In this episode, Louis Massaro shares how to build a $10 million dollar moving company from scratch.
- “One of the first questions I ask people that I work with privately is, how much money you want to make? That’s going to determine how we need to structure your path of where you’re going.”
- “If I was starting all over today, I would start with a local moving company, two trucks, short term lease. I’d keep it real simple.”
- “I would hire and train a dispatcher and a moving consultant right away. Now you might say, “Louis, I don’t have the money to do that,” It’s going to be different for everybody. For me, I’d keep it simple. Local moves, couple of trucks, get started, keep the overhead low, hire and train a dispatcher and a moving consultant because I don’t want to do it.”
- “I’m not hiring a manager to just go figure it out. No. I’ve already figured it out when I fine-tuned the processes. I handed this person those processes, those roles, those metrics like this is how you run the business, and now I watch, just like, okay, that person could do it. Cool. Let’s do three more locations. I’ll open up three more. I’ll spend the next two years bringing all five locations to $10 million total.”
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Let me tell you what I would do if I started all over today. If I went from scratch and I started all over, what I would do. Doesn’t mean that’s what you should do. Remember, everybody’s different. It’s all about like, yeah, I’m willing to deal with that. I’m willing to put in that extra work. Nah, I don’t really want to be bothered with that. I’ll do it this way. I’m happy with making that kind of money.
One of the first questions I ask people that I work with privately is, how much money you want to make? That’s going to determine how we need to structure your path of where you’re going, and so if I was starting all over again, first of all, this is my first warehouse. I don’t have a picture of the truck rental yard that I worked in, but this is my first warehouse that I got maybe three or four months after I started off working in the Penske truck rental yard, dispatched my trucks there, rented two trucks.
I finally was able to go and negotiate this deal on this warehouse. That’s not mine by the way. It’s basically from here, and then right over here there’s a door, and that was it. I want to say it was maybe 3,000 square feet, but like 1,200 of it was office. Had way too much office, but I got a good deal on it. All the carpet was ripped up. There was no carpet in the office. It was all like cement with glue from the carpet that was there, and that was where I started.
That’s me in the office. I was probably 20 years old, Yellow Pages, eating fast food. That was like three times a day I was eating fast food back then. No more. I haven’t touched Wendy’s in years, but had a CRM by the way. Early on, there was a DOS program that a guy made for the moving industry. I don’t even remember the name of it, but printed my contracts. Did all that. Had all my movers. That’s all the movers. They’re what I call now the mover database that we turn into electronic, which we’ll talk about later. That’s my mover database sitting there when I needed guys. You’ll see this book right here. The three-ring binder that had my script in it, that had my rebuttals in it, that had all the information that I needed to be able to book jobs. All my contracts. Here’s two file cabinets. Four more. I kept six months worth of contracts right there next to me, and that was it.
I started off. My first office was in Las Vegas for six months. Never got an office. Worked out of my apartment and rented two trucks there, and that office, I couldn’t get a license so I was renting. I was renting. I was doing a labor service with one contract and renting trucks with another contract, and so I was like, “There’s got to be a better way. Right?” Like, I want storage. I want names on my trucks. I want to build a real business. I don’t want to be out here doing this half way of doing it. I want to do it for real.
So I went to Denver, Colorado, right six months later, so my first moving company failed. Just open it up, spent six months there, and then left. Went to Denver, and that’s really where it all started for me. Had storage here. That’s me on the forklift. When I first got the warehouse, really what I first did was when I was working out of the truck rental yard, I already put in the Yellow Pages moving and storage so we were getting storage customers and I was putting them in a self storage unit, and then by the time I got the warehouse, I had a bunch of storage already and we brought it all over and just had it floor loaded with tape. I don’t recommend this by the way. This is just like learning. You know, just figuring out how to do it.
Then I would order 20 of these vaults at a time when I had money. They were about $200 a piece. I got them from Contain in North Carolina. They’d come out. I’d have to build them in the warehouse with these little clamps. You guys probably know if you do storage. And that was it. We ended up taking over the space next door. We ended up moving into a bigger warehouse, and the Denver office alone I think we got up to at 5 or 600 vaults. Other offices the same, but that was me at the very, very beginning.
I literally was there. You saw me in the office on the phone when a storage shipment came in or was going out. Either way. I forwarded the phone. There was a code that you put in the phone to my cell phone, my Nextel walkie talkie. Went out to the warehouse and there was not one. We talked about liability for storage. I was so tight with the security. There was not one crew that was ever allowed in this warehouse without me or in the future with somebody else. Had our inventory sheets that were done for storage, and every single item had to be checked off as it came in. Every single. I was on the phone. If a call came in for me to book a move, the movers had to sit there and wait. I paid them for the time, but they had to sit there and wait. Okay, I’m done. Alright, let’s go. You’ve got to run it tight with storage. You can’t let people in and out of there. You’ve got to make sure it’s on point.
