How to Start a Moving Company 🚚 | 7 Tips for Starting a Moving Company

How to Start a Moving Company

To start your own moving business, you'll need to plan carefully, set up the necessary infrastructure, and ensure that you meet all legal requirements. Here’s a step-by-step guide on how to start a moving company and make it a success.

#1. Conduct Market Research

Before starting a moving company, it's crucial to conduct thorough market research. Identify your target market by considering who your potential customers might be. Are they individuals or businesses? Will you cater to local moves, long-distance moves, or both? Understanding your target customers helps you align your services, pricing, and marketing strategies with their needs.

Also, research your competition in the moving industry. Identify what kind of moving services and packing services they offer and how you can differentiate your own business to attract ideal customers. During this research phase, try to identify underserved customers in your market.

By recognizing the needs and preferences of potential clients, you can effectively tailor your offerings to carve out your place in the market.

This is a good time to determine the types of services you will offer.

• Will you focus on local moves or handle long-distance relocations? Starting a moving company that only handles local moves means lower startup costs without the cost of federal regulations and interstate moving, but it will eventually limit your growth and revenue potential.
  
  
• Will you offer packing services? Consider your target market. Many customers prefer a one-stop solution and a mover that can handle packing, and it allows you to charge more for moving jobs. However, you will have increased costs to get started due to packing materials and potentially expanded training.
  
  

Will you focus on residential moves or offer commercial services? When starting a moving business, it's usually best to handle residential moves only because commercial relocations require specialized equipment and expertise. Of course, your moving industry experience, resources, and local market matter. You may decide you are better positioned to offer these services along with residential moves or even focus entirely on commercial moving.

#2. Create a Robust Moving Company Business Plan

Creating a comprehensive business plan is an important step in starting a moving company. This plan should outline aspects like:

• Your business model
• An overview of your local market and the types of customers you want to serve
• Pricing structure and revenue goals
• Overview and plan for daily business operations
• Moving services you will offer, such as local moves, long-distance moves, commercial moves, and packing services
• How you will meet client expectations and handle customer inquiries and complaints
• Your regular marketing strategy and a plan to expand marketing efforts
  
  

A good business plan for a moving company includes short-term and long-term goals and specific plans for achieving them. A detailed business plan serves as a roadmap to guide your company toward success.

#3. Prioritize Legal Requirements and Compliance

Understanding how to start a moving company legally is crucial for building a successful moving business.

How to Start a Moving Company With the Right Legal Entity

The first step to starting a business company is choosing a business structure. Most moving companies form a limited liability company (LLC) to protect your personal assets. If you operate as a sole proprietorship, you will not have this legal protection. You can learn more about the types of business entities from theSmall Business Association.

Set Up Your New Business for Tax Obligations

Apply for an Employer Identification Number (EIN) for tax purposes and open a business bank account to simplify accounting and operations. Be prepared to comply with federal laws regarding payroll taxes, one of the most complicated aspects of running your own moving business. You will likely want to hire an accountant or tax professional, but you should still learn the basics of your tax obligations and employee classification before hiring a team.

Get the Right Moving Business Insurance Coverage

Moving businesses require multiple types of insurance coverage. These policies are required to obtain the necessary operating authority and certification or permits:

• General liability insurance to cover property damage and bodily injury
• Cargo insurance to cover loss, damage, or theft to cargo being transported
• Commercial auto insurance for auto liability, collision, and no-fault coverage of your movers and trucks

Insurance is crucial to protect your new moving business and your clients’ belongings during transit. You may want to invest in additional types of coverage, like commercial property insurance for your physical assets like equipment, fixtures, computers, and records.

Make sure you check with your state authorities to verify the insurance coverage you need. Depending on your state and the size of your business, you may also need workers' compensation insurance to cover your employees.

Register Your Business & Get Operating Authority, Permits, and Licenses

The next step is registering your business with state and local governments. The moving services you will offer affect the type of federal license or registration you need, and it may affect state licensing or certification.

Federal Requirements

• USDOT Number. This is required for commercial motor vehicles that transport goods and weigh over a certain limit, whether you operate within your state or cross state lines. Obtain a USDOT number from the Federal Motor Carrier Safety Administration (FMCSA). You must comply with safety regulations and show proof of insurance.
• Motor Carrier (MC) Number. AnMC number is issued through the FMCSA and required if your moving business will transport interstate cargo, whether it's within your state or over state lines.
• Motor Carrier of Household Goods (HHG) operating authority. You will need to apply for the appropriateoperating authority through the FMCSA.

