How Much Does It Cost to Start a Local Moving Business?

How Much Does It Cost to Start a Local Moving Business?

No matter where you are in the United States, people are constantly moving—relocating homes, offices, downsizing, and more. So, no doubt moving companies are making good money.

Let’s Get Moving boasts over 13 years of specialization in local moves in North America, operating through corporate and franchise locations.

We know the startup costs of starting a local moving business can vary, but one consistent thing is the industry’s high demand. 

If you are looking to start a moving company, there are two options: owning a franchise or starting your own. 

In this blog, we looked into the cost of starting a local moving business, including up-front and recurring expenses.

Also, as seasoned professionals in local moves, our experts have pinpointed the essential costs that aspiring moving company franchise owners should know before committing to ownership.

Approximate Costs to Start a Moving Company

First, here is a quick reference chart of some costs of starting a moving company in the USA.

Moving company licensing and permits $300-2,500 One-time/Recurring
Registering your moving company $50-500 One-time
Insurance and Liability $500-3,500 Recurring, annually
Purchasing or leasing moving vehicles $20,000-150,000 One-time (for down payments or one-time purchases)
Truck maintenance and gas $15,000+ Recurring
Moving equipment and supplies $1,000-10,000 One-time upfront, changing to recurring, restocking as needed
Storage facilities $75-300 per unit Recurring, monthly
Office space and utilities $1,500-15,000 Recurring, monthly
Marketing & advertising $200-15,000 Recurring
Personnel (training & wages) $12-25/hour per employee Recurring
Technology (software & hardware) From $500 Recurring, monthly
Miscellaneous (gas cards, uniforms) From $500 Varies

11 Startup Costs for a Local Moving Business

Starting a local moving business requires capital, and knowing the cost upfront is essential to ensure you have enough money. 

Remember that many of the business startup costs here are recurring. You’ll need to cover these costs—rent, office supplies, and payroll—monthly, quarterly, or annually. Then, there are one-time expenses, like the incorporation fee or procuring office furniture. 

Let’s dig deep into them!

1. Licenses and permits 

Licenses and permits allow your moving company to operate on a state and federal level. The cost of these can vary based on local state regulations.

As a moving company owner in the US, you will know the United States Department of Transportation (USDOT), the Federal Motor Carrier Safety Administration (FMCSA), and various local agencies have stringent regulations, including having the proper state and local licenses and permits.

How much do Let’s Get Moving USA franchise owners pay for licensing and permits?

Let’s Get Moving franchisees pay between $300 and $2000 for licenses, depending on their city and state.

One of our franchisees, Moe in Delray Beach, FL, paid approximately $750-$1000 for permits necessary to operate within his city.

Depending on the city and state, some licenses and permits may be recurring costs because they require renewal.

2. Registering your business name

When starting your moving business, choosing the proper legal structure is crucial. This decision impacts not only your taxes but also your liability protection. 

Many entrepreneurs opt to register their new ventures as LLCs (limited liability companies) or corporations because of the personal liability shield they provide.

The costs associated with LLC or corporation registration vary by state, from $50 to $500. 

If you decide to form one of these entities, you must appoint a registered agent. While hiring a registered agent service is expensive, it offers numerous advantages over fulfilling this role yourself.

What Does Let’s Get Moving Suggest for its Franchisees?

Although sole proprietorships or partnerships may initially seem more affordable, they lack the same legal protections essential in an industry where accidents or damages are possible.

At Let’s Get Moving, we highly encourage franchisees to have an LLC to protect their assets. 

3. Insurance

While insurance is essential for all businesses, it’s imperative in an industry as physical as moving. 

Moving companies typically need insurance coverage for third–party bodily injury and third-party property damage and insurance for legal defense costs in case someone files a lawsuit against your company. 

Insurance for a moving company in the US ranges from $39 to $279 per month. What you pay in that range will depend on the size of the company, the number of employees, coverage, and risks.

Will you own moving trucks? 

Commercial trucking insurance rates in the United States differ from state to state and company to company.

Still, we found the cheapest rates in Mississippi, at $3,552 per year, and the most expensive in New Jersey, at $20,763 per year.

4. Trucks, Equipments and Moving Supplies Cost

You won’t be able to move much or do it safely without a few pieces of equipment, moving supplies, and at least one moving truck or van to transport goods. 

Cost of Buying Moving Trucks

At Let’s Get Moving, our first choice will be to use reputable websites such as Edmunds to find the average pricing for each truck based on our recommended specs for new franchisees.

We would never recommend private listings to franchisees; instead, we would recommend purchasing from dealerships only. The cost of acquiring a vehicle will be affected by size, age, and condition.

Next, we focus on ensuring they follow through with the purchase, keeping us in the loop, and even involving an expert mechanic to inspect the truck before purchase.

