How to Start a Junk Removal Business

Junk removal is hard work, often hot, filthy and physically challenging. But the good news is, you can get started with little more than a pickup truck. And the demand for junk removal services is growing. People are downsizing and decluttering. Businesses are taking similar trends, upgrading to more efficient equipment and often downsizing to small spaces with lower rents. The general public and businesses have an ongoing need for these important services. Here’s a guide on how to start a junk removal business.

The Junk Removal Industry

There are many reasons why a person or business may need a junk removal business:

1. Decluttering: Both residential and commercial properties accumulate unwanted items over time.
2. Moving: When people or businesses relocate, they often require services to remove unwanted items.
3. Renovations: Construction waste from home or business renovations needs to be properly disposed of.
4. Health and Safety: Accumulated junk can become a fire hazard or breeding ground for pests.
5. Convenience: Many people don’t have the time, vehicle, or ability to take large items to a dump.
6. Legal Requirements: Some jurisdictions have specific disposal requirements for certain types of waste.

Remember that junk removal can range from removing one item, such as a nonworking refrigerator, to disposing items from a household full of junk.

What is a Junk Removal Business?

A junk removal business may specialize in one type of service or diversify to offer several different services.

Here’s a snapshot of the types of junk removal businesses:

1. Residential Junk Removal: Includes services like furniture removal, electronic waste disposal, and yard waste removal.
2. Commercial Junk Removal: Covers office cleanouts, construction debris removal, and electronic waste disposal.
3. Specialized Services: Some companies specialize in particular types of waste like hazardous materials, medical waste, or recyclables.

Why Junk Removal Services Are In Demand

The main reason junk removal services are in demand is because they offer convenience. For a fee, they offer clients their hard work and get rid of unwanted junk.

Junk removal services also handle waste types that the general public can’t easily get rid of, such as tires, electronics, paint cans and more.

The general public, as well as businesses, may not be up to date on regulatory laws and regulations that govern how waste is disposed of. By the same token, they may not know of the avenues for recycling waste, such as tires. Some companies shred tires and turn them into material used for playground bases and landscaping. People know the importance of recycling whenever possible and are glad to turn that job over to a junk removal company.

Junk Removal Job Variety

Within the main three types of junk removal services, there is a lot of variety:

Residential

Includes removal of household items, yard waste, and construction debris from small projects.

Commercial

Encompasses larger-scale removal such as office furniture, construction debris, and electronic waste.

Hazardous Materials

Some companies specialize in removal and disposal of hazardous materials like chemicals, paints, and medical waste.

Steps to Starting Your Own Junk Removal Business

The junk removal business is very competitive. Before you make your foray into the field, here’s a guide on how to start a business in this industry:

Market Analysis: Residential vs. Commercial Junk Removal

The strongest market can vary by location and economic climate, but typically, the commercial market can offer larger, more consistent contracts, while the residential market might be more plentiful but less predictable.

Drafting a Junk Removal Business Plan

A business plan is very important. It can be very helpful to use an existing template for a business plan to guide you through the process.

Don’t get bogged down – remember that you can change your business plan as the business evolves.

A business plan is important for two main reasons:

1. In the future, if you seek financial help to expand, lenders will want to see it.
2. It will help you brainstorm and plan the various aspects of your business, such as marketing and adapting for future growth.

Choosing a Junk Removal Business Name

You need a name for your junk removal business that is catchy and easy to remember. At the same time, you need to make sure that another business is not already either using the same name or using one that is very similar.

Before registering your business in your state, check to ensure the name is available. Also, do an internet search to see what answers you get for the name.

There are a number of junk removal franchises with established names, and you want to avoid choosing a name similar to those (they are listed below).

Securing Junk Removal Business Insurance

1. General Liability Insurance: To cover any damages or accidents.
2. Vehicle Insurance: For the company trucks, this would be commercial vehicle insurance.
3. Workers’ Compensation: In case an employee is injured on the job.
4. BOP, or Business Owner’s Policy: This umbrella coverage includes your basic liability insurance and commercial vehicle insurance.
5. Bonding: While not always required, bonding is often advised as it provides an extra layer of financial protection for you and your clients. You will be working in private properties, and sometimes (especially when dealing with bank-owned properties) bonding is necessary.

Selecting the Right Vehicles and Junk Removal Equipment

Often you’ll be getting rid of junk at a landfill. Landfills often have dirt lots, which can be muddy and rutted by traffic from larger vehicles including municipal trash trucks and tractor-trailer trash haulers.

It can be difficult to navigate those lots with a pickup truck towing a trailer, especially when you’re backing up to the disposal area. You may want to visit your local disposal sites to see how they are set up.

Although you can get your start with a pickup truck and a trailer, as you grow, you may opt for larger straight box-style trucks, which will have a higher bed and wider wheelbase. This type of vehicle may be easier to navigate at a landfill.

