Decisions to Make Before Scaling Your Moving Company


In this episode of The Moving Mastery Podcast, Louis Massaro shares eight decisions to make before scaling your moving company.

  • “What you were able to do with your tight-knit group before in your business, it’s going to become very different as you start to grow. So, there are some decisions that need to be made before you scale.”
  • “If you want to scale your business, open more locations, franchise, or if you just want to take what you have and build it up to a place where it’s making more money… I’m all for that. But, the thing is… I don’t want to see you prematurely go out and overextend or spread yourself too thin, and then be in a position where you have to scramble to hold onto everything.”
  • “Opening an additional location, or getting into long distance when you only do local, or whatever your version of scaling is, could put tremendous strain on you and your existing successful business, if these things aren’t set up right.”
  • “I’m giving you these eight things to think about in order to go in prepared and ready to go. You want to go in fully committed. The last thing you want to do is throw something against the wall to see if it sticks when it comes to scaling or expansion.”
  • Watch the video to get full training.


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Louis Massaro:
All right, what’s up, guys? We are back for the Moving CEO Scaling series, day 13, episode 13. This is an important time. It’s an important series. As we’re coming out of moving season, I know that many of you are still experiencing high demand. I know that there’s a lot of changes going on this year. COVID caused a lot of stuff to happen, interest rates, there’s a lot of factors for why it’s so busy right now. And as we come out of that, and hopefully it keeps going, I’m not a fortune teller, I don’t know what’s going to happen, but typically, this time of year, things start to slow down. I’m talking to private clients yesterday that are just crushing it. still October’s booked out. They’re having busier Octobers, that we’re not even halfway through, than they’ve had other summers previously. So it’s pretty awesome.

But at the same time, we need to make sure that we don’t allow the good times to give us a false sense of confidence to go and just start opening additional locations like it’s that easy. And that’s really what this whole series has been about. It’s look, you want to grow your business, you want to open more locations, you want to franchise, you just want to take what you have and build it up to a place where it’s making more money, you could hire some help, you could have some consistency? Great, I’m all for that. And the thing is, I don’t want to see somebody prematurely go out, overextend themselves, spread themselves too thin, and then be in a position where they have to scramble to hold onto everything. Because by opening an additional location, or maybe getting into long distance when you only do local, or whatever your version of scaling is, it could put tremendous, tremendous strain on you and your existing successful business, if these things aren’t set up right.

So those of you that have been with us since the beginning of this series, we’ve started off talking about what to stabilize in your current business. You got to get things stable and calm. Once you do that, then systematize it, so that anyone could do it, so that your team knows exactly what to do, so things are done the same way every single time. And you need that in order to be able to, let’s say, scale or open an additional office. Because when you bring on more people, and when you spread yourself out thinner, a lot of that gets lost in translation. What you’re able to do with your tight-knit group, it’s going to become very different as you start to scale. So the systematizing piece is very important. And now we’ve been talking about scaling.

So we are talking today about some decisions that need to be made before we scale. And I want to give you these eight decisions that you need to make, so that you start thinking about this stuff ahead of time and you don’t miss anything.

And I want to give you these eight things, so that as you’re starting to scale, as you’re starting to get into a new line of business, as you’re starting to open new locations, you don’t miss anything. So I’m kind of giving you the things to think about in order to go in, because we want to go in prepared, we want to go in ready to go, we want to go in fully committed. The last thing you want to do, the last thing you want to do, is throw something against the wall to see if it sticks when it comes to scaling or expansion. You have a new marketing idea, great. Throw it against the wall. Test it. Track it. Tweak it. See if it works. If not, get it out. But if you’re going to make a strategic move to open another office or a location, or get into long distance or get into commercial or get into junk calling or whatever it might be, you got to go in there with a plan and you got to go in there committed to that plan.

So I just don’t want you to miss anything that you could possibly miss without thinking about it. Always ask questions. Always ask yourself questions. Everything that I need to figure out, I get out either a note app on my phone or a pen and a paper and a notebook or journal, and just start writing and asking myself questions. “All right, what do I need to do to make this happen? Okay, what roadblocks am I going to run into? Okay.” And think through the scenario ahead of time so that you’re prepared. Let’s get into these questions here. First thing you need to ask yourself, and use these as a prompt, and then I want you to journal about them later or tuck them away in your notes if you’re not ready to scale right now, and have them ready when you are ready to scale. Have them ready.

