Are you wondering how to start a junk removal business and become your own boss? Perhaps you want more freedom and control of what you do with your time. Whatever your motive, starting a junk removal service is a great opportunity. Junk removal is one of the fastest-growing segments of the waste management industry, with an estimated growth rate of 8% per year.
Owning and operating a junk-removal business lets you:
- Work and set your own hours and employees
- Make your own decisions
- Receive money directly from clients and customers rather than a paycheck
- Build strong customer relationships
- Contribute to the community
- And much more!
In this article, you’ll discover how easy it is to start a junk removal business and ten key steps to get your new business making income constantly. Let’s take a look at what it takes to launch it, how to manage it, and what financial projections to expect.
Steps Needed To Start A New Junk Removal Business
- 1. Draft Your Business Plan
- 2. Register Your New Junk Removal Business
- 3. Get Business Insurance
- 4. Secure Funding for Your New Venture
- 5. Set Up Banking & Accounting
- 6. Determine Your Services & Pricing
- 7. Invest in Essential Tools for Junk Removal
- 8. Market Your Business & Land Your First Client
- 9. Impress Clients With High-Quality Service
- 10. Scale With Junk Removal Software
1. Draft Your Business Plan
Creating your business plan is more than just ideas on a piece of paper. You must do your homework and research to develop a solid business plan properly. It also helps build sustainability and provide direction.
Conduct Market Research
To build a business plan, you must conduct market research to gauge local demand for junk removal services, identify target customers, and analyze competitors. This often includes local searches on search engines, social media, competitor websites, and online directories. You also need to choose a business model, whether that is residential, commercial, specialty, or any combination.
What to Include in Your Business Plan
Most business plans include startup costs, ongoing expenses, revenue projections, etc. Specify clear, achievable goals and milestones to measure business progress and success. Long-term goals must include short-term goals that help you reach those long-term expectations. You’ll need to know how much it costs to start a junk removal business.
- Company Information and Overview: Briefly summarize your business and funding needs.
- Your Target Market: Form a detailed list of who you plan to target in local areas.
- List of Services and Pricing: Create a detailed list of services and their associated price points.
- Your Marketing Strategies and Budget: Build a detailed list of marketing strategies and estimate the costs of each one.
- Startup and Ongoing Expenses: Create a detailed list of startup expenses including registrations, equipment, licenses, permits, promotional materials, utilities, insurance, employee wages/benefits, and service provider fees.
- Your Short-Term, Long-Term Financial Goals: Develop long-term goals for sales, profit, and projected revenue, then create short-term goals (monthly, quarterly, etc.) to help achieve them.
- Business Goals: Include detailed goals such as expanding services, increasing employees, adding more managers, and establishing training.
- Competitive Strategies: Create a detailed list of your strategies for competing in the area and the methods you’ll use.
Choose Your Business Model
You must determine your business model, which can include residential or commercial services, specialized services, or a combination.
Residential Junk Removal
Residential junk removal includes a variety of services, but they all have the same purpose—to clear out properties, from whole house cleanouts and basements to garages, backyards, and barns.
Commercial Junk Removal
Commercial junk removal includes business properties and residential ones managed by property owners, property management companies, realtors, and investors. After all, they are businesses that require your services.
Specialized Junk Removal
This model focuses on removing specialized waste that businesses cannot otherwise dispose of in a dumpster or residential trash.
2. Register Your New Junk Removal Business
Various junk removal business structures exist, including sole proprietorships, partnerships, limited liability companies (LLCs), and corporations. When you’re starting a junk removal business, it’s essential to recognize that success doesn’t come easily.
As Alex Valencia, Owner of JV Junk Removal puts it, “The biggest lesson is that nothing is easy, you get what you put out. I never knew all the hard work that goes into running a business until I had to learn for myself.”
Sole proprietors are not required to register an EIN, but partnerships, LLCs, and corporations must register. Trade name protection is optional through the USPTO to protect it nationally or the Secretary of State’s office for state protection.
Business Registration Requirements
- General Partnership (GP) requires state registration through the secretary of state to obtain a Certificate of Partnership, and all partners are responsible for all business debts and liabilities.
- Limited Partnership (LP) serves under GP partners in the same business and requires a Certificate of Limited Partnership at the state level, using the GP business name. All “limited” partners are safe from losing personal assets.
