How to Start a Junk Removal Business? [9 Simple Steps to Follow]

Looking at the current market trends, you know that starting your own business is not easy, and it requires a lot of hard work and dedication to see the business through to its full potential.

However, starting a junk removal business may be one of the important decisions toward attaining financial independence. All you need is time, some resources, and a good idea.

Starting your own junk removal business can be very profitable if you do it right. According to a survey by the Bureau of Labor Statistics, the junk removal business has a market value of over $1 trillion worldwide.

This article will give you tips and advice on how to start a successful junk removal business.

A junk removal business is one such business that provides services to clean or remove junk from the customer’s home or offices. It is a boon for homeowners, renters, and construction workers.

The services for junk hauling business are provided on the site. Such cleaning jobs are huge and physically challenging ones that cannot be handled by a property owner alone.

Junk removal businesses are becoming more popular every day. People are starting to realize that they need to hire a professional junk removal company if they want all their garbage removed from their property. Also, due to the high workload and hectic schedules, people do not prefer to do it by themselves, and so they choose junk removal businesses to do the job.

However, many junk removal businesses have a team of junk haulers, or junk removers, who can drive a pickup truck or dump truck.

How to Start a Junk Removal Business in 9 Easy Steps?

Let us now take a tour to understand the step-by-step guide on starting your own junk removal business from scratch

Step 1: Market research (potential and cost estimation)

Before entering the junk removal industry, it is essential for you to research about the market and junk removal business requirements.

Gather relevant and primary information such as demand of the business, number of potential customers, and setting up. As a junk removal business owner, you should have answers while doing your market research and getting insights.

  • What is going on in the target market?
  • How many competitors or junk removal players are there in your area?
  • The latest trends of the business stand.
  • What is your budget and cost estimation?
  • How many employees do you want to hire, or do you want to operate as a sole proprietorship?

You can gather all information with the help of Google or talk to people in the existing industry.

Step 2: Plan and write a business plan

Having a business plan for your junk removal business will help you to get on the right track. You have to make a list of plans like your goals, objective, vision, and purpose of your junk removal business.

Plan and write a business plan

A junk removal plan should cover:

  • Initial investments

    You’ll need to think about what your initial investment will be in order to start up your own junk removal business. The startup cost can vary depending on the type of equipment you choose, the location of your service, and more.

    If you’re looking to start up a junk removal business that is going to be located in one of the larger cities, such as New York City or Chicago, then many costs come along with setting up a business there.

  • Buy or lease a property:

    This is a significant necessity you should count for any new business because a property is required to accommodate all your workers, manage all the junk, park garbage vehicles and manage all the administrative work.

    It would help if you also considered the property’s rent or purchasing cost while calculating your business estimate.

  • Need of equipments:

    There will be a high demand for different equipment to start a junk removal business. Make a list of processes involved in the junk removal process and all the types of equipment used in it.

    This includes everything from large dumpsters to smaller bins designed for storing recyclables, household items, or any other junk.

  • Manpower

    Getting an estimate of all the machines and tools won’t be enough. To operate and regulate them, you will need manpower. Workers will carry out operations like picking up the junk, dumping it into the trucks, emptying the trucks, doing administrative work, driving trucks, and much more.

    Basically, you will need a fleet of efficient workers who can carry out all the business operations.

Step 3: Register your business for taxes

While setting up a new business, you will need to complete a lot of paperwork. This includes getting your business registered. You must get a state tax ID number and apply for EIN. Also, you will require zonal approvals to operate in a particular area.

You will be liable to pay various state and federal taxes. Registering your business and paying taxes will help you get a clean image in the government’s eyes so that you won’t face any legal trouble from their side. 

Also, you will need to select a business entity for your business. Just like every other business, there are 4 business entities.

You can form a business entity by yourself or hire an agent to handle all your business legal entity. You can find out about your registration of a business entity and your city’s legal formality through the official website of the IRS.

Ways of Business EntitiesWhat Do They Offer?
Sole ProprietorshipIf you are a small business owner or own a junk removal business entirely by yourself, you need a sole proprietorship business entity.
CorporationWhen your legal entity is owned by a shareholder and operated by the board of directors.
PartnershipWhen there are two or more partners running your junk removal business.
Limited Liability Company ( LLC)LLC is one of the types of legal entity to form a business structure than a partnership or sole proprietorship.

Step 4: Open a business bank account and get credit card

Most business owners make mistakes by managing their company’s finances from their personal bank accounts. This practice can risk your personal assets like properties and money if the company faces any financial issues.

So, it’s better to open one business bank account to carry out all the transactions and keep your books clear. Also, it helps you get business loans for various development purposes of your junk removal business.

Also, getting a credit card in your business’s name can be beneficial in many ways. You will get more credit, a better interest rate, offers, and many enterprise benefits.

Step 5: Get required licenses, permits, and insurance

You need to contact the local commerce or SBA branch to get complete details about various business requirements.

Also, you need to take special permits or business license specifically for transporting scrap materials from one location to another. If you have employees in your organization, taking an employer identification number (EIN) from the IRS site is mandatory.

Moreover, you need to get business insurance along with business permits and licenses.

Why business insurance?

While starting a waste removal business, you should be prepared to face any consequences. For example, on the way to the job, a car accident occurs during work, and you face a heavy money loss and manpower loss.

Well, to cover such costs, you will require business insurance. For junk removal business, there are three types of junk removal business insurance.

Types of Business InsuranceWhat Do They Offer?
General LiabilityThey offer insurance costs for daily business operations such as property damage, physical or personal injuries.
Commercial AutoThey help to cover financial revenue when the employee is at fault during an auto incident.
Workers’ CompensationThey help to cover expenses of medical bills and wage replacement when some employees get injured or have diseases due to work occupation.

