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How to Start a Junk Removal Business That’s Profitable From Day One

March 21, 2023 12 min. read
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Junk removal can be a profitable business to start and run, especially if you like setting your own hours and being your own boss. It’s also easy to get started—as long as you know what you’re doing.

Find out how to start a junk removal business and run it safely, profitably, and confidently, right from the get-go.

1. Write a junk removal business plan

Start your junk removal company on the right foot with a detailed business plan describing how you plan to operate. This is also essential for securing a business loan or other funding.

Your junk removal business plan should include:

  • Cover page and table of contents to help the reader move through the document
  • Executive summary with a quick summary of your junk removal company planning, including how much funding you need and your competitive advantage
  • Business overview introducing your junk removal business and explaining what services you’ll provide, why, and for which customers
  • Services list showing which junk removal services you’ll provide to customers
  • Pricing strategy with prices for your junk removal services
  • Market research showing who your target market is and how much local junk removal businesses charge for services
  • Competitive analysis that reviews competing junk removal businesses in your neighborhood and explains how your business will stand out
  • Marketing plan explaining how you plan to advertise to your ideal customers, including tactics and marketing budget
  • Employee planning showing when and if you plan to hire employees, as well as their roles and responsibilities
  • Financial plans, including startup costs, operating costs, expected revenue, and your small business budget

You can also consider whether you’d like to open a junk removal franchise (like Junk King or College HUNKS Hauling Junk), or if you’d rather start your own business from the ground up.

Buying into a franchise usually has a five-figure cost up front. However, as a franchisee, you get a recognized brand and access to the company’s systems, processes, training, and support so you can win clients and earn revenue faster.

Pro Tip: Some junk removal pros offer pest removal services, too. Pests go hand in hand with piles of junk, and you’re already at the customer’s home anyway—why not make your visit even more profitable?

2. Create a junk removal brand

A recognizable, memorable service business brand helps you stand out from your competitors and build a reputation for your business. That brand starts with your business name and logo.

First, pick a junk removal business name that attracts customers and makes a strong statement about your business. Make sure it’s not already in use in your service area, too.

READ MORE: How to name a business and protect your brand

Then design a logo for your junk removal service. You can hire a designer to help, or you can make one yourself using an online logo builder like Looka. It could look something like this:

junk removal logo application

3. Register your business

You’ll likely need to register your business name with the government to ensure you’re running the business legally. Registration requirements can vary depending on where you live and what the regulations are in your city, state, and country.

Learn about business registration requirements in your area by googling “AREA + business registration,” and check with the registration division of your local government.

Business name registration

You can register your junk hauling business at your local registry office. Here’s what the process looks like in a few different countries:

Choose a business structure

As part of the registration process, you’ll need to decide on a type of business structure (also known as a business entity). The structure you choose affects how much your business pays in annual income tax.

Your business entity options generally include:

  • Working alone as a sole proprietor (U.S., CA) or sole trader (UK, AU). Entrepreneurs who strike out on their own often choose sole proprietorship.
  • Partnering with another person to share the responsibilities of running the business. This is called a partnership (U.S., CA, UK), or a joint venture or co-operative (AU).
  • Incorporating as a limited liability company or LLC (U.S.), corporation (CA), limited company or limited partnership (UK), or company (AU) to reduce risk and protect your personal assets in case of any legal trouble.

READ MORE: Why and when should I incorporate my business?

Register for taxes

Have a partner or plan to hire employees one day? You’ll need an employer identification number (EIN) from the Internal Revenue Service so you can accurately file taxes in the U.S.

If you live in a different country, this number is also called a business number (CA), company registration number (U.K.), or Australian business number (AU).

4. Get your junk removal business license and permits

You’ll probably need a business license to legally operate a junk removal business in your area, or a license for transporting large loads. Licensing and permitting requirements vary depending on where you live.

You may even need a state permit, license, or certification for certain types of waste removal, especially if you want to dispose of chemicals, biohazards, and similar dangerous substances.

Check with your local Chamber of Commerce or the Small Business Administration (SBA) to see which licenses or permits you need—and what you’re allowed to dispose of.

Pro Tip: Figure out a responsible junk disposal plan ahead of time, like heading to the dump or recycling depot, or selling unwanted items and scrap metal. Check to make sure your disposal site accepts the types of waste you’re collecting.

5. Open a bank account and get funding

Before you accept your first junk removal job, open a small business bank account with low fees and interest rates. A separate account helps keep your finances organized, which is important at tax time.

You’ll need a business loan to get started if you don’t already have money set aside for startup costs. Look into funding sources like:

READ MORE: 6 steps to take before you apply for a small business loan

You may also want to hire a bookkeeper or accountant to track business income and expenses, handle bills and payroll, create and send invoices, and maintain your business’s finances.

