Although we may not be able to give an exact amount of what it will cost you to start a junk removal business because of certain factors, but with a budget of $85,000, you can successfully start a small-scale junk removal business. This is so because the cheapest used junk removal truck you can get is between $25,000 and $50,000.
The junk removal business is one of the business opportunities available in the waste management sector that an aspiring entrepreneur can start in the United States of America. The truth is that if you settle for this business, you are sure of making huge returns from your investment.
This is so because junks which can be classified as domestic waste are generated on a daily basis and of course reliable statistics show that the waste collection industry in the United States of America rakes in a whooping sum of $45 billion dollars annually.
If you are looking to start a junk removal business, you should first acquire the required experience, and exposure before drawing up an estimate of what it will cost you to start the business. Please note that there are key factors that can determine the total budget of starting a junk removal business and that is what we will discuss in this article.
7 Factors That Influence the Cost of a Junk Removal Business
Your Choice of Location
Your choice of location is one of the major costs that can determine the amount it will cost you to start your junk removal business. The truth is that the location of a business will determine how much you will spend on rent or lease, acquiring licenses and permits, and utilities.
The Cost of Licensing and Permits
You cannot legally start and operate a junk removal business in the United States of America, and in most countries of the world without first obtaining the specific licenses and permits needed to start the business.
If you plan to start your junk removal business in the United States of America, you should make plans to get a business license, waste management permit, hazardous waste transporter license (if handling hazardous waste), commercial driver’s license (for drivers of collection vehicles), environmental protection agency (EPA) registration, department of transportation (DOT) registration (if transporting waste),
Occupational safety and health administration (OSHA) compliance, state-specific waste disposal certifications, health department approval, and recycling facility license (if providing recycling services). It is important to state that different jurisdictions have their own cost for their licenses and permits.
The Cost of Insurance Policy Cover
The cost of obtaining insurance policies is yet another major factor that can influence how much it will cost you to start a junk removal business. For a junk removal business, you would typically require vehicle insurance, liability insurance, and workers’ compensation insurance to protect against potential risks and liabilities.
Keep in mind that the amount it will cost to purchase all the needed insurance policy cover for your junk removal business will depend on factors such as the size of your business and the coverage limits you choose.
The Cost of Equipment and Supplies
Another factor that can influence the amount it will cost you to start your junk removal business is the cost of equipment and supplies you will need to operate your junk removal business. The fact that you will need various equipment and supplies means that you should make a budget for them before launching the business.
You should make provision for personal protective equipment (PPE), cleaning agents, disinfectants, waste disposal containers, and specialized cleaning tools.
Obviously, the amount you are to spend on equipment and supplies will depend on the size of your junk removal business and the junk removal projects you are handling per time. But the main thing is that it is a significant cost that will impact the overall cost of starting a junk removal business.
The Cost of Purchasing Junk Removal Trucks
The cost of purchasing junk removal trucks is yet another major cost that will determine how much it will cost you to start a junk removal business. Please note that depending on the size and location of your junk removal business, you may need different sizes and types of junk removal trucks.
It is important to note that the cost of a suitable junk removal truck will depend on your preferences and also your decision to settle for an outright purchase or lease. For example, if you settle for a used junk removal truck, you will spend less, but if you choose to start with brand new junk removal trucks, then you must be ready to spend a significant portion of your start-up capital.
For instance, prices for a new 2022 Ford Super Duty F-550 Chassis Cab currently range from $52,660 to $117,048. Also, a used 2021 Chevrolet Silverado 3500HD costs between $27,967 and $67,846.
The Cost of Marketing and Advertising the Junk Removal Business
If you have plans to start a junk removal business, then you should do all it takes to secure junk removal contracts and, in most cases, because you can secure a contract, you should be able to market and promote your services. In essence, promoting your junk removal business through marketing and advertising efforts is essential to attract clients.
Even though there are no specific costs attached to marketing and advertising a business, the bottom line is that if you want to launch a business that will win a fair share of the available market in your location, then you must be ready to invest a significant amount to promote your junk removal business.
Last of all, another cost that can influence the overall cost of starting a junk removal business is the amount you are expected to spend on operational expenses.
Essentially, for a junk removal business, you should budget for fees associated with disposing of waste at appropriate disposal facilities, such as landfills, recycling centers, and composting sites, costs associated with sorting, processing, and recycling waste materials, costs associated with ensuring compliance with environmental regulations,
Safety standards, and waste disposal requirements and also spend on operational expenses such as rent for office or storage space for your supplies and equipment, utilities, fueling, maintenance, office supplies, and any employees you may hire when you have a project that requires additional workforce.
In as much as you can spend less than $100,000 to start a junk removal business, it is important to note that if you have plans to start a standard junk removal business with vast coverage in a populated county, or city, then you should make plans to spend over a million dollars.
But if you critically consider all the factors discussed above, you will have a rough idea of how much it will cost you to start your junk removal business.