Permits and Licenses for Junk Removal Businesses

1. Business License: General business license to operate.
2. Waste Carrier License: Often required for transporting waste.
3. Special Permits: For handling hazardous or special waste materials.

Pricing Your Junk Removal Service

Pricing is a critical aspect of any business, and for junk removal companies, it can be particularly complex due to the varied nature of the jobs. Here are some tips on how to price various services:

Understand Your Costs

1. Labor Costs: Know the cost per hour for your employees and yourself.
2. Vehicle Expenses: Fuel, maintenance, and depreciation on your vehicles.
3. Disposal Fees: Dump fees or any other costs related to getting rid of the junk.
4. Equipment Costs: Tools, protective gear, etc.
5. Overhead: Office space, utilities, and other fixed costs.
6. Insurance and Permits: The cost of necessary insurance and permits.

Determine Pricing Model

1. Flat Rate: Charge a flat rate for specific types of items or services.
2. Hourly Rate: Charge based on the amount of time it takes to complete the job.
3. Volume-based: Charge based on the amount of space the junk takes up in your truck.
4. Weight-based: Charging is based on the total weight of the junk.
5. Project-based: Some jobs may be unique and require a custom quote.

Market Research

1. Competitor Pricing: Know what your competitors are charging and find your competitive edge.
2. Customer Willingness: Sometimes, what the market is willing to pay is more important than what you think the service is worth.

Add-Ons and Special Services

1. Hazardous Material: Handling hazardous materials generally requires special permits and thus can be priced higher.
2. Urgency: Fast-track or emergency services can be priced at a premium.
3. Recycling Fees: If you are segregating and recycling items, you might charge an additional fee.

Consider Discounts

1. Loyalty Discounts: For repeat customers.
2. Referral Discounts: For customers who refer others to your service.
3. Seasonal Promotions: For times when business is slow.

Transparency

1. Itemized Quotes: Break down the costs so customers understand what they’re paying for.
2. Contracts: For larger jobs, consider drawing up contracts to clarify the scope and cost of the work.

Where Will Your Junk Hauling Business Take the Junk?

Get to know the location of your nearest disposal sites as well as the types of things that are accepted at those sites. When choosing one disposal site over another, keep in mind its distance from junk removal jobs.

You can significantly lower your landfill costs, which are calculated by weight. Typically, you’ll be weighed as you enter the facility and again as you leave, and pay a flat rate based on tonnage.

If you’ve recycled everything you can before going to the landfill, you will keep your costs lower.

Marketing Your Junk Removal Company

So what is marketing for a junk removal company? Of course, you’ll have an online presence, which will include a website and FB page.

You can also market your business offline. Be sure to join your local Chamber of Commerce to network with other business owners there.

For example, someone who owns a construction company could be a good contact because they need to get rid of unused construction materials or items left over from remodeling projects, such as kitchen cabinets or old flooring. Someone who owns a car repair shop may have a need for monthly pickup of worn tires.

Building a Loyal Customer Base

Even for small jobs, it’s good to have a contract that describes the service that will be performed and what it will cost. As a side benefit, the customer will have a copy of the contract, which includes your contact information.

Maintain information on customers and ask for feedback. To build a loyal customer base, you can do things such as provide a discount for referrals or continued loyalty.

Environmentally-Friendly Junk Removal Practices

1. Recycling: Segregating recyclable materials, such as plastic and metals.
2. Donation: Giving usable items to charity. However, post-pandemic, it is no longer possible to donate items such as mattresses, couches or upholstered chairs because of the cloth surface. New guidelines preclude people, as well as junk haulers, from donating those items.
3. Green Disposal: Use methods that have a lesser impact on the environment. For example, latex paint cans that contain paint residue can be opened so that the water-based paint can evaporate. It takes time, but once the paint has evaporated and dried, the paint can be recycled.

Training and Safety Protocols

You may be moving large, heavy objects. Proper lifting and moving techniques are essential for preventing injuries, especially lifting injuries.

You may also be removing junk from areas involving hazardous breathing conditions, such as moldy basements or fire-damaged areas. Ensure you use the proper breathing apparatus to work in such areas.

As much as possible, keep the work area free from slip, trip and fall hazards.

Specialized Services: Estate Cleanouts, Hoarder Situations, and More

1. Estate Cleanouts: Specializing in clearing out homes after a death.
2. Hoarder Cleanouts: Requires special attention to detail and sometimes psychological understanding.
3. Foreclosed Home Cleanouts: Working with banks or real estate agencies to clean out and prepare homes for resale.

Expanding Your Services: Upselling and Diversifying

There are lots of opportunities to upsell in the junk removal industry. For example, you may remove unwanted items from a customer’s garage but notice that the items that remain in the garage still take up too much space. Can they be organized? Would shelving and storage hooks solve the problem? Customers who are too busy to remove unwanted items may jump at the chance to finish the job.

