How to Start a Junk Removal Business
- May 31, 2019
- By: Vonigo
Junk removal is one of the easiest home services businesses you can create. And the current home organization craze, driven in part by the popularity of shows like Tidying Up with Marie Kondo and Hoarders, means that the market for junk removal companies is red hot.
Before you dive in, read this list of tips and considerations. It includes links to a number of detailed articles we’ve published for operators of junk removal companies.
Explore the Market Conditions
If you’re thinking about starting a junk removal company, it’s probably because you already have some of the pieces in place. Either you own a truck, possess a willingness to do some heavy lifting, or you’ve spotted a great market opportunity.
Before you start spending cash to get your business off the ground, consider its viability in your current market. Will you be operating in your local area? Are there other junk removal players competing for market share? Are there commercial clients you can serve, or will you go after residential customers?
Decide on the Company’s Identity
Even at this early stage, it’s not too soon to start thinking about your company’s branding. And we are not even talking about names or colors of trucks yet. At the highest level, what kind of junk removal company will you be?
Will you be delivering industrial dumpsters to job sites using a flatbed truck? Do you plan to specialize in cleaning up yards with a small pickup truck? Will you offer a “white glove service” to customers, where you sweep their home clean when you exit? Maybe you’ll offer home organizing as a service as well? Will you make certain environmental commitments around recycling and reuse of items?
Taking into consideration your available market, your existing skill set, and the equipment that you have access to, start by deciding what your unique approach will be. Once you’ve made those key decisions, you’re ready to start your business.
What’s in a Name?
Anyone with a truck and a bit of hustle can call themselves a junk removal specialist. To last over the long haul though, you have to remain top-of-mind. A good (even clever) business name can be a key factor in this. It doesn’t cost anything extra to be creative — have some fun with it.
There’s a popular trend across the industry (no doubt popularized by 1-800-GOT-JUNK?) of having your contact information in your name. As a tool for remaining top of mind, this can be quite clever. If you plan to grow, make sure your name can scale along with your business. Some examples:
Other companies opt for clever names that customers can easily recall when they need a service provider. Some examples:
When you’ve settled on a name, go to the business registry for your State or area and conduct a search to see if it’s available. Register the name and start your small business, either as a sole proprietorship (just you) or a partnership. One day you may wish to incorporate your business, but it’s not necessary at first.
Start with the Basics to Save Costs
A truck. A business license. Pricing. If you want to start generating revenue before you start generating too much in the way of costs, then buy a business license to operate in your area, and you can start right away.
The cost of business name registration and a license can vary depending on where you are, but you should be able to launch a legitimate business for just a few hundred dollars (aside from the cost of your truck, insurance, fuel, etc.).
Pricing is an important one. You want to make sure that you’re charging enough to cover your hard costs like fuel, equipment rental, and any tipping fees you may encounter at your local landfill or processing plant. The lowest possible cost is to do it all yourself, but you might want to make sure that your pricing strategy will still see you earning good margins if you add another truck and another team.
Getting Started With Sales and Marketing
In the spirit of keeping costs low to start, avoid splashing out a bunch of money on marketing. Once you’re more established and have a better idea of who you’re competing with, you can start to invest in battling it out on Google for new business, or establishing a social media presence.
For now, what you need are sales. To close sales, it helps to look legitimate. A box of 250 digitally-printed business cards will cost you 10s of dollars and give you what you need to start making sales calls. Pin your card to bulletin boards, leave them with potential leads, give small handfuls to friends who will spread the word. See a garage sale on the side of the road? Say hi, and leave a card. Garage sales mean purges of stuff, which means there could be money on the table for an opportunistic junk removal company.
Want to really look legit without spending a mint? Have your local printing company make you some large magnetic signs featuring your branding and contact info. One day you’ll have hit the big time and you can custom paint your whole fleet. For now, magnetic signs that you can move between your truck to rented trucks, trailers, or dumpsters can be very handy, and give you a professional look.
Repeat Business and Referrals
Not only in the beginning but for the entire lifecycle of your company, repeat business and referrals are a key ingredient to success. Recognize and reward repeat customers or those that send you referrals. You can do this with a gift, a reduced rate, or even just by saying thank you.
Whatever you choose, try to think of every customer as a long-term relationship and they just might become one. Repeat customers and referrals are more profitable because they don’t require costly non-billables like sales calls.
Making Long Term and Immediate Growth Plans
It’s a good idea to plot your long-term future. How big do you want to grow? What’s your exit strategy? But as much as planning for the long term is important, so too is being ready to grow in the immediate term.
For example, let’s say you land a larger job, and you think it would be more profitable to finish it quickly with help than do it all yourself. Do you know where to find short term help? Have you priced out the cost and determined the availability of any extra equipment you might need?
Having a plan in place to handle any job that comes your way can help give you the confidence to sell the job in the first place. Renting equipment and paying for day labor isn’t strictly a “fake-it-til-you-make-it” play. It can be a viable strategy to keep costs low and still keep you in the hunt for a wider range of jobs.
Building Systems for Efficiency and Growth
When you start to feel like you’re establishing some market share and business is growing, it might be time to put down roots in the form of infrastructure. One of the first jobs you might want to hire and resource for is the booking process. How will you accept bookings when the volume gets to be too much for you to handle on your own?
Call centers can be costly, but having dedicated customer service can help you win jobs. Some clients want an immediate response, and you can’t always be available. Junk removal business software tools that handle online booking, scheduling, invoicing, payments, and business metrics can help you “level up” your company’s professionalism and save you time.
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