You would need a minimum of $743,580 to start a medium–scale but standard moving and storage business in any city in the United States of America (seven hundred and forty – three thousand five hundred and eighty USD).
Moving into a new office or apartment might pose a challenge sometimes, especially if you take on all the responsibilities without involving experts. The moving and storage industry is a $15 billion industry in the United States. About 42 million families each year use a moving company or pay in some other way for their relocation.
Do-it-yourself storage during moves is a growing industry as well, now bringing in about $22 billion a year. But how did this all get started? Companies in this industry provide moving and relocation services, including local, long-distance, and international trucking and shipping of used household, institutional and commercial goods, furniture, and equipment. Industry operators often provide incidental packing and storage activities.
The industry promises a good level of success when one diligently seeks to do what is required of them. It is no surprise that there are lots of people already making it big in this business. Starting and operating a moving and storage company can be capital intensive and challenging, but the truth is that it can be rewarding at the same time.
One good thing about the industry is that it is open for both big time investors who have the capacity to start the business with fleet of trucks and aspiring entrepreneurs who may want to start with just one truck.
Estimated Cost Breakdown to Start a Moving and Storage Business
When it comes to starting a standard moving and storage business, one is expected to spend the bulk of the start-up capital on the purchase of standard trucks, vans, and storage facilities. Depending on the options you choose, the cost of a typical truck or van can be anywhere between $58,000 and $850,000.
Aside from that, you are expected to spend on maintenance and fueling and of course paying your employees and utility bills. These are the key areas you are expected to spend your start-up capital;
- The total fee for registering the business in the United States of America – $750.
- Legal expenses for obtaining licenses and permits as well as the accounting services (software, P.O.S machines, and other software) – $3,300.
- Marketing promotion expenses for the grand launching of the business in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of – $3,580.
- The cost for hiring a Business Consultant (it includes writing business plan) – $2,500.
- Insurance (general liability, workers’ compensation, and auto insurance) coverage at a total premium – $15,000.
- The cost for payment of rent for 12 months at $1.76 per square foot in the total amount of – $105,600.
- The cost for parking yard/facility remodeling – $25,000.
- Other start-up expenses including stationery ($500) and phone and utility deposits ($2,500) – $3,000
- Operational cost for the first 3 months (salaries of employees, fueling and maintenance of the truck, and payments of bills et al) – $120,000
- The cost for office / store equipment (cash register, security, ventilation, signage) – $750
- The cost of purchase of two 50 tons moving trucks (fairly used) – $450,000
- The cost of launching a website – $600
- Miscellaneous – $10,000
From the rough estimate as listed above, you would need a minimum of seven hundred and forty – three thousand five hundred and eighty USD ($743,580) to start a medium–scale but standard moving and storage business in any city in the United States of America.
Please note that this amount includes the salaries of all the staff for the first three months of operation and excluding having in–house maintenance team under your payroll. You can always contract this aspect of the business to a third–party service provider.
Please note that this is a rough estimate and we usually advise our readers to directly contact major truck dealers in their city in order to get the real time prices of the trucks and vans they want. The truth is that if you are a good bargainer, you can get a better deal that will help you beat down the estimated price as listed above.
Having said that, here are some of the general factors that will influence the overall cost of starting a moving and storage business in the United States of America.
Factors That Will Influence the Cost of Opening a Moving And Storage Business
The Brands and Number of Trucks You Are Starting With
A major factor that will determine the overall cost of opening a moving and storage company in the United States of America is the number and brand of moving trucks and vans you intend to start the business with. For example, you can start your moving company with any of the following;
Semi-Trailer Truck, Extra Duty Truck, 18-Wheeler Truck, Tanker Truck, Heavy Truck, Flatbed Truck, or regular vans. If decide to start with fairly used truck or van, it is going to cost you far less but you might have to spend more on maintenance in the long run.
The Choice of Location
Another major factor that will determine the cost of opening a moving company in the United States of America is your location. As a matter of fact, there are business consultants cum realtors who are specialized in helping people choose an ideal location for their type of business; a location that will guarantee them profitability within the shortest time frame.
The truth is that the location you choose to open your moving and storage company determines if you will be issued the required business license and permits. Government officials must first inspect your facility to be sure that it is located in an area zoned for such business.
Please note that in the United States of America and in most countries of the world, zoning violations and citations can be very costly for a business. It is always preferable to make sure you comply with all the zoning and land use laws before you choose a location for your business.
The Required Licenses and Permits
In the United States of America, you cannot open a moving and storage company without first applying for the mandatory licenses and permits. You would need building license, zonal permits, CDL and signage permits amongst others that may be unique to different cities and states. These license and permits cost money and it will influence the overall cost of opening your business.
