The moving and storage industry is a $15 billion industry in the United States, and with 42 million families using movers every year, there’s enough pie to go around.
While these stats sound pretty optimistic, managing finances and keeping money in your pocket can be a challenge.
In this article, we will recommend some cost saving ideas as well as ideas on managing your day-to-day operations to improve your cash flow.
Hire Part-Time Employees
If you’re a small moving business, having a lot of employees on the payroll and having to pay salaries through the off-season can negatively affect your cash flow.
Great places to find part-time workers are local colleges. Most college students are only looking for part-time work and many of these young adults are fit and willing to work hard labor jobs for extra cash.
In addition, to address the ebb and flow of high demand and low demand periods, establish a relationship with a good, local labor service, such as Labor Ready. Although their personnel may not be as seasoned or experienced as your full-time employees, they can be a valuable resource when you have moves that require a lot of movers, such as large office moves. Although the rate for their helpers may be slightly higher than you pay your helpers, you don’t need to be concerned about paying for workers comp or employee taxes. In fact, if you use them regularly, you can likely negotiate a nice rate per hour.
Consider Short-Term Leasing or Renting Moving Trucks
Leasing or renting moving trucks on a short-term basis (daily or monthly) is great for companies who wish to keep cash in their pockets. During the slow season, if you own your trucks, you still have to make truck payments, pay for insurance, pay for licensing and registration, and also pay the cost to park or store your trucks. These fixed costs exist even when the truck sits.
The only downside to renting trucks is you won’t have your rolling billboard advertising your services (which is a very cost effective way to advertise) in the communities you serve. For newer companies who are tight on cash, leasing / renting trucks is worth it if you can focus your marketing effort in other areas.
Grow Your Network
If you’re known for providing great moving services, then expanding your network with real estate agents and building managers is a very cost effective way to get business. These audiences are specifically looking for great partners to provide their clients with exceptional services and often times you’ll be referred over and over again just because you provide great services.
Here are 11 Target Audiences Who Will Consistently Refer Your Moving Services
Require a Pre-Move Deposit for Multi-Day Moves
Having a deposit reduces the likelihood of a financial loss if a customer decides to cancel last minute when you’ve already turned away work to secure their move dates.
Be sure that customers understand your policy, and include it in the contract language to avoid future difficulties.
Require Payment of Quoted Price the Day before Move
If a customer is paying with a credit card, secure your payment by charging the card the quoted price the day before the move. Then after the move, either give a refund if the actual move price is under or charge extra if the actual move price is over.
Again, be sure that customers understand your policies, and include it in the contract language to avoid future difficulties.
Offer Storage Services
Storage accounts bring in cash every month without having to do much work once the items are stored. Even if you don’t have a warehouse you can still offer storage services. All you have to do is find an affordable self-storage and run your storage accounts through them, and get your cut on top. The customer would be paying for their storage to be securely wrapped and stored safely and properly.
In addition, if you work with a local self storage facility vs having your own warehouse, when your customer is ready to deliver out from storage, you simply vacate the self storage unit. Whereas when a storage customer delivers out from your own storage warehouse, you still have the fixed cost of your warehouse lease.
Reject the Appeal of “New” Technology
New products, especially electronic gadgets, are continually introduced with cutting edge features. But before succumbing to the advertising excitement, confirm that the new features will provide a meaningful performance improvement in the ways you use the product in your business. In most cases, you will discover that the benefits are not worth the added cost. Use your existing equipment until it cannot be repaired at a justifiable cost or until the job requirements change and require upgraded equipment.
Consider Buying Used Equipment, Not New
Used equipment in good condition can generally do the same required work as new equipment. If you need equipment, search the local advertisements and auctions in your area, specifically looking for companies whose assets have been foreclosed and are being sold by the lender. You may be able to buy quality, used equipment for savings up to 80% off the price of new equipment, without a comparable degradation of capability. (Last two items from this article).
Get New Boxes From Local Recycling Centers
We know a number of movers that pay about 10 to 30 cents on the dollar for brand new boxes, purchased from local recycling centers. It’s not uncommon that local carton manufacturers or local businesses will send BRAND NEW overruns or misprints to the recycling center.
Offer the recycling center slightly more than the going ton rate for scrap cardboard, and they will often accept your offer. These boxes are usually not “standard” moving cartons, such as 1.5’s, or 3.0’s or 4.5’s, etc. Instead of a 3.0 cubic foot carton being 18 x 18 x 16, they may have pallets of brand new boxes 20 x 16 x 15 (2.8 cubic feet). And you may be able to buy pallets of these boxes for pennies on the dollar. So visit some local cardboard recyclers and check this out.