State Requirements

• State License, Certification, or Registration. Many states require a license, certificate, or registration for household goods movers operating within the state. This process usually requires paying a fee and providing proof of minimum insurance coverage. There may also be a required exam. Some states have a Public Utilities Commission or Department of Transportation overseeing moving companies.
• Local Permit. Some local governments may require a business permit or license to operate within certain cities or counties.

Other Legal Considerations for Starting a Moving Company

Learning how to start a moving company involves many complex legal regulations that don't end with registration, insurance, and licensing. You may have other specific requirements in your state, but here are two common requirements for a moving business:

• Tariff Filing. For interstate movers, you must file tariffs (price lists) with the FMCSA. Your state may also require filing tariffs with rules on maximum tariffs and specific regulations.
• Contracts and Agreements. Make sure you develop clear service contracts and agreements for customers, outlining terms, conditions, and pricing. Check the requirements in your state for what must be included in these agreements and any other regulations involving the responsibilities of movers.
  
  

#4. Secure Financing for Your Moving Company

Financing is a key element of starting your own moving company. You will need to cover initial start-up costs, such as purchasing commercial vehicles and moving equipment. Small business owners often consider a business loan to help cover these expenses. Alternatively, you can explore ways to lower startup costs by leasing equipment or buying used vehicles.

For new businesses, securing adequate funding ensures you have the resources needed to handle operational challenges, cover marketing expenses, and invest in quality staff and equipment.

#5. Hire and Train a Reliable Team

As your moving company grows, you'll need to focus on hiring employees who are skilled, trustworthy, and have a strong work ethic. Professional movers are essential for delivering quality service to your customers.

During the hiring process, be sure to conduct background checks. You will need team members with a commercial driver's license to operate large moving trucks, but this isn't necessary for all of your movers.

Once hired, it’s crucial to provide moving company training to set clear expectations and teach best practices in handling various types of moves. Proper training ensures your team can meet customer expectations and provide a high standard of service.

#6. Effective Marketing Is Key for a Successful Moving Company

Marketing plays a vital role in building a successful moving company. Start by listing your business in local business directories to increase your visibility. Develop a marketing plan that outlines how you will promote your services, including social media platforms and online advertising. Use targeted marketing assistance to reach your ideal market effectively.

Having a professional website is essential. Invest in search engine optimization (SEO) to improve your website's visibility in search results, helping potential customers find you easily. This is particularly vital for local moving companies to dominate local search results and appear higher than your competition.

Engage previous customers to build a referral network and offer incentives for referrals to attract new clients.

Keep in mind an effective marketing strategy includes traditional marketing as well as strategies to market your business online.

#7. Establishing Partnerships and Network

Building a professional network is key to the success of any moving company. Join business forums and connect with other local businesses that complement your services, such as real estate agents, home staging companies, and storage facility owners. Look for unique opportunities to advertise specialized services by partnering with local piano repair shops or antique malls, for example. Establishing strong relationships within your community can lead to partnership opportunities, generating more referrals and expanding your client base.

For networking opportunities, expert industry insights, and industry education, consider attending events like a moving retreat. This can help you expand your skills and professional network for a successful moving company.

How to Start a Moving Company FAQs

What Permits Do I Need to Start a Moving Company?

To start a moving company, you need to obtain state certification or licensing (when applicable) and local business permits in some markets. Federal registration is also required for most household goods movers. Local licensing and permits depend on your location, so check with your state and local governments for specific requirements.

What Kind of Insurance Do I Need for a Moving Company?

The main types of moving company insurance coverage you need include commercial auto insurance, cargo insurance, and general liability insurance. You may need workers' compensation depending on your state and number of employees. Moving company insurance requirements vary by state: check with your local government agency that regulates movers to verify coverage requirements.

How Much Does it Cost to Start a Moving Company?

The cost of starting a moving company can vary. Basic start-up costs include purchasing vehicles, equipment, insurance, licensing or registration fees, and labor costs. While some companies may require significant investment, there are ways to lower startup costs, such as leasing equipment, using a small business loan, outsourcing certain activities, or offering services with a lower upfront cost, like local vs long-distance moves.

How do I Manage Seasonal Demand in the Moving Industry?

Manage seasonal demand by hiring part-time or seasonal workers during peak periods. You can also offer promotions during off-peak seasons to attract customers. Look for opportunities to expand your service opportunities during slow times such as piano moving and other specialized moving solutions. Flexibility and strategic planning help balance the workload throughout the year.

What Is a Good Profit Margin for a Moving Company?

A good profit margin for a moving company typically ranges from 10% to 20%. However, this can vary depending on factors like your business model, pricing structure, and operational costs.

What Is the Best Business Structure for a Moving Company?

The best business structure for a moving company depends on your specific needs. Many moving companies choose to form an LLC (Limited Liability Company) to protect personal assets. A sole proprietorship is simpler but offers no protection of your assets.