How Much Should Moving Companies Profit?

Hey, my friend, it's Louis Massaro, CEO Moving Mastery, where we help moving company owners set up proven systems and processes so they can increase profits, reduce stress and live a better quality of life. You know, I get the question a lot on, you know, how much money should moving companies make? How much money should moving company owners be able to take home? And you know, it's one of those things that typically comes with some frustration, right? You know, maybe you're putting in a ton of work, you know, you're working really hard. You maybe even got a ton of, you know, gross revenue, right? Your gross revenue is really high. But at the end of the day, where's the profit, right? Where's the money that you're able to take home? And it creates a lot of frustration. You know, we know that there's a lot of liability in the moving business. There's a lot of responsibility. You know, you're responsible for your movers, you're responsible for your customers, you're responsible for your equipment, you're responsible for and accountable for and liable for those trucks that you put out on the road every single day for the safety of everyone else that's out there. That's a lot, you know, that's a lot of pressure to put on somebody. And you know, you want to be able to have the rewards. You want to be able to make the money that you deserve if you're running a solid business. But how much is that, right? I'll get the question about, you know, Louis, what's the average percentage of net profit for a moving company? And here's what I, I could tell you. You know, the first thing you need to know is that you should not be looking at average ever. Okay? Average is made up of people doing, you know, very low numbers and people doing very high numbers, alright? So you don't want to strive to be average. You want to strive to be extraordinary. And the number that I would say you want to shoot for as a net profit in your moving company after all your expenses is 20%. Now, there's companies that are doing more than 20%, and if you're there, great. However, if you're on industry average, which I think is like 9 or 10%, which isn't good, you want to start getting it up higher, okay? And you want to know for the work that you put in, how much you're going to be able to make. You want to know that this endeavor, this business, these hours that you're putting in is worth your time, it's worth your effort. Right. So, you know, for me, when I started in the moving business and I was a 19 year old kid, and I was really just looking for a way at the time to make 10,000 bucks a month, like that was my goal. I'm like, how can I make 10,000 bucks a month as a 19 year old kid? Then I got into the business, so I'm like, okay, I see people are making the money, making money. I could do that. I had a mentor say to me, he said, Louis, make yourself $400,000 a year, okay? Yourself. That's what we're talking about right now. We're not talking about how much gross revenue your business should have, because that's kind of irrelevant, right? It is a certain number and a point that you should look at. But then gross number is only set so that you can then have your expenses and then have your net profit at the end. So I had a mentor say to me, said, Louis, make yourself $400,000 a year. Save 200, spend 200, you'll live a good lifestyle. So I said, okay. So that was my goal, right? I didn't know any better. And within my second year in business, I went to like 300,000 net on my tax return personal income, okay? I think it was my third or fourth year in business, went to 800,000 personal net income, and then after that I went to seven figures and up. But the thing is, you've got to be able to know what's possible. And I'm not saying this in any type of way to, you know, claim that you are going to be able to make that money. Because I don't know you, I don't know your work ethic, I don't know your focus, I don't know your situation. So I'm just telling you what was reality for me in this business and what the possibilities are to be able to make money in the moving business. And it's important that you establish what that is for you. All right, so here's the deal. If you want to get to a point where you're making the amount of money you want to make in the moving business, here's what you got to do. The first thing you need to do is you need to know your numbers, okay? We can't just, you know, kind of shoot in the dark and go and hustle and get a bunch of moves and try this and try that. Not really know how it's all working out, right? You need to review your profit and loss statements. You need to be able to review your Cash, Cash flow reports. You need to take a look at your marketing ROI to know that the money you're spending on marketing is actually profitable. For, for each individual source, right? You have to know your numbers if you're gonna be revenue income minded to where, like, you're focused on how much income you're gonna be able to make, right? You might say, louis, but it's not all about that. Well, it kinda is, right? Because you got into business to make money, right? Otherwise, if it was just something you enjoyed doing, then volunteer and do it for free, right? Be one of those services that says, you know what? We'll move people for free, not for profit. And if that's