contents of a Moving Business Business Plan

Your business plan should contain:

  • Basic information about your moving company
  • The name, location, and registered agent
  • Location and date of incorporation if you create a legal entity
  • Your business's purpose and goals
  • A list of the company's managers or members
  • Marketing plan for getting the word out about your services, including market research
  • Financial plans and financial projections, including funding plans and a breakeven analysis
  • A precise list of startup costs and ongoing operating expenses (it would help to base this on a detailed description of the types of moving services you'll offer and your price structure)
  • Your startup plans and ideas for expansion

As you launch your moving company, you might decide to start small with local moves for friends and neighbors. This can help you build good reviews and a reputation. If you're moving customers from home to home within the same town, you can make several trips with your pickup truck.

Once 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.

Pricing Moving Business Services

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 rather 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'll 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've created your pricing structure, you can start to figure out how to become profitable. Consider all your expenses against the calculated prices. This information will help you determine how much business you need before you become profitable. This is called a break-even analysis.

Plan for Obstacles

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 potential problems specific to your business and location. Then, form backup plans.

2. Write a Marketing Plan

Your marketing plan will form part of your business plan. This is your opportunity to get creative. Determine what services your customers need and how you will offer them. You should also figure out your pricing structure.

  • Research your target market: As you begin writing your marketing plan, think about who your target market is. Also, consider which of your services will be in the highest demand. In certain areas, your target customers might be particularly interested in packing services. Customers who need to move quickly or who work long hours may be willing to pay a premium to avoid the hassle of packing boxes themselves.
  • Determine services: If your target market includes young families, they might prioritize speed and value. Knowing your target market can determine whether they're after premium services, low prices, or superior customer service.
  • Encourage referrals: As a moving company, repeat customers will not be likely. But your customers might refer you to their friends and family by word of mouth. To help your customers give referrals, it's a good idea to pass out business cards. Don't forget to let your customers know about your website and social media, too.
  • Build an online presence: To ensure your community knows about your services, you should find ways to spread the word. As with any new business, your moving company will need a good website. It's a good idea to maintain a social media presence, too. This allows you to interact with your customers. A simple and free way to drum up some business as you start is to put an ad in a local Facebook group.

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, several benefits are involved. They often offer moving business forums, marketing assistance, and industry education.

3. Choose a Name for Your Moving Business

You'll want to think of a business name that describes your moving services and is easy to remember. With that in mind, ensure your name is unique. You should conduct a thorough search to ensure your name is available.

Pick a Unique Moving Company Name

It would be best to ensure that no other moving businesses or similar companies use the same name as yours. This is important to avoid claims that you're infringing on another company's trademark. If another business sues you for trademark infringement, you'll have to rebrand, change your name, and pay their attorney's fees and damages. You should search the internet for similar names to avoid this legal hassle.

Next, search the United States Patent and Trademark Office's (USPTO's) trademark database for similar registered trademarks.

Review State Registered Entities

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 doesn't infringe on another business's trademark.

Once you're satisfied that your business name is unique, check to make sure that you're following all of your state's other naming requirements.

4. Decide on Your Business's Legal Structure

All businesses have a legal structure, whether they choose one or not. If you open a business yourself, the default business structure will be a sole proprietorship. If two or more people own it, it's 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, consider structuring your moving company as a limited liability company (LLC) or a corporation. These structures allow you:

  • Tax advantages
  • Limited liability so your personal assets can't be seized in the event of a lawsuit against the company
  • Protect your home, cares, and other assets from risks

Most moving companies organize their business structure as an LLC. An LLC has fewer restrictions than forming a corporation. This makes it a popular small business structure for small businesses.

To form an LLC, you need to:

  • Have your unique business name ready
  • File your articles of organization
  • Pay a filing fee with the state
  • Employer identification number (EIN) from the Internal Revenue Service (IRS)

Write an LLC operating agreement. Although this might not be a legal requirement, it's a good idea for all LLCs to have an operating agreement. It forms the agreement among your LLC members regarding management, finances, and other issues.

5. Open a Business Bank Account

To keep your LLC or corporation's limited liability status, you need to follow a few rules:

  • Don't combine personal and business funds in one account
  • Avoid paying personal debts from the business account
  • Open a business bank account and only use this account for business deposits and expenses

Mixing your funds opens you up to personal liability. This is known as piercing the corporate veil.

6. Look for Funding

When you first create your startup, you may not need outside funding. If you have a truck or van and are willing to work hard, there might not be much to purchase when you start. Aside from your vehicle, your main expenses will be:

  • Moving equipment, such as ropes, hand trucks, boxes, tape, moving blankets, packing materials, and dollies
  • Fuel and other vehicle expenses, including maintenance
  • Personal safety items like gloves and back braces
  • Insurance coverage

If you choose to expand your business, you might want to make purchases to handle more moving jobs. This may include larger moving trucks or trailers. A warehouse may become another added expense when expanding.

To finance your expansion, you could consider applying for a loan or seeking an equity investment. You'll probably need a banking resolution to get a loan if you have a corporation or an LLC. A banking resolution is an agreement you make with the other company members. It spells out your members' duties and responsibilities regarding banking tasks. An investor will probably ask to see your business plan and articles of organization or operating agreement before investing.

7. Get the Permits and Licenses You Need

As a moving business, you may need several licenses to operate legally. Depending on your location and moving radius, you might have to get federal and state licenses.

If you plan on using a large vehicle bigger than an SUV or truck, you might need an oversized load permit and a commercial driver's license (CDL) from the local department of motor vehicles (DMV). Each state has its own set of rules about whether you need a special oversized or overweight permit. A list of state requirements can be found at USDOT.

8. Hire Employees

You may not need to hire staff when starting your moving company. But as you grow and get more clients, you might find that you can't move by yourself.

A large part of a moving business's success will depend on the skills and courtesy of the movers themselves. If you hire employees to represent your business, you should ensure they're careful with your clients' belongings. Your workers are the face of your business and should work well with customers. An employee handbook and training policy can help your business avoid public relations issues and damages.

As an employer, you must have workers' compensation insurance. It will cover any injury to an employee on the job. Most states mandate that you have this insurance and will fine you if you don't.

9. Get an EIN and Pay Taxes

You must get an employer identification number (EIN) to employ people legally. An EIN is a unique number that the Internal Revenue Service (IRS) uses to identify businesses. It's easy to get one, and you can even apply online. Even if you don't hire employees, you will still need an EIN to open a bank account and file your business taxes.

As a business, you'll need to pay both federal and state taxes. The types and amounts of state taxes you will pay will vary by state. 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.

10. Get a Good Insurance Policy

All moving industry businesses need a good insurance policy to protect against lawsuits and other risks. You'll want comprehensive insurance coverage that considers all the heavy lifting, driving, construction, and other physical hazards involved.

A moving company takes on several liability risks. There's a risk of injury to workers and customers, but also a risk of property damage and automobile accidents. Finally, there's 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:

Your state may have minimum requirements for your insurance coverage and types. You should ask your insurance agent or a business attorney if you are unsure about these minimums.

How a Business Attorney Can Help

As a business owner starting your own moving company, you may have questions about legal structure, licenses, and more. A business attorney helps answer or file licensing requirements.

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