Do you want to start a junk removal business? If YES, here is a complete guide to starting a junk removal business with NO money and no experience.
Okay, so we have provided you an in-depth sample junk removal business plan template. We also took it further by analyzing and drafting a sample junk removal marketing plan backed up by actionable guerrilla marketing ideas for junk removal businesses. In this article, we will be considering all the requirements for starting a junk removal business. So put on your entrepreneurial hat and let’s proceed.
Why Start a Junk Removal Business?
Starting a junk removal business can be the best business decision for you as this is a business that does not require much capital and time to start. However, just like every other business, there are certain factors that you would need to consider for your business to become a success and these factors are; ensuring that you conduct market research, create a good reputation for your business, finding and maintaining your clients and then engaging in the right publicity to boost your corporate image.
No one starts a business without correctly assessing the market which they are going into and as trivial as the junk business might seem, it is no different from starting other kinds of businesses. In assessing the market for your junk removal business, it is necessary that you not only look out for other businesses that are into the junk removal but that you also look out for well-known brands in order to understand what strategies they used to succeed and also what weaknesses they have that your business can exploit in order to become known in the industry.
Starting a Junk Removal Business – A Complete Guide
- Industry Overview
According to estimates by Jdog Management, the market for residential junk removal in the United States is estimated to be at least $6 billion annually, which is based on a number of factors such as the number of households in the country as well as consumer habits, which is having people buying more stuffs and then looking for way to get rid of old stuffs. According to the states journal in 2010, the junk removal industry saw revenue of $3.8 billion. The industry is a fragmented one with the two largest companies capturing only a small fraction of the revenue market.
According to IBISWorld, the waste collection service industry has annual revenue of $45 billion and has been experiencing a 0.6 percent growth from the periods of 2011 to 2016. There are about 11,000 waste collection businesses in the United States of America employing more than 207,000 people.
Several factors contributed to the growth experienced in the industry and these are; the recovery of industrial, commercial and construction business sectors, the economic boost which has more individuals and businesses increasing their demands and spending more, as well as a decrease in fuel prices which saw the cost of purchases falling and therefore driving up profit for the industry.
The size and distribution of the population in the United States as well as the economic activity that the population brings are the major causes of the concentration of waste collection establishments all over the country. Places that are densely populated are of course more active economically and also generate more waste than those in sparsely populated places.
The junk removal services which is a segment in the cleaning industry is one that experienced bumps during the great recession as revenue fell by 5.3 percent in 2008 and again by more than 6 percent in 2009. This was due to the fact that generally, most of the services in the industry were deemed to be expendable during the tough times.
The industry however bounced back in 2015 as it generated revenue of $51 billion. The increase in revenue was due to the fact that less people were unemployed and also that there was a decline in office vacancy rates which led to an increase in non-residential construction activity.
A study by First Research has pointed to the fact that the waste management industry is highly dependent on not only the amount of waste produced but also the economic condition of the region where the waste is produced. The United States as a country has one of the biggest markets globally and therefore produces nearly 251 million tons of waste annually, which is why the waste management industry is so large and is one of the multi-billion dollar industries getting $75 billion annually. The reason why most waste management businesses are surviving is due to the size of their labor and efficiency of their operations.
According to the American Moving and Storage Association, there are more than 7,000 junk removal companies operating in about 14,000 locations and also employing more than 120,000 people. The junk removal industry is so huge and this is due to the fact that not only homeowners but property managers, corporate offices, building contractors and real estate agents all require junk removal services at one point or the other to get rid of certain equipment, outdated computers, construction debris, files and furniture. This segment of the industry is one that has a great opportunity for franchisors and even franchisees.
Starting a Junk Removal Business – Market Research and Feasibility Studies
- Demographics and Psychographics
The demographic and psychographic composition of those who require the services of a junk removal company is not just restricted to homeowners but extends to building contractors, real estate agents, property managers and offices. This shows that this business is one that cuts across individuals and corporate offices even though it is restricted to the region where the business is operating from.
