Is Junk Removal Business Profitable? How to Start a Junk Removal Company

How much do junk removers make money? As per GlassDoor, in the United States, junk removers make money $47,668 annually, excluding some additional pay. Please check the report here: https://www.glassdoor.com/Salaries/junk-removal-salary-SRCH_KO0,12.htm

 So, if you are looking for ways to know about how to start a junk removal company, you have come to the right place. This article will walk you through every step you need with detailed guidelines.

In this article, we have discussed about what to consider before starting a junk removal business, its advantage and disadvantage, the equipment you need for this business. We also discuss about a probable junk removal business startup cost.

Let’s explore!

Is Junk Removal Business Profitable?

As we already mentioned about how profitable a junk removal business is, including its profit income a junk removal business can make per year. The trend of this industry is growing.

Xavier Cladera, CEO of Junk-ify shared a post on LinkedIn regarding Jun Removal Industry Statistics.

“There are 8,352 Waste Collection Services businesses in the U.S. as of 2022, an increase of 1.3% from 2021″

In addition, according to a survey of IBISWorld, over the last five years, from 2018 to 2023, the waste collection service company make of 1.1% every year in the US. Total revenue they earn $73.7 billion.

The report can be found here: https://www.ibisworld.com/united-states/market-research-reports/waste-collection-services-industry/

For more information regarding junk removal business profitable you can see this video:

A Short Business Overview

Junk removal business is no doubt a profitable business. It specializes in removing unwanted items from homes, businesses, and others properties.

In general, a junk removal business offers picking up or disposing of furniture, appliances, including removing of debris from construction sites and home remodels.

It also offers the service of hauling of old mattresses, tires, and recycling of metals, electronics and others.

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Advantage and Disadvantage of Junk Removal Business

When it comes to starting any business, it’s recommended to consider the pros and cons of the business you are going to start. In this case, we suggest you to look some advantages along with disadvantages, which can help you to determine during the business planning. So, we have included several points of both pros and cons:

Advantages:

• Low barrier to entry. It requires very little start-up capital. You can get started with a truck, some basic tools, and a few employees.
• Simple Business Model. A junk removal business has a simple business model, which makes launching and building the business more seamless.
• High demand. There is always a demand for junk removal services, especially in urban areas. People are always looking to declutter their homes and businesses, and they don’t want to deal with the hassle of hauling away their junk themselves.
• Scalability. You can easily scale up or down as needed. If you start to get a lot of business, you can hire more employees and buy more trucks. If business slows down, you can scale back your operations.
• Flexibility. This junk removal business is very flexible. You can work odd hours and take on jobs as they come in. This can be a great option for people who want to be their own boss and have a lot of control over their own schedule.
• Environmentally friendly. This business can help to reduce pollution by recycling and disposing of junk in an environmentally friendly manner.

Disadvantages:

• Competition. The junk removal industry is very competitive, so you’ll need to find a way to differentiate yourself from your competitors.
• Heavy lifting. You’ll need to be able to lift heavy objects and work in all types of weather conditions.
• Liability risks. This business is exposed to a number of liability risks, such as injuries to employees or customers, damage to property, and environmental contamination. You’ll need to have adequate insurance to protect yourself from these risks.
• Physical Job. Junk removal is a very physical job, and you’ll be working with young people.

Junk Removal Business Startup Cost

The startup costs for a junk removal business can range from $7,500 to $16,000 or more, depending on the size and scope of your business. The largest expense is the down payment on a vehicle, so your costs will depend on how large and how new a vehicle you want to start with. You can always get a larger truck later, once your business is up and running.

Here is a breakdown of some of the other startup costs you can expect to incur:

• Vehicle: $5,000 – $10,000
• Tools and equipment: $1,000 – $2,000
• Insurance: $500 – $1,000 per year
• Licenses and permits: $200 – $500
• Marketing: $500 – $1,000
• Office space: $0 – $1,000 per month (if applicable)

In addition to these startup costs, you will also need to budget for ongoing expenses such as:

• Fuel: $500 – $1,000 per month
• Garbage disposal fees: $100 – $200 per month
• Employee wages: $2,000 – $5,000 per month (if applicable)
• Marketing: $500 – $1,000 per month

Overall, the startup costs for a junk removal business can be significant, but the potential profits can also be high.

Junk Removal Business Profit Margin

The profit margin for a junk removal business can vary depending on a number of factors, including the size of the business, the location, and the types of services offered. However, a typical profit margin for a junk removal business is around 20%.

For example, let’s say a junk removal business has a revenue of $100,000 and expenses of $80,000. This would give the business a profit of $20,000, which is a profit margin of 20%.