So if I was starting all over today, I would start with a local moving company, two trucks, short term lease. I’d keep it real simple with local. The two trucks based on my budget of how I would start would either be rental trucks, I would purchase them, I would lease them. We’ll talk about the scaling matrix and how to decide what to do with what, but at the end of the day you could start with two rental trucks. I started with two rental trucks.
I would do a short term office lease, and the reason you want to do a short term office lease is because you want to be in a position. When I say short term, a year, two years. As low as you could get them. All the landlords, they’re going to want three years. They’re going to want five years. But the thing is, if you’re going to commit to that kind of time, you need something bigger to grow into, but you don’t want to pay that upfront. Always try to negotiate some upfront free rent, but it’s harder to get upfront free rent on a year lease, right? The more years that you’re willing to give them the more you can actually negotiate longterm.
So for me, I would want something that’s ideally a year just to get situated, just to get going, just to prove out the concept, make some money, and then I would move into more of a longterm facility that I’d be willing to commit to a longer term and negotiate some free upfront. I would also start this based on where I live. If I live somewhere good and it’s a good market and I feel comfortable there. If I live in this little small town and I feel like I need to go somewhere bigger, I would go somewhere bigger. For me, I left where I grew up just because I was 19 and it was just better to … You know, your friends aren’t really doing much. They’re either in college or they’re messing around and not doing anything, and I went somewhere else, right? And I ended up recruiting a bunch of them anyways to work for me, but I would start either where you are or identify a market that you want to move to and go there.
I would hire and train a dispatcher and a moving consultant right away. Now you might say, “Louis, if I don’t have the money to do that,” and by the way, as I’m going through this I want you to think about most of you have companies. A lot of you have multiple companies. This could be for your second location as well, right? This is me. By the way, this is not my advice for you. This is just what I would do. We talked about the five models to scale. It’s going to be different for everybody. For me, I’d keep it simple. Local moves, couple of trucks, get started, keep the overhead low, hire and train a dispatcher and a moving consultant because I don’t want to do it.
I might dispatch one day just for the fun of it, just to show the dispatcher how it’s done, or I might jump on a call just for the fun of it or show them how it’s done the same way that I’ll go to my friend’s pizza place and make pizza for the fun of it, because that’s what I did before I wasn’t moving. But I don’t want to start by being in that position, so I would hire and train a dispatcher and a moving consultant. I would start with direct mail. As for marketing, I would start with direct mail postcards. Pay per click. I would do Google. I would do Bing. I would buy moving leads, probably Equate Media, Quote Runner, maybe Moving.com, and I would start my referral program and all of it would be tracked.
Everything would be tracked. Tracking numbers to make sure that the stuff’s working. So that postcard goes out. It has a unique phone number on it that when that call comes in, it says “postcard” and we’re able to put it right in the CRM so that we’re able to track it and know exactly what’s going on. Because then from there, at the beginning stages, I’ve got to be able to see what’s working. Especially at the beginning. My marketing budget, I’m putting it out there. It’s all I have.
I don’t have any repeat customers. I don’t have any referral customers. I need to make sure that this stuff’s working, so I need to track it from day one and I know a lot of you don’t track it now 10 years later, right? We’re going to talk about how to do that, but I would make sure all that stuff is tracked. I would develop roles and processes for a model business right away from day one.
What that means is, and this is really important for you guys that are already established if you don’t have your roles and processes, which we’ll talk more about, so we’ll get to that but that means, okay, this dispatcher, this moving consultant, I’ve already got my roles and processes established for both of them. So if I’m starting today, I’m ahead of the game. It’s like, “Here. This is what you do. This is what you do.” But if I didn’t have that, I would spend a little time in that position and develop what those roles are. Like, what do I want a dispatcher to do? What do I want a sales person to do? What are the step-by-step processes of how they dispatch the crew, how they take in storage, how they follow up with a customer?
I need all that down, because remember, in order to thrive in any economy, you need to be able to hire quick and you need to be able to fire quick, and part of that is having the roles down and having the processes down. You’re not working out? See you. Bring somebody in, because I’m hiring quickly. Sit them down. Here’s your role. Here’s the processes. Train them. I’m back up and running. So, so important. We’ll talk more about that.