The ages of those that usually require junk removal services range from 25 to 44, because these are the people who get married and have to move in together or relocate, thereby needing a junk removal service.
List of Niche ideas Within the Junk Removal Business That You Can Specialize in
The junk removal service is a specialty cleaning service that is a sub segment of the waste collection market in the cleaning service industry. It is a segment that has helped individuals get rid of junk in an efficient manner and its gain in publicity has seen more people become aware of the benefit of clearing out their junks and taking advantage of the junk removal services in their local areas to do so.
Due to the fact that the industry is one that requires going through the homes or offices of clients, most clients usually prefer those who operate locally to go through their things. However, just like in any other business, niches might allow you stand out from others.
Therefore in order to stand out and be able to compete, some of the junk removal companies have decided to major in certain niche areas such as;
- Residential junk removal services
- Processing and resale of junks
- Transfer and storage facilities
- Non-residential junk removal services
- Recyclable junk collection services
The Level of Competition in the Junk Removal Services Industry
The level of competition in the junk removal business is highly dependent on the location of the business as clients prefer to patronize the services of junk removal companies in their area or locality than have to look for one operating in another part of the country.
Due to the fact that distance can sometimes be a barrier in how clients compete amongst each other, most junk removal companies prefer to focus more on their local clients, while large scale companies usually look to a location they deem economically viable and choose to offer a franchise to new businesses looking to have an edge over their competitors in the market place by purchasing the services of a popular brand to do so.
Due to the high demand in the industry, the competition between large scale junk removal companies and small scale junk removal companies is usually stiff. The large scale junk removal companies usually have the advantage in the use of more staff and offering efficient operations, while the small scale junk removal companies usually compete by offering personalized services.
List of Well – Known Brands in the Junk Removal Industry
Every industry has brands that are well known and popular probably due to varying factors and the junk removal business is no different. Some of the well-known junk removal companies in the waste management industry are those who are famous for their franchises, marketing and publicity strategies, their scale of operation, or how long they have been in the industry.
As a new entrant, studying these well known brands is vital to making your company become known as well. Therefore, some of the well-known junk removal businesses in the United States of America are;
- Junk King
- The JunkLuggers
- College Hunks Hauling Junk
- J Dog Junk Removal
One core reason why junk removal businesses are booming is due to the fact that Americans are buying more stuffs than they need and so when they need to move, they get to use the services of a junk removal company. According to the United States Census Bureau, an average American in his or her lifetime has moved 12 times. It is estimated that about 43 million Americans with 13 million being children have had to relocate within a year.
The typical American that moves is between the ages of 25 and 44 and the average move in miles is 1,100. Most of those who have had to move have done so due to their jobs, while the rest is due to personal matters or government relocations.
The junk removal service is a segment in the waste collection services industry and yet represents a huge chunk in the larger segment. In this sub-segment, the top two companies account for 39 percent of the total revenue in the industry. The junk removal business is however a highly competitive one and has several franchised operators nationally as well as lots of local competitors all over the country.
The junk removal service mostly offers services to clients in the locality where it is operating from. Junk removal is not like other kinds of waste collection businesses, as junk removals usually have to enter the homes of their clients in order to collect the needed junk.
According to a top analyst, the waste collection business is amongst the recession proof industry as people will always accumulate junks and dispose it when it is necessary whether the economy is good or bad. The industry is also gaining more awareness in the eye of the public as there are now programmes on television that are focusing on those who have compulsive hoarding disorder and how they can help themselves get rid of this mental disorder by using the services of a junk removal business.
One trend that has driven the junk removal business economically is the reprocessing and repurposing of most of the junks collected from customers so that it doesn’t end up in a landfill. Most companies are now processing most of the junks collected and then reselling them to consignment or second hand stores or donating them to charity homes. This has led to a significant increase in revenue for these companies and for the industry as a whole.