Please note that you may have to go through several inspections before you can be issued your licenses and permits. In order to get the overall cost of licensing and permits associated with opening a new moving and storage company in the United States, we will advise that you reach out to your city council or state government. You also need to consider state and federal requirements.
The Type of Facility
The type of facility you want to run your moving and storage company from is also a major factor that will determine the overall cost of opening a moving and storage company in the United States of America. As regards the facility, you have the options of renting, leasing, or designing and constructing your own facility from the scratch.
With renting and leasing a facility, you might just have to spend extra to modify the facility to fit into what you have in mind, but there is a limit to how far you can go and it will be dependent on what the landlord of the facility wants.
If you want to construct your moving and storage company facility from the scratch, it means that you will buy the land or a property, bring up your design and of course construct and equip the facility to fit into what you have in mind. With that, you will agree that you are going to spend way more when compared to people that rent or lease a facility.
Additional Service Offerings
Another key factor that will determine the cost of opening a moving company in the United States of America is the additional service offerings of the business. The fact that there is no one mold fits all means that moving and storage companies are designed to offer different additional services.
For example, a moving and storage company may decide to go into any of the following services; local and long-distance transportation of household and office goods, warehousing and storage services, packing and packaging services, process, distribution, and logistics services et al.
This means that they will have an additional facility, equipment, and staff to handle these aspect of the business. Some of the additional services you are going to be offering will cost you more hence you must increase your running budget.
The Cost of Hiring and Paying a Business Consultant and Attorney
If you want to get your business started on the right foundation, it is a wise decision to hire the services of a competent business consultant and perhaps an attorney. A business consultant will help with drafting a workable business plan document, a marketing plan and strategy, a comprehensive SWOT analysis, and other advisory services that will help you with opening the business.
So also, an attorney will help you with registering the business, draft contract documents, and offer you all the legal expertise that will help you start the business on the right foundation. Of course, you will agree that these services will cost you money and it will indeed influence the overall cost of opening a moving and storage company in the United States of America.
The Cost for Branding, Promotion, and Marketing of the Company
The cost for branding, promoting, and marketing the moving and storage company is yet another key factor that will determine the overall cost of opening the business in the United States of America. Trust me, if you need massive results as it relates to competing and winning a fair share of the available market in your city, then you must be willing to pay for effective branding, promotion, and marketing.
Know that it is not cheap to come by an expert in branding, promotion, and marketing that will help you compete with brands that are already determining the market direction of the moving and storage industry in your city. So, if you add the cost of paying a branding and marketing expert, it will surely increase the cost of opening your moving and storage company.
The Cost for Insurance
The cost of paying for insurance policy cover is yet another important factor that will determine the overall cost of opening a moving and storage company in the United States of America. In the United States, you can’t operate a business without having some of the basic insurance policy covers that are required by the industry you want to operate from.
Thus, it is imperative to create a budget for insurance policy cover and perhaps consult an insurance broker to guide you in choosing the best and most appropriate insurance policies for your moving and storage company.
The Cost for Registering the Business
The cost of registering a moving and storage company is yet another cost that will influence the overall cost of opening the business in the United States of America. Although, the cost of registering a business is affordable, but it will no doubt add to the overall cost of opening the moving and storage business.
Source of Your Supplies and Ongoing Expenses
Another major factor that will determine the cost of opening a moving and storage company in the United States of America is the source of your supplies such as spare parts, maintenance, gas et al. For example, if you have access to manufacturers of all the supplies you would need, it will sure cut down the cost of running the business. So also, if you have in–house maintenance technicians, it will increase your profitability.
Cost of Recruiting and Training Your Staff
The fact that you are opening your moving and storage company as a new business means that you are expected to recruit and train your staff. The training will help you sell the corporate culture of your organization to the new employees.
As expected, it will cost you money to hire expert trainers that will help you train your new hires and that will add to the overall cost of opening a moving and storage company.
The Cost for the Purchase and Customizing of Uniforms
Another factor that will determine the overall cost of opening a moving and storage company in the United States is the cost of purchasing and customizing uniforms. As expected, your drivers, staff and security personnel need uniforms when they are on duty.
All these uniforms will cost you money which is why it must be part of your budget if you are looking towards opening a moving and storage company.
Please note that there are other factors not listed above that will surely influence the overall cost of opening your moving and storage company which is why we will advise that you work with a result driven business consultant in your city to give you the needed guide and info as it relates to the unique factors in your location that will influence the overall cost of opening your moving and storage business.