I’ve said it before, never feel like there’s too much information coming at you if it’s good, valuable information that you’re choosing that’s going to actually help you. Just have a little system for file… You guys can see books up here, but I’ve got notebooks of all. I mean, my personal notes of stuff, plus digital files of all kinds of stuff, things that I’ve learned and I want to implement that I might not be ready to implement right now, but at some point, some day, I’ll be ready to do it, and I know where to go to find that information. So this is important, whether you’re ready to scale or not, keep this in mind.

All right, first question. Why open? Why? Why? And this is important because let’s say we’re talking about… Let’s just throw two scenarios out there. We’re talking about opening a new location, or we’re talking about opening a new division within our company, without going to another city. Why? Really think this through. Because a lot of times we feel… Maybe you’re here or for 13 days on this scaling series and somehow feel like you’re supposed to scale, you’re supposed to grow, and we talked about it earlier in the series is that you want to really make sure that the reason you do it is based upon the outcome. And the outcome is really based upon the life that you want to live. And the life that you want to live is based upon the money that it’s going to take to live that life and the free time that you want to have to enjoy that life.

I forget which episode that was, but go back… I think it was stabilize your money and mindset. Go watch the that if you haven’t seen it. And we need to make sure that we’re opening for the right reasons because more money isn’t always the answer because a lot of times there’s more money rate where you’re at. You’re standing on top of gold. You just need to dig a little deeper as opposed to digging a bunch of little shallow holes. And we’ve also got our ego to contend with. I was a young kid and when I started… I was only 22 when I started opening up additional locations. I was 19 when I started. 21, 22. And there was definitely some ego involved.

I have six offices. People say, “What do you do?” “I own a moving company.” “What do you do?” “I have moving companies. Six of them throughout the US. Long distance.” That’s ego. And we need to be careful of that because in this social media, look at me, flashing all my stuff, type world that we live in, we don’t want to make decisions from that place. Because when you do open that line of business, when you do open that additional location, it’s going to require much more of your time, money, and energy. Don’t just think it’s instant money. So just think about why you want to open. Is it it leading you towards your big plan? If you didn’t watch the episode on stabilize your mindset and your money, go watch that. It’s important. Because we want to build a business as a means to building a life and we want to establish what that life looks like, what we really want, and then figure out what it’s going to take, monetarily, money wise, what it’s going to take to live that life. Then we reverse engineer that into our plan with our business.

Why open another location and have more responsibility if your plan is set with the office you have? So just think through why. You don’t have to… I know people that are crushing it with one location. My first office, my first office failed, which was in Las Vegas. I was there six months, couldn’t get a license, then went to Denver. So I consider that my zero office. My first real office in Denver, just that location alone, I was profiting 800,000 a year. For me. One location, local moves and storage only. And I know people that are making over a million a year in one location. One location. I don’t know who’s watching, could be you. When I say over a million a year, for themselves. Take home for them as the owner to then go pay their taxes and live their life with.

So again, I’m drilling down on this, because as much as I’d love to see people expand, the expansion’s not the impressive part. It’s the controlled expansion with sustained profitability that’s the impressive part. How many trucks? Doesn’t matter. How many locations. Doesn’t matter. I’d rather you be happy, content with less stress… Eliminating stress altogether is very hard to do when you run a business. But reducing that stress to a very minimal level and make the money you want to make. Oftentimes complexity will lead to overwhelm and it will kill profits. So just think through why? Why do I want to open this? Don’t feel that pressure. Don’t feel the pressure from outside influences don’t feel the pressure like, “I need to grow. I need to be bigger. I need to be…”

Because let me tell you something, I was there and I know a lot of people that have been there, I’m working with some clients now that kind of reached on an office and are having a little bit of issues there and we’re working on unraveling those. And I could tell you that having a business that just runs smooth and efficient and then just making tweaks and adjustments to increase the profitability and the quality of your service, a long way. Then when you have that, then you’ve got a model business. You’ve got systems, you’ve got processes, you’re working. Now if you’re going to scale decisions to make before scaling, what model are you going to scale with? What model are you going to scale with?

We talked about this a couple days ago when we… I believe the episode was your moving company’s scalability, I think it was called. And just because you’ve got local, long distance, storage, you book all the moves from your office there currently, doesn’t mean that that’s what you add actually have to scale. Even if you’re like, “Hey, I want to get into long distance.” Well, there’s several ways to get into long distance. There’s five models, successful models to scale. Meaning you might say, “Louis, just tell me the one where I can make the most money?” I’m going to give you the five where you can make the most money and help you distinguish which one is right for you.

