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How To Start a Junk Removal Business in Seven Simple Steps [2023 Update]

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Have you thought about starting a junk removal business but don’t know where to begin?

Not anymore. Luckily, a junk removal business has a low startup cost, making it a perfect choice if you’re on a low budget.

With a market size of $68 billion in 2022, this business guarantees promising revenue.

In this article, you’ll learn more about junk removal services and how profitable they can be.

How Profitable Is Owning a Junk Removal Business?

Although earnings depend on the location of your company, junk removal businesses have a rewarding average profit margin.

Revenue also depends on the type of job, whether commercial, industrial, or residential.

If you plan to start small, it helps to know that a single dump truck can complete three to four jobs per day.

You can charge $500 for a full load of trash and $250 for a half load.

After disposal and gas expenses, your net profit sums up to about 60% (sometimes more) of what you charge.

Doing the math, you can earn up to $450 per day completing three half-truckload jobs. That’s about $56 per hour, which is excellent.

As your business grows, you start hiring employees and renting a facility.

With all these expenses, your profit margin reduces to 40%.

That doesn’t mean less income for you because, with more drivers, you get to complete more jobs.

With about 12 jobs per day, your business’s annual revenue can surpass $700,000.

What You Will Need To Start a Junk Removal Business [& Associated Costs]

The associated costs of a junk removal business depend on how big you’re willing to start.

You can buy a junk removal franchise to minimize risk.

However, the name alone can cost up to $30,000, not to mention the royalty fees and other liquid assets.

If you think about starting the business with your existing pickup truck, you need to only pay for the paperwork and some tools.

Here’s what you need to start a profitable junk removal business.

  • Business Registering: It varies from one state to the other. According to the U.S. Small Business Administration (SBA), registering your business costs less than $300.
  • Business License: The cost of issuing a business license also varies depending on location. It ranges between $50 and $200 on average.
  • Truck: The larger your vehicle is, the more junk you get to carry with minimum trips to the landfill. You can expect to pay anywhere from $25,000 for an average pickup truck (or a used dump truck) to over $100,000 for a brand-new dump truck.
  • Equipment: For hauling junk, you need special equipment and gear, such as dollies, masks, gloves, goggles, and other disassembling tools. This costs about $1,000–$2,000.
  • Insurance: It’s essential to get insurance coverage for vehicles, damages, and injuries. The average $1 million general liability coverage insurance costs $450–$1000 annually.
  • Identity: Setting up an identity for your business and marketing your services aren’t free but are worth the money. A website, business cards, and brochures add up to an estimate of $1,000 to $3,000.

Do I Need a License or Certificates To Start a Junk Removal Business?

The answer depends on the region where you’re starting your business and what type of junk you’re hauling.

In most states, you need a business license for any kind of business.

Handling certain types of materials requires a dumpster license, a waste management license, and a hazardous waste handling license.

It’s wise to check your city and county’s regulations to know where to start.

Pro Tip: where some people won’t operate is a potential business idea. For example, starting a pet waste removal business. Do the job that others don’t want to, and you could see serious cash flow.

Why You Should Consider Starting a Junk Removal Business as a Side Hustle

People are constantly searching for great side hustle ideas to increase their income.

A junk removal business is one of the best ideas to do that.

Joining this industry allows you to grow in a short time with advantages including:

  • Great Income: Even with a single truck, you can make a decent profit hauling junk and dumping it into landfills.
  • Low Startup Cost: You can start a Junk removal business with the lowest costs possible. Using your pickup truck or buying a used dump truck can be an efficient way to cut expenses.
  • Recession Proof: Market recession doesn’t affect this type of business. As a junk hauler, you can expect to take jobs ranging from home renovation and foreclosure cleanups to large construction site debris removal.

How To Start a Junk Removal Business in Seven Simple Steps

Having a junk removal business can be profitable, but how to do it?

Starting a new business of any kind is an overwhelming process. If you do enough research, this process becomes much easier.

Here’s how to start a junk removal business in seven simple steps.

Step #1: Research the Market

The most important step before starting any business is doing market research.

Learn more about your competition, how many they are, and their charging rates.

Get to know all the dumping sites and landfills in your area and the costs of operating such a business.

You’ll encounter all kinds of waste, and it helps to know how to deal with each of them properly.

Step #2: Work on a Business Plan

Having a business plan is essential. Not only do banks require having one, but it also helps summarize your budget, goals, and objectives as a future reference.

Step #3: Register Your Company

Getting all your paperwork ready and registering your company is the next logical step.

