The guide below will highlight 5 of the most important factors moving companies must take into account. Whether it is a new start-up or an existing business, these factors will help you to make the best decisions regarding your moving company.
Any business carries an amount of risk and the same is true for moving companies. Moving Company Insurance is therefore one of the most important factors for any business.
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The most common type of business insurance is general liability insurance. Risks that are covered by general liability insurance are:
- Medical Expenses
- Bodily Harm / Injury
- Legal Fees
- Property Damage
- Advertising or Personal Injury
Picking up heavy loads can lead to injury. Damage can also occur when valuable items are dropped during the moving process. Having insurance means that the company would not have to carry the financial burden of medical costs or replacement costs. The insurance will cover the expenses.
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Although general liability insurance covers a range of different risks, there might be other types of insurance that the company needs to consider such as:
- Commercial Auto Insurance – Compulsory for any company with vehicles such as moving trucks.
- Commercial Property Insurance – Insurance for offices or warehouses.
- Workers Compensation – Covers wages and medical expenses if a worker is injured on the job.
- Commercial Umbrella Insurance – Supplemental liability cover for large claims.
The insurance cost will depend on the type of cover required.
2. Register a Limited Liability Company
Insurance is a good way to protect your business, however, setting up an LLC (Limited Liability Company) is another way in which a business can protect itself.
An LLC protects the business owner which can’t be held liable for any legal applications brought against the company. This means that the personal assets of the business owner are protected and can’t be used to settle any disputes between the business and another party.
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It is important to know the rules of setting up an LLC as well as the tax rates for the specific state.
3. Determine the type of moving company
There are many different types of moving companies. Some only focus on one category while others may operate in a few different categories. Below are some of the types of moving companies and what areas they focus on.
Local Moving Companies
Operates within the same state and offers relocation services within a 100-mile radius.
Long Distance Moving Companies
Offers relocation services over a 100-mile radius. A USDOT number is required which can be obtained from the FMCSA (Federal Motor Carrier Safety Administration)
International Moving Companies
Relocations from one country to another.
Commercial Moving Companies
Usually, special equipment is required for these types of moves as the cargo might be large and very expensive.
Car Transportation Movers
Transportation of vehicles between locations.
Relocates items of value such as artwork or antiques.
4. Draft a business plan
Every business needs a business plan, but it does not have to be overly complicated. A business plan should help to identify problems and possibilities the business might face, which in turn will enable the business owner to make planned decisions.
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Below are the sections that need to be part of the business plan:
- Executive Summary – Overview of the business.
- Products & Services – Outlines the problem faced, how to solve the problem and how the product fits into it all.
- Market Analysis – Potential customers as well as competition.
- Marketing and Sales – Marketing plan on how to reach the target segment.
- Company organization and management team – Describe the current team and legal structure
- Financial projections – Financial plan of projected profits
- Appendix – Additional charts, graphs or figures.
Investors will want to look at a business plan so it is key to have one ready.
5. Business licenses and permits
There may be several licenses needed to operate a moving company legally. State, as well as Federal licensing, might be required depending on the type of moving business.
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Long distance movers that operate across state lines will need to obtain federal licensing. A USDOT number must be obtained from the MCSA (Federal Motor Carrier Safety Administration).
Local and State Licensing
Many states will require registration with the state’s department of transportation. Permit options can be checked on the state’s local website.