We’re all different. We all have different areas of the business that we like and dislike. We all have different monetary goals. We’ve all got different abilities to manage on the ground teams, remote teams. So I’m going to give you five models, but for now, think about what model you want to expand with. Meaning if you do local, long distance, you’re a van line agent, you’ve got commercial work, maybe you do military, but now you want to open up other offices. Do you need to actually take that model and open up? Or can you do a trimmed down model? What model are you going to actually move forward with? Because that’s the model you’ve got to have all your processes ready for.

Next question to ask yourself before you scale, where are you going to open? This is specifically for an additional location, but where are you going to open that office? Where and why? Maybe you’ve established a really good market somewhere near you or somewhere not near you, but you just know, “Hey, we could go there and we could make money.” What’s the reason? Is it you want to move there yourself? You’ve got someone that you could send there to open up? It’s part of your… Maybe you want to open locations so that you’ve got your little route for long distance that you could keep… You’ve got a little triangle or you’ve got an up and down or you’ve got a back and forth. You’ve got a strategic plan for long distance, so you want to put hubs in certain locations.

Then, when? When will you open this office? For me, my locations in the time period that I was opening up, yellow pages was the dominant marketing source. That was my number one source for a long time to the point we were spending $250,000 a month, a month on yellow pages between all the locations and… So when we talk about where to open, I was just thinking, I was like… I’m hearing myself say it, I’m like, “So crazy. So crazy.” The marketing today is so much more flexible. So much more dynamic. There’s so much you could do. It’s a little more complex to actually manage it and do it than just putting an ad in, but you’ve got so much flexibility and you’re not stuck with that, that overall nut every month, no matter what.

So anyways, I’ll be teacher marketing too at Moving CEO Virtual Summit, by the way, and what to be doing today, specifically what lead sources to use. So when to open. So with yellow pages, it was in different cities there was always a main Yellow Page book, you know? And then of course there was like these other yellow page books too, that you felt that you had to be in those as well, you were going to this out. And whenever the book dropped, that was the terminology, when the book drops, that’s when you want to open up, you want to open up right around when the book’s dropping. So for example, if the book’s dropping in October. You want to make sure that right there in a October or November, that you are open and ready for business, because that’s when you’re going to start receiving calls. But if we think about moving season and when things are slower and all that, that might not be an ideal time to open up. But when you’re basing it off the book, then you’ve got to open up when the book is.

But now you could turn on and off marketing at the press of a button any time of the year, wherever you want. There’s no restrictions. So now you’ve got to decide is the best time to open up? Meaning what time of the year, what month of the year will be your best time? Because there’s a lot that goes into this. There’s a busier part of the year, the summer. There’s a slower part of the year. There’s times of the year where you’re going into the holidays. There’s the beginning of the year. And when do we really want to get going? Because summertime, oh yeah, great, it’s busy, but it’s going to be really hard to hire movers. Wintertime, there’ll be a lot of movers available, but it’s going to be slower.

Next question before you scale, who’s going to run it. Whether it’s a new location or a new division, maybe long distance or whatever, who is going to run it? Let’s say we’re talking about a new location. Who’s going to run it, and then what is their situation? What is their comp like? Are they going to be a partner? Are they just going to be an employee? Are they going to be a franchisee? What happens if that person doesn’t work out? It happens all the time. What happens if that person doesn’t work out? What’s the contingency plan there? When you start making plans for expansion, we need to… Obviously we want to have a positive, we can make this happen outlook, but we don’t want to be blindly, overly optimistic and think that nothing can go wrong. We need to look at it and go, “What could go wrong? What’s going to happen if that person that we send there or that we hire to run that location just doesn’t turn out to be what we thought they were.” Or whatever.

Things happen to people and they change. Or they’re just not the person you thought they were going to be. So who’s going to run it? What’s their deal? Meaning are they going to be a partner? Are they going to be a franchisee? Are they going to be a licensee? Are they going to be a GM? Are you just going to hire a dispatcher? Are you going to hire just some movers and let them dispatch themselves? Who’s going to run that new location or that new division? Very important. Then how much time is this going to take from you? The most common thing I hear from people is, “Louis, I don’t have the time. I don’t have the time.” Which if that’s an issue, make sure you go back and watch in this series, stabilize your tech and time I believe it’s called. Stabilize your tech and time.

But how much time is it going to take? When you write this number down, whatever you think this number is, I want you to double it. If you’re like, “Oh, it’ll take me 10 hours a week to…” 20 hours a week. Everybody underestimates this. Everybody underestimates this. They think that the person I’m sending there or the person that’s going to run that division, they’ve got it. They’re going to handle it. No big deal. I could go about my regular business and I’ll just be handling it with some emails and whatever else. In order to get that business up and running and have the momentum to get out the gate quick and successfully build a sustainable business, you’re going to need to spend some time.