you, cool. More power to you. All right? But most people are in this business because they saw the opportunity to make money and they want to be able to do that. But if you don't know your numbers, it's going to be very, very hard to get to where you want to go. Because when you have, you know, a benchmark, right? When you have a starting point of what your numbers are, you could start to make adjustments. How do we raise the gross revenue? How do we reduce the expenses to increase the profit? Right? Second thing you want to do, figure out how much money you want to make personally, right? Like, how much money is it going to take to live the life you want to live? All the expenses that you have, right? All the expenses you want to have, all the investments, the savings, the charity, the emergency fund. What is it going to take to live the life that you want to live? That number could be different for everybody. It's definitely different for everybody. You know, somebody might say, louis, I just want to make six figures. I want to get to 100,000 and I'm good, right? Other people might say, listen, if I'm not making a half a million dollars a year, I don't even know how I'm going to eat, right? So it's different for everybody. Take some time, figure out what it's going to cost to live the life that you want to live. Literally, get out a sheet of paper, right? What's the mortgage going to be on your house that you want? What are the car payments, schools for your kids, insurance, investments, savings, anything else. Charity, what is all that gonna cost you, right? And then the third thing you need to do is build your business with that number in mind, right? Instead of just saying, let me run this business and see what happens, right? You've got to determine the outcome, right? And the outcome is income, right? So you want to make sure that you're in a business that's going to be able to provide the money that you want. And if you're in the moving business, I'm here to tell you the chances are unless you've got, you know, very, very, very, very high aspirations, you can make the money in this business. Right? You could personally make some seven figures a year in this business. And it's just, you have to know that that's where you want to go and then build the business around that. But it's very important to understand truly what you want, right? So when we talk about figure out how much money you want, think about what you want from your heart, right? Because we could all set these big goals, like, yeah, I want to make $10 million a year. Do you need $10 million a year? Right. To live the life you want to live. It's amazing. I take clients through this process all the time where it's like, let's figure out what it's going to cost for you to get everything you want. And usually the number is significantly less than they think it is, right? They get everything they want. They've got their savings. They could retire at the age they want to retire at. It's usually significantly less than just a number they pick out of a hat. And why is that important? Well, it's important because you're going to build your business around that goal, right? And if your goal is way too high and you start trying to make moves in your business that are unnecessary, right? You're just bringing on more work, more responsibility, and for what, right? You're just adding complexity. What you want to do is you don't want to, you know, create this monster that just consumes your whole life. So figure out how much you want to make. Figure out what it's going to take to live the life you want to live. Then you build the business around that. Number four, don't assume that more business equals more money. I see this happen all the time, and I feel fortunate when I'm able to get in with somebody, when somebody becomes a client, when they're thinking about maybe opening another location or they're thinking about expanding. And I'm able to see where they're at currently and stop them from doing that. Okay? I'm all for expansion. I'm all for growth. You want to open 50 locations around the U.S. you want to do $100 million a year, great. However, just because you open another office does not mean you're going to make more money. A lot of Times, you're going to make less money and you're going to introduce more complexity into your life and into your business. So don't just assume that you have to go do all these different things to make. Right. I personally made 800,000 a year off one office, right? That was before I even opened up my six locations. So don't think that you have to go reaching outside of what you have right now to make that money, right? I tell people all the time, don't go dig a bunch of shallow holes. Find the one hole that has the oil and the gold under it and dig a deep hole there, all right? And typically, you know, a lot of people do local moving. By the way, I made all that money doing nothing but local moves. I didn't even start doing long distance moves. So I was in business for seven years. So I'm saying this as like a cautionary, you know, word of advice that, you know, to go out and just do more does not equal more money. All right? If you want to scale, if you want to grow, set up your model business first. Set up one business that runs, it's efficient, your profit margins are at 20% and above, and your