Pricing for Profit

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This topic contains 0 replies, has 1 voice, and was last updated by Profile photo of Steve Huggins Steve Huggins 5 years, 11 months ago.

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    Profile photo of Steve Huggins
    Steve Huggins
    Keymaster

    For small moving companies or sole traders that are just finding their feet in the industry, pricing can often be the hardest job of the day. In many cases, the mover has a lot of experience of carrying out the work, but little in calculating the actually costs involved.

    When just starting out, the new mover knows how much he wants to earn, how much he pays his staff and the cost of fuel. All too often, these are the only things he considers when calculating the overheads per move. This error can lead to his business being wiped out by just a few quiet weeks.

    Factoring in the monthly or annual costs to the business, such as insurances, advertising, telephone, printing, website hosting and other costs is often overlooked or incorrectly calculated.

    These costs are not affected by the amount of work the mover has and they will still need to be paid even if the mover has an empty diary. Calculating the daily cost of these static overheads can help the mover to see the bigger picture when quoting for moves.

    If the mover lists all his static costs for the year and divides the overall figure by 242, (allowing for a 5 day week, with 28 days personal and public holidays) he will get an idea of how much he needs to make per working day, before considering wages, fuel and other job specific costs.

    Wear and tear on vehicles and equipment are also often ignored. It may be that the mover prefers to maintain the vehicle himself, but he still needs to consider the cost of parts, oil, anti-freeze, and other expenses that add up over the year as well as the fact the vehicle will someday need replacing.

    By offering guidance and advice on pricing and costing issues, as well as the many other hurdles that small removals businesses face, the Alliance of Independent Movers is helping to create the next generation of successful removals companies while raising standards from the start.

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