Here’s how to do it:

  1. Choose a business structure.
  2. Find a location for your business to receive tax filing and other important documents.
  3. Pick a business name, and register it (some states require filing a DBA).
  4. Get your employer identification number EIN by registering with the IRS
  5. Register with the state and local government agencies, like revenue offices.

Step #4: Get the Licenses, Permits, and Insurance

You need to issue a business license, street use, and occupancy permits.

Other licenses and permits vary in different states, and disposing of certain materials requires additional fees and permits.

It helps to research your local disposal regulations and the facilities you’ll work with.

Step #5: Buy the Tools and Equipment

You don’t have to get all the extravagant equipment.

Starting a business with little money isn’t impossible.

Aside from the truck, you need to have:

  • Safety gear
  • Shovels and rakes
  • Garbage bins and bags
  • A tarp

Step #6: Hire the Staff

If you plan to start the business yourself, you need at least one person to help you lift heavy objects.

According to ZipRecruiter, the national average salary of a junk removal employee is $31,458 per year.

Step #7: Work on Marketing

Many people are using the internet to find what they need.

That’s why your business should have an online presence, such as a website and social media accounts.

Utilize and invest in online advertising tools to reach as many customers as possible.

You should also consider having junk removal business software to help you schedule appointments and plan routes.

Things To Consider When Building a Junk Removal Business

Junk removal businesses aren’t about paperwork and financing alone.

There are a few more considerations to pay attention to before starting this kind of business.

Can You Run a Junk Removal Business by Yourself?

If you’re unwilling to hire employees, you should have the physical strength to haul trash yourself.

Remember, larger-scale jobs require an extra helping hand.

That’s why you need to consider these possibilities, so you don’t end up missing opportunities.

Is There a Trash Removal Site Nearby?

For your business to succeed, you should have a landfill within a decent driving distance from your location.

If you live in an area without such facilities, you’ll have a hard time running a junk removal business.

Do You Know a Local Recycling Facility?

A huge percentage of daily waste Americans produce is recyclable.

You can contribute to maintaining a healthy environment if you take such material to your local recycling facility.

Most customers prefer knowing their junk didn’t go to waste, and it gives your business a great reputation as well.

INSPIRATION: Junk Removal Business Ideas

Through your junk removal business, you can perform multiple types of jobs or specialize in one particular service, for example:

1. Commercial Junk Removal

It specializes in disposing of junk for commercial spaces, such as department stores and supermarkets.

These kinds of jobs don’t contain hazardous materials, but they need large dump trucks to perform.

2. Moving Service

This is a two-in-one job. You get paid to help people move as well as dispose of their junk.

In some cases, you can also clean the house they’re planning to move into.

3. Hazardous Junk Removal

Some junk removal companies choose not to deal with hazardous waste, and some specialize in it.

Hazardous junk removal businesses require expertise in dealing with such materials and disposing of them properly.

4. Dumpster Rental Service

Some people prefer to collect and remove their junk themselves.

You can offer delivery and pick-up services for dumpsters at a decent price depending on the dumpster’s size, type of debris, and service location.

Frequently Asked Questions

Is the junk removal business saturated?

There’s noticeable competition in the junk removal sector out there when it comes to small jobs.

However, if you set your mind to dominating the industry in your area and growing your business, you can ace it.

What is a great way to get more junk removal leads?

Investing in online marketing campaigns is an excellent way to get leads for your junk removal business.

Building relations with companies and construction firms also works great.

This doesn’t mean you should ignore other advertising means, like flyers and word-of-mouth.

That’s why it’s essential to focus on high-quality customer service to build your reputation.

Similar Businesses To Consider Starting

If you think a junk removal business isn’t the best fit for you, there are a few similar businesses to consider, including:

  • How To Start a Handyman Business: Whether you have a skill or are thinking about hiring a staff, starting a handyman business is an excellent and profitable idea.
  • How To Start a Dump Truck Business[1] : As expensive as a dump truck is, this business idea is cost-effective. The more you invest in it, the more it rewards you back.
  • How To Start a Delivery Business[2] : From food to merchandise, delivery businesses are thriving. With hundreds of opportunities, you can make tremendous profits from such a business.

Wrapping Up

Whether you have decent capital to invest or planning on applying for a loan, starting a junk removal business isn’t too hard.

You can even work with a single pickup truck and grow larger from there.

Keep in mind that having a good plan is essential for any business to succeed.

Tell us more about what you think in the comments below, and share this article with your friends who are looking for great business ideas.

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