Of course, there are some junk removal businesses that have much higher profit margins. For example, a business that specializes in removing hazardous waste or e-waste can often command much higher prices for their services. These businesses can have profit margins of 30% or even higher.

What Is The Average Junk Removal Owner Salary In Year?

The salary of a junk removal owner varies depending on a number of factors, including the size of the company, the location, and the experience of the owner.

According to ZipRecruiter, the average salary for a junk removal owner in New York is $43,596 per year. However, the lowest salary is $27,599 in Arkansas compared to other states.

For more information, you can see the full report here: https://www.ziprecruiter.com/Salaries/What-Is-the-Average-Junk-Removal-Salary-by-State

Is The Junk Removal Business Saturated?

It is difficult to determine whether the junk removal business is saturated or not. There are conflicting opinions and perspectives on this matter. Some suggest that the market is saturated, while others argue that it is not. It is important to note that the saturation of a market can vary depending on the location and specific circumstances.

An expert from Reddit has his opinion on this matter. He says –

“Every industry is saturated. It doesn’t matter what they do, if you do it better. Provide better services, be better at advertisement, research other companies and you will be good. First 3-5 years will be a struggle, but later it will be good.”

How to Start a Junk Removal Company? Step by Step

In this section, start planning of starting junk removal business and what necessaries are required to implement, including permits, license, logo making, and more. All these factors are described below in details so that you can get a complete instruction. 

Step 1: Junk Removal Business Plan

In this step, business plan outlines everything from your services and pricing to marketing strategies, including company operations, business loan or funding. A good business plan is a roadmap to success. So, here are a list of the junk removal business plan is given below:

Executive summary is a brief overview of your business plan with summarizing the key points of your business plan in a clear and concise way.

Company description introduces about what type of service your company provides and who are your targeted customers, and the competitive pricing and a satisfaction guarantee you offer.

Market analysis is a study of a market within an industry to understand its size, growth rate, trends, target market, competition, economic environment, and regulations.

Competitive analysis is a process of researching and analyzing your competitors’ strengths, weaknesses, products, pricing, marketing strategies, and distribution channels.

Marketing plan is a valuable tool for business of all sizes. It can help to identify your target market, set measurable goals, choose the right marketing strategies of advertising, including marketing budget.

Management team is a group of individuals who are responsible for leading and overseeing the operations of your business. The management team works together to set the organization’s direction, make critical decisions, and ensure it achieves its goals

Pricing guideline guides you to set a price for your junk removal services, compared to your competitor.

Financial planning is the process of creating a roadmap for your company’s financial future. It includes startup cost, operational cost, expected revenue, etc.

Step 2: Branding Junk Removal Business

In short, a brand is a name, term, design, symbol, or any other feature that distinguishes your services or products from others. So, during naming your junk removal business and creating your logo must be memorable and recognizable.

There are many online tools for creating business logo and you can also create your junk removal business name.

Remember, your junk removal business logo and name must be easy to remember, recognize and completely unique from others.

So, when it comes to designing a logo, you have several ways to create the logo by hiring a graphic designer or self-designing if you have an idea about it. There are many free logo builder tools like Canva you can try.

Step 3: Business Name Registration

It is a process to make your junk removal business official. It helps you to ensure that your junk removal business name is unique and not already in use by another business. However, business name registration is an essential step because it’s recommended for opening a bank account, paying taxes, and more.

• Choose a business structure. The first step is to decide on a business structure, such as a sole proprietorship, partnership, limited liability company (LLC), C Corp and S Corp. Each structure has its own advantages and disadvantages, so it is important to choose the one that is right for your business.
• Register your business name. You will need to register your junk removal business name with the state in which you will be doing business. In this case, we suggest to register your business name in the area where you live.

Step 4: Registration for Taxes

Before you pay taxes for your business, you need an Employer Identification Number (EIN). It’s like a business ID which you need. Getting EIN online is very straightforward, it does not take a long time.

Step 5: Bank Account Opening for Funding

Opening a bank account is crucial when revenue start coming from your business. In this case, business bank account is essential because easily you can track your junk removal company’s income. It also helps you to follow up the expenditure and taxes.

So, opening a business bank account is easy and straightforward similar to personal account. It may a few days, however, depending on different banks, time of opening bank account can vary.

Step 6: What License Do I Need To Start A Junk Removal Business?

So, starting your junk removal business, you need a license or permits from your local area or governments where you live. Taking license and permits may vary depending on different areas.

Permitting or licensing is crucial for a junk removal business because you will be dealing with transporting heavy load on road. In addition, your junk removal business will transport certain type of waste, including biohazards, chemicals, and dangerous substances; as a result, taking license and permits is necessary.

For determining what types of license or permits you need, you can check Small Business Administration (SBA) and US Chamber of Commerce.

