Starting a junk removal business can be a rewarding experience that may make you decent money. However, there are many steps to consider before beginning this process. You’ll need to understand how to market your business, what expenses you must pay, and much more.
Thankfully, this process doesn’t have to be challenging if you understand where to start. Following the steps below can streamline your business creation and get you started on the right foot. Here are a few things to consider when starting a new junk removal business in your area.
1. Understand Your Earning Expectations
According to Salary.com, junk removal professionals earn an average salary of $30,864 and up to nearly $40,000 yearly. As a business owner, you’ll likely make more than that, depending on your scope. For instance, a sole proprietorship may earn you more money because you’ll handle the junk and make most of the profit yourself.
However, most junk removal companies require multiple people to handle the demands of this field. Handling heavy objects, like beds and other items, may require two or even more people to handle. As the business owner, you must pay their salaries and ensure they make enough to stay solvent.
While many sites claim junk removal companies can earn thousands of dollars daily, these are exaggerated. It is possible to make $500-600 daily immediately if you invest in the right equipment. You will work hard to achieve this steady income by making new customers and hauling heavy items daily.
2. Gauge Your Area’s Junk Removal Demands
Before starting your junk removal company, ensure your area can support your service. Consider your potential competitors, their services, and how you will stand out. It is crucial to provide your customers with a unique range of options that make you stand out compared to others.
For instance, you can focus heavily on removing recyclable material and advertise yourself this way. Or you can emphasize fast and inexpensive service compared to your competitors. Finally, focus your firm on a service that isn’t present or poorly represented in your area to improve your success chances.
Just as importantly, it is essential to know what your customers are likely to spend. Typically, prices average about $230 per truckload for junk removal, depending on your service area. Streamlining your operation is vital to ensure you make the most money possible.
This step includes deciding how many people you want to hire, what trucks you want to buy or rent, hauling equipment to buy, and more. Understanding these issues can help you streamline your business operation and ensure that you handle your customers’ needs more effectively.
3. Finance Your Company
Junk removal startup costs range from $7,500 to $16,000, depending on your business scope. These costs must be covered through personal or business loans, grants, venture capital, or family investment. Once you start making money, you can pay back your financing team.
These costs can vary heavily based on your business but include things like startup expenses, employee salaries, and taxes. You’ll need to cover these costs just to start working. Just a few fees you’re going to pay when starting your junk removal company include:
- Licenses and Permits: $100 to $300
- Insurance: $100 to $300
- Website Design: $1,000 to $2,000
- Business Cards: $200 to $300
- Hauling Equipment: $1,000 to $2,000
- Truck Down Payment: $5,000 to $10,000
Note that these costs vary depending on your business size. For instance, a solo junk removal expert only needs a small truck to handle their loads. Note that your profit margin is close to 80% if you work alone. You’ll also do all the work yourself and may get tired very quickly as a result.
Larger junk removal teams often focus on doing multiple daily jobs with larger crews. For example, a five-person team might do 3-4 junk removal jobs per day every week. That’s nearly $1,000 per day split between you and the team doing the hauling with you.
Split between four people, that’s $250 per day or $1,250 per five-day workweek. However, note that you will make more as the business owner, with a margin of about 40%. That’s because you’ll not only pay your employees but pay for office rental, operating expenses, and more.
Let’s say your team does five hauls for $250 for each run, five days a week. That’s $6,250 per week for your firm. With a 40% profit margin, you’re making $2,500 per week or $10,000 a month and $120,000 per year. Note that your expenses and job availability may affect your profit margin.
4. Market Your Firm and Find Your Niche
Start social media accounts, like Facebook, Instagram, Tik Tok, and Twitter, and start marketing your business. First, build a website (which make cost a few thousand dollars) to advertise your firm and get customers. Then, buy advertisements on local radio and television stations to reach a broader market.
Now, it is crucial to narrow your niche and provide the service your customers want. For example, you may focus on smaller jobs with fast service, such as cleaning apartments. This career option makes sense if you work alone or with a single partner in your business.
You can also specialize in specific waste types, such as hazardous waste removal. While more dangerous, this field earns you more money and creates a particular niche. You’ll need more expensive equipment, such as specialized storage trucks, to start this business type.
You can also offer 24/7 emergency pickup, estate sale cleanup, recyclable material removal, and large-scale projects. Know what market you want to service and focus your advertising on them. Doing so can help you appeal to a broader customer base.
As you get gigs, take before and after pictures and encourage customers to leave positive reviews. Building word-of-mouth in this way can help expand your company’s reach and make you more money. Online marketing of this type is so critical for modern business success.
Furthermore, it would help if you interact with your customers online whenever possible. Leave comments on positive reviews, address complaints professionally, and showcase your successful gigs with photos. Handle this step yourself or hire a social media marketing team to help you.
5. Expanding Your Business and Finding an Operational Location
As you start your business, make sure you register with your local and state authorities, apply for an employer identification number (EIN), register for taxes, and get any necessary licenses and certifications for your area. Furthermore, you can start expanding into other fields that go beyond general junk removal, including:
- Garage cleaning projects
- Basement waste removal
- Tree and yard cleanup
- Recycling and donation items
- Apartment and home cleaning
- Estate sale management
- Hazardous waste transportation
After you’ve expanded your services into areas that make sense for you, find a business location for your office. While you can operate out of your home or garage in a smaller junk removal firm, you need an official office for more prominent companies. Find an office with room for your trucks and hauling equipment, as well as space for reception and customer waiting.
A good office should be centrally located with easy public transportation. Make sure the interior is clean and well-ventilated with good light and plenty of open room. There should be minimal renovation or repair needs to ensure that you can get started right away. You’ll need to pick a strong business name and brand logo and integrate both in your office to appeal to customers.
As you expand, you may also need to create business plans, product and service descriptions, sales and marketing projections, operational procedures, financial guides, and executive summaries. These more complex steps are critical as you add more workers to your junk removal company. If you’re the sole proprietor or only work with one or two people, these steps are less critical.