With the rise of consumerism, another thing that has grown is the amount of possessions people go through every year. People are always in need of hauling away their hoarded items. While this is a problem on its own, it highlights the need for a reputable rubbish removal company.
And when unwanted belongings can’t be disposed of normally, junk removal companies come into play.
A junk hauling business performs many duties, such as garage cleanouts, clearing out an attic full of trash, hauling away broken furniture debris from a major construction site, and a lot more.
If you are wondering – is the junk removal business profitable, don’t worry. As it is a growing and competitive industry, getting into this field can be a profitable venture.
So, if you are determined to start, we will help you with everything required to answer the question of how to start a junk removal business.
In this blog, we’ve included all of the information you’ll need to start your new business successfully.
How to Start a Junk Removal Business? In 9 Easy Steps
Although it can be a labor-intensive job, starting a properly planned junk hauling business can become highly profitable. So, to help you get started and understand how to start a junk removal business, we have collected all the necessary steps below.
Here’s how to establish a rubbish removal service in 9 easy steps!
1. Create a Business Plan
Starting a junk removal company requires a few steps. First, your business must identify its target audience. The kind of services you can provide in your community will depend on this.
Start by understanding your competitors’ pricing, business costs, and customer needs. This can help you identify the important factors, such as pricing, that will lead to a successful business. In-depth market research can also help you make more informed pricing and service offering decisions.
A business plan should include a company overview, a vision and mission statement, a name and logo, business opportunities, a target market, financial targets, and a pricing model.
While making a business plan, finalizing a memorable name and logo can also help customers easily recognize and remember your business.
You can decide whether to provide your services to the target market, including residential, commercial, or both services. Commercial services typically involve large-scale tasks, while residential services involve large amounts of junk removal.
In your business plan, you will also need to establish a pricing model to cover costs, provide a fair price, and attract customers. To this end, you can compare your competitors’ pricing and ensure it is simple and clear for customers to understand.
2. Register Your Business
First things first: you may need to register your business name and obtain municipal zoning approval. The most prevalent business forms are corporations, partnerships, LLCs, and sole proprietorships.
In the event of a lawsuit, you will not be held personally liable if you decide to incorporate your company as an LLC or corporation. These will also help junk removal business owners with the financing and taxation processes.
In the U.S., the Small Business Administration (SBA) lists federal and state permit and license requirements for junk removal and other small businesses.
You can also seek legal advice to obtain critical permissions and business licenses required for legal setup and operation. If you want to set up your business appropriately, you should consider hiring legal assistance.
3. Obtain Business Licences and Permits for Junk Removal
Obtaining the necessary licenses and permissions is necessary for operating your business legally. These will help you maintain the guidelines set in place for businesses to operate lawfully and provide safe services to their clients.
These licenses and permits will also depend on the type of services you provide and the area where you are located.
To further lessen the possibility of legal issues, your business should have clients sign a service agreement that outlines payment terms, service level expectations, and intellectual property ownership. These agreements are helpful in junk hauling businesses as they involve many variables, and any changes to the job description later can harm your business image or revenue.
Your company may be forced to close, or you may face severe fines if you do not possess the required licenses and permits. Getting the right licenses and permits will also build trust with your clients and maintain good relations with them.
4. Use the Professional Invoicing Tool
While operating a successful junk removal business, using the right invoicing software will allow you to worry less about your finances so that you can focus on your job.
Recording expenses and income is crucial for analyzing your company’s financial success, but doing so manually may be time-consuming. Using an intuitive invoicing tool, such as Moon Invoice, will save you time and effort. It also provides a customizable junk removal invoice template and useful insights into your earnings and expenses, allowing you to stay organized and in control of your finances.
By creating professional-looking invoices and automatically monitoring them, you simplify the process for you and your clients. Maintaining thorough and precise documentation also facilitates annual tax filing.
A proper invoicing and accounting system will also help you manage the job database, client list, services provided, and much more for your commercial junk removal business. You can manage these data on a single dashboard, making your overall bookkeeping a lot easier.
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5. Open a Bank Account and Get Funding
Opening a bank account is necessary to manage your company’s finances. You’ll be able to closely monitor your income and expenses and effortlessly manage your financial flow.
