Why Your Moving Company Is Losing Money

Hey, my friend. It's Louis Massaro, CEO of Moving Mastery, where we help moving company owners set up proven systems and processes to increase profits, reduce stress and live a better quality of life. You know, I often have clients come to me that are already running successful moving companies. And when I say successful, I mean they're doing big numbers. They're already seven figure companies doing a million two, even up to 5 million, sometimes even 15 million a year. But the profits aren't really what they want them to be, right? In other words, they've got this great business, they've got the trucks, they've got the office, they've got the staff, the sales team. Everything's in place. But what happens after all the bills are paid is they don't have the money that they want to make. And it's super frustrating for them. And it can be very overwhelming to go and put in the work and put in the time and put in the effort to run these businesses that require a lot of effort to not get the profits and the take home compensation that they deserve, right? So what I tell them is, look, think of your company like a bucket, right? If you think about just a bucket, right? And you have all these opportunities going into the bucket, right? So new leads are going into the bucket. All your gross revenue is going into the bucket. Basically, you know, you're kind of creating this, you know, you know, stew, if you will, of everything, all these opportunities and everything that comes into your business, right? But what happens is most companies have holes in that bucket, right? So I wouldn't consider, you know, your typical expenses to be a hole, but holes are areas of, you know, inefficiency or areas where you're losing money that when plugged in will allow your profits to be there at the end of the day, right? So, you know, what we want to do is we want to start looking at where we could plug the holes and how we could take this bucket and not let the money that comes in the top. No matter where you are, right? If you're just starting out or you're doing 15 million a year, whatever the case may be, when money comes in, you want to keep as much of it as possible. So I want to talk to you about where you could be losing money in your business and how to start plugging those holes. Because it's super, super important. It's not about gross revenue, right? It's about your profitability. It's about your compensation as the owner of the business and how much you're actually able to take Home. That's why you go do what you do every day, right? So how do you go about plugging the holes? How do you go about finding the areas where you, you're losing money? And after working with hundreds, if you include seminars, courses, everything, newsletters, thousands of moving companies, I could tell you that there's five areas that typically we find the holes that we're able to plug. So I want to tell you what those five areas are so that you could go find them, plug the holes, and start keeping more of the money for yourself. So the first area that is, is a huge, huge way for you to be losing money. It's unprofitable marketing sources. And so what do I mean by that? Unprofitable marketing sources could be anything, right? Could be anywhere. So you spend your money on marketing, right? Whether you're doing, let's say, SEO, pay per click, direct mail, moving leads, Angie's list, home advisor, whatever it might be, wherever you're spending dollars to receive, you know, to get return on your investment, if each individual marketing source is not profitable, it's taking down your entire net profit for your whole business, right? So the way that you establish this is you start doing a marketing ROI report. And what that means is you take each individual source every single month and you look at all the leads that you received for that source. You looked at all the jobs that you booked, you look at your booking percentage, you look at the amount that you spent versus the amount that you actually received so that you could see where you are as far as profits go, right? You don't want to be spending more than 10% of a job on marketing. So for example, if a job is $1,000, you don't want to be spending more than $100 on that marketing, you know, wherever it came from, right? So you don't necessarily need to do it on a job by job basis, but you want to do it on a monthly basis to where you're able to see, okay, if we brought in $100,000 from lead source A, how much did we spend? Right? If you spent $8,000 to bring in the hundred thousand, that's 8%, which is good. But if you spent, you know, let's say you spent 15,000 to bring in the hundred thousand, you're at 15%, which is, you know, getting up there, it's getting a little too high. So as you start to look at the profitability of each marketing source using a marketing ROI report, you're going to be able to determine, okay, where could I Take some, you know, take some of this money that I'm spending and reallocate it to a different source to that's more profitable. Okay? This is, you know, besides your P and L, right? Besides your financials for your business. Your marketing ROI report is one of the most important reports you could be looking at on a monthly basis. It's what allowed me to really get from, you know, a certain, let's say I was already at maybe 10 million and I went to 20 million after I established this. Because once