How to Make Money with a Junk Removal Business
- August 14, 2018
- By: Vonigo
In the past two decades, the junk removal industry has grown exponentially. From small owner/operator companies to global franchises, the industry has seen a lot of growth. Here’s how to make money with a junk removal business.
Establish Your Unique Junk Removal Business’ Identity
Whether you aspire to be a local provider or a nationwide franchise, you are going to have to compete for market share. The best way to do that is to be unique and memorable.
Your junk removal business should have a recognizable name. One that customers will remember and learn to trust. The business of junk removal is no laughing matter, but that doesn’t mean you can’t have a little fun. Choose a name and identity that will stand out.
For example, JiffyJunk prides themselves on being fast, but truly differentiates themselves by offering a “White Glove Treatment.” When they clear junk from a space, they leave it broom clean. It’s a tiny detail that helps them get talked about.
To Go Big, Think Big
If you have your sights set on growing your junk removal business to multiple trucks and locations, choose your name and identity wisely.
Often a local junk removal business will name themselves with a local phone number. While this can make it easy for locals to contact you, it’s a branding problem once you decide to scale bigger than your local area code. If your ambition is to outgrow your town or state, choose a brand that can remain relevant as you expand.
Rubbish Works started in Washington and since changed owners and moved to Colorado. They continue to sell licenses to owners in other states as well, using a brand name that can work nationwide.
Picture a bulletin board full of pinned business cards. Or, imagine a number of junk removal business trucks at a stoplight. What makes yours unique? What will be your differentiator? Is it your colors? Is it a clever name? Maybe it’s a service promise or a memorable catchphrase? Drawing inspiration from Apple Computers in the 80’s: Think different.
More specifically, focus your signage and marketing materials on how people can contact you. Your phone number and website should be easy to see. If possible, they should be easy to remember. When customers have junk to get rid of, they should be able to recall your name and contact info.
Grunts Move Junk is a junk removal company based on the goal of creating jobs for former Armed Forces vets. Their brand stands out and is highly memorable. Their simple GruntsMoveJunk.com domain name and easy-to-remember phone number (1-844-GRUNTS-HELP) help to set them apart and increase bookings.
Know Your Costs
This is Economics 101, so we are stating the obvious a bit here. Still, with junk removal, there are a number of variables to consider to make sure you understand your costs. Starting with the basics, figure out the travel time to and from the pickup location and then eventual disposal site.
Some of the materials you collect can be recycled for free, but others will require a fee at a landfill or incinerator. Not only do you have to consider the hard costs of labor and operating your equipment, but you also have to know what it will cost to dispose of your payload.
Don’t forget about all of the other costs your business will have to bear. Marketing, insurance, office space if necessary, business operations software and office personnel, utilities, and more. Remember, profit is revenue minus expenses, so price your jobs accordingly.
Make it Easy for Customers
A junk removal business makes one key promise to its customers. That it’s easier to have them deal with the disposal of items than to do it themselves. Make this a key part of your messaging and service.
The quicker and easier it is for customers to get a price quote, book your service, and to have you haul the junk away, the more likely they will be satisfied and book with you again. Better yet, they may even refer their friends.
Junk4Good uses a very simple cost estimate tool to start a booking. The customer can use the slider to get an estimated cost of removing their junk based on the size of the pile.
Reduce Your Expenses Wherever Possible
In a similar vein to knowing your costs, look for ways that you can increase efficiency. Book your jobs based on geography, in an effort to reduce travel time. Send the right size of crew to a job to ensure that it’s done as swiftly as possible (relative to the labor costs).
Find ways to reduce the amount of time between a customer’s first contact with you, and when you’ve completed the job. Even the time it takes to close the business on the phone is overhead for you, so if you can sell quicker, find a way.
When You Can, Profit Twice
One person’s junk is another’s treasure. Some of the items you collect might have value in another market. When possible, take advantage of that value.
You can approach this one of several ways:
- Have your team identify items that have resale value, and post them for sale for a profit. Look at Craigslist, Facebook Marketplace, eBay and even antique dealers as potential outlets for your found treasures.
- When a team member identifies a valuable item, they should be rewarded for their find. It will help to motivate them to find the “good stuff” in any given haul. Before long, your team will all be expert pickers, with keen eyes for quality and resale potential.
- You can arrange to split the profits of the resale of items with your team or let them keep the item as a reward. Even if you don’t make a buck on the resale of an item, if your team member does, it can be good for employee satisfaction and retention. Everybody wins.
Focus on Repeat Business
The most profitable customers are the ones you only have to acquire once, and they keep coming back. For example, it’s harder to sell to myriad homeowners than it is to align with a cleaning, property management, or demolitions company to keep a steady flow of business.
When you do land a residential customer, ask them if they want you back, and if need be offer them an incentive to book you again. Or, when you’re visiting a site, take some time to ask the neighbors if they need anything hauled away.
“Door hangers” are handy as printed pieces to achieve this. Removed an unsightly pile of rubbish from a customers lawn? Hang a door hanger on the neighbors’ door to let them know who is responsible for the cleanup. Between that and your brightly colored trucks with easily retained contact info, you’ll be swimming in referrals before long.
Manage Your Growth
Thinking about a second truck or expanding to a second location? Think about the economics of the move. Is your business already able to absorb the cost of the investment? If not, what will it take to expand into the new overhead and become profitable again?
The same is true of hiring new team members. Some jobs might require short-term contractors or part-time laborers that are called in as needed. At some point, it becomes more cost-effective to hire full-timers.
Each time you take a look at a new expense or expansion tactic, think about how it affects your profitability.
Establish Systems That Work
As you start to establish and improve your process, document it. Every time you find a better way of doing things, make it the new policy.
Everything from the way you calculate price quotes, to the script template you use during sales calls, to the way you invoice and follow-up with a customer should have a documented system in place. Consistency is key: for customer satisfaction, team member satisfaction, and for efficiency and profitability.
When you’ve documented your processes in detail and established a system that works, you can teach them to others. And that means that if you choose to, you can franchise.
The cornerstone of a successful franchise is the operations manual; “how we do it.” When you have a detailed operations manual, you can open up new locations by selling franchise areas to investor owners, rather than expanding your own fleet to cover them. It’s a way to expand without having to bear all of the cost yourself.
With franchising, you can maintain some of the work as you choose. For example, some junk removal franchises choose to have centralized booking and scheduling. The can reduce the costs for local owners, which can be a major selling point for them. It leaves them to focus on local marketing and the actual profitable work of visiting the sites and hauling the junk.
Centralized booking with franchises can reduce your costs across your entire junk removal business, and also help to maintain a consistent customer experience.
Use Online Booking and Scheduling
Want to make booking easy for customers and your team, and keep costs low? Use an online booking form. Some customers these days prefer the convenience of online booking.
With online booking, a customer can seek a price quote as well as book and schedule their job all on their own. For many, it’s a convenience that they insist upon; the vendor with the easiest booking process and transparent pricing will get the booking. It also means that your office team saves loads of time. No lengthy sales calls, no calls to confirm pick up times, and no unnecessary paperwork.
Rubbish Works’ online booking tool has helped them grow their franchise into several states. 40% of their jobs are self-booked by the customer online, saving them and their licensees loads of time and cost in administration.
Try Online Booking and Junk Removal Business Software for Yourself
Want to learn more about how junk removal business software can help to grow your business and make it more profitable? Book a free, private demo of Vonigo.
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