- Limited Liability Partnership (LLP) requires state registration for a Certificate of Limited Liability Partnership.
- Limited Liability Company (LLC) requires state registration for Articles of Organization, which must be filed to become an LLC officially.
Business Permits and Licenses
The business may also need state or local health and safety permits or zoning permits, which vary by location. Check with your local governmental offices, but common permits/licenses include state waste removal licenses, waste carrier permits, and waste management permits. Some states require a contractor’s license for subcontractors or employees.
3. Get Business Insurance
Obtaining insurance for your business is highly recommended to protect your assets and company from liability claims, legal disputes, property damage, human injuries, or business losses.
Unforeseen circumstances can cause major setbacks and financial losses, but insurance helps protect your business from taking significant losses. For instance, environmental insurance protects you from hazardous waste damages in an auto accident. Auto insurance protects your business from bodily and property damages. If you have umbrella insurance, it will cover additional needs beyond the two.
The most important insurance to get when starting a junk removal business includes general liability for third-party claims and legal disputes, auto insurance for property damage and personal injuries, environmental insurance for hazardous accidents, umbrella insurance to cover additional costs, and worker’s compensation (mandatory).
Finding the Best Insurance Policies for Your Business
Every insurance provider offers coverage levels with different types of protection. One policy may cover up to $1,000,000 in liability while another is $2,000,000. The best insurance search method involves third-party insurance matching websites or providers. You select the coverage you desire, and the system presents various agents/companies offering policies you can choose from.
Several insurance plans also exclude certain risks, such as theft claims. Review the limits and check for exclusions.
4. Secure Funding for Your New Venture
Your junk removal business venture requires funding to run properly and successfully. Typical funding requirements include equipment, marketing, insurance, registrations, and hiring, but can also include more.
Business Financing Fund Options
Financing options generally include personal loans or small business loans. These financing/funding methods are the fastest way to grow your business. Housecall Pro with Stripe Capital provides the funding you need tomorrow to get your junk removal business off the ground.
Pros:
- Fast Financing: Depending on the source, you can get same-day or next-day loans.
- Flexible Payments & Spending: You can get a credit limit and use funds as needed.
- Investments Power: Investors or stockholders can provide the money you need for a share of the profits, and you don’t have to pay it back.
Cons:
- Legal Obligations: Loans require contracts that you must pay or risk asset seizures.
- Investor Control: In partnership structures, investors may have some control over business operations and functions.
- Profit Reductions: Loans reduce profit levels as an expense due to interest and balance owed.
Bootstrapping Fund Options
Bootstrapping is funding your business independently by utilizing personal funds, investments, initial profits, and continued organizational growth. It excludes loans and financing, and it is a safer route with less liability, but it moves your business forward gradually.
Pros:
- Direct Fund Access: Funds are accessible as you need them. Depending on the source, you may have slight delays, such as withdrawals from your investment account.
- No Contracts: Bootstrapped funds are direct funding with no repayment obligations or contracts.
Cons:
- Gradual Funds Availability: If you use existing profits from your junk removal business or investment funds, you must wait for them as they become available gradually.
- Fund Limitations: You can only use what you have available at a given time.
5. Set Up Banking & Accounting
If you’re a sole proprietor or create a general partnership, you pay taxes on a personal level using your SSN. It is vital to separate business from personal activities and expenses. You’ll need one or more business accounts and separate accounting for both. It also helps with filing come tax time.
Using Professional Accountants
Hiring an accountant to handle business transactions is a safer way to avoid trouble. It prevents reporting mistakes, incorrect entries, misappropriated transactions, tax audits, etc. Ensuring compliance with tax regulations is vital as your business grows and accounting becomes more complex and detailed.
Using Accounting Software
In addition to a professional accountant, you can use accounting software to manage your business. Accountants easily integrate financial data into your business accounting software, such as Quickbooks or Intuit.
Quickbooks is popular among small and large business entities because of its streamlined, organized financial management capabilities. It helps track expenses on the fly, manage customer invoices, and generate financial reports with custom options. Quickbooks integration is a key feature that allows your customer data to integrate with specific business software applications, such as HouseCall Pro’s customer management software.
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6. Determine Your Services & Pricing
Researching the competition and economy within the area is essential to developing your services and pricing for those services. You want to remain profitable yet competitive.
