How to Start a Moving Company: The Planning Phase

When diving into a new venture like starting a business, it’s crucial to take time in the planning phase – you can see our blog on the research phase here.

Although you may be tempted to skip this step and dive right into establishing your company, it’s actually one of the most critical sections to ensuring a solid foundation!

The planning phase when you’re trying to start a moving company can be broken down into four distinct categories:

Costs

It’s important to plan for all aspects of running a moving company and how much each will cost you. It can be helpful to split your costs into initial costs and ongoing costs.

Initial Costs

Vehicle Costs: You can’t offer moving services without a truck or a van to transport furniture and items, so this is likely to be your first major cost. You’ll have to decide whether it makes financial sense to buy, rent, or lease a truck.

Equipment Costs: You’ll need moving equipment which will likely include dollies, boxes, pads, ropes, and wrapping materials.

Office Supply Costs: To get started you’ll need basic office supplies including a computer, printer and a phone line.

Warehouse Costs: If you plan to offer storage you’ll need a warehouse or storage space.

Ongoing Costs

Payroll and payroll taxes: If you hire employees you’ll have to factor in payroll and payroll tax costs.

Office Space: You’ll need somewhere to run your business so an ongoing cost may be rent for office space.

Vehicle Maintenance and Fuel: A safe and working vehicle is an integral part of running a moving company.

Insurance: Without insurance, you’ll be liable for lost or damaged furniture so it’s important to take out a good insurance policy before you start operating.

Marketing: Don’t forget to factor in your logo and website design and ongoing costs for marketing and advertising. Depending on your situation, there may be a variety of financial options that can help you get started. Ranging from self-funding, to investors, to small business loans, you’ll have to decide if any of these are right for you. Check out the US Small Business Administration to research available funding programs for small businesses.

Licensing and Insurance

License requirements depend on the state your company is based in, and if you’re planning to move only within the state, or interstate. You’ll need to confirm the license and registration requirements with the Department of Transportation for your state to find out what you need to do to register your company and vehicle.

Certain moving companies, including those operating interstate, will need to apply for a US Department of Transportation (DOT) number. You can obtain this number in either the U.S. Dot website or the FMCSA (Federal Motor Carrier Safety Administration) website.
When you establish your business as a legal entity you protect yourself from being held liable if someone tries to sue your moving company.

Many moving companies are structured as Limited Liability Company (LLC) or Corporation, but you also have the option of sole proprietorship or partnerships. Each business structure has different legal requirements and fees. You’ll need to do some research to decide which structure makes the most sense for your company
Before you begin operating as a moving company, you’ll need to register for various state and federal taxes, and this means you’ll have to apply for an EIN which you can do through the IRS website.

Next, you’ll need to open a business bank account and credit card. It’s important to separate your business and personal accounts and assets, and this will also help to simplify your business accounting.

Moving companies typically have liability, vehicle and cargo insurance, but requirements differ depending on your state, so you’ll need to research state-specific requirements. Interstate movers are obligated to offer FMCSA-mandate moving coverages to their customers including Full Value Protection and Released Value Protection to emphasize the importance of cargo coverage. If customers are interested, there are insurance partners available to help you offer other third-party liability products

Insurance options to research are:

  • General liability insurance
  • Workers’ Compensation
  • Commercial auto insurance
  • Cargo insurance
  • Policies

The Oncue sales team books hundreds of jobs every day of the week for movers all around the country. Over the years our data has shown that keeping policies simple and customer friendly will help to keep your customer service processes running smoothly.

Your terms and conditions should be designed to protect your moving company by including all major incidents that could go wrong. In case you don’t manage to cover every aspect of your mover policy on a sales call, it’s important that everything is covered in your terms and conditions.

Here are examples of what can be included in your terms and conditions:

  • Cancellation policy
  • Minimum hours for local moves
  • Specific policies eg washer / dryer / fridge
  • COVID-19 protocols
  • State-mandated information or PDF pamphlets

For the occasions when something does not go according to plan, for example when a customer states they have only two rooms to move but when you arrive you find out it’s actually five, it’s important that you have a thorough and detailed inventory.

At Oncue, we help give our movers a clear idea of what they’re dealing with on move day with texted photos, a cubed out inventory, or both. It’s also important to explicitly state in your terms and conditions that anything NOT included on the confirmation email is subject to extra cost.

Employees

In the early days of growing a moving company, many owners choose to handle everything on their own, or ask a family member or friend to help out.

At some point you’ll likely reach the stage where this becomes too much to handle, and you might consider hiring employees to help you out with the various aspects of growing your business.

The hiring process is time-consuming and it’s important to hire the right person for the job. At Oncue, our Director of Inside Sales can spend up to 33 hours a week on new hire admin, and an additional 30 hours a week on training.

When you start the process of hiring you’ll need to factor in time for:

  • Advertising the job (online and offline)
  • Searching through resumes to find suitable candidates
  • Arranging and setting up interviews
  • Following up with each candidate
  • Arranging final interviews with your candidate shortlist
  • Creating a job offer with relevant legal documents and contracts
  • Making the job offer and dealing with any potential negotiations

As a moving company owner trying to simultaneously run your company and hire a new employee, you can see how quickly your days will get booked up with the tasks needed for employment. This makes it extremely important that each hire you make is the right person for the job.

For more information on our blog series about starting a moving company mentioned above, take a look at the 2nd part of the the Research Categories in Part 2.

For even more in-depth information on how to start or scale your company, download our FREE eBook: The Ultimate Guide to Growing a Moving Company.

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