Step 7: Insurance for Junk Removal Business

People sometimes forget about business insurance, but it’s really important for entrepreneurs. Insurance keeps you safe from sudden problems that could really hurt your business. Here are some types of insurances:

• General liability insurance: This is the most basic type of business insurance and covers you against third-party claims for bodily injury or property damage that occurs at your business location or as a result of your business activities.
• Workers’ compensation insurance: This is required by law in most states and covers your employees’ medical expenses and lost wages if they are injured on the job.
• Property insurance: This covers your business property from damage caused by fire, theft, vandalism, or other events. It can also cover the cost of business interruption if your property is damaged and you have to temporarily close your business.
• Professional liability insurance: This protects you from lawsuits claiming negligence or errors and omissions in your professional work.
• Business interruption insurance: This covers your lost profits and other expenses if your business is forced to close due to a covered event, such as a fire, flood, or power outage.

Step 8: Start Promoting Your Business

When you’re all set, then you are ready to start promoting your junk removal business. Business promotion for any business is an essential key step to success. There are many ways you can promote your junk removal business. Here are some tips given below.

• Create a website and blog which introduces your online presence, including your services, offers, and your location. Website is a great way to share your business, industry insights, and customer testimonials.
• Use social media. Social media is a great way to connect with potential customers and build relationships. Share interesting content, engage with your followers, and run social media ads.
• Word-of-mouth marketing is one of the most effective and trusted forms of marketing. It helps you to get engaged with customer live.
• Printing promotion is a great way to get the word out about your business and attract new customers. There are many different types of printing promotions that you can use, business card, flyers, posters, banners, etc.
• Get listed in online directories. This will help potential customers find your business when they’re searching online. Make sure junk removal business is listed in the major directories, such as Google My Business, Yelp, and Yellow Pages, Angi, Hotfrog, Merchant Circle, etc.
• Email marketing is a great way to stay in touch with your customers and promote your business. Make sure you’re sending out regular emails with news about your business, services, and other that will interest your customers.

Step 9: Equipment needed for junk removal business

Before you are starting a junk removal business, there are several essential equipment you need. So, here are some equipment given below.

Hand tools. A variety of hand tools will be necessary for breaking down furniture, removing nails and screws, and other tasks. Some essential hand tools include:

• Crowbar
• Sledgehammer
• Saw
• Wrench
• Screwdriver

Power tools. Power tools can make some tasks easier and more efficient. Some essential power tools for junk removal include:

• Reciprocating saw
• Demolition hammer
• Air compressor
• Generator

Safety equipment. It is important to wear safety equipment when working with junk. Some essential safety equipment includes:

• Hard hat
• Safety glasses
• Gloves
• Dust mask
• Ear protection

Cleaning supplies. You will need to clean up after yourself after each job. Some essential cleaning supplies include:

• Broom
• Dustpan
• Trash bags
• Shop vac

In addition to the above equipment, you may also want to consider investing in some of the following items:

• Ladder
• Tarps
• Ratchet straps
• Moving blankets
• Dollies
• Hand truck

The specific equipment you need will depend on the size and type of junk removal business you are starting. However, the items listed above are a good starting point.

Step 10: Start Making Money and Grow Your Junk Removal Business

If everything is set, start growing your business and services across the area you want to work with. Following the promotion methods we have discussed above, you can expand your business.

Junk removal business is a large business which is growing per year in the United States. It also has a great demand among the people. On contrary, this junk removal business is environment-friendly job.

Frequently Asked Questions (FAQs)

Do you need a license to haul junk in Georgia?

Yes, in Georgia, a license is required for hauling junk. Businesses engaged in junk removal must obtain a business license and a contractor’s license if they intend to hire subcontractors or employees.

How do I create a junk removal business plan?

A junk removal business plan is a roadmap for your business. It should outline your goals, strategies, and financial projections. So, the business plan for junk removal business includes executive summary, business overview, market analysis, product pricing, operational plan, etc.

What license do you need to drive a dump truck in Georgia?

To drive a dump truck in Georgia, you would need a Class B Commercial Driver’s License (CDL). This license allows you to operate vehicles like dump trucks, along with other vehicles such as city buses and tractor-trailers.

Final Thoughts

So to summarize, is junk removal business profitable? Yes, it’s is, typically a junk remover makes money $47,668 per year without any other cost.

Now coming to how to start a junk removal company? Starting a junk removal business is very straightforward. You need to go through several steps like, business plan, marketing, promotion, branding, license, and permits. All these steps are well discussed in this article with a complete guidelines.

Finally, we suggest to consider the business startup cost and advantage and disadvantage of this junk removal business before starting the business. It can help you to take right decision.