Why Your Moving Company Is Losing Money

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In this video, Louis Massaro shares five areas where you might be losing profits in your moving company and how to start keeping more money for yourself.

  • “Unprofitable Marketing Sources” Wherever you’re spending dollars to get a return on your investment, if each individual marketing source is not profitable, it’s taking down your entire net profit for your whole business.
  • “Low Booking Percentages” 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.
  • “High Labor Payroll Percentage” Having a high labor payroll percentage is another area where a lot of companies are losing money.
  • “Lack of Crew Management” Running a tight dispatch operation is one of the best ways to keep all the money in-house.
  • “Not Multiplying Moves” You want to be able to multiply every single move that you have by turning each customer into a repeat customer.
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How Much Should Moving Companies Profit?

Your Moving Company’s Profit and Loss Statement

Increase Profits: Tighten Up Your Moving Operations

Run a Tight Local Moving Operation

Charge More Money for Your Moving Services


Hey, my friend, it’s Louis Massaro, CEO 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. 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 are already seven-figure companies, doing a million, two, even up to 5 million, sometimes even 15 million a year, but the profits aren’t what they want them to be. 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.

So, what I tell them is, look, think of your company like a bucket. If you think about just a bucket, and you have all these opportunities going into the bucket. So, new leads are going into the bucket, all your gross revenue is going into the bucket, basically, you’re creating this stew, if you will, of all these opportunities and everything that comes into your business. But what happens is, most companies have holes in that bucket. So I want to consider your typical expenses to be a hole, but holes or areas of inefficiency or areas where you’re losing money that when plugged will allow your profits to be there at the end of the day.

So, what we want to do is, we want to start looking at where we can 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, 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. 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.

So how do you go about plugging the holes? How do you go about finding the areas where you’re losing money? And after working with hundreds, if you include seminars, courses, everything, newsletters, thousands of moving companies, I can 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. All right, so the first area that is a 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. It could be anywhere. So you spend your money on marketing, 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 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 look 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.

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 a $100 on that marketing wherever it came from. 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? If you spent $8,000 to bring in $100,000 that’s 8% which is good. But if you spent, let’s say you spent $15,000 to bring in the $100,000 you’re at 15% which is 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 can I take some of this money that I’m spending and reallocate it to a different source that’s more profitable? This is besides your P&L, besides your financials for your business, your marketing ROI report is one of the most important reports you can be looking at on a monthly basis. It’s what allowed me to really get from 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 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 can either do this in an excel spreadsheet, you could do this in your moving CRM. Those of you know I’m a co-founder of SmartMoving 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. That’s a huge hole in your bucket and an area where you’re losing money.

The second area is low booking percentages. And what does this mean? AKA this means wasting leads. 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 somebody called in from direct mail, or placed a request for a quote online, or a realtor sent you a 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 100 leads come in and you book 10 of those, your booking percentage is 10%. So what do you need to do to increase your booking percentage? And it’s really those of you who know I have Moving Sales Academy online course, I have the three-day live event and the whole purpose of that is to build a 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 jobs that you book.

And so, you do this by setting up your lead management to make sure that you’re not wasting leads, that you’re getting to them quick. 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. You’ve got your sales scripts in place, you’ve got your email automation in place. These are things that 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 a $20 million business which was sales.

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. I’ll use the analogy with somebody, if I go to their office, and I listened to their sales floor, and I see what’s going on, I’ve said it several times, I see hundred dollar bills all over the floor as if they’re falling between the cracks of the desk. So when you are able to increase your booking percentage, everything changes.

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 my sales reps say they’re working or my sales reps say they’re not working, you need to track the profitability. We’re calling them and we’re 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? You’ve got to be able to increase your booking percentage. There’s other videos on that you could 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, there’s only a hundred percent of that pie, certain percentage has to be allocated to certain things. So, you’ve got your marketing. If you’re paying sales commission, you’ve got that. But one of the biggest areas is the labor percentage. 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? And so, when I see companies with high labor percentages, the answer is not reduce their pay, 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 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 money per move. You need to get a higher average dollar amount for each move in order to balance that out. So, what I would do is every single week, I want you to take the payroll that you paid for that period, and divide that into the amount of revenue that was brought in that week. So let’s say you brought in $100,000 in that pay period, in that week. Well, the same amount of pay that you paid out for those same jobs that brought in $100,000, let’s say that was $25,000. Well, then your labor percentage is 25%.

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. I’ve found dispatchers before they were in cahoots with the movers paying them extra hours and getting a kickback. If you’re not looking at your labor percentage, things could get out of control really quick. So to be able to look at that every week, it’d be like, all right, I’m at 29%, I’m at 29.5% and see why is it higher? Why is it lower? This is part of knowing your numbers. This is something you want to look at every single week.

Typically the payroll percentages are anywhere between 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 the way your business is structured. Because when we look at the job and some people could afford to pay a little bit more because their fixed costs are lower. Their rent for their office, or their trucks, or their staff and things like that. So it’s typically between 25-35%. Check where you are now. 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. And this is basically the opposite of running a tight dispatch operation, this is running a loose dispatch operation. Meaning, are we on top of the inventory, on the trucks, all the equipment, the dollies, the pads, the straps, all of that? Boxes, are they getting lost, or stolen, or left at jobs and nobody’s accountable for that and you’re just purchasing more or you’re on top of that? 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 or long distance job, here’s the charges, 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 three o’clock you’re looking at your GPS and you’re seeing, okay, they left at three o’clock.

Tight crew management will save you a ton of money. Same thing with claims and damage. 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, we’re having issues with… I’ll give you a perfect example, for me, I saw on my P&L at one point that we had very high claims in one office and after drilling down we found that it was a small group of guys and they were damaging 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 with those items and solve the issue, and now I’m not spending the money on claims. Which is a hole in the bucket. 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.

The fifth way that you’re losing money is that you’re not multiplying moves. And what do I mean by multiplying moves? Well, the moves that you book, you spend money to acquire those moves, 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. 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.

So, you do this by requesting reviews on the job site when you’re finished. 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. 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.

Please note: I reserve the right to delete comments that are offensive or off-topic.