Should You Add Moving to Your Junk Removal Business?
Moving and junk removal. At first glance, these two services may seem like day and night. After all, when you’re moving, you’re packing up the items you want to keep, and with junk removal, you’re getting rid of the stuff you don’t want—right? Wrong!
From lead generation to equipment and operational overlaps, junk removal and moving are a perfect match. That’s why JRA founder Lee Godbold launched Nth Zone™ Moving —to help junk removal business owners expand into the moving industry in smart, efficient, and profitable ways. Let’s take a look at some of the opportunities and challenges of starting a moving company to see if it’s the right expansion move for your junk removal business.
The Opportunity: Why Moving?
Why Moving and Junk Removal Pair Well
As a junk removal business, you are already equipped with a lot of the tools and resources you need to do moving jobs. You have capable employees who can handle handy lifting. You have a truck that can move items from Point A to Point B. And, perhaps most importantly, you have a chance to prove yourself to your target demographic for moving services. Why? Because, more often than not, the people who are going to move are also going to need junk removal.
Nth Zone™ Moving estimates that 75% of junk removal customers are in the stage of life where a move is likely. People often book junk removal services prior to moving. Customers want to get rid of their unwanted belongings before they spend the time and money to pack and move to a new location. These are EASY LEADS for your moving side of the business. Give your customers an exceptional junk removal experience and they will be thrilled to learn that your trusted company can handle their move as well.
Are you worried about those cross-country moving jobs? You can turn these down and still have a pretty big slice of the pie. That’s because 80% of moves are local, and as a junk removal business, you already know your community and its roads better than most other people.
Moving vs. Other Expansion Ideas
Compared to other expansion ideas, moving may be the best option for your junk removal business. For example, if you are choosing between adding moving services and adding dumpster rental services, consider that dumpster rentals are going to take away from the number of customers that need full-service junk removal.
What about expanding geographically? While it works, it brings about its own challenges, too. As you branch out into cities farther away from your base of operations, you may need to open new offices, new headquarters, and new warehouses. You’ll also need to hire different people to service these new, distant locations. By adding moving services, you can expand without even having to step foot outside of your community.
Proof of Concept: You Won’t Be the First
Junk removal companies also doing moving jobs isn’t anything new. In fact, many franchises are already offering these services. Consider the following:
- 2 Men and a Truck
- Capital City
- College Hunks
- Suburban Solutions
Cross-Selling Between Junk Removal and Moving
Sometimes, a junk removal appointment will segue into moving services, and vice versa. It’s up to you to pay attention to these opportunities so you can act on them. For example, it’s always helpful to ask your customers questions as a form of friendly conversation while also using their answers to find a good sales opportunity. Ask your customers why they need junk removal. Is it because they’re planning to move in a month or two? Be sure to let them know you offer moving services as well. Do it the other way around, too—ask your customers who are moving if they need to get rid of junk. Chances are, they do!
Something else you can do is send mail, be it snail mail or email, to your past customers. Take out your address list and let them know about your new moving services. This is a great way to remind people of your services and get repeat business as well as referrals.
How Much Can You Make with Moving?
The Financial Potential of a Moving Company
The amount of money you can make with moving depends on the market and operator. Of course, one operator might be able to make their moving services a success, whereas another one fails to reach success. However, in the case of success, an established local moving company will normally see ten to twenty percent net profits from moving. For the first two years as that business gains market share, it’s closer to zero to five percent.
Nth Zone™ Moving has prepared some general revenue estimates for the first five years of a business operating a moving company. These are not guarantees, merely targets to aim for.
- 1st Year: $150,000
- 2nd Year: $225,000
- 3rd Year: $335,000
- 4th Year: $500,000
- 5th Year: $760,000
Moving Add-On Services
You can boost your moving services revenue with add-on services. These services will not only help drive your success as a company, but they will be convenient, helpful options for your customers as well. Add-ons for you to consider are as follows:
- Moving supplies. Boxes, tape, bubble wrap, and packing paper are all examples of moving supplies your customers will need. The profit margins for these products are very high, so offering these supplies for a charge is a great way to up your earnings.
- Packing. Since you’ve already got the supplies on hand, you can also offer to pack items for your customers. Many will be more than willing to let you box up their belongings for a fee if it means they avoid this work altogether.
- Storage. When your customers need temporary storage for their belongings, you can offer this to them for a good profit. You might need to provide a valuation of these items while they are in storage, which is another great add-on service to offer.
- Cleaning. Customers moving from a rental space often need to leave their home clean in order to get their security deposit back. Others selling their homes generally want to leave a clean space for the new owners. You can also refer the customer to a cleaning service for their convenience. This saves them the search and gives them a positive outlook on your business.