If you’re cleaning junk from a foreclosed property, offer to finish the job by doing a thorough cleaning. You can further expand your paid work opportunities by offering to keep the property looking good with grass cutting or snow removal. Often, foreclosed properties are headed for the real estate market, and offering services that improve curb appeal will often be ordered.

Junk Removal Business Startup Cost

In addition to the various licenses, permits and insurances, you’ll also need trucks, vans and trailers.

On a good note, you can get started in the junk removal business with a pickup truck – especially if you’re willing to start with small jobs. You can add a landscape trailer or an enclosed cargo trailer. A trailer with a ramp to load makes it much easier to load large, unwieldy heavy items.

Other items needed include handtrucks, cargo straps and heavy work gloves.

If you spend $15,000 on a used pickup truck and another $2,500 to $4,000 on a trailer, you can get started for less than $20,000 with a truck and a trailer. Let your profits pay for upgraded equipment. Opt for an 8-cylinder truck so that you can pull a trailer that may weigh more than 3,000 pounds easily.

Consider a Junk Removal Franchise

There are junk removal franchises available for junk removal services, which offer the advantage of a recognized brand and business model.

Several well-known franchises exist in the junk removal industry. Joining a franchise can offer the advantage of an established business model, brand recognition, and marketing support.

Here are some junk removal franchises:

1. 1-800-GOT-JUNK?: Perhaps one of the most well-known junk removal franchises, they offer a wide range of services and have extensive brand recognition.
2. Junk King: This franchise places an emphasis on green practices, aiming to recycle or donate a large percentage of the items they collect.
3. College HUNKS Hauling Junk & Moving: This franchise offers both junk removal and moving services and targets a younger demographic.
4. JDog Junk Removal & Hauling: JDog Junk Removal is unique in that it is veteran-owned and operated; this franchise aims to offer trustworthy, reliable services.
5. The Junkluggers: Junkluggers Junk Hauling Services focuses on eco-friendly junk removal, aiming to donate or recycle as much as possible.
6. LoadUp: Known for upfront pricing and online booking, this franchise is trying to make the junk removal process as straightforward as possible.
7. Two Men and a Truck: Primarily a moving service, they have also branched into junk removal.

FAQs: How to Start a Junk Removal Business

How Does High-Volume Junk Removal Differ from Smaller Jobs?

Many junk removal services get their start by handling small jobs, such as helping a homeowner discard a sectional couch or nonworking appliances. Some entrepreneurs even research how to start a handyman business or how to start a tow truck business to offer additional services.

High-volume junk removal typically involves a much greater volume of items, such as cleaning out a foreclosed home or removing equipment from a commercial business – such as a warehouse that has changed ownership.

How do I create a junk removal business plan?

Writing a business plan can seem daunting and complicated. Stick to the basics. Describe the company’s organizational structure, such as if it is a limited liability corporation, partnership or corporation. Name the principal people who are involved and their duties/roles with the company.

Include a mission statement, which will detail the reasons this type of business was started. Include plans for strategic growth and marketing.

A lender will want to see financial information about the company and the people involved in the company. And lenders also will want to see a business plan. There are numerous templates available that can help you through the process. You can also gather inspiration from learning about other businesses in this industry. For example, read our profile on Always Reliable Junk Removal.

Are there different Rules for Junk removal businesses in different states?

You wouldn’t think so, but regulations for junk removal companies can vary significantly depending on the state and even local jurisdictions within states. These regulations often cover various aspects related to waste disposal, environmental protection, and business operations. Here are some areas where you might encounter differing regulations:

Licensing

• Some states may require a specialized waste carrier license, while others may not.
• Additional local permits may be needed for certain types of waste, like hazardous materials.

Waste Disposal

• States may have specific locations where waste must be disposed of, and some may restrict out-of-state waste disposal.
• There may be additional guidelines on how certain types of waste, like electronics or hazardous materials, must be disposed of.

Recycling Requirements

• Some states have more stringent recycling requirements and may require businesses to recycle a certain percentage of the waste they collect.

Vehicle Regulations

• States may have differing vehicle requirements or regulations, from the type of trucks you can use to emission standards your vehicles must meet.

Health and Safety

• OSHA standards are federal but can be enforced differently at the state level.
• Some states may require additional health and safety training or equipment.

Zoning Laws

• Local zoning laws can affect where your business can operate. Some areas may not allow waste sorting or storage.

Bonding and Insurance

• Requirements for bonding and types of small business insurance you must carry may vary by state and local jurisdiction.

Public Contracts

• The process for bidding on public contracts may vary by state and may require additional certifications or qualifications.

Hazardous Waste

• Handling of hazardous waste often has a separate set of regulations that may vary considerably by state.

Environmental Regulations

• Some states have additional environmental regulations that a junk removal company must adhere to.

Given this complexity, it’s crucial for junk removal companies to thoroughly research and consult legal advice to understand the specific regulations that apply to them. Failure to comply with state or local laws can result in hefty fines, loss of license, or other legal troubles. Always stay updated, as regulations can change, and what was permissible one year might not be the next.

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