Starting any business is the process of coming up with a solution. Sometimes, the market exists. Sometimes, the entrepreneur has to create one. A mover’s company or a moving company is a legitimate business with a vast market demand, and it has been thriving for years.
The moving company owners are those individuals who move their muscles so that their customers can move homes. It’s a big market with immense potential since many people are leaving cities and settling in somewhere else. Well, it doesn’t always have to be far. Some stories just shift places within the town.
Yes, it’s easy to start a moving company. It starts with owning a moving truck. But starting a moving company requires more than owning a truck. If you want to start your moving company, it’s important to know how the industry functions.
Pros & Cons
| Pros | Cons |
| A moving company can be rewarding and a less stressful way to generate income. The business model isn’t intricate and the learning curve isn’t steep. Businesses are scalable by adding more trucks, employees, etc. | It’s difficult to find a reliable worker. Employees may feel fatigued due to labor intensive. There are high costs associated with running and operating a moving company. |
Industry: Moving Company Industry Size & Trends
Moving companies have been racking a lot of profit in the last few years. A steady surge in revenue is evident between 2018 and 2023, showing 0.7% revenue growth. The growth forecast for the upcoming five years also feels sound.
So, is it a good time to start a moving company? Let’s find out.
Industry Overview: Movers Business in Recent Times
Moving companies have seen a volatile market recently. But despite a volatile market, the industry has seen a rise. Consumer confidence did fall during COVID-19. But that didn’t lower the demand for moving companies or the residential sector thanks to low interest rates.
A 2020 overview of the corporate sector shows plunging profit, making the demand from the nonresidential stoop so low. However, the post-pandemic scenario saw a quick rise in both the nonresidential and residential sectors. The corporate sector had a better profit, and the per capita income increased, leaving most U.S. citizens with enough disposable money. So, the demand rose in both sectors. Following that scenario, more people want a new home, and more are looking for a moving company to move out. But that sounds like a growing market. Why volatile, then?
Inflation has soared in 2023 in the USA, which caused the Federal Reserve to raise interest rates. The elevated interest rate makes it difficult for borrowers to afford a moving company. Fuel prices also spiked, making it more difficult for customers to afford movers.
The housing market and the mortgage rates are closely related to the moving company industry. When the mortgage rates are high, the housing market will remain weak, making it difficult for movers to generate a business. Moving companies that offer services through an app creates tough competition for the more traditional companies providing the same services.
Industry Size & Growth
Size: An IBIS world research suggests that the moving company business will be valued at $21.3 billion in 2023.
Growth: Its growth is restricted to a CAGR of 0.7% in the last five years. During the outlook period, the growth is expected to reach 1.1.% going up to $22.6 billion in 2028. In the U.S. market, there’s something different from others. The U.S. market is expected to grow further at a pace of 2% every year through 2026.
Number of Businesses: Currently, there are 16,851 moving companies operating in the USA.
Employment: This industry employs 108k employees across different states of the USA.
Trends & Challenges
Here are some common trends in the moving company industry –
Moving Company Trends:
Moving companies serving the residential housing market are affected by the rise of interest rates in the housing market. When the rates are low and people buy new homes, they have more furniture to move from one place to another. So, it’s safe to say that trends in the moving company are partially set by the housing market interest rate.
However, the commercial property market is quite different. It is affected more by incidents like the pandemic. General economic conditions like the interest rate don’t affect commercial property-related moving. Most businesses depend on high consumer spending and confidence to generate revenue.
- Since the pandemic, the moving company has faced different twists and turns. However, post-pandemic times have been brighter for moving companies thanks to the lower interest rates, which have caused a boom in revenue.
- The current times seem difficult for moving companies in the housing market. Elevated interest rates lower the rate of new home purchases, restricting the growth of moving companies’ business in the residential industry.
- Mover’s companies have good opportunities in the regions with the most number of manufacturing companies. Due to constantly changing needs in the manufacturing landscape, moving companies are needed to perform necessary transport work.
Moving Company Challenges:
The common challenges in this industry are the heft and expense related to moving. The U.S. citizens do love to move to a new place. But, sometimes, high moving costs can be a challenge for them, making it challenging for businesses to get new customers.
It’s also difficult to gain and retain qualified workers in the moving industry.
Who Is Working In This Industry?
51% of people working in the moving company industry are women, and 49% of them are men. 52% of moving company consultants have a bachelor’s degree. These individuals are 44 years old.
Startup Cost: How Much Does It Cost To Start A Moving Company?
