The truth about moving company profits
When someone does not want to exert the effort necessary to pack up their possessions and move them to another location they will call you. They want to make a deal: your labor in exchange for some money.
This, whether the customer realizes it or not, is how they are thinking of your services.
You and I, however, know there's a lot more to it than just heavy lifting. Running a moving company takes attention to detail, and a series of skills to make every job the easiest it can possibly be for everyone involved.
There is also the people-reading aspect for you and your sales team. You have to know when a potential customer is on the fence about your services, or be able to hear the skepticism in their voice and know how to ease them into trusting that your services are as valuable as the price you're asking. In essence, you have to be a mind-reader.
Then there's the actual business part. Profit and loss, banking, hiring and firing, payroll, and the rest of the skills necessary to run any business.
Your moving company, it turns out, is much more than just labor in exchange for money. What the customer is really buying unbeknownst to them is a SYSTEM of the transportation of goods.
And because they are buying a SYSTEM your every dollar is tied to how efficient that system is at any given moment. Efficiency is the source of your profits.
Two Kinds of Efficiency
Whether or not any given job is charged by the hour you are still paying for every minute your business is operating. Especially in heavily regulated states like California where daily overtime laws and workman's compensation can be an onerous expenses.
Optimizing for time while delivering high quality service can be tricky. There is a real temptation to take shortcuts such as not properly wrapping furniture or having too many inexperienced workers on a crew because you can pay them a few dollars less, which may seem like an economical decision until you realize how easily a newer crew member will tire or do things incorrectly that another, more experienced crew member will have to do over again.
Here are a few time efficiency tips to get your crew into shape:
Make sure there is a meeting place other than the customer's origin location. Have a quick 5-10 meeting about what the crew can expect when they arrive at the loading location (such as: 'this is an elderly couple, please take extra care when going around corners to prevent injury' or 'There are several expensive items, so use extra pads and get three men on the bulkier pieces.'). A short morning meeting can also give the crew a little extra time to wake up, get some coffee, or joke around to lighten the mood before the day begins.
A morning check-in puts everybody on the same, which saves A LOT of time in the end. If everyone is informed and understands the expectations, there are fewer headaches and stalls during the job.
Make sure all your employees know how to work all of the equipment safely.
Take 10-15 minutes with new employees and be sure they know how to use the lift gate and the lift-straps and each dolly. Make them do it in front of you so that if they have to do on the job site it won't be their first time.
Get a rhythm going
If you are putting a crew of three or more on a job they need to understand the rhythm of a move. If two guys are moving mattresses, the third guys is wrapping furniture. Get your crew in the habit of trading off the heavy furniture between members so that no one gets too tired too quickly.
There is a natural cycle that develops on all moves. Get into that cycle as quickly as possible. You'll know your in the cycle when crew members are passing each other to and from the truck consistently.
Know who the boss is
If the boss is someone other than you. Make sure everyone knows who's in charge of the move. If you are the real boss, but have a driver or foreman on the job. The crew needs to go to the foreman or driver for instructions, not you. The crew needs to know clearly who is running the job beginning to end to save time with questions and ensure everyone is getting only one set of instructions.
If you as the real boss need something done, tell your driver or foreman and let him or her instruct to the crew.
Chain of command becomes very important when you are running more than one crew. If you are a mid-sized business, you may want to check on your various crews as they're loading. If you show up everyone needs to understand that the driver or foreman is still in charge and that you've placed your trust in him for a reason. The worst thing an owner can do is show up on a job site and start barking orders. It's demoralizing to the person you put in charge and it makes for a confusing and stressful environment, which in the long run, obviously, will cost you money.
This type of efficiency is actually a component of Time Efficiency but we should give it special attention since much of a moving business is concerned with physical labor.
What is effort efficiency? It is the principle that your workers do things the easiest way possible both to conserve their energy and reduce the misery that sometimes comes with hard labor.
If you're wondering what this has to do with profits I ask you to picture your three-man moving crew moving a refrigerator. Two guys are carrying it instead of using a dolly or lift straps. The third guy is standing around because he and one of the guys on the refrigerator just moved an insanely heavy exercise machine down a flight of stairs and through a door that was too small. Now one of they guys on the refrigerator is double tired and they bang up the door frame on the way out. And the situation gets worse when the customer plugs in the refrigerator at the new location and it doesn't work because in order to get the fridge out of the house they had to tilt it on its side and the refrigerant is out of place which makes the compressor blow out.
This is a series of disasters that add up to you, first, paying guys to take multiple breaks because they're tired and, second, paying for the repairs on a refrigerator that may or may not have been faulty before your guys tilted it, but now you have to pay for it because if you don't the customer will leave you a series of bad online reviews that will cost you far more than the repairs on the fridge in the long run.
This kind of thing happens everyday to moving companies that are not concerned with effort efficiency.
So how do we ensure we are effort efficient?
Here are a few tips:
Use the equipment
Make sure your guys aren't muscling things around. Make sure they are using dollies, lift straps, sliders and anything else that is supposed to make things easier.
Pack the truck properly
Your guys needs to be methodical about loading the truck. There's no greater time waster on the job than re-packing the truck. Avoid this by training everyone on your team how to fit pieces and boxes together for an optimal use of space. It's not only efficient, it's impressive to the customer to see their belongings so perfectly packed
Use furniture sliders on carpet
No great explanation needed here. This saves effort and will reduce the chance of damage to furniture.
Use door frame pads on all the doors and wrap all piece furniture in blankets.
This not only minimizes the potential damage, it allows the crew to work a little faster through hallways and around corners since they don't have to worry as much about digging corners in to the walls and doors. They should still be careful, though. Also, working faster will preserve the energy wasted when moving things slowly.
Bring enough crew for the job
It's happened to every mover. You thought you could do the job with three guys but you're going to need four. A lot of times you'll quote an hourly job with three guys just to land the job. This is perfectly OK. Sometimes you gotta make sacrifices to get the sale.
BUT, if you have a feeling it's going to take one or two more guys then you have to do it. Even if you have to keep the hourly rate at a three-person crew. It's better to take the loss on paying two extra crew members than to wear down three of them in the first three hours because the job is too big for a three-person crew.
The customer will appreciate this and you will have done the most efficient thing you can do in the situation. In the end you will have saved your guys unnecessary effort and maybe your customer will be that much more inclined to give your company a good review.
Efficiency Begins in the Office.
What systems do you have in place to make your day-to-day easier and time-saving? Here are some specific questions to ask:
Are you still using pen and paper?
Getting on online system like MovingPro can greatly increase efficiency and save you loads of time getting contracts signed, collecting payments and keeping track of jobs and employees.
If you are using something like Excel spreadsheets to track things, this is a little better but still extremely time consuming.
Consider using MovingPro to run your company and save time.
What is your staff doing when they are not taking calls?
If you have guys that get back early from a job or if you have office staff not taking calls, they need to be doing something.
Here are some tasks that can slip through the cracks and really bog down the efficiency of your operation.
- clean and maintain moving equipment
- clean and fold the moving blankets
- call delinquent accounts
- wash truck interior and exterior
- print and place address stickers on advertising mailers
- organize and stock supply area
Even in small companies there's always something to do to improve. Make your staff is concerned with the minutiae of maintaining a successful moving company.
Making it All Work Together
Lapses in efficiency happen to all companies of all sizes. But the things we discussed here are essential for any moving company that's ready to increase profits while reducing the overall amount of effort needed to achieve those goals. Implement these things today and watch your company dominate the field.