How To Start A Junk Removal Business
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By: Scam Risk - Expert Reviewer
Starting A Junk Removal Business: Easy Way To Make $10K?
Junk removal services can be hired to remove unwanted items that are too large for regular trash. Businesses and individuals need assistance with moving unwanted furniture, emptying attics full of junk, or clearing out estates or foreclosures.
The junk removal industry, which is competitive and growing, can either start from scratch or as a franchise.
Starting a junk removal company can be lucrative and rewarding if you are up for the challenge. This involves hauling heavy garbage and also looking for local recycling and donation options.
Towards the end of this article, you’ll find answers to some of the most frequently asked questions on how to start a junk removal business…
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Table of Contents
Business Overview
Junk removal businesses offer a valuable service to homeowners, renters, builders, and others.
These businesses will come to your location and clear out all junk. It can include everything from old appliances to trees and brushes to bags and garbage.
A junk removal job is usually physically challenging. The property owner may not have the resources, time, or strength to do it themselves.
The majority of junk removal companies employ teams of workers that work out of a dump truck or pickup truck.
Once the materials have been removed, they are often taken to landfills or recycled.
Clients rarely need junk removal services regularly, so a junk removal business often works with multiple customers at several sites within a week.
Industry Summary
According to IBIS World’s estimates, the collection services industry has seen steady growth since 2015-2020.
The experience experienced a 1.2% increase in that period and reached $51.7 billion by 2020. This is because of the increased demand for services in waste collection in construction, industrial, and commercial business industries. 12, 158 businesses had 219, 049 employees as of 2020.
The junk removal business will continue to grow between 2020 and 2025. This growth is due to an increase in waste production, which correlates well with population growth.
Industry Trends
Understanding current junk and other waste trends can help a business owner determine the most sought-after services. Junk Happens states that the average person in the United States creates five pounds per day and that the United States could double its waste generation in one year.
The majority of toxic waste in the United States is generated by electronic waste. It is estimated that less than 13% of electronic waste is recycled. Mobile phones, computers, and televisions account for around 10 million tons of garbage.
1-800-GOT-JUNK is a franchised Canadian residential and commercial junk hauling business that operates in the United States, Canada, and Australia. Its founder is Brian Scudamore.
Skills, Experience, And Education Useful In Running A Junk Removal Business
You don’t need a business degree in order to start a junk removal business. However, certain skills and experience can help increase your chances of it being a success.
Knowledge Of Local Disposal Regulations. This will allow the owner of a junk removal company to choose the most appropriate disposal sites and methods.
Endurance And Physical Strength. Junk removal can be a physically demanding job. Therefore, strength and endurance are essential for productivity and the well-being of the business owner.
Safety And Attention To Detail. It can be hazardous to remove junk, especially if it involves heavier and larger items. To keep employees and themselves safe, a business owner should have a keen eye for detail.
Proper Lifting Techniques. This knowledge can prevent injury to the owner as well as staff members.
Excellent Customer Service Skills. A business owner can build strong relationships with customers to gain referrals, positive reviews and repeat business.
Management Experience. Experience in managing, training and hiring staff is a key asset for business owners.
Start A Junk Removal Business By Following These 10 Steps:
The steps below will help ensure that your junk removal business is adequately planned, registered, and legally compliant.
Step 1: Plan Your Junk Removal Business Plan.
To be a successful entrepreneur in any industry, you would need a clear business plan. It will help to map out your business and identify potential problems. The following are essential points to be aware of if you want to start a junk removal company:
What Are The Costs Involved In Opening A Junk Removal Business?
These resources are sufficient to start a junk removal company.
- Truck or large van
- Basic cleaning supplies and tools
- Location to sort collected junk
The biggest obstacle is the first vehicle. You can choose to use your truck, a used or new vehicle, or a commercial tractor-trailer. You can also use vehicle decals or logo wear to show professionalism and brand your business to customers.
Junk removal business owners need accurate knowledge and data of all overhead, including:
- Employee wages (junk removers, junk haulers, etc.)
- Insurance (injury, liability, business auto, and more)
- Landfill fees and other disposal costs
- Fuel costs and auto payments
- Office, marketing, and other expenses
Who Is The Target Market?
Both individuals and businesses are frequent junk removal clients. Two industries that have a special need are real estate and storage. Many residential customers are usually empty nesters or retirees who want to declutter.
How Much Can You Charge Customers?
According to HomeAdvisor, homeowners typically spend $139-$373 for a junk removal service. This usually covers a small amount of junk, such as appliances or furniture. Pricing is based on junk volume and can vary depending on the customer’s requirements.
Owners of junk removal businesses need to have accurate information and data about all overheads, including:
- Wages for employees
- Insurance (injury and liability, auto for business, and many other things)
- Other disposal costs and fees for landfills
- Auto payments and fuel costs
- Marketing, office, and other expenses
Sometimes, the junk removal company can profit financially by disposing of scrap metal or by receiving tax deductions for donations.