you're able to spend money on marketing without concern, without fear, without worry of like, is it working or not working because you have a report to be able to do this, it makes things so much smoother, so much easier. You know, you could either do this in an Excel spreadsheet, you could do this in your moving CRM. Those of you know, I'm a co founder in smart moving software. You could do it in there as well. But you want to make sure that you're tracking your marketing and that you're getting rid of any unprofitable marketing sources. Okay? That's a huge hole in your bucket in an area where you're losing money. The second area is low booking percentages. And what does this mean? AKA this means wasting leads, right? So if you get 100 leads that come in, okay, when I say leads, that could be phone calls, that could be leads from a lead provider, those could be leads from your website, Those could be, you know, somebody called in from direct mail or placed a request for a quote online or a realtor sent you referral, anything, any lead, the amount of leads you get versus the jobs you book will give you your booking percentage. So if you have a hundred leads come in and you book 10 of those, your booking percentage is 10%. Okay? So what do you need to do to increase your booking percentage? And it's really those of, you know, I have moving Sales Academy online course. I have the, you know, three day live event. And the whole purpose of that is to build a sales sales machine to increase your booking percentage. So instead of spending more money on marketing, you take the same amount of leads or less and you increase the amount of the amount of jobs that you book, right? And so, you know, you do this by setting up your lead management to make sure that, you know, you're not wasting leads, that you're getting to them quick, right? That you're calling them, you're leaving them a message, you're emailing them, you're texting them, you're Having them set up in your CRM for follow up so that you don't just talk to somebody once and then wait for them to call you back, right? You've got your sales scripts in place, you've got your email automation in place. These are things that, you know, you could watch my other videos. I talk about it a lot because that's really one of the things that allowed me to grow $20 million business, which was sales. Right. If you've got low booking percentages, meaning the leads that come in, you're not booking enough of them, Money is just being wasted. Right? I've, you know, I'll use the analogy with somebody. If I, if I go to their office and I listen to their sales floor and I see what's going on, I've said it several times, I'm like, I see $100 bills all over the floor as if they're like falling between the cracks of the desk, right? So when you are able to increase your booking percentage, everything changes. Everything changes. You know, companies will often be so frustrated. Look, I'm doing all the marketing, I'm placing it here. I'll say, okay, well, are you tracking the profitability? No, but you know, my sales reps say they're working or my sales reps say they're not working. You need to track the profitability, right? You know, we're calling them or giving them a quote. Okay, are you doing this? Are you calling them this quickly? Are you calling them this many times? Are you doing this follow up? What about when they say your price is too high? Do you have a rebuttal for that? Objection. Right. You've got to be able to increase your booking percentage. There's other videos on that you can watch. The third reason that you're losing money is a high labor payroll percentage. So if you look at each job that you do as a pie, right? There's only 100% of that pie. Certain percentage has to be allocated to certain things, right? So you, you know, you've got your marketing, right? If you're paying sales commission, you've got that. But one of the biggest areas is the labor percentage, right? How much of the whole job? Again, let's say we're talking about $1,000 job. How much of that job are you paying out to the movers? Right? And so when I see companies with high labor percentages, the answer is not, you know, reduce their pay, right? Because that doesn't ever turn out good. When you bring your guys in and say, hey, look, I know you're getting this amount, but we're going to lower your pay because we need to, you know, straighten out our labor payroll percentage. That doesn't work. Typically, what you're going to need to do is raise your rates and get more. More money per move. Right? You need to get a higher average dollar amount for each move in order to balance that out. So what. What I would do is every single week, every single week, I want you to take the payroll that you paid for that period, okay. And divide that into the amount of revenue that was brought in that week. Okay? So let's say you brought in $100,000 in that pay period. Right. In that week. Well, the same amount of pay that you paid out for those same jobs that brought in 100,000. Right. Let's say that was 25,000. Well, then your labor percentage is 25%. Okay? And so you want to make sure that you're on top of this and that you set a benchmark for yourself of what your labor percentage is, because this is another huge area where you can find things going on in the company. Right. I've found dispatchers before, they were in cahoots with the movers, paying them extra hours, getting a