Startup costs in moving companies can be affordable. However, depending on the scale of the business, the startup cost can differ. It can range between $20000 to $100000. The average cost of starting up a moving company is close to $65000.
Let’s assume that you already have most of the startup cost needed to purchase the house. But you’ll need to spend most of your money on a truck. It’s best to choose a used truck when you are just starting out the business. As your business starts to expand, you can buy newer trucks and expand your business.
Here is a list of some essential items you need to start a moving company –
- Truck
- Dollies
- Rope & Furniture straps.
- Boxes
- Packing Supplies.
| Start up cost | Ballpark range |
| Naming & Incorporation | $150 to $200 |
| Licences & Permits | $200 to $300 |
| Insurance | $100 to $300 |
| Business Cards & Brochures | $200 to $300 |
| Website Setup | $1000 to $3000 |
| Event Software | $0 to $2000 |
| Initial Marketing Budget | $100 to $500 |
| Moving Truck | $20000 $1000000 |
| Moving Supplies | $1000 to $2000 |
| Total | $22,750 – $106,800 |
Earning Potential: How Much Can You Earn From A Moving Company?
The basic charge for a local move costs close to $60 per hour. This charge also includes the overhead and labor costs. But if you want to earn more, you have to charge $100 per hour for each move, which will let you earn a 40% profit margin. These companies usually pay the workers $12 to $15 and charge their customers with Twitch the amount for per-hour shifts.
As a mover, you have to be able to make three to four moves every week. As a result, you will make close to $104000. This amount of revenue means a profit of $41000, a 40% margin.
However, the income potential goes up with growing brand recognition. As you keep expanding your business, you’ll have to add more trucks to your service line. Also, you have to rent a commercial place and hire more staff, cutting your profit margin by 20% in the process. Businesses can expect an expanded annual revenue of close to $416000. They can expect a profit of $83000 out of this revenue.
Entry Barrier: Common Entry Barriers In The Movers Industry
The entry barrier in the moving company industry is pretty low. However, the biggest challenges to entering and sustaining a business in this industry are related to initial expenses, maintenance of tools, the truck, and the reputation of the company. Moviompanies can expect to face the following challenges in their business –
- There are certain policies, such as the U.S. Protectionism Policy. The USMCA (United States–Mexico–Canada Agreement ) can create barriers for the moving companies. USMCA replaces NAFTA and introduces new non-compliance measures and tariffs. The administration is currently focusing on protecting local industries and jobs. This may lead to restrictions on foreign companies.
- Economic conditions affected by global pandemics can be quite alarming.
- Moving companies are reliant on the real estate industry. A negative shift in the housing market can cause a loss in moving company business.
- Many companies struggle to come up with the right marketing method, hence lacking proper branding effort.
- Operating a moving company business without insurance has lots of risks. Ensure that you hold proper licenses before entering the market.
Moving Company Opportunities: Who Are Your Potential Customers?
It’s important to consider the challenges before starting a moving company or any business. But, here are some brighter opportunities – as a moving company owner, you’ll enjoy better job security. You will work close to your home. Desk jobs minimize physical movement, and health-conscious people wouldn’t have any other way than to work for something that requires a lot of moving around.
To gain all these perks of a moving company, you must be able to build a strong customer base. Start by analyzing your local competitors and the services they are providing. As a mover, you can offer different services that the other companies lack. Your business can provide a new suite of specialty services related to moving or transporting. A creative solution to diversifying your services would be adding unpacking or packing services along with different.
Frequently Asked Questions
Here are some popular questions related to the mover’s company business –
Moving companies have a professional name, which is a removalist or a van line. These are companies that help homeowners and professional firms to move their belongings from one place to another. Usually, these companies help businesses and homeowners relocate.
The fastest-growing moving company is called Piece of Cake Moving & Storage. This company was founded back in 2017 and is one of the most successful moving and storage companies nowadays.
The average profit margin for moving companies in this industry is close to 4.3%. This suggests that for every dollar revenue, moving companies earn a profit of 4.3 cents. The average income of a moving company is roughly around $500 to $2000. Depending on the clients they are serving, a moving company can earn a decent amount.
Conclusion
The first suggestion – if you are starting a moving company, then a low startup cost shouldn’t be a parameter of judgment. There are other businesses you can start under the budget of $5000, but not a moving company. A truck alone takes more than $10000 in budget. It’s a low-hassle business idea, thanks to the simple business model it follows.
However, before you start a moving company, consider your competitors and the difficulties getting staff for different moving gigs. Also, be clear about the industry you will serve as a moving company owner. Whether it’s the commercial sector or the residential sector, it has a huge effect on the amount your business generates in revenue.
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