National franchisors are the most transparent in their pricing. After arriving on-site, the crew will estimate, and the customer can decide whether or not to proceed.
You may get more information on pricing models for junk removal companies on these links:
Step 2: Form A Legal Entity.
Some of the business structures that are commonly used include sole proprietorships, partnerships, limited liability companies (LLC), and corporations.
If your software development firm is sued, you can avoid personally being liable by forming a business entity, such as an LLC or business corporation.
You can create an LLC independently and only pay the state filing fees or hire an LLC Service provider. Additional fees may apply.
Step 3: Register For Taxes.
In order to start a business, you must register with multiple federal and state tax authorities. To register for taxes, you must have an EIN.
Small Business Taxes
There are many options available for taxation, depending on what business structure you choose. An example of this is an LLC that could be taxed as an S Corp.
Below are a few guides to help small business owners learn more about taxes:
- LLC Taxes
- Sole Proprietorship vs. LLC
- LLC vs. Corporation
- S Corp vs. LLC
- How to Start an S Corp
Step 4: Open A Business Bank Account & Credit Cards.
It is crucial to protect your personal assets by opening dedicated credit and bank accounts for business purposes.
Mixing personal and business accounts places your home, car, and other assets at risk. This is known in business law as piercing your corporate veil.
Furthermore, learning how to build credit for your business can help you get credit cards. You can finance your business with other funding in your company’s name (instead of your own), higher interest rates, better credit lines, and many more.
Service Contracts
A junk removal company should require that clients sign a service agreement before starting any job. This agreement should clearly define client expectations, minimize legal disputes, and include payment terms and service expectations.
Certificate Of Occupancy (CO)
Junk removal businesses often have an office where clerical functions are performed. Often, Businesses that work from a physical location need a Certificate of Occupancy (CO). A CO verifies that all building codes and zoning laws are met.
If you want to lease a site:
- It is usually the landlord’s responsibility to obtain a CO.
- Before leasing, confirm with your landlord that you have or can obtain a valid CO.
- A new CO is required for major renovations. A valid CO must be issued first before lease payments begin, as stated in your lease agreement.
If you want to buy or remodel a place:
- You will need to get a valid CO issued by a local authority.
- For junk removal businesses, it is essential to check all relevant building codes and regulations for the area where they are located.
Certificate Of Occupancy (CO)
It is essential to record all expenses and income sources to understand your business’ financial performance. Your annual tax filings will be much easier if you keep accurate and detailed records.
Step 6: Obtain Necessary Permits And Licenses.
Failure to obtain necessary permits and licenses can lead to heavy penalties or even the termination of your business.
State And Local Business License Requirements
A license or permit from a state may be required to operate a junk hauling business. Find out more about licensing requirements in your area by visiting SBA’s reference on state licenses and permits.
Get information about local permits and licenses:
- You can check with the county, city, or town clerk’s office.
- You can get assistance from the local associations listed in the US Small Business Associations directory of Local Business Resources.
Step 7: Get Business Insurance.
Insurance is essential for your business to operate legally and safely. Your company’s financial security is protected in the case of a covered event.
Many insurance policies can be used to protect different types of businesses and various risks. General Liability Insurance can help you determine the risks your business faces. This coverage is what small businesses most commonly need. It’s an excellent place for you to start.
Another crucial insurance policy that businesses require is Workers’ Compensation Insurance. In most states, workers’ compensation insurance is required.
Step 8: Define Your Brand.
Your brand is your company’s identity. Your business image also depends on how the public perceives it. A strong brand can help you distinguish yourself from other companies.
How To Promote & Market A Junk Removal Business
Your customers need to be able to trust you and your name. Quality branding is key to marketing junk removal businesses.
Bright colors and funny names are an excellent choice for direct advertising campaigns. Local customers can also benefit from a solid online presence.
Step 9: Create Your Junk Removal Business Website.
Once you have defined your brand and designed your logo, you will need to make a website for your business.
Some people may be afraid of creating a website, even though it is an important step. Although this was a reasonable concern back in 2015, it has become much less common in recent years.
These are the main reasons to build your website now:
- Websites are a must for all legitimate businesses. It doesn’t matter what industry you’re in or what your business is when you launch online.
- Facebook pages, LinkedIn business profiles, and social media accounts are not meant to replace your business website.
- Websites can be created in minutes via website builder tools like the GoDaddy Website Builder.
STEP 10: Set Up Your Business Phone System.
Having your own company phone line helps keep your personal and business lives separate.
Aside from helping you automate your business, it also gives it credibility, and it makes finding and contacting potential customers easier.
Entrepreneurs can choose from a variety of services to set up their business phone system.
Starting A Junk Removal Business: Is This Business Right For You?
Starting a junk removal business can be successful if you are a problem solver, people person, and someone who enjoys working with their hands. While managing many people and resources is challenging, it’s possible to keep the business on track by following a tight schedule.
A Junk removal business works by appointment. This means that owners may be able to take days off. While not essential, night and weekend appointments are highly sought after and can often be profitable.
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