When you factor in all the parts involved, such as the brakes, alternators, wires, and air hoses, the costs associated with moving truck maintenance can easily exceed $15,000 per year. 

Cost of Gas in Moving Trucks

If you want to do a cost estimate of gas, you’ll need the trip distance, the average fuel price in your state, and how many miles per gallon (mpg) the moving truck gets. Then, use this equation:

Miles ÷ MPG x Gas Price = Minimum Fuel Cost

(Miles=distance)
(MPG=average miles per gallon)
(Gas Price= cost of gas per gallon)

For example, if you plan to drive 950 miles in a vehicle that gets 10 miles to the gallon and gas averages $3.40, you should budget around $323.00 for gas.

Cost of Buying Moving Equipements

High-quality moving blankets and pads can cost anywhere from $10 to $40 each. 

Dollies for lifting heavy items can cost $20 to $200, while hand trucks typically range from $50 to $300. Moving straps are handy for movers and are relatively affordable, averaging between $10 to $50. 

Cost of Moving Boxes and Packing Supplies

Investing in quality boxes and packing supplies to protect your clients’ belongings may require an initial investment of $500 to $2,000, depending on the amount needed.

The company also provides all moving supplies to be sold directly through our flagship location at 945 Wilson Ave #7, North York, ON M3K1E8. We do this to label the moving boxes and all materials used for trucks and customers.

5. Storage facilities 

The monthly average cost (approximately $75-300 per unit) depends on the size and location of the storage facility and the rates you can negotiate by renting more units than the average customer.

A storage facility must have the following:

  • A space with power and internet, or an office within the storage facility.
  • Parking spots for the operating trucks are typically places that can handle three or more trucks. (As you grow, you can’t be limited to just one truck spot.)
  • 24-hour access
  • Pest Control
  • Water sprinklers
  • Security cameras

6. Office space 

You will need physical office space for administrative purposes, customer inquiries, and coordination. The area of the office will differ based on your budgets, which typically range between $2500 and $15000/month.

For offices, we recommend three options that aren’t storage facilities: a work-share space center, an industrial unit within a complex, or even operating from a self-standing building. 

One significant advantage to the following office types is that the chances of Google approving the location are much higher. 

Work-Space Share Center

Pros

  • These professional spaces are the most inexpensive on this list.
  • You can operate from a single office within a heated building with internet, security cameras, alarms, and power. 
  • You can also store some of your marketing materials here.

Cons

  • Due to the layout of the office facility, truck parking may not be accessible or included.
  • The office may not be available 24 hours a day for on-site employees.
  • Off-site rental storage will be necessary if you provide this service for customers.

Industrial Unit within a complex

Pros

  • Leasing a unit within a larger complex should give you everything you need, including storage and trash removal. 
  • You should also have 24-hour access to your own space, and you can choose the internet provider, security, and additional third-party services you prefer. 
  • Finally, Google will be able to approve this much more quickly because the unit within the building is in the hands of a new tenant.

Cons

  • Costs will be much higher considering the space included is usually 800+ sqft minimum. 
  • Our franchisees typically upgrade to this option upon 6-12 months of operations once their location has reviews, a larger marketing budget, and up to 10-15 customers with storage needs.

Self-Standing Building

Pros

Buying or leasing a building displays an immense presence within any city for a moving company operating in a self-standing building. 

Cons

This option is costly, and the cost of operations itself will be exponential, so it’s not recommended unless you have more than ten trucks.

7. Marketing and advertising 

Marketing plays an important role when it comes to moving business. Unless you are a popular name, you must invest in both online and offline marketing to generate more leads and customers. 

Website Setup Cost

A simple DIY website can cost around $200 to set up and $50 monthly to maintain. If you hire a designer or developer, the upfront cost can start at around $6,000, with an ongoing cost of $1,000 annually.

Digital Marketing Cost 

From there, a moving company marketing plan could include email campaigns, search engine marketing, social media marketing, pay-per-click (PPC), and content marketing. In the initial stages of business growth, a marketing budget of around 10% of planned annual revenue or less.

Costs associated with print marketing

Here are a few costs associated with printed marketing materials our franchisees invest in:

  • Banners: $750-$5000, depending on the coverage your facility needs. The higher the cost, the more windows and doors.
  • Pamphlets: $500-5000, depending on how you distribute them across your location.
  • Business boards within inside roads (8×40): $2500/month, but smaller business boards can be less.

Brand Awareness & Customer Acquisition Cost

Building brand awareness is crucial for continuously attracting new customers in the competitive moving business. Depending on the size of each location, the cost will be between $120 and $150 on average.

The acquisition means the customer is confirmed as “booked”; thus, the cost includes time with agents and facilitating the booking process. Acquiring the lead is between $60-$90 if this also helps.

