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Value Drivers for Moving Companies

Value Drivers for Moving Companies

The moving company industry faces unique challenges given current economic conditions. This significantly affects the value of a moving company. The country’s ongoing battle against increasing inflation rates poses threats to the industry as a whole. The country has seen several interest rate hikes in response to the rising rate of inflation. The Federal Reserve makes these moves to make money less available and increase the value of the dollar. Unfortunately, this means that home sales financing through lending will decline. With home sales being one of the main value drivers for the moving company industry, it is cause for concern. But do not let this stop you from maximizing the value of your company. There are still many ways to increase the value of a moving company even during times of economic stress. Below are some of the most important value drivers for moving companies. 

To better understand the value of a moving company, get a business valuation. Peak Business Valuation, a business appraiser, is happy to provide you with a business valuation. And, answer any questions you may have about valuing a moving company. Schedule a free consultation!

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Key Value Drivers for Moving Companies 

In the following paragraphs, we discuss key value drivers for moving companies. These value drivers can help you maximize the value of a moving company. To better understand the value of a moving company, get a business valuation. As a business appraiser, Peak Business Valuation provides business valuations for moving companies. We are happy to answer questions you have about how to value a moving company. Please schedule a free consultation to learn more. See also Valuing a Moving Company, Valuation Multiples for a Moving Company, and How to Value a Moving Company.

External Influences and Economic Conditions

A primary revenue driver for moving companies is the number of home sales. As home sales increase, more consumers need the help of a moving company. There is little a moving company can do to encourage more home sales. Yet, it’s important to pay attention to the market to predict when market conditions will help influence more demand. At the moment, the real estate market appears to be in retrograde as interest rates climb. But, this creates an opportunity for the moving company owner. As more consumers move into rental units, moving companies can pivot and focus on renters. 

Companies whose leadership pays attention to changes in the market tend to show less dramatic swings in revenue. Forecasting how market conditions will affect a company is not easy. It requires a detailed study of markets and valuable industry experience to predict how forces will affect sales. Yet, accurate forecasting of market changes sets the table for companies to stabilize sales and grow company value. Stable revenue growth increases company value. Companies that have stable revenue growth are more able to control costs and increase margins. Increasing company margins is one of the most effective ways to increase value. For additional information, read How Economic Conditions Impact the Value of a Company. 

Ease of Access through Technology

The adoption of technology may not seem like an important value driver for moving companies, but it is. Industry insiders report moving companies who adapt technology find greater success. This can be through investing in scheduling software that can also help customers easily access your services. Other moving companies use technology to quickly provide pricing quotes for new projects. This helps speed up the sales process. These technologies aid in both marketing and cost reduction. Moving companies with these technologies enjoy higher sales growth and increasing margins. Both of these factors can increase the value of a moving company. To understand the value of your moving company, schedule a free consultation with Peak Business Valuation today!

Focus on SEO

Another important value driver for moving companies is focusing on SEO or search engine optimization. The moving company industry is highly competitive. As such, standing out from the competition is very important. Therefore, moving companies that focus on SEO increase their chances of being seen and customers choosing them. 

A few ideas to increase your SEO presence include setting up a Google my Business page. This enables customers to more easily find you. Ask for reviews from each customer. Reviews, especially positive ones, will help new consumers choose your company over another moving company. For additional ideas, see The Value of SEO. 

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Establish Key Partnerships

Another way to improve revenue outlooks is to establish relationships with key partnerships. As the Feds continue to battle inflation through the use of raising inflation rates, home sales will fall. This could spell trouble for moving companies who rely on residential moving services. Yet, by establishing key partnerships, it may prove to be no issue at all. For example, providing promotional discounts to large apartment complexes can provide a stream of clients. 

Key partnerships can provide many benefits to a company which increases its value. Such benefits can include increasing revenue and stabilizing it. As well as decreasing customer concentration. Customer concentration and revenue swings are factors a valuation analyst at Peak Business Valuation looks at to determine risk. Companies with higher risk receive lower valuations to account for the inherent risk. For questions, schedule your free consultation. 

Employee Retention

The last important value driver for moving companies is employee retention. Employees can make or break any company, this is very true for moving companies. Industry reports show that a common challenge for moving companies is in finding and keeping quality employees. Moving companies place a tremendous amount of trust in their employees with many of them working independently. This highlights the importance of investing in the hiring process.

For example, hiring policies and employee retention activities can help in this area. Moving companies that are better able to find and keep quality employees will operate more smoothly and profitably. Valuation analysts spend time analyzing management and staff levels. High employee retention rates decrease company risk and increase value.

Summary

Moving companies provide interesting challenges and benefits. Understanding what drives the value of your moving company enables you to maximize the value. Whether you are looking to buy or sell a moving company, you need to know how to value a moving business. Determining the value of a moving company can be complicated. A business valuation professional uses judgment and experience to determine the value.

The first step to finding out how much your business is worth is with a business appraisal. A business valuation or appraisal for a moving company will determine a fair market value. Additionally, it will analyze the business’s strengths and weaknesses compared to its competitors. 

Peak Business Valuation, business appraiser, works with many moving companies providing business appraisals. We are happy to answer questions about valuing a moving company and value drivers for moving companies. Get started by scheduling a free consultation below! 

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