6. Price your junk removal services

It’s great to get paid for junk removal, but to be profitable, make sure your prices cover labor, materials, and overhead. You can do that by creating a pricing strategy for your waste removal business:

  1. Decide whether you’ll charge customers by time, weight, or truck volume based on cubic yard. You can always set prices for all three methods and choose the best one for each individual job. Whichever method you choose, it should include the factors below.
  2. Research what competitors are charging. Don’t copy their prices outright, but use them as a benchmark to see what customers expect to spend on junk removal services.
  3. Calculate your monthly overhead by adding together expenses like rent, insurance, payroll, and utilities. Then break that down into hourly overhead by dividing it by the number of billable hours you work in a month. Apply this rate for every hour of labor.
  4. Factor in materials, travel time for waste disposal, taxes, and at least a 15% net profit margin. Use our free profit margin calculator to double-check your pricing and make sure every job is profitable.

Once you’ve settled on your service pricing, you can apply it when you’re pricing a junk removal job and creating your junk removal estimate.

How much do junk removal companies make?

Your junk removal business income could be $156,000 (USD) per year, assuming you charge $600 per truckload and transport five truckloads per week.

Is a junk removal business profitable?

It definitely can be. You can make $23,400 in annual net profit if you charge $600 per truckload and have five weekly truckloads, with a 17.65% markup and 15% profit margin.

In rough costs, that breaks down to:

  • Labor: $360
  • Materials: $50
  • Overhead: $100
  • Profit: $90

While income is the total amount of money your business brings in before deductions, profit is the amount your business gets to keep after deductions. That’s money you can reinvest in the business to help it grow.

The amount of profit your junk removal company makes will vary, depending on your profit margin. Start with 15% profit on every job and gradually increase the percentage as you get more experience.

It’s easier to stay profitable when you bid junk removal jobs correctly and don’t discount your services. You can also boost profits by keeping overhead costs low and sales high.

FREE TOOL: Get paid faster with our free junk removal invoice generator

What is a junk removal owner salary?

The average junk removal employee in the United States earns $31,458 a year. As the business owner, you could make much more, especially if your salary is a percentage of gross income.

7. Buy junk removal equipment

You’ll likely spend $900–2,550+ (USD) on equipment when you’re starting a junk removal business. Spread out these business expenses over time by only buying equipment when you need it, or buying used items instead of new.

Many of the items you need are available at your local hardware store. You can also talk to local contracting and janitorial suppliers to see if they offer better prices, payment plans, or product bundles.

8. Get junk removal business insurance

Junk removal comes with many hazards, from damaging a customer’s home to throwing out your back. Business insurance protects yourself, your employees, your company, and your customers in case of an incident.

At the very least, your small business insurance policy should include:

  • General liability insurance for property damage and personal harm
  • Commercial property insurance for damage to your office and equipment in it
  • Business income insurance to keep you up and running after an incident or disaster
  • Commercial auto insurance for your company vehicle
  • Workers’ compensation insurance in case an employee is injured on the job

You may also want extra junk removal insurance coverage for different situations, like professional liability, employment practices liability, cyber liability, and crime insurance.

Prices for junk removal business insurance can vary depending on where you are and what services you offer. Expect to pay more each month if you’re handling hazardous waste.

9. Start marketing your junk removal services

Your junk removal business is ready to roll—it’s time to land your first customer. Use this junk removal marketing ideas to attract potential customers and start winning work:

  • Create a website where a potential customer can learn about your junk removal business, see before-and-after photos of finished jobs, and book a consultation online.
  • Print business cards with your junk removal business name, logo, and contact information, then pass them out to people in the community.
  • List your company on Google Business, Bing Places, Yelp for Business, Angi, Thumbtack, and other online directories and lead generation sites where potential customers are searching for junk removal companies.
  • Network with other home service contractors in your area—you may be able to send work to each other. You can also reach new customers by joining your local business association and sponsoring community events.
  • Word of mouth is one of the most effective ways to market your junk removal company. After your first few jobs, start a customer referral program and ask for customer reviews of your business.
  • Vehicle decals are easy to apply, make your truck and trailer look more professional, and act as a large mobile billboard for your junk removal services as you drive around town. Think about upgrading to a custom wrap if and when you have room in the budget.
  • Social media is a popular place for home service businesses to find new customers. Set up a Facebook business page, Twitter profile, or Instagram account to reach potential junk removal customers on the platforms where they spend time.
  • Send direct mail—like postcards, flyers, and door hangers—to homes in the areas where you want to work. Consider focusing on older communities where owners have been living in the same home for a long time. Just make sure you aren’t breaking any local rules around flyers and soliciting.
  • Advertise online using digital marketing platforms like Google search, Local Services Ads, or Facebook ads. You can choose the audiences you advertise to and when, which makes your budget go further.

10. Grow your junk removal business

Junk removal is a big job that requires lots of heavy lifting—and you’ll want a team to help you handle the workload.

Plan to hire employees who can do heavy labor with a good attitude. You can train them on the job to work safely and help you get the job done faster.

You can also hire an office manager or virtual assistant to help with scheduling work, managing your marketing, and handling the admin side of the business.

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