kickback, Right. If you're not looking at your labor percentage, things could get out of control really quick. Right? So to be able to look at that every week and be like, all right, I'm at, you know, 29%. I'm at 29 and a half. I'm at, you know, and see, why is it higher? Why is it lower? Right? You're gonna. This is. This is part of knowing your numbers. All right? This is something you want to look at every single week. Typically, the payroll percentages are anywhere between, you know, 25 to 35%. And a lot of that has to do. Like, I can't just tell you what it should be. A lot of it has to do with what, you know, the way your business is structured. Right? Because when we look at. When we look at the job, and some people could afford to pay a little bit more because their fixed costs are lower, right. Their rent for their office or their trucks or their staff and things like that. So it's typically between 25, 30, 35%. Check where you are now, right? With all numbers, you want to be able to set a benchmark for yourself, which means, let me look at what it is, and then let's look for ways to improve it and make it better. All right? So having a high labor payroll percentage is another area where a lot of companies are losing money. Number four, lack of crew management. Okay? And this is basically the opposite of running a tight dispatch operation. This is running a loose dispatch operation. Meaning, right, are we on top of the inventory, right? On the trucks, all the equipment, the dollies, the pads, the straps, all of that boxes, right. You know, are they getting lost or stolen or left at jobs and nobody's accountable for that and you're just purchasing more, purchasing more, purchasing more or you're on top of that, right? What about your crews? Are they clocking themselves in and out? Are you giving them the paperwork and sending them out for the day and saying, hey, okay, here's the hourly rate, go ahead and calculate it when you're done, right? Or long distance job, you know, here's the charges, you know, let me know if you need anything. Or are you having them check in with you where you're clocking them in, you're clocking them out, you're telling them how much to collect and you're making sure that if they clock out at 3 o', clock, you're looking at your GPS and you're seeing, okay, they left at 3 o'. Clock. Alright? Tight crew management will save you a ton of money. Same thing with claims and damage, right? If you've got claims and you've got damage and you've got complaints and you're not keeping track of this, you're not able to tell, okay, this, you know, we're having issues with, you know, I'll give you a perfect example. For me, I saw on my P and L at one point that we had very high claims in one office and after drilling down, we found that, you know, it was a small group of guys and they were damaging, you know, glass tabletops, marble tabletops and flat screen TVs, that was like the extent of all the damage that was happening. So we were able to identify that right away, train those guys on how to move those items and solve the issue. And now I'm not spending the money on claims, right? Which is a hole in the bucket, alright? So make sure you're on top of your crews. Running a tight dispatch operation is one of the best ways to keep all the money in house, alright? The fifth way that you're losing money is that you're not multiplying moves. And what do I mean by multiplying moves? Well, you know, the moves that you book, right? You spend money to acquire those moves, right? Or you get a referral from those moves to be able to get those moves, you want to be able to multiply those. You want to turn that customer into a repeat customer, into a referral customer and into a review customer. Alright, so don't look at the job when it's done and say it's done, we took care of them. No, you need to get yourself a five star review from that customer. You need to get a referral and you need to make sure that they're a repeat customer the next time that they go to move. All right, so you do this by requesting reviews on the job site when you're finished, right? Having automatic texts from your CRM go out, automatic emails going out requesting that, having a database of these customers and reengaging them at a later date to be able to bring them back in and also enrolling them in your referral program. You can check there's been another episode on the referral program. Go and watch that. Alright, you want to be able to multiply every single move that you have. So just to recap, five areas that you could be losing money that you need to go check right away and start tightening it up and plugging the holes. Unprofitable marketing sources, low booking percentages, high labor payroll percentages, lack of crew management, and not multiplying moves. I hope this was helpful my friends. If so, do me a favor. Share this out on social media with somebody or a friend that might find what we talked about today helpful. Hit the like button if you could. I'd really appreciate it. And until I see you next time, go out there every single day. Profit in your business, thrive in your life. I'll see you next time. 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 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 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. @lewismassaro.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. 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