Do you want to start a demolition company? If YES, here is a complete guide to starting a demolition business with NO money and NO experience.
If you decide to start a business in the demolition and wrecking industry, you are sure of making huge returns from your investment. This is so because reliable statistics show that the demolition and wrecking industry in the united states of America rakes in a whooping sum of about billion dollars annually.
If you want to partake in this thriving industry, then you would need to obtain all the necessary license and then launch your own demolition and wrecking company.
The truth is that, the market is still pretty much open for new investors to come in. Although there are competitions at various levels in the industry, but if you are able to come up with a good business strategy, then you are sure of getting your own fair share of the available market in the industry.
So, if you have decided to start a demolition and wrecking company, then you should make sure that you carry out thorough feasibility studies and also market survey. This will enable you properly locate the business in a community or city with the right demography; a location that can readily accept your services.
If you are interested in starting a demolition and wrecking company, then you should ensure you read through this article for the necessary industry guide.
Steps to Starting a Demolition Company
1. Understand the Industry
Companies in the demolition and wrecking industry mainly wreck and demolish buildings and structures and sometimes sell salvaged materials.
Other services rendered by players in this industry include the clearing and recycling of debris, interior strip outs, handling of asbestos and hazardous materials, site remediation (decontamination and waste disposal), concrete cutting and explosive demolition.
It is important to clearly state that excavation and land-clearing work is not part of the demolition and wrecking industry.
If you are close watcher of the demolition and wrecking industry, you will agree that the industry has been recovering from the effects of the recession which drastically reduced demand for construction services. Nevertheless, the business has begun to experience little growth, and the industry is projected to grow past its pre – recession magnitude.
Usually, as the value of residential and nonresidential construction increases, the need for demolition of new structures increases as well, hence increased income for demolition and wrecking companies. So also, land development and construction markets are projected to grow rapidly as economic growth encourages the construction of new retail and commercial facilities.
The demolition and wrecking industry will continue to experience growth in all parts of the world especially in developed countries such as United States of America, Canada, united kingdom, Germany, Australia, South Korea, Italy, Germany et al. The company with the leading market share in the industry in the United States is Northstar Group Holdings, LLC.
Interesting Statistics About the Industry
Statistics has it that in the United States of America alone, there are about 4,505 licensed and registered demolition and wrecking companies scattered all across the length and breadth of the country and they are responsible for employing about 23,252 employees.
The industry rakes in a whooping sum of $5 billion annually with an annual growth rate projected at 2.1 percent within 2011 and 2016.
A recent report published by IBISWORLD shows that establishments in the demolition and wrecking industry are distributed roughly in line with population density, though regional variations in industrialization and urbanization, and create a larger industry presence in some areas.
The report also estimates that the Southeast, Great Lakes and Mid-Atlantic regions hold the largest share of industry locations.
While the Southeast region has the largest share of establishments in the industry, this 22.7 percent share is somewhat lower than its share of the total US population, 25.4 percent. The report further stated that the discrepancy reflects a less densely concentrated population and fewer major cities that lack sufficient space to expand, as is the case in regions with less unoccupied land.
Some of the factors that encourage entrepreneurs to start their own demolition and wrecking company business could be that the business is a thriving and profitable one, it is easy to set up and they can easily get support from the government.
Despite the fact that the demolition and wrecking business involves both government establishments (Public works department) and private sector, that does not in any way make the industry to be over saturated. The fact that construction works and renovation of buildings are being carried out on a regular basis means that there is always a ready market for demolition and wrecking companies.
Just like any other business, if you are able to conduct your cost analysis, market research and feasibility studies before launching your demolition and wrecking company, you are more likely not going to struggle to grow the business because there are loads of people and businesses out there who are looking for demolition and wrecking companies to help them handle the demolition and wrecking of their property in other to pave way for reconstruction as required by the law in the United States of America.
Over and above, starting and operating a demolition and wrecking company can be challenging, but the truth is that it can be rewarding at the same time. One good thing about the industry is that it is open for both big