So you want to get clear on that and you want to make sure you have the time and you want to make sure then the time that you’re spending with this new venture, what’s getting dropped or what’s getting missed or what’s getting neglected or what needs to be passed off or delegated in your current business? I think it was yesterday, the day before we talked about you need to free yourself from the day to day. You need to be process driven. You need to delegate, you need to get things off your plate because you need freedom to scale. If you don’t have time right now, guys, I’m telling you, a new location or a new division is not going to solve your problems. If you’re like, “Money’s tight,” and you want to throw a Hail Mary and open another location. It’s a long, long, long shot.

Get your current operation working, make that profitable, get yourself some freedom from the day to day so you have the time to make sure that that office runs the way that it runs. And if it doesn’t require the double that I told you to add onto it, great, you’ve got extra time to go golf, fish, and hang out with your kids, take a nap, read a book, whatever you want to do. The idea is you need the freedom to scale. And before you scale, you’ve got to get real about how much time it’s going to take from you.

Next question here that you need to ask yourself. How much capital? How much money is it going to take to pull this venture off you’ve got to have that figured out going into it, and you’ve got to have that money aside. You can’t open another office. I mean, you can, but it’s going to be very stressful and it’s going to be very down to the wire a lot of the times, but you can’t open an office thinking that, “Oh, don’t worry. There’s a little extra money in our account. We’ll just spoon feed that office as it needs money.” In other words, “Oh, we need to put some advertising. Okay, there’s a little bit for that. Okay, we need to do this? There’s a little bit for that.” Before you know it, you’re way over budget. And now you’re hurting your existing business.

So we need to be really strategic and say how much capital is it going to require? You want to do a projection. You want to do a projection, so you can see how much you’re going to spend, what you’re going to do. I’m going to teach you what’s called the scaling matrix. And the scaling matrix will help you determine how much capital you need. Because there’s a few things, as you open an office that you need to consider. And you could spend more on one and less on the other, all depending on how much… You’re like, “Hey, I’ve got 20 grand,” or, “Hey, I’ve got 200 grand.” It’s going to be a different game plan for opening up. Totally. What type of office you get, or are you just working out of a truck yard? What type of marketing are you doing? What type of office staff and employees are you going to have? What about trucks? Are you buying? Are you leasing? Or are you just going to rent all of that?

That’s why it’s a scaling matrix, because depending on the amount of money that you have to open, you could tweak and modify those different areas to meet that budget and just understand what you’re gaining by spending more in certain areas and what you’re going to be lacking by saving in certain areas and being okay with that. You’ve got to know how much capital. And you want to take that capital and you want to put it in a totally separate account, because the next question you want to ask yourself is what entity? If you open a new location and that location is… Especially if it’s out of state, it needs to be its own corporation or LLC. So you want to basically take that capital that you’re committing to that business, put it into that entity’s bank account, and typically you would not do that from your existing business. You want to be very careful not to co-mingle funds. Because the whole reason you’re doing another entity is for the legal protection.

So essentially check with your CPAs and your lawyers and all that before you do it. I’ll get more in depth into this at the event. But you would essentially have money that’s your money that you would loan to this business. That’s the simple way of putting it. Money that you’ve earned from your other business that’s now in your name, and then you would loan it to this business and you’d have money here ready to go. So now you’ve got the money here. It doesn’t mean you’re going to use it all. But let’s say it’s $25,000, let’s say it’s $100,000, let’s say it’s $200,000.

When you know you have it, now you could start making your projections. You could lay out your spreadsheet with the projections of where you’re going. What month by month it’s going to look and now you have an idea of what you need to do, how many jobs you’re going to need to book, what you’re are going to be spending on marketing, when you’re going to decide to hire that first person, when you’re going to get that next truck. But you’ve got to have that separate entity. We’ll talk more about that at the summit, but when you have a separate entity, typically you would do… Talk to your lawyers. Make sure or you don’t take legal advice from me. I’m not an attorney. I’m not a CPA. I’m not a tax expert. But you would have an S corp, if it’s a company that you own by yourself, an LLC, if you own it with a partner or a wife. Because if you have a single member LLC, now you subject to self-employment tax, there’s other things that go along with that.

So picking which entity is a big deal, and it also matters in your overall asset protection plan. Because if you’re like, “Louis, I’m opening 50 locations, I’m franchising. I’ve got a plan to do this or that,” you’ve got to start thinking about your asset protection as well. You don’t want, god forbid, the truck gets in an accident and rolls over and people get hurt in one city or something happens and you get a really, really big lawsuit and they can now come after that company and all your other companies. You need to have isolation so that each company does not put the other companies at risk.