How to start up a removals business

If you want to offer removals services you'll need to decide who your customers will be - domestic households or commercial organisations. You'll find all you need to start up and run your removals business in our practical guide.

Research your target market

Estimating demand

It's important to find out whether there will be a demand for the removals services you propose to provide.

For example, if you plan to target domestic customers you will need to be located in or near a reasonably large centre of population. If you are planning to provide specialist removals to the commercial sector your area needs to be one which attracts new businesses to it and in which a healthy local economy encourages existing businesses to relocate to new premises.

A good first step would be to check out the competition to see how many other firms are currently offering removals services to the market you have decided to target. A look on Yell.com and other online directories will give you an idea of the number of firms that will be your competitors. You could also look at local print directories.

You could work out the rates you are likely to charge and leave details with businesses such as auction houses, estate agents or relocation specialists which might be prepared to pass on your details to their clients. You could think about offering such firms commission on any work resulting from their recommendation. Solicitors might pass your details on to clients looking for a firm to undertake a house clearance.

Be wary about trying to compete just on price. Although you will have to be competitive, if your prices are too low you may not be able to afford experienced staff or to maintain your vehicles to a high standard. Note that the Traffic Commissioners (who grant goods vehicle operator's licences) require you to maintain your vehicles properly. Customers will expect a high quality and reliable service, for which you will need efficient and reliable vehicles.

Research current trends, plus legal and tax issues

Seasonality

If you are planning to target the domestic removals market you are likely to be busiest between late spring and early autumn as this is the period which is generally most popular with people moving house. If you are going to provide services to commercial customers you may find that demand for your services is more evenly spread throughout the year.

Many householders prefer to move over a weekend so Friday is usually a busy day. Demand is usually strongest during the first and last week of the month. You may find that on some days of the week you have no bookings and you may have to adjust your staffing levels accordingly.

Establish your customer profiles

Your market

Your customer base will depend on the type of work you decide to undertake and might include:

  • members of the public
  • local businesses
  • public sector organisations like colleges and hospitals
  • other removals businesses who sub-contract work to you
  • relocation specialists

You might obtain much of your work from householders, particularly those with larger houses and families, as they are likely to have accumulated many possessions over the years and may not be willing or able to undertake the removal themselves.

Your rates

Give some thought to how you will set your rates. Things to consider include:

  • the size of the job and how long it will take you to load and unload everything
  • how much packing and unpacking you will be required to do
  • how many vehicles and crew (drivers, packers) will be needed
  • how far you will be travelling (you will have fuel costs and maybe other costs such as tolls or ferries)
  • how long the whole job will take (employees will be charged out by the hour. An overnight stop might be needed)
  • your profit margin

If you offer a range of services you'll need to set your rates for each. As well as basic removals you might also need to work out your charges for things like storage services, specialist removals (items like pianos, antiques or computers), and business relocation services.

Set your rates by reference to your overheads and running costs, although you will also have to be aware of what your competitors charge. For convenience you might decide on a fixed tariff, charging more for moving the contents of larger houses over a longer distance.

Customers will want a quote before giving you the work. To do this you will probably have to visit the premises to assess the job.

Most removals firms request customers to pay for the job in advance of the removal taking place - seven days in advance is commonplace to give the cheque time to clear. Storage terms are normally monthly in advance.

Decide which services to offer

There are a number of different services that are typically offered by removals firms, such as:

  • general removals, including packing services
  • commercial removals, for example office furniture, files, equipment and so on
  • specialist removals of items such as computers, antiques, pianos, paintings and so on
  • arranging insurance for customers
  • arranging for customers goods (such as soft furnishings) to be cleaned before or after going into storage
  • relocation packages - including arranging for utilities to be connected, sending out change of address cards and so on
  • storage - including document storage and customer self storage
  • contract work for larger firms
  • parcel delivery
  • services like crate and packaging hire or confidential shredding and disposal

Some firms only ever work within a local area, others regularly go all over the country and others travel to mainland Europe. Many domestic removals involve a journey of less than 20 miles.

When deciding on the range of services to offer, think about the following:

  • how far you are prepared to travel
  • how many employees you will need in order to offer a comprehensive service
  • whether there will be any opportunities to minimise empty running by carrying a back load. Most removals firms operate on what is known as a 'simple' pattern - that is, travelling from the depot or base to the loading or collection point and then on to the delivery and unloading destination. Most then turn around and travel back to the depot without a return load. If you can arrange to carry a return load as often as possible this will improve your profitability

Advertising your services

However you plan to operate, it's very important to make sure that your potential customers know about you and the services you provide. Word of mouth recommendations and a reputation for excellent service are very valuable and you can encourage these by making sure that your vehicles and staff are always impeccably turned out. Your packers and drivers should be well trained so that goods are not damaged during packing, in transit or in storage. Moving house can be an upsetting experience and staff can reduce the stress by providing a helpful and unobtrusive service.

Think about gaining a quality accreditation like the BS 8522 commercial moving standard or the Contractors Health and Safety Assessment Scheme (CHAS). This will reassure potential customers that you meet their health and safety standards.

Don't forget to include your contact details prominently on your vehicles. You could offer a freephone contact number to make it easy for people to get in touch with you. British Association of Removers (BAR) members can display the BAR logo on their promotional material as an indication of the quality of the service they provide.

Buy an existing business

You might decide to buy an existing removals business rather than start your own venture from scratch. Buying a going concern can mean that:

  • the vehicles, premises and equipment are already in place
  • there may be existing customers
  • the business can generate income immediately
  • suppliers have been identified and relationships established with them
  • the business has a track record which can help if you are looking for finance
  • staff are already in place
  • a business website has already been set up

However, look critically at any business that you are interested in to make sure that the price you negotiate with the seller is a fair one. Try to establish why the business is for sale - for example, is the owner keen to retire or is there another personal reason for selling up.

Your market research into the sector as a whole and the locality in particular will help you to establish whether or not the owner is selling because he or she can no longer generate enough income from the business. This may not necessarily deter you - many business people are confident that they can turn a failing business around. The important thing is to have established the current position so that the price you pay for the business is not too high.

Other matters to consider include:

  • the age, condition and mileage of the vehicles
  • the state of the premises, equipment and so on. Will you have to spend money refurbishing or replacing assets
  • existing staff rights
  • how to retain key personnel once you've taken over
  • does the business owe money that you will be responsible for
  • if you are paying for goodwill, to what extent does this depend on the skills, personality and contacts of the seller

Ask your accountant to look critically at the business accounts for the past three years and discuss with him or her the selling price in the light of what the accounts reveal. Make sure you budget for other professional fees such as legal fees and valuation and survey costs.

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