If you want to start a dumpster rental business, you should plan to spend at least $100,000. Dumpster rental businesses are often associated with making available dumpsters or roll-off containers to clients.
It is important to note that an entrepreneur who wants to start a standard dumpster rental business with a fleet of dumpsters or roll-off containers must be ready to spend well over $550,000 to get the business up and running.
But over and above, there are certain factors that can determine the exact cost or an estimate of what it will cost you to start a dumpster rental business, and that is what we will discuss in this article.
Factors That Influence the Cost of Opening a Dumpster Rental Business
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The Number and Types of Dumpsters or Roll-off Containers You Want to Start With
If you intend to start your dumpster rental business with less than a handful of dumpsters or roll-off containers, then you should be prepared to spend about $100,000 or more.
Average prices for construction dumpsters typically range from $363 – $1,131. These containers cost a bit more than residential bins due to the higher disposal fees associated with construction debris.
Also, it is important to note that the brand, type, and size of dumpsters or roll-off containers you want to start the business with will go a long way to determining how much you will spend to get the business up and running.
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The Size of Your Parking or Storage Facility
You are not supposed to park or store your dumpsters or roll-off containers indiscriminately on the street or main road. By law, before you can get approval to start a dumpster rental business, you should secure a parking or storage facility for your dumpsters or roll-off containers.
The cost of leasing a secured parking or storage facility that is large enough for over 10 dozen dumpsters is huge. For example, it will cost you between $2,000 to $10,000 per acre per year to lease a secured parking or storage facility in a suburban area, and between $10,000 to $100,000 or more per acre per year to lease a parking and storage facility in an urban or prime commercial area.
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The Cost of Registering the Business, and Obtaining the Necessary Licenses and Permits
Before you can start a dumpster rental business, you should have the following licenses and permits; business license, operating permit, commercial driver’s license (CDL), vehicle registration, hazardous materials transportation permit (if applicable),
Environmental permits (if applicable), solid waste hauling license, zoning permit, land use permit, fire department permit, health department permit, vehicle inspection certificate, insurance (liability, commercial auto, workers’ compensation), Federal Employer Identification Number (EIN), state sales tax permit, waste disposal permit (if applicable), et al.
It might interest you to note that the amount it will cost you to obtain all the listed permits and licenses will form a significant portion of your budget.
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The Required Insurance Policy Coverage
No wise businessman or woman would want to start a dumpster rental business without having the necessary insurance policy coverage in place.
This is so because more often than not, the vehicles or dumpsters that are used in the business might be under a lease agreement, coupled with the fact that the dumpster rental business is subjected to risks of different proportions.
If you are planning to start a dumpster rental business, you should at least have the following insurance policy coverage in place; commercial auto insurance, liability insurance, passenger liability insurance, workers’ compensation insurance,
General liability insurance, property insurance (for your vehicles and premises), umbrella insurance (excess liability insurance), garage keepers insurance, business interruption insurance, and business owner’s policy (BOP).
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The Cost of Hiring and Training Your Employees
The fact that you cannot operate a dumpster rental business alone means that you should make provisions in your budget for hiring and training your employees.
You should make plans for competent people to occupy the role of dumpster fleet manager, truck (delivery and pickup) drivers, customer service representatives, fleet maintenance technicians, accountants, administrative support staff, and marketing and sales officers. Trust me, it will cost you a significant portion of your startup capital to recruit and train your employees.
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Equipment, Tools, and Supplies You Need
You should plan and budget for dumpsters (various sizes), roll-off trucks, dumpster lifting and dumping equipment, safety cones and signs, tarps and covers, bungee cords or tie-down straps, wheelbarrows, shovels, rakes,
Work gloves, safety vests, first aid kit, fire extinguisher, grease gun (for truck maintenance), fuel containers, GPS or navigation system, office equipment (computers, phones, etc.), accounting software, and invoicing and billing software.
Trust me, the amount it will cost you to buy all that is listed above will form a significant portion of your start-up capital.
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Your Operational Cost, and Contingency
You cannot operate a dumpster rental business without having a budget for operation and contingency. Under your operational cost and contingency, you should be able to budget for fueling your trucks and utility vehicles, servicing and maintenance,
Toll fees, parking fees, towing fees, emergency vehicle repairs, unforeseen maintenance costs, unplanned vehicle downtime, legal fees (if facing any legal issues), accidents and collision repairs, and medical expenses (if injuries occur), et al.