How to Start a Junk Removal Business
If you own a truck or van, like physical labor, and relish the thought of being your own boss, a junk removal business could be for you.
Waste collection is a $51.7 billion industry in the United States and is expected to grow. In fact, the amount of waste produced in the U.S. is expected to double by 2050. Whether a junk removal business is something you want to pursue full time or you are looking at it as a side hustle, it's clear that there is a lot of money to be made in the junk removal industry. This article will give you the information you need to get your junk removal business off the ground.
Plan Your Junk Removal Business
Before you pick up your first load of junk to haul to the dump, it's a good idea to take some time to create a solid business plan. Think about what skills you will need to be successful, what types of junk you can haul, who your target customers will be, what your startup costs will be, and how much you can charge for your services.
Junk Removal Business Abilities and Knowledge
You don't need any formal training to make a lot of money in junk removal, but you do need to possess certain knowledge and skills. These include:
- Sufficient strength and lifting technique knowledge. Removing junk is physically demanding. You need a strong back and the knowledge of how to lift heavy items without incurring physical injury. You also need to know your own limitations, especially if you are going to start doing the junk removal and disposal on your own. Nobody makes money if they are lying in bed with a thrown-out back or worse.
- A commitment to safety. Along with being heavy, the junk you are handling could be dangerous. You will need to be the kind of person who can gauge any situation to determine the risks and then act in a way to mitigate them as much as possible.
- Disposal regulations knowledge. Every community has rules and regulations that govern what type of items can be disposed of in certain locations. As the owner of a junk removal business, you are responsible for complying with these regulations.
- People skills. While you might like the idea of working solo, you need to remember that you have customers to please. Customer service is very important for any business, but especially for one like junk removal where people are relying on you to show up on time and perform the job in a courteous and respectful manner.
Decide What Type of Junk You Will Take
You need to decide if you will specialize in a certain type of junk removal. For instance, some junk haulers focus on homeowners and renters who need appliances and similar items taken away and disposed of. Others focus on construction site junk removal. There are junk-hauling businesses that exclusively take recyclable goods that they can turn over for additional profit. Others only take goods that are in good enough shape to be donated.
Your decision on what type of junk to take will depend on capacity. You need to think about how large your truck or van is and how much weight you can handle on your own. You may also want to restrict the area that you will service so that you can schedule pickups and drop-offs in a way that allows you to work at maximum efficiency for maximum profit.
You will need to decide if you are willing to haul junk that requires special handling, permitting, licensing, and/or disposal techniques. For example, paint, chemicals, oils, and items containing asbestos require you to have a special license for handling and disposing of hazardous waste. Working with these types of items is dangerous and will increase your overhead due to insurance and licensing requirements but will allow you to charge more for your services.
Acquiring Necessary Junk Removal Supplies and Equipment
Once you decide what type of junk you will be removing, you will need to think about what equipment you need to get the job done. If you don't already have a pickup truck or van, you will have to get one. In addition, you may need to get some or all of the following:
- Hand truck and/or dolly
- Tools to disassemble and reassemble furniture
- Trash cans
- Trash bags
- Safety work gloves and goggles
- Moving blankets
There are numerous risks associated with providing junk removal services. You will be going onto other people's property, handling potentially dangerous items, and driving to different drop sites. Think about obtaining the following types of insurance:
- Business liability insurance. Also called commercial or general liability insurance, this type of business insurance protects you if you accidentally cause harm to someone or their property while working on a job or if someone gets hurt because of your actions. The cost for this insurance will depend on your location, how much coverage you sign up for and for how long, and if your business employs others.
- Auto liability insurance. If you use your personal vehicle to haul junk, you will want to ask your personal auto insurance carrier if you are covered while working your business. If your vehicle is owned by your company, you will want to look into commercial auto liability insurance. If you expand your junk removal business and you take on employees who operate company-owned vehicles, you will need commercial auto liability insurance.