This is even more crucial because you will need the financial information to file your taxes with the government.
Before you finalize on a bank to set up your account, make sure to understand all the services they provide and if they align with your business’s needs. After this, have all your documents ready and get your business bank account.
Your business also needs a lot of money to function successfully. While you can dip into your savings, you will need more. You can look into getting finance for your company from other sources, such as bootstrapping, government grants, small business loans, private investors, etc. This will provide the groundwork for your monetary prosperity.
6. Price Your Junk Removal Services
While finalizing the prices of your junk removal services, you must consider sustainability and profits.
Analyze how much you spend on client services to get started. Then, you can mark up your profits accordingly. To determine whether your pricing are appropriate for your customers, you may also test them.
Make sure you charge enough to cover expenses if you want your firm to stay successful. It is imperative that you provide equitable pricing for your clientele. You can evaluate the prices of all the other competitors in your area.
Create a simple pricing structure for your clients so they can easily choose from the list of services you offer and keep hiring you.
7. Buy Junk Removal Equipment
While the junk removal business is labor-intensive, you will also need some equipment for the job. Apart from workers, equipment will be your other expense.
This equipment list includes:
- A van or pickup truck to transport goods
- Uniforms for staff members
- All relevant tools to pick up objects and clean debris, like moving blankets, shovels, rakes, screwdrivers,
- saws, large boxes, bolt cutters, hand trucks, and sledgehammers
- Up-to-date safety equipment, such as protective goggles, gloves, and a PPE (personal protective equipment) suit
8. Get Junk Removal Business Insurance
Mishaps can happen to any business, and when you frequently deal with hazardous items in new locations, the risk is exponential.
So, to protect your workers and your junk removal business, you need to get insured properly. Insurance for junk removal jobs will protect them from loss and liability in case any damage occurs to your client’s property or your workers’ health.
9. Start Marketing Your Junk Removal Services
To make profits in this business, you need to reach the right audience. By building a polished brand image and promoting it to that market, you can grow your company.
Since it is a competitive market, you will need to come up with ideas to stand out from the crowd and make your business look reliable and professional.
You can also use digital modes of promotion, such as building a website to list your services and using social media. On these pages, you can share client testimonials, services, prices, and more to attract customers.
In the initial phase, you can also try paid advertisements to launch your business on a larger scale.
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How Much Does it Cost to Start a Junk Removal Business?
If you are wondering how to start a junk removal business, you will need to determine how much money you need. On the lower end, you can start your junk hauling business by investing around $62, and it can reach around $63,201.
Your potential start-up costs will include:
- Equipment (a cheap truck + trailer): $5000
- Basic tools: $500
- Monthly insurance: $450 – $1000
- Monthly gas fees: $600 – $1000
- Initial advertising costs: $500 – $1000
- Landfill fees: ≈ $40 per ton (Note – Every state/landfill charges different rates)
Starting a trash disposal business is expected to cost, on average, between $90k and $150k.
Is Junk Removal Business Profitable?
Yes, a junk hauling business can be highly profitable if you take the right steps.
In this industry, the gross profit margin is around 32.74%. By making a business plan and taking the right steps, you can make your junk cleaning business profitable. With an initial investment and skilled labor, this business requires very little interference and makes considerable profits over time.
Final Words
Got everything on how to start a junk removal business?
The junk removal business is one of the emerging sectors with the potential to be highly profitable. As a recession-free and non-seasonal business, it can be profitable year-round.
If you have the right equipment and have done your research, you can start your business quickly. In this blog, we’ve covered all the essential groundwork to get you started.
Along with these tips and tricks, managing your junk removal business’ accounting becomes easy with tools like Moon Invoice.
So why wait? Get started providing top-notch services now.
FAQs
Jayanti Katariya is the founder & CEO of Moon Invoice, with over a decade of experience in developing SaaS products and the fintech industry. He holds a degree in engineering. Since 2011, Jayanti's expertise has helped thousands of businesses, from small startups to large enterprises, streamline invoicing, estimation, and accounting operations. His vision is to deliver top-tier financial solutions globally, ensuring efficient financial management for all business owners.
