How To Start a Junk Removal Business
The junk removal industry is a relatively overlooked industry especially by the younger generation but is actually a massive $75 billion/year industry that is still growing.
So, if you are thinking of starting your own junk removal business, then it’s definitely a great plan with a lot of potentials.
You can start your business from the ground up, or buy into a franchise, but above anything else, you’ll need proper planning before you can start and run a successful junk removal business.
Here, you can learn whether starting a junk removal business is the right choice for you, and how you can start a successful one with great planning.
Junk Removal Business: The Overview
How does a junk removal business actually work?
A junk removal business must be able to handle, sort, and value discarded goods, and a typical junk removal operation will be as follows:
- A client booked the service on a set date
- On appointment day, the junk removal service will show up with a clean truck and uniformed crew
- The crew will conduct a thorough sweep and will collect the items you want to dispose of. All items must be non-hazardous.
- The junk removal service will then charge the client (quoted on-site) based on the type and amount of discarded goods removed. The fees can vary depending on many different factors, including the accessibility of the client’s premise.
- The junk removal service will then haul away the thrown goods to disposal and recycling facilities
Junk Removal Business: Startup Costs
At a bare minimum, you can start a junk removal business with:
- A secure, big enough location for sorting
- A truck or large van. You can get a used large van for $5,000-$10,000 if you are lucky and a used dump truck for $40,000.
- Cleaning supplies
- Basic cleaning equipment
Typically purchasing the vehicle will be the most significant upfront cost you’ll need, including customizing the vehicle to include your logo and brand colors.
Another key concern is online booking software. Nowadays people would expect to book their appointments online, preferably with a functional app that may also count as business professionalism to certain clients. There is a cost-effective all-in-one junk removal software that will provide you with a functional mobile app, automated schedule and dispatch, job tracking, and more features.
Junk Removal Business: Legal Requirements
Depending on your location, you might need a permit, license, and insurance before you can start your junk removal business. Make sure to check your state’s and federal’s requirements to ensure you are legally compliant for starting the business.
Also, there may be local, state, and federal laws applicable to your junk removal business, especially if you also perform the removal of hazardous waste. There are also states that may require a transportation certificate if you are transporting certain materials.
Where To Dispose The Junk
A key concern in a junk removal business is to figure out where you will dispose of the junk that you’ve collected.
First and foremost you should make sure you dispose of the wastes responsibly, but at the same time, you should also take account of profitability. The basic option is to take all of the junk to the nearest dump, but there are also other viable options to consider:
- Donation: you can donate relatively new items in good condition. It’s always great to help others, but this can actually help cut down on disposal fees. Ask local donation centers about what kind of items they’ll accept.
- Resell: there might be instances when clients will dispose of junk that can be valuable with or without their knowledge. List these items on eBay, Craigslist, or other platforms, which can be an extra source of revenue for your business.
- Recycle: as a general rule of thumb, you should attempt to recycle items that can be recycled rather than dumping them.
Junk Removal Business: Pricing Strategy
In a junk removal business, you make money by quoting your clients based on the type and volume of garbage removed. Typically wastes are measured in cubic feet inside the truck, but you can also charge more for especially heavy/hard-to-transport items, potentially hazardous items, and rush appointments. You can also offer a total clean-up service for a higher price.
According to HomeAdvisor, a single junk removal visit would cost between $133 to $360 for a basic removal service consisting of cleaning a small room full of garbage or moving a few pieces of furniture.
A good approach to decide how much you will charge your customers is to research the competitors in your area. However, you should not always aim to charge a cheaper price even if you are a brand new business. If you can offer more value, by all means, you can charge higher.
You should set your price after a careful calculation of:
- Staff’s wages
- Insurance costs
- Total transport costs including auto payments
- Total disposal costs
- Other expenses including marketing
If you can generate enough demand, a single dump truck can generate about $500 for each truckload. You can always expand your business by investing in a larger fleet of truck, that will affect your revenue and profitability.
A junk removal business is a lucrative business opportunity despite being relatively competitive. A key highlight of the business is its scalability: simply by increasing your fleet size, you can easily double or triple your revenue.
However, that doesn’t mean you’ll automatically attract more customers just because you’ve launched your business and/or get more trucks. Proper planning, market research, and having a comprehensive truck are necessary if you really want to attract more customers and grow your business.