Much of the time, passive income isn’t created overnight. Actually, more often than not, the income in the early stages is minimal and the hours are long and difficult. After a few years of hard work though, a business can be molded into a passive revenue stream that will send money your way, even when you’re not around!
Two Men and a Truck
The moving company, Two Men and a Truck, started in the early 80s (in my neck of the woods) by two brothers looking to make a buck while in high school. They started this business with a regular Chevy pick-up and two pairs of hands. Nothing more, nothing less. After making enough money with a few moves, the brothers invested in their very first box truck – it cost them $350. After growing their business within their region, they decided that it was time to franchise the company and become more than just “Two Men and a Truck”.
Today, their company has not just one truck, but 1,300. Plus, they are the largest franchised moving company in the United States. Not too shabby for a company that started with two high schoolers and a regular truck!
Are You Ready to Start a Moving Company?
The beauty of starting your own moving business is that you can start small! The bottom line though, is that everyone needs to move at some point in their lives, and if you develop relationships before that move happens, there’s a pretty good chance that you’ll be receiving their business.
The Initial Investment
You might already own a regular pickup truck. It that’s the case, then your initial investment would most likely be $0.00! But, if you do want to start your business with a box truck, they really aren’t that expensive either. I just found a 2007 Box Truck for $8,500. I could buy that truck tomorrow and start making money over the weekend!
In addition to the truck, you’ll most likely want some tie-down straps, some dollies, and some moving gloves. These items would maybe cost you $150 total, and are hardly worth mentioning.
The largest variable expense would probably be the gas that it would take to move the items from house to house – and along with that, the wear and tear on your vehicle. This should be factored in when deciding on the price to move a client.
Also, since people are sue-crazy these days, you’ll most likely need to carry some insurance in the event that their belongings are damaged in the move.
Making Your Business Passive
A moving company is a pretty straight forward business. There are boxes and furniture and they need to be moved from point ‘A’ to point ‘B’. In order to make the business passive, you’ll need to teach someone else the reigns and have them take over your position. This could take some time, but ultimately if it frees up the rest of your life, I’d say that it would be worth it.
Calculate the Profits
If you went out and bought that $8,500 and also purchased another $500 in equipment (and your business license of course), your initial expense in the business is $9,000.
You figure that each move costs you $100 when factoring in gas, repairs, and depreciation.
On average, you’re able to earn $400 for each move (the standard rate is $100 per hour), and you figure you can find 60 gigs in that first year.
Your income before expenses is $24,000 (not bad for a side-gig that’s soon to be passive). Take off your $9,000 for that truck, and the $6,000 in gas, repairs, and depreciation and you earned $9,000 in that first year (not including tax).
That first year may have seemed like a lot of work for 9,000 bucks, but in Year 2, you can create a passive income and earn more!
The truck is paid for, so your only expense is variable, but you also decide to replace yourself on the job. Your new employee gets paid $16 an hour plus a potential bonus of $1,000 (for the year) if he keeps a clean moving record.
Let’s say that all goes well. Word has been spreading about your awesome moving company and you’re able to book 80 gigs for the year. Your employee worked all of the jobs and you did basically nothing. Here is what the books look like:
- Gross Income = 32,000
- Gas/Repairs/Dep. = (8,000)
- Employee Cost = (6,120) – 16*(4 hours)*(80 gigs) + 1,000 bonus
- Net Income = $17,880
So, you made almost double the income and worked hardly at all! Sounds like a pretty sweet passive income source to me.
What are your thoughts of a passive income with a moving company?