You’ve filed the paperwork, chosen a name, and purchased the equipment. So what’s next for your new moving company? Deciding what services to offer and what prices to charge is a key step in building a moving business.
Here are some questions to keep in mind when it comes to making that decision.
What Are My Expenses?
Before calculating the prices you plan to charge customers, consider what your own expenses will be.
Whether you’re renting a truck or have purchased one, remember to factor in the daily expenses, from daily rental fees to vehicular maintenance. If you decide to offer packing services, consider the costs of packing material for each move.
Estimate the cost of gas and fuel for each move, especially in longer-distance moves and in areas where gas prices are higher.
Other costs to keep in mind are insurance fees, advertising costs, and employee wages. All of these should impact your final pricing model.
What Services Should I Offer?
One of the first things you need to decide when choosing services is if you want your business to focus on local moves, long distance moves, or both. You can charge more for long distance moves, but that also means longer hours for you and your employees, more fuel expenses, and other logistical problems.
Local moves have quicker turnaround times, but you won’t be able to charge as much. Think about which model makes the most sense for your business – are you better equipped for one long move, or multiple shorter moves per day?
Many moving companies offer short and long term storage as an additional service. While this requires spending money on a storage space, it can be a profitable add-on and gives customers a more full-service experience.
Other additional services include junk removal, pickup and delivery services, and load-only labor. The latter lets you avoid the costs of buying/renting a moving vehicle, as the customer provides their own transportation.
What Should I Charge?
When deciding your final prices, a good strategy is to calculate your total expenses and then add a percentage on top for profit. Small businesses typically aim for a 20% net profit, meaning that 20% of your total revenue is left over after costs and expenses.
If you offer additional services, like packing and storing, you may consider charging more. If you offer services like load-only labor, you probably should ask for less.
The best way to predict how much to charge for your services is to look at other movers in your area who offer similar ones. That way, you stay competitive with the market and won’t charge too much or too little.