How Let’s Get Moving helps franchisees with marketing & getting leads?

Things can get out of hand if you pay for marketing and advertising expertise, online marketing, print materials, and promotional activities. 

A franchise model like Let’s Get Moving takes care of this for you, keeping expenses predictable and in control. Here are a few things we do to generate leads for our franchisees – 

  • Design a landing page targeting the franchisee’s location. 
  • Create & manage a google business profile for the target location. 
  • We take care of each location’s web presence by providing SEO services dedicated to helping each location. 
  • Running pay-per-click ads on Facebook, Google, and other sites, 
  • Listings on third-party sites like HomeStars, Houzz, yelp, etc., and much more. 

8. Personnel costs 

If you plan to hire staff, consider the costs associated with salaries, training, and benefits. 

The hourly minimum wage in the United States is $7.25/hour; however, professional movers typically make $16-20/hour and as high as $25/hour.

Exact numbers are difficult to pinpoint, but a recent Society for Human Resource Management (SHRM) study states that hiring and training an employee is, on average, $4,129, or 6 weeks of pay for a $15/hour job.

Using a worker recruitment system like ZipRecruiter or Indeed is excellent for posting jobs, and hiring can be worthwhile for filling positions quickly. The paid versions allow business owners to boost their ads to help fill positions faster. ZipRecruiter costs start at $299 per month for a set number of credits, while Indeed is as little as $5 per post per day.

After that, roadside coverage from a service provider like AAA costs between $64.99 and $124.99 annually.

In addition to doing tasks yourself, you can save on personnel costs by using part-time workers and contractors or a temporary worker employment agency when there is no need for permanent employees.

9. Technology 

Invest in software and technology to manage bookings, schedules, and communications. If you become a moving company franchisee, you will receive recommendations on the preferred technology.

  • SmartMoving: is the leading CRM for all our moving logistics needs. (Cost: starting at $399/month)
  • RingCentral: for all calls to and from customers. (Cost: $35-55/month)
  • Samsara: is for fleet management third-party software that allows tracking of our trucks and camera tracking on our employees. (Cost: About $27-$33/vehicle/month)
  • Alarm.com: for the alarms, including sensors, to be set up within your operation facility.
  • Global/Remedy/Clover (POS Systems): This takes customer payments. (Cost: starting at $14.95 per month, hardware price from $49)

10. Miscellaneous costs 

Factor in miscellaneous expenses such as pre-paid gas cards, uniforms, and custom printing on garments. Franchise moving companies will provide uniform outlines and service providers for branded items.

  • Setting up a gas card with a credit limit of at least $5000 will allow your fleet to stay on the road if your regular credit card breaches its limit.
  • One uniform, including a t-shirt, long-sleeved t-shirt, work pants, and sweatshirt, starts at about $150 for generic items from Dickies.
  • The cost of a logo-printed t-shirt can vary widely, depending on the order size, the shirt quality, the printing method, and how soon you need it. Generally, expect to pay from $10 to $50 for a custom-printed logo t-shirt, and the more you order, the less you pay per piece.

11. Working capital 

It is strongly advised that there be enough working capital to cover about six months’ operational expenses. When calculating your business startup costs, plan to cover those expenses upfront. 

Don’t count on your business’s revenue to ease your costs until at least after that early period. You’ll want a cushion while you get your feet under you, promote your moving business, and generate leads.

Conducting thorough market research on these items and creating a detailed business plan will help you better estimate the specific costs for your local moving business.

3 Tips for Drafting a Moving Business Plan with Expenses

Providing an exact figure for the startup costs is challenging as they can vary significantly based on the above-mentioned factors. However, these four steps can help you estimate the costs of starting a moving company in your area to create an accurate business plan. 

  1. Use the SBA’s startup costs worksheet to estimate your finances. Their templates will help you assess your initial investment costs, so you know how much capital to request when seeking funding.
  2. Use a free Excel template like the one found here, which includes all the formulas you need to calculate your employees’ costs.
  3. Draft a business plan to estimate your startup costs. The financial projections section within your plan should estimate your revenue, profit, and expenses for up to five years.

Conclusion: Investing in a Moving Franchise Reduces Costs

Investing in a franchise is one great way to reduce the overhead of starting a company from scratch and fast-track your way to success as a moving company owner. 

If you are exploring moving company franchisee opportunities, ask if they provide marketing and advertising support and support in obtaining licenses, permits, and insurance.

Learn more in our 7-step guide to buying a moving company franchise in the US.

As a company that has grown in the moving sector over the last 13 years, we know our franchisees enjoy having a turn-key solution that starts them out with a nationally recognized brand with an excellent reputation.

Learn more about starting a local moving company franchise with Let’s Get Moving.