In this video, Louis Massaro shares how much money a moving company should profit.
“Know your numbers.” Review your Profit & Loss statements, review your cash flow reports, review your Marketing ROI and know that the money your spending is actually profitable for each individual source.
“How much money do you want to make?” Take some time and figure out what it’s going to cost for you to live the life you want to live.
“Build your business with a specific number in mind.” Determine the outcome you want and make sure the business is able to provide that amount of money.
“Don’t assume that more business equals more money.” Don’t think that you have to reach outside of the amount of business you have now in order to make more money.
- “Don’t just focus on the money, focus on your lifestyle as well.” You have to profit in business AND thrive in life.
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Hey, my friend, it’s Louis Massaro, CEO of 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 how much money should moving companies make? How much money should moving company owners be able to take home? And it’s one of those things that typically comes with some frustration, right? Maybe you’re putting in a ton of work. You’re working really hard. You’ve maybe even got a ton of gross revenue. Your gross revenue is really high. But at the end of the day, where’s the profit? Where’s the money that you’re able to take home? And it creates a lot of frustration.
We know that there’s a lot of liability in the moving business. There’s a lot of responsibility. 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. That’s a lot of pressure to put on somebody and 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?
I’ll get the question about, you know, “Louis, what are, what’s the average percentage of net profit for a moving company?” And here’s what I can 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 very low numbers and people doing very high numbers. All right? 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 nine 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, 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 and 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 the 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, he 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 it 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, right? So I’m just telling you what you know 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 kind of shoot in the dark, and go and hustle, and get a bunch of moves, and try this and try that, and 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 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 each individual source. You have to know your numbers. If you are going to be revenue income minded to where you’re focused on how much income you’re going to be able to make, right?
And you might say, “Louis, but it’s not all about that.” Well, it kind of is. Because you got into business to make money, right? Otherwise, if it was just something you enjoy 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 a benchmark, right? When you have a starting point of what your numbers are, you can start to make adjustments. How do we raise the gross revenue? How do we reduce the expenses to increase the profit?
Second thing you want to do, figure out how much money you want to make personally. Like how much money is it going to take to live the life you want to live? All the expenses that you have. 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.” 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.”
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. 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 going to cost you?
And then the third thing you need to do is build your business with that number in mind. Instead of just saying, “Let me run this business and see what happens.” You’ve got to determine the outcome. 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 that chances are unless you’ve got very, very, very, very high aspirations, you can make the money in this business. You could personally make 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. So when we talk about figure out how much money you want, think about what you want from your heart. 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? 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. 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. And if your goal is way too high and you start trying to make moves in your business that are unnecessary, you’re just bringing on more work, more responsibility, and for what? You’re just adding complexity. What you want to do is you don’t want to 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. I’m all for expansion. I’m all for growth. You want to open 50 locations around the US? 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 money, right? I personally made $800,000 a year off one office. 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. 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.
And typically 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 until I was in business for seven years. So I’m saying this as like a cautionary word of advice, that 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. 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 are not just focused on the money, but you focus on your lifestyle as well. I mean, look, if you’re so focused on the money that you 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, right? But I was a young kid, single, no family. Could go out and 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 didn’t bring me the happiness that I thought it would. 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 can 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 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 24/7, 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. 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, but as soon as you get momentum, you have to introduce the lifestyle. The same way that 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? 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. All right?
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.
Number three, build your business based on that number.
Number four, don’t assume that more business equals more money. Build a tight, tight foundation that’s profitable and then you could grow and build upon that.
And 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 light 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, profit in your business and thrive in your life. I’ll see you later.