Determining What to Charge for Junk Removal
Figuring out how much to charge for your junk-hauling services can be a challenge. Pricing is going to depend on where you live. If you operate a haul-away service in a big city or in areas with high populations, you will be able to charge higher prices than if you live in more rural areas.
On average, junk removal services charge $75 per cubic yard. You will want to do some market research in your area to determine what rates are reasonable.
When setting your rates, you will also want to take into account the level of difficulty of each particular job. For instance, if you are hauling away a set of bedroom furniture on the third floor of an apartment building with no elevator, you will want to tack on a surcharge for the extra time and effort of walking up and down the stairs, as well as any disassembling work you need to perform. Many junk haulers will charge an additional $25 or more an hour for these extras.
When setting your fees, you should consider out-of-pocket costs. These include any dump fees you will have to pay, the cost of gas, and vehicle maintenance.
Forming and Operating Your Junk-Hauling Business
You will need to decide on the type of legal structure you want for your business, how you will promote it, and how you will handle the day-to-day operations of your small business.
Creating a Legal Structure for Your Junk-Hauling Business
The legal structures you can choose for your business are:
- A sole proprietorship
- A partnership (if you will be joining forces with someone else)
- A limited liability company (LLC)
- A corporation
Each has certain advantages and disadvantages from both a personal liability and tax liability standpoint. For example, you will pay lower taxes with a sole proprietorship, but you could be exposed to personal liability if a customer or creditor sues you. A corporation offers the best protection against financial liability, but you will have a greater tax liability. Many small business owners choose an LLC, as this structure offers some reductions in exposure and offers the tax benefits of a sole proprietorship.
If you decide to incorporate or form an LLC, you can handle all of the details - choosing a name for your business, appointing directors, filing articles of incorporation/organization, and paying the filing fee - on your state's corporations website.
You can obtain a federal tax identification number online, as well. You will need to get an employee identification number (EIN) before you open a business bank account, enter into business contracts, hire employees, or conduct any other business in the company's name. You may also need a state tax ID number (depending on the state where you operate) and a business license.
Creating a Marketing Plan for Your Junk Removal Business
Whether you decide to specialize in certain types of junk removal or are willing to haul away anything you can handle, you will need to get the word out that you can do the work. Here are some marketing strategies for your startup small business:
- Promote your business on your truck. Start by thinking of a catchy new business name for your haul-away junk company and stenciling or painting it, along with your phone number, on your truck or van. You can also have magnetic signs made for the sides of your vehicle at a relatively low cost. This is a great way to show off your junk removal business as you drive around town.
- Contact family and friends. Reach out to the people you know and let them know that you are available to haul their junk away for a fee. Then, ask them to refer you to their friend and work networks. Word-of-mouth advertising is a great way to market to potential customers.
- List your business on free referral sites. Thumbtack is an example of a lead-generating service that allows you to list your junk removal business for free. You pay a fee for each lead provided through the service. You can also advertise your business on Craigslist and create a free business profile on Google My Business.
- Print and hand out flyers and business cards. Consider printing out flyers and business cards with your business contact information. You can distribute them in the neighborhoods you want to target.
- Connect with customers on social media. You can create business pages on sites like Facebook and Instagram. Ask customers to provide reviews and share your pages with their networks.
- Create a website. It's easy to create a small business website with free website builder tools like Wix and WordPress. Be sure to link to your social media pages and put the site URL on your flyers and signage.
Running Your Junk Removal Business
While starting your own junk removal company is exciting, you need to keep in mind that along with reaching out to your target market and doing the actual junk removal and delivery work, you will have to manage the business side of your enterprise.
This includes knowing how to bid on a job, how to properly fill out an invoice, and how to collect on unpaid invoices. You will need to track income and expenses, understand assets and liabilities, and keep up with taxes. Fortunately, you can rely on Skynova to help.
Skynova Makes Running Your Own Business Easier
Running your own business is easy when you have Skynova on your side. Everything you need to produce job estimates, issue invoices, and furnish customer receipts for your trash removal startup can be accessed through Skynova's online business templates. In fact, Skynova's accounting software was created specifically for small business owners like you.