Pricing Your Junk Removal Services
To determine your prices for each service properly, you need to factor in labor, materials, overhead, and your desired profit margins. Choose pricing strategies based on flat rates, hourly rates (as mentioned above), or coverage area rates.
- Determine the hourly rate and the predicted hourly duration for the task, then multiply the two to get the total cost for labor.
- Add material costs, expenses, and projected profit to get a total, then add that to the total labor cost.
- Determine the value given to the customer to establish a price for the service.
- Tweak the price to be competitive.
Typical Junk Removal Services to Consider
During your research, you’ll discover specific services commonly used by competitors.
Typical services include, but are not limited to:
- Whole-house junk removal
- Garage or basement junk removal
- Warehouse junk removal
- Office cleanouts
- Furniture or appliance removal
- Yard cleanup and removal
- Construction debris removal
- Electronics recycling
- Rental cleanouts
- Hazardous waste disposal
Unique Junk Removal Services
You have to be creative to set yourself apart from the competition in the area. While some cleanup service companies handle basic household or commercial junk, fewer handle hazardous materials. This service could be an angle to consider. Get the appropriate licenses and permits, and use that as your angle.
Another unique service could be electronics disposal services, where electronic junk is recycled appropriately and lawfully. This specialty is an excellent angle for commercial audiences but could also work for residential customers.
Close More Sales With Visual Pricing Tools
Pricing your junk removal services is no small ask. Knowing which pricing strategies to go after can make or break new businesses. This is why Housecall Pro’s estimating and sales proposal software takes the guesswork out of pricing and ensures every junk removal job is profitable with a customizable price book that syncs seamlessly with QuickBooks.
- Boost your revenue by using flat rate pricing and visual tools that make upselling easier and more effective.
- Never come up short on a job again by including all labor and material costs directly in your service prices.
- Help customers understand exactly what they’re getting with clear images and descriptions, making it easier to close deals and build trust.
Streamline Pricing & Increase Your Average Ticket: Sales Proposal Tool from Housecall Pro
7. Invest in Essential Tools for Junk Removal
When preparing your tool inventory, you want reliable and durable products. Stick with high-quality equipment that reduces the need for repairs, replacements, and extra work. Cheaper equipment may require more effort and consume more time.
Top Junk Removal Tools You Should Have
- Box Trucks: These vehicles are essential for loading and transporting bulk junk.
- Dump Trucks: These vehicles are necessary for big jobs requiring repetitive refilling and disposal to save time.
- Recycle Bins: You want to contribute to the environment while abiding by federal, state, and local recycling laws and initiatives. Recycling also provides a good business image.
- Dumpsters: This option can be on-site or off-site, but having them on-site offers faster service and efficiency, cutting labor costs and customer charges.
- Hauling Trailers: Large junk that won’t fit in bins and is not dumpable out of a truck requires trailers to haul it away.
- Personal Protective Equipment (PPE): PPE is vital to any junk removal job you perform and includes gloves, masks, knee pads, elbow protection, wrist support, hard hats, and protective eyewear.
- Saws: There is almost always something that requires cutting to reduce the size or dismounting it from something else. These tools include jigsaws, reciprocating, hand, and keyhole saws.
- Hand Tools: To secure some items, you must disassemble or strap them. Tools like screwdriver sets, commercial strapping tape, ratcheting tie-downs, bungee cords, ropes, and drills come in handy.
8. Market Your Business & Land Your First Client
Your new junk removal business requires marketing and advertising to generate valuable customers, promoting growth and success. But marketing isn’t just advertising. It’s also community participation and social interaction.
Effective Marketing Strategies for Getting New Clients
Use these marketing strategies to get leads and kickstart your junk removal business:
- Register on Google Business Profile: Register & claim a free Google Business Profile (Google My Business) to appear in local searches and Google Maps.
- Build Your Website: Create an eye-catching business website. Show customers who you are, what you offer, special promotions, and contact information.
- Create Sales Funnels: Develop sales funnel landing pages to motivate customer action and use them to get email registrations for your newsletters (more on that below).
- Use Email Campaigns: Automation is the key to seamless customer integration for business email marketing campaigns. Use it for newsletters, leads, and customer follow-ups.