cash flow is strong, you're making money, then you've got a model, then you could take that and then you can expand on that, all right? So don't assume that more business equals more money. The next thing you want to focus on is you want to make sure that you're not just focused on the money, but you focus on your lifestyle as well, right? I mean, look, if you're so focused on the money that you, you know, let your relationship suffer, your health suffer, your personal mental health suffer, you're not going to live a good life. I don't care how much money you have. I learned this the hard way when I first started my business. It was money, money, money, money. But I was a young kid, single, no family can go out, and, you know, that was all I did. However, once I made all the money that I. More than I ever thought that I would, I realized that that really didn't bring me the happiness that I thought it would. Right? It wasn't until I got to a point where I'm like, you know what? I need to incorporate my whole lifestyle into this. I need to figure out how I could, you know, profit in my business and thrive in my life. So don't make the mistake of just chasing down money. Build your business to get the income goal that you want, but build it in a way that requires you know, as little effort as possible. And when I say that as little effort as possible could mean 50 hours a week, right? Could mean 40 hours a week. The point is, don't give it everything you've got working 24, seven, seven days a week to get it going and sacrifice all that. Because what will happen is your mental capacity will start to diminish and the business will suffer from it as well. Right? And at the end of the day, that's not really the goal. Now, you might be in a position like, Louis, I don't care. I'll do what I need to do. I need to get money now. Cool, right? Like, do what you need to do to get momentum, right? But as soon as you get momentum, you have to introduce the lifestyle the same way that you know you're going to do the exercise. On how much money do you need to specifically live the life you want to live? You also need to say, what do I want to do in my life? What experiences do I want? How many days a week do I want to work? When I'm working, what am I actually going to be doing during those days? Right? Am I going to be dispatching trucks, or am I going to be reviewing some reports, having a few meetings, checking in on my investments? You've got to be able to define all that for yourself. And don't make it all about money, make it about lifestyle. So, number one, if you want to start getting to that level in your business where you're making good money, number one is know your numbers, alright? Number two, figure out actually how much money you personally want to make. You personally remember your business is there as a means to financial freedom for you and your family, all right? Number three, build your business based on that number. Number four, don't assume that more business equals more money, all right? Build a tight, tight foundation that's profitable, and then you could grow and build upon that. Number five, don't just focus on the money, but focus on the lifestyle as well. That's why you'll hear me say all the time, profit in your business, thrive in your life, my friend. I hope that was helpful. If so, do me a favor. Share this video with somebody out there on social media or a friend that you think might find what we talked about today valuable. And if you could hit the like button for me too, I'd really appreciate it. Thank you so much for tuning in. I'll see you next time. And remember, go out there every single day and profit in your business and thriving your life. I'll see you later. I hope you enjoyed that episode. Make sure you subscribe to the new Moving Mastery Podcast. It's available on itunes right now and it's the exclusive place where I share proven strategies and processes on how to reach higher levels of success in your moving business. Every week I share valuable insights, stories and expert interviews with takeaways from you can implement in your business right away. You'll get a behind the scenes look and tactical training from my seminars and online training programs on how to improve each area of your moving business. It's called the Moving Mastery Podcast and it's available on itunes or anywhere you get your podcast. So make sure you subscribe. And if you're ready to take your moving company to the next level, make sure you check out my brand new on demand training on how to consist consistently book more high paying moves all year long. It's called the six Stages of a Moving Company Sales Machine and you can access it right now for free@lewismissaro.com Six stages in this training you'll learn the steps you need to take to increase your sales with a smooth running consistent process. This is the same process I use in my moving companies to book 12,000 moves a year and now I'm training you on how to implement it in your moving company for free. It's available now@lewismassaro.com Six stages before you go, make sure you subscribe to my channel. It really helps support me and the channel and enables me to keep putting out new videos for you. I'd really appreciate it by subscribing. You'll also get a notification every time I release new training, so make sure you hit subscribe.