Once I had a profitable model business with all my foundations down, all the foundation is there. We talked about that before. We’ve got lead generation, booking moves, servicing moves, making sure we’ve got happy customers and accounting. I’ve got all that dialed in. I’m not jumping the gun and opening up another location before I have that. Once I do, I’ll open a second location, then develop and fine tune the processes for managing multiple locations.
This is something that caught me totally off guard. I had what I felt like were good processes and good roles in place with my first location, and the way that I managed it, but I managed it being there, seeing what’s going on, being able to see and feel and watch. When I opened more locations, I couldn’t be there. I couldn’t see it. I couldn’t watch, and the technology back then was not like the technology now.
Sure, I had cameras in those offices and I could log in to those cameras and see what was happening. It wasn’t like I was pulling them up on my phone, but I need to now establish, and I have all this now, but if I didn’t I would say, “Okay, the second location is open. Let me really fine tune how I’m going to run that office just as good as I run this office without being there. What reports do I need to see? What meetings do I need to have? What do I need to check in on? What are my metrics in my key performance indicators that I say, ‘Oh, that happened with the number. That number reached above this threshold. I need to take this action.'”
I would start dialing that in. I would then hire a manager/COO to run the day-to-day, the operations. It’s a little too early right now to decide what caliber I would want. Sometimes you can’t have it totally planned out. You’ve kind of get to a place, see where you’re at, see how it’s going, and then decide but I want someone that’s going to run the day-to-day of not only the existing company, but the new offices.
Now, I already have it, but if I didn’t, I would want to establish what that is, but what that would be, that role, would be a role that I would be establishing here in number six. Because I would personally go, “Okay, this is how I’m managing this. This needs to be done everyday. This needs to be checked. I need to look at these reports. I need to go in the CRM and do that. I need to make sure this is happening,” and then I would hire somebody to replace me to do that day-to-day. Because again, if I do this again, I’m not doing this to have a job for myself. I’m doing this to set it up, make some money. I’m not doing it to get in there everyday and run it.
Then I would open three more locations over the next 18 months. I’d open three more locations over the next 18 months, so now I’ve got five locations. Because once you’ve got the model business, now you could open a second location no problem. You just duplicate it. Then you develop and fine tune the processes, so it’s like, okay, this is how I’m managing it. If this happens, I handle it this way. I feel in control. It’s a control thing. Like I feel in control. It’s thousands of miles away, but I feel in control. I don’t have to be there. I’m hiring somebody. I got them in place. They’re running the day-to-day while I’m sitting back and I watch them. I’m watching them. They’re on it. They’re running the day-to-day. They’re not running the business. They’re running the processes.
So they’re not just trying to figure it out. I’m not hiring a manager to just go figure it out. No. I’ve already figured it out when I fine tune the processes. I handed this person those processes, those roles, those metrics like this is how you run the business, and now I watch, just like, okay, that person could do it. Cool. Let’s do three more locations. I’ll open up three more. I’ll spend the next two years bringing all five locations to 10 million total.
Now of course, this is my projection. And I say it with confidence, but who knows? Maybe in two years, maybe this number is 8 million. Maybe it’s 12. But my intention going into it would be like, alright, I’m going to spend the next two years working on fundamentals. Right now I’ve got five. It’s different than one. I’ve got five. It’s different than two. It’s a whole different ball game. When I went from one to open my second one, okay. I had a licensee partner in that one office so it was easier. Then all of a sudden I had five. It became a lot more to manage. It’s a different thing. You’ve got to be that moving CEO. You’ve got to be managing your day-to-day on a whole different level.
Then I would just continue to develop processes, people, and profits. Continuously. If it’s me today, I’d open five locations. I’d do 10 million. I’d want to set a target to profit 2 million a year, and run that profitably for, you know, either run it for five years and then sell it or just keep it going. Or, maybe I get another gust of motivation. Maybe I go back to my workbook here to what do I want my life, and all of a sudden I’m like, “You know what? I got all this already. Hmm. That worked out pretty good.” I wrote it down, figured out what I want, I came up with a plan, I went and got it. Let me open 20 more offices. Right? At that point, who knows?
But I feel like for me at this stage of my life, it’s yeah, I did 20 million. I don’t need to do it again. I would be very content here with it just running smooth, consistent, smooth, consistent, smooth, consistent, easy. Like, not this weight that I’m … You know what I mean? Like it’s not stressful. To be able to bring in 10 million, put 2 million a year in your pocket with not a lot of stress. I mean, that’s good, right? So, that’s what I would do if I started all over.