Starting Your Junk Removal Company from Scratch vs Buying a Franchise
Starting a junk removal company from scratch or buying a franchise is a decision that an entrepreneur would need to think long and hard about before deciding on which would best suit the goals and objectives of his company. Each decision comes with its pros and cons and a lack of careful consideration might mar the chances of the business growing and surviving.
Once a junk removal company has made a huge name for itself in the industry, it usually considers becoming a franchisor by selling its brand and its basic operations to start-ups. The franchisor controls all the major decision making of the franchisee such as pricing, publicity and marketing as well as certain other key decisions.
While buying a franchise might be considered a good business decision for your junk removal start-up business, you should ensure that you carry out a thorough research on the companies you intend to buy a franchise from and make sure that their corporate goals and objectives align with yours, so you don’t end up buying the wrong franchise for your business.
Possible Threats and Challenges You Will Face When Starting a Junk Removal Company
Facing threats and challenges are nothing new to any entrepreneur intending to start a business as these are phenomena to be expected. Therefore, every entrepreneur going into business is always prepared to face challenges and threats and must therefore do their best to not only be prepared for it but to remain optimistic. Some of the challenges encountered when starting the junk removal business include; government policies and regulations regarding the business as well as competition from already established companies.
Starting a Junk Removal Business – Legal Matters
- Best legal entity to use for this type of business
Choosing the right legal entity for your junk removal business is one of the most important decisions you would make for your business. While there are several kinds of legal entities to choose for your junk removal business, each comes with its own pros and cons that needs to be studied well in order to know what impact – negatively or positively – it might have on your junk removal business. If you are however confused as to what is best, you can check what your top competitors are using for their businesses or seek the services of an attorney to help you out.
The common types of legal entity are those that fall into the basic and hybrid category. Either of this categories deal with issues such as ownership and control, taxation, flexibility, liability and so many other factors. Therefore some of the basic legal entities that exist for a junk removal business are sole proprietorship, partnership and corporation; which fall under the basic kind of legal entity. Others are Limited Partnership and Limited Liability Company (LLC) which are under the hybrid form of legal entity.
The sole proprietorship kind of legal entity is that which is fully owned and run by just one person. It is usually easy to create and requires no huge formality. However, getting start-up capital for this business is usually hard especially if the owner had no sufficient capital at hand to start the business with.
Another minus regarding this kind of legal entity is the fact that the owner is held personally liable for every debt incurred in the process of carrying out the business. Most local junk removal services usually start up using this legal entity and then change the legal entity once the business has grown to a certain extent. If however you do not have enough capital to start this business, you should consider using another legal entity to start your business.
Catchy Business Name Ideas Suitable for a Junk Removal Company
When starting your business, it is expected that you choose the right name for your business as the name you choose will determine how clients will perceive your business. When it therefore comes to choosing a name for your junk removal business, ensure that you choose something that is memorable, eye catching, unique and creative.
If you are stumped as regards the name to give junk removal business, here are some to choose from;
- Junks and Waste Removals Inc
- Dave Junk Luggers
- Corporate Junk and Specialty Services
- Triple J Junks
- The Hunky Junk Kings
- Remove ‘n’ Junk Services
Having the right insurance policies for your junk removal business is very important because anything can go wrong during the course of carrying out your business and having an insurance will help cover for any liability that you would have had to pay out of your own pocket.
It is an offense to run a business in the United States of America without insurance of any kind as you could be penalized by the regulatory authorities. If you are however confused on what insurance policies would be suitable for your junk removal business; you can seek the advice of a professional insurance agent or broker.
However, there are some basic insurance policies that you should consider acquiring if you intend to start your own junk removal business in the United States of America and they are;
- Business Liability Insurance
- Auto Insurance
- General Liability Insurance
- Property Insurance
- Business Owner’s Policy
- Errors and Omissions Insurance
- Workers’ Compensation Insurance
- Health Insurance
Intellectual Property Protection/Trademark
The junk removal business is a service based kind of business and therefore activities in this business are not one that involves any sort of intellectual property that would require intellectual protection. Those who might have had any sort of reason to apply for an intellectual property protection are those who might have during the course of running the business developed a software programme that would allow for junks to be removed in a faster and more efficient manner.
