The term “start-up” usually conjures images of digital marketing, cybersecurity, and fintech companies. Because of this, many entrepreneurs overlook promising business sectors that are outside high-tech. Today I am interviewing one such entrepreneur who built a thriving company in the heart of Silicon Valley. Leon Schwab is the owner of Fair Price Movers, a residential and commercial moving company. Leon will share insights from his journey and advice for entrepreneurs in the Start-Up Nation.
The moving industry is a very competitive market. Many would argue that it is a saturated sector with little room for growth. How did you choose to enter this business?
There are many moving companies in the Bay Area, but there is a shortage of honest moving companies. I had 30 years of experience in the moving industry before starting Fair Price Movers. I started from the ground up, initially lifting furniture and boxes for other movers. I worked my way up to leading a team and then into management at some of California’s most well-known names.
The more I moved into management, the less I was excited about what I saw on the business side. Many movers will quote a customer a low price, get them to sign on the dotted line, and then hit the customer with hidden or inflated costs at the end.
What kind of hidden or inflated costs will they add?
The moving company might tell a customer that the initial estimate was lower than it should have been. The client forgot to include several items or that the client’s measurements were smaller than the actual sizes. This is often the case, and any company needs to get paid for additional work. Dishonest companies will say that this added weight or space on the truck requires much more space on the truck than it does. What should be an extra $300 to $500 is inflated into an additional $3,000 to $5,000.
What happens next?
Usually, people will call the company to complain. The company will say that the extra charges are in the contract, which is typically true. The people are stuck.
How did you realize this was going on?
When I moved into my first management role, I asked my boss about some customer complaints with their bills. I was told that the customers were upset because they forgot to include things in their estimates or realize how the business works. Sometimes a few more boxes will require a larger truck. I can’t stack extra weight on fragile items or go over a truck’s legal weight capacity.
At first, these responses made sense. But, over time, I started to see a pattern. What I thought were the outliers were the standard for the company.
What did you do?
One Friday morning, I got a call from a client. After investigating the situation, I realized that there was no way this client should have been billed an extra $5000 for their move because I traced the truck’s loads. I told the client that there was a mistake, your additional fees should be $500. It had been a hectic week, and someone must have typed in an extra zero on accident. Then I refunded them the difference.
Later that day, my boss called me into the office. He was furious at me. I explained what happened and how I fixed the situation. He told me that every moving company in the state does this. This is business. If I didn’t like it, I should leave.
How did you respond?
I was shocked. My parents always taught me to work hard and be honest. How could someone run a company based on lies? I went home feeling angry. I build my career in a business based on lies. What would I do now?
I did a lot of thinking about life and business that weekend. I spoke with a good friend about everything that happened. He told me, “If there are so many dishonest moving companies out there, why don’t you start your own company and be the honest guy?” That is where I got the idea for Fair Price Movers.
Thank you for sharing your inspiring story. Many Israelis have similar experiences working in binary options, misappropriation of funds, and various forms of fraud. What would you say to someone who may be in a similar situation as you were in?
There are honest and dishonest people in the world. Choose to be honest. If you are at a job where you see things are wrong, don’t be afraid to quit. At the time, it was hard. Where am I going to work? How will I pay the bills? Is it that bad? Talk to someone you trust, and do the right thing.
Israel is known as the Start-Up Nation. Don’t be afraid to start your own business, even if it is not high tech. Entrepreneurship is not for everyone, but it is an excellent solution for many people. Running a low tech business can be personally rewarding and profitable. Do a good job, charge a fair price, and treat people right. These are my keys to success.