Challenges of the Moving Industry
There are hurdles present in the moving industry that you may not be familiar with from the junk removal industry. With all things, it’s good to be prepared. Let’s make sure you know what to expect as you move into moving:
- Regulations. Every state, city, and community has different regulations that moving companies need to follow. If you handle interstate moves, you even have to get a DOT number from the Department of Transportation. Read up on the regulations for your area and make sure your company can abide by them.
- Insurance claims. While you’re probably familiar with insurance claims on the junk removal side of things, you should know that you may have to deal with them on the moving side of things, too. Most junk removal claims are for damage to home/property, but most moving claims are for items damaged during handling.
- Customer expectations. Your customers have high expectations of you when they book moving services. Consider that during junk removal, people don’t really care if items they want to be thrown out are handled roughly. However, during a move, you have to be gentle with these belongings because they’re going to a new home, not the dump.
- Estimates. It used to be that moving quotes were made by walking through the home and noting everything that needed to go. Nowadays, many walk-throughs have been replaced with virtual video tours. This makes it difficult, though not impossible, to determine exactly how many items you need to move and how much you should charge. It’s a skill you will need to learn.
- Last-minute changes. Sometimes, people aren’t going to move exactly when they originally planned to. These people may ask you to reschedule their services at the last minute. Try to accommodate them when you can, but have a written agreement to the original time and date ready so you have control of the situation.
- Finding knowledgeable movers. Moving services require staff with an appropriate skill set and familiarity with the work. This doesn’t mean you need to hire people with decades of experience. Even someone who has put a year or two in on a moving company in the past will be a valuable asset to your business.
It’s All About Timing: When to Add Moving
The Right Time to Add Moving
A junk removal business needs to be the right size before it considers expanding into moving services. At Nth Zone™ Moving, we suggest that a business should have at least three junk removal trucks; it should have a top line of revenue of $500,000 or higher; finally, it should also have profits of $100,000 or higher. With these numbers, your cash flow will be enough to help support your moving services at the start, as you will likely lose money on that side of the business until your moving services gain traction.
We also recommend that you are completely “off the truck” on the junk removal side of your business. As a business owner, you shouldn’t have to be tied down on the truck to keep your business running, and that’s especially true when you have moving services you’re trying to get off the ground. Make sure you have a supervisor or a general manager to lead your junk removal staff in your absence. You may want a supervisor or a general manager for the moving side of your business, too.
Finally, make sure you have $40,000 to $100,000 of dedicated start-up capital for your moving business, and also make sure you have the time and the ambition needed to make this venture happen. If your money or your patience wears out, then your moving services aren’t going anywhere. You’ll need a good deal of each!
The Wrong Time to Add Moving
If there is a right time to add moving, there is a wrong time to add moving, too. Are you still tied up on the junk removal truck because you’re a crucial part of day-to-day operations? Do you not have the start-up capital needed for expansion? If so, then it’s just too early to consider expanding into moving. Put some work into the junk removal side of things first!
Do you feel like you have the capital needed to expand, but your motivation is being dragged down by recent poor performance with junk removal? When something in your car is broken, you don’t take it in to add upgrades. You have to get it repaired first. Similarly, you need to find out what’s making junk removal not work as it should and resolve the problem before you expand into moving.
Above all else, if money, time, and personal drive don’t allow for adding moving, then it would be a costly mistake to go forward with it anyway.
Getting Started with Moving Services
When looking into whether you should expand into moving services, you should do some market research and see what your competition might be. Check and see how many moving companies there are in the area. Is the demand for moving already satisfied? What do the reviews look like for these companies? If the reviews are bad, then customers need a better moving company they can turn to—and you might be able to fill that void.
Also, consider how far out nearby moving companies are booked. If their schedule is not available online, you can always call and pose as an interested customer. If your nearby moving companies are all booked up, then that means there is demand for moving services that hasn’t been met. Demand that could be met by you!
We recommend operating your junk removal and moving sides of the business as two separate businesses. If possible, don’t let your junk removal staff work on the moving truck, too. And certainly don’t have all the revenue streams go into the same bank accounts. You absolutely want your finances to be separate between junk removal and moving. That way, you can precisely measure the monetary success—or shortcomings—of both sectors of your company.
If there’s one thing these two halves of your company should share, though, it’s their name! That way, good word-of-mouth for one side is good word-of-mouth for another. Ultimately, that’s the ultimate goal of expanding into moving services: turning junk removal customers into moving customers, turning moving customers into junk removal customers, and delivering a great customer experience to everyone involved so they can tell their friends and family about you. That way, you can skyrocket to success in all aspects.
Join Nth Zone™ Moving
Want to learn more about adding moving to your junk removal business? Contact Nth Zone Moving to get started!