Is Professional Certification Needed to Run a Junk Removal Business?
The junk removal business is one that requires lifting heavy lifting and might need some sort of training in order to be able to lift certain specialized junks. While this might be the case however, it is usually not relevant or necessary to get any sort of professional certification before starting this kind of business.
What is mostly required of those in this business is being fit and ensuring that the proper work gear is used during the course of removing junks for a client.
List of Legal Documents You Need to Run a Junk Removal Company
There is no business that is being run in the United States of America without legal documents of any sort to back the business up. The need for a business – regardless of the kind – to have some sort of documentation is a serious requirement by the authority and defaulters might not only be financially penalized but also be banned from running the business within the country.
If you have no idea on what documents you would need for your business, it is best you go to your city hall or approach an attorney to guide you on what documents you would need. Therefore, some of the basic documents that you would be required to have in order to start and run your own junk removal business in the United States of America are;
- Certificate of Incorporation
- Operating Agreement
- Business License
- Insurance Policies
- Business Plan
- Contract Documents
- Employment Agreement
- Federal Tax Identification Number
- Employer Identification Number (EIN)
Financing Your Junk Removal Company
While some of the equipment needed to start a junk removal business – such as work gloves -might not be so difficult to procure, others – such as a truck – might not be so easy especially if you are starting the business off on a tight budget. In order to deal with the problems associated with getting heavy equipment, some entrepreneurs usually rent this equipment.
However, if you intend to become commercially successfully, you must be ready to get some necessary equipment that will allow you run your business smoothly. This is why it is necessary to have a comprehensive business plan as this would help you convince potential investors on how serious you are with your business as regards getting a loan to fund your business.
Therefore some of the financing options that are available to you to start your junk removal business are;
- Generating part of the start-up capital from personal savings
- Sourcing for soft loans from family members and friends
- Applying for loan from a bank
- Applying for loan from a credit union
Choosing a Suitable Location for your Junk Removal Business
The junk removal business is one that can be run either from one’s home or via a rented or leased office facility. It is essential to note that clients usually prefer to patronize junk removal businesses that are located within the vicinity than those that are located far from them. Therefore, you should consider the economic viability of running the junk removal business from either your home or a facility and choose that which would not be a strain on your budget.
If you intend running your junk removal business from home and are living within the hub of your target market, then you might need to engage in more publicity for your business by ensuring that you have an interactive website, social media platforms and phone lines in order to connect with your clients. In making the decision of where to run your business, you might need to consider what your closest competitors are up to and if they are renting or leasing a facility, then you might need to do so as well.
There are several advantages in running your business from a leased or rented facility as a leased facility would allow you to be more visible to your clients as opposed to running your business from home. Before choosing a location for your business however, it is important that you conduct a thorough research so that you will know which location will let you be within the hub of your target market.
You should be careful that where you choose to locate your business falls within the city’s zonal requirements. You might need to get the help of a real estate agent in order to be able to choose a location that is not only right for your budget but one that will enable you not to break any laws of the state you intend operating from.
Setting a budget for your junk removal business is very important so that you do not spend beyond your budget and cause a huge strain on other parts of your business; this is why it is usually necessary to write a business plan.
Starting a Junk Removal Business – Technical & Manpower Details
The junk removal business might look like an easy business to start, but if you do not have enough money to buy equipment and also run your business till it starts making money, then you might find yourself struggling and maybe eventually failing.
There are several equipment that you would need in order to start and run your junk removal business successfully. Even though this is a business that does not require much technicality, there is the need to use a truck in the course of running the business.
