It may seem like common sense that the majority of the money made per year by a moving company is made in the summer. To a startup this critical fact is not as apparent until after their growth spurt. It’s important to plan your time and finances in such as way to accommodate this fact. Focus on making as much as possible during the summer and save enough to survive the winter. This cash flow pattern can kill an unsuspecting company.
We’ve created a chart with actual numbers to help you understand how much of your year’s revenue is made each month.
This chart only works for a company past the startup phase. It may not look it but this chart is extremely useful.
What you can learn from this chart.
- Which months are you busiest months.
- When are you best to work on the business’s structure versus making money
- By the end of February you have some idea how much money you will make this year. Add the revenues from January and February divide by 11 multiply by 100.example: $110,000/11*100 = $1,000,000 yearThis is a good approximate number but isn’t always going to hold true.
- If you think creatively this chart can be used to determine the value of marketing opportunities and other aspects of you moving business. Such as this example of a radio spot potential customers
- Radio station has 60,000 listeners at any moment of the day = 60,000 potential
- Statistically 16% will move this year = 9,600 potentials
- 79% move themselves, so only 21% want movers = 2,016 potentials
- 13% at most are moving this month best case scenario based off peak seasonality and this chart= 262 potentials
These numbers are great for forecasting and planning. Generally speaking these hold up 90% of the time there are however incidents where they do not.
Reasons your numbers may be off.
Result Better then this projected
- Startup or Growth Phase – In the startup phase typically each month will be better then the last. This will happen consistently until you hit a maturity plateau where these numbers will start to hold true.
Results Worse then projected.
- Market Conditions – In the recession these numbers weren’t 100% accurate during the fall of the market in that the months got worse over time. They returned to being true when the market leveled out and were off again as the market started to rise.
- Company Atrophy – The company may be losing market share at a rapid pace due to negative customer experience or other potential internal issues. Typically if the company is shrinking you will see it in year-to-year comparisons rather then within the coarse of the year. However if you see it between January and December of the same year something needs addressed right away.
Being able to look at your numbers and project is extremely valuable, it can tell you if you are in for a good year or bad, and allow you to predetermine you financial goals to have a stable and successful year.
3 Responses
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“Radio station has 60,000 listeners at any moment of the day = 60,000 potential” – This is actually an incorrect way to look at potential when it comes to advertising in this sort of medium. It takes three impressions for an advertisement to stick with a consumer. The chance you will reach the same 60,000 people 3 times is extremely rare, especially in a medium like radio where the commercial rotation is so broad. The amount of people listening at a given time differs as to what time of the day it is, so it is actually false to say 60,000 people could be listening at any time. What this is actually a great example of is why it is important to get someone handling your advertising that really understands how the media and advertising world works so you’re not throwing your money away! Don’t let the advertising rep tell you “Oh, that frequency number doesn’t matter, that’s for agencies…” – it DOES matter!
Excellent. From my side you did awesome job on this particular topic and I like is so much. Yes it’s hard to find good, reliable and professional moving companies!!