- Market Your Business on Social Media: Create free pages to promote your brand and services and build an audience. Establish social ad campaigns to advertise your junk removal services.
- Advertise with Yard Signs: Place signs at each job site to promote your business and cultivate a customer following.
- Attend or Sponsor Community Events: Community events promote your business, especially if you have a booth or sponsor the event.
- Become a Local Chamber of Commerce Member: Membership builds credibility in the community and increases the public’s trust in your business. You also gain new connections who use or refer your services to others.
- Create a Portfolio: Portfolios are an excellent opportunity to show what makes your junk removal business unique and showcase your accomplishments, dedication to the community, and experience.
9. Impress Clients With High-Quality Service
It’s one thing to offer junk removal services but another to provide high-quality, caring service that builds a loyal customer base. To truly stand out in your area, you have to differentiate your brand by providing a highly personalized and unique customer experience. Housecall Pro’s customer management software solution boosts professionalism and provides your customers with seamless service, improving satisfaction and retention.
Hard work, consistent effort, and a strong focus on customer satisfaction are crucial in building a thriving junk removal business. It’s about going the extra mile, like Alex Valencia of JV Junk Removal, who ensures his team leaves every worksite spotless, not just clearing junk but also sweeping up afterward to exceed customer expectations.
“I go above and beyond for my customers. ” Alex says, “Apart from great customer service and uniformed employees, we clean our work areas. When we finish a junk removal we like to sweep and leave the area clean for our customers.”
Other ways to deliver high-quality service:
- Be Punctual: Always strive to arrive on time as it sets a positive impression.
- Maintain Courtesy: Be polite and respectful, and always maintain a positive attitude towards customers.
- Listen to the Customer: Listening shows respect and helps solve problems.
- Provide Recommendations: Show that you care by providing recommendations as if they were family.
- Pay Attention to Details: Pay close attention to details to avoid potential mistakes and underestimated job tasks. This step ensures excellent customer service and results without excuses.
- Maintain Professionalism: Your conduct represents your business. Being professional promotes authority in the industry and increases referrals from satisfied customers.
- Maintain Positive Reviews: Monitor customer reviews and ratings on social platforms, contractor websites, Google, etc. Be responsive. This shows respect and care, satisfying more customers.
Getting consistent reviews is one of the fastest ways to grow your business says Alex. “One feature that I like is the review link it sends to customers when we finish the job. That has helped me get tons of reviews on my Google Business Profile which has helped our business grow a lot.” This is why Housecall Pro’s review management software was designed with customer reputation and satisfaction in mind and brings all reviews together in one platform.
10. Scale With Junk Removal Software
Using software helps organize, manage, and control business activities and interactions, but too many apps on one plate that don’t interact effectively can take away precious time and profits.
Good software syncs data through various channels to ensure every report has the correct information, customer data is integrated into all necessary applications, accurate projections, and enhanced and automated customer communications/tracking. It also helps to streamline your operations, such as job performance, job scheduling, labor reports, lead management, and more.
Great junk removal business software should provide the following:
- Scheduling and Dispatching: Provide scheduling and dispatching capabilities, allowing junk removal businesses to optimize their routes, reduce travel time, and increase the number of jobs completed per day.
- Estimates and Invoicing: Tools for creating professional estimates and invoices quickly and easily. Junk removal businesses can generate accurate quotes on-site and send invoices immediately after job completion, streamlining their financial processes.
- Job Costing: Allows businesses to calculate job profitability by tracking time, materials, labor rates, and commissions. This helps junk removal companies ensure they’re pricing their services appropriately and maintaining healthy profit margins.
- Customer Management: The software includes a comprehensive customer management system, enabling junk removal businesses to maintain detailed customer records, track communication history, and provide personalized service. This feature can help improve customer retention and generate repeat business.
- Mobile App: Allows junk removal teams to access important information and perform various tasks while on the go. This includes features like GPS tracking, mobile check deposits, and the ability to manage calls directly within the app, enhancing overall operational efficiency
Junk removal business software and customer management tools from Housecall Pro can help you manage every aspect of your business effortlessly. Benefit from seamless online booking directly from your Google Business Profile, simple drag-and-drop scheduling, and Live GPS tracking for your trucks.
The best part? With Housecall Pro, you can try our software for free with a 14-day trial. Sign up today to get started.