Step 6: Get business tools and equipments

Once you are done with planning, and all legal formalities, as a junk removal business owner, you will require the foremost important thing for the junk removal business, and that is tools and types of equipment. Without tools and equipment, you cannot function one task and assign employees for junk removal jobs.

For junk removal industry service, you need equipment like garbage bins, shovels, garbage bags, rakes, trucks, and tarps. You will need a vehicle like a pickup truck to collect and transport garbage from the job site to the dump area. The workers will gather all the garbage in the trucks and drive it from one place to another.

The hazardous material is unsafe,; therefore, you will need to use the right equipment to keep your workers safe from mishaps. The truck size and number of workers carrying junk disposal will depend on your junk removal business size.

Step 7: Decide your pricings for junk removal services

Deciding prices is crucial as customers always research and compare prices of different businesses and then allot the job to any one junk removal company. So, make sure your prices are profitable to you but also affordable to your customers.

Your service price should include all the costs in completing a job. So make sure you add all the costs before adding profit margin or markup costs. While deciding the pricing model, you should also study the prices of your competitors to stay competitive in the business.

Various costs you should consider before making up your pricing model include:

  • Equipment costs
  • Property rent/price
  • Employee wages
  • Vehicle wear and tear
  • Gas fees
  • Other maintenance costs

Step 8: Market your junk removal business

After successfully establishing a junk removal business, there comes a time to attract customers to your business. Marketing a business is not an easy task as you have to develop trust among the general public and convert them to try your services and become a part of your potential customer base.

There are a few ideas to market your business:

  • Define your Brand

    As we mentioned, it is a competitive industry with plenty of other competitors offering junk removal services. To make the audience or customers understand why your company is different, and how you are different from other junk removal business owners, you need to gain their trust.

    Create a website, post on social media like Facebook pages and introduce them to your quality features, your exceptional services. Define your brand like what you do, what you offer, and why you are different from others. A powerful online presence will help you to draw more customers.

  • Work For Repeat Business

    You need to work hard to make a robust reputation among individuals and businesses that can benefit you as a repeat business.

    Local government bodies, property managers, construction companies, or other local businesses are the best examples that you can try for repeat business.

  • Follow-up Strategies

    To get the customers at an initial stage, you must follow up on your marketing strategies, and having a strategy is also part of your business plan. You should keep data ready of your existing and new customers, follow up with them regularly, and update them with offers and updates on your business.

    This strategy will help your customers stay in touch with you, and they can contact you in case of junk removal requirements. Thus, it will help you earn a yearly recurring junk removal business salary.

Step 9: Use software to manage the jobs

In order to convert your newly set up business into a successful business, you should opt for a smarter way of managing your business operations.

The junk removal business needs job scheduling. As the number of jobs and workers increases, planning and scheduling jobs manually takes time. So, to eradicate such problems and save time, you should adopt various smart ways like field service management software.

Field service management software like FieldCamp fulfills all your managerial requirements. All you need to do is import an excel sheet of all the jobs and the available workers. FieldCamp will automatically schedule jobs and helps you save up to 95% of time spent in job planning and scheduling.  

With FieldCamp, along with job scheduling, you can dispatch workers, get their progress reports, track their location, generate customizable invoices, and accept payments. In a nutshell, it digitizes 90% of your work operations.

A Junk Removal Business Software That Helps You

Save up to 95% of your time Automate 90% of your daily operations Generate and track reports in a few clicks

No credit card details required

FAQs

To plan your junk removal business, you should consider all the steps involved in the process. A junk removal business plan should include important factors like branding, documentation, equipment list, employee recruitment process, training, costing, banking, and financial planning.

Your junk removal pricing structure should include all the costs involved in the junk removal process like employees’ wages, vehicle wear and tear, gas charges, and all other maintenance costs. Then, a profit or markup amount should be added, keeping all the costs and competitors’ prices in mind.

Establishing your own company is not the only way you can jump into the junk removal business. If you have limited funds and resources, you can also opt for a junk removal franchise. There are many companies that offer a franchise, and we have filtered out the top 5 companies to help you get a clear vision.

  • Junk Removal Authority
  • Dog Junk Removal & Hauling
  • The Junkluggers
  • College Hunks Hauling Junk & Moving
  • Bin There Dump

You should decide your charges by considering all the operational costs of your business and then adding your proportion of profit into it.

Depending on the services you provide at that initial stage and the quality and quantity of equipment you prefer, you can set up your junk removal business for around $90k to $150k or more.

The junk removal business is not a technical job, so you need minimal technical skills. But, you will need more managerial and customer service skills to run your business smoothly.

Conclusion

We hope you are now ready to start your own junk removal company.

A junk removal business helps you to get significant income if it’s under the correct management. The exciting thing to note is that junk removal requires less time and money than other service businesses.

Follow every step mentioned in the article to take your junk removal business to an another level. You need to keep in mind the essential things and tips that are mandatory for your business enhancement to a great extent. 

The good part is that you can easily automate your business operations like creating schedules, tracking cleaners, generating reports, and other tasks easily using FieldCamp, which is a top field service scheduling software.

Author Bio
author

Gaurang Bhatt

Gaurang Bhatt is a techie in himself with an ability to solve problems technically and present solutions in the form of a product. He is one of the pioneers to curate FieldCamp with his 15+ years of knowledge and expertise in providing solutions to home service industries. Gaurang aims to overcome challenges faced by service business owners through software solutions and blogs.

https://www.fieldcamp.com/how-to-start-a-junk-removal-business/