Depending on your finances, you might need to either buy a truck or van new or second hand so as to be able to transport the junk of your clients to disposal facilities or waste recycling facilities. You would need to fit your truck with GPS and if you are buying second hand, make sure to check the engine so you don’t end up spending a lot to repair the vehicle.
Getting heavy duty wear for collecting junk is very vital as this can be a dirty job. Therefore, you would require trousers that are loose fitting, a shovel, rake, dust masks and goggles. Other equipment you would need are first aid kit and gloves.
Regarding the number of people that you would need in order to run your junk removal business efficiently and successfully in the United States of America, you would need; a chief executive officer, a human resources and administrative manager, a front desk officer, field workers, a marketer and a driver.
Therefore, in order to run your junk removal business efficiently and effectively, you would need a minimum of 7 key people.
The Service Delivery Process of a Junk Removal Company
The junk removal business is one that does not require a lot of technicality in order to achieve the set tasks. However, you would require certain equipment in order to efficiently and effectively meet the expectations of your clients as well as the regulated authorities. While the process usually involves getting rid of the junk that your client has, you would also need to properly dispose of the junk you have collected.
There has to be a plan as regards how you intend to dispose of your junk. It is usually best to contact the junk disposal sites beforehand to know what kind of junks they would be accepting. Also, knowing that there are fees to be paid for disposing the junk, you will need to know beforehand what can be recycled, what can be donated to charities and what can be sold as scrap.
It is also vital that you understand what laws are affecting the type of junk you are collecting and if there are specific disposal rules you would need to follow.
Starting a Junk Removal Business – The Marketing Plan
- Marketing ideas and strategies
Marketing is a very important part of any business and so needs proper planning especially as this is where majority of the revenue you will need to sustain and boost your business will come from. Also, whilst marketing might generate revenue for your business, it is also helpful in creating awareness for your junk removal business.
First off, you would need to conduct a market survey so that you can understand who your target market is and what they are expecting from you and also what you should expect from them. This market survey will allow you to effectively pinpoint what marketing strategies that would generate maximum returns for your junk removal business.
However, there are other factors that have an effect on your marketing strategies and they are your location and your profile. Being in a good location can have a positive impact on your business and reduce the amount you would have needed to spend in creating awareness for your business. Therefore, it is important that you choose a very suitable location for your business.
Another factor is creating the right profile that will attract and retain clients for your junk removal business. You may need to start small in order to build the right profile by removing junks in your neighborhood and friends. Below are some of the platforms that you can use in marketing your junk removal business;
- Ensure that you advertise your junk removal business in local newspapers and magazines as well as on radio and television stations
- Create a professional brochure and have your services, rates and contact information attached and place this in mailboxes or on windscreens to get the awareness you would need
- Ensure that your junk removal business is listed in local directories/yellow pages as well as online directories
- Use social media platforms such as Facebook, Twitter, Instagram as well as your website to market your junk removal business
- Distribute handbills and paste fliers on utility poles and notice boards
- Carry out direct marketing by placing cold calls and visiting potential clients
Strategies to Boost Your Brand Awareness and Create Your Corporate Identity
While having the right awareness for your business is necessary, it is important that you understand that not all channels used will be very effective in promoting the brand of your junk removal business. Publicity plays a dual purpose for a business because not only does it enable awareness and create a corporate identity for a brand, it also generates revenue that is used to sustain and grow the business.
As an entrepreneur, it is important that you look for ways that will not only be effective in promoting your brand but one that will not be a strain on your pocket as well. Below therefore are some of the platforms that can be used to boost your brand awareness and create a corporate identity;
- Create a unique logo for your junk removal business and also choose a unique business name
- Create an official and interactive website and use this to raise awareness for your business
- Place adverts in local newspapers, magazines as well as on radio and television stations
- Visit forums and blogs that are waste management related and educate people as regards junk removal
- Encourage your loyal customers to help spread the word about your business
- Use social media platforms such as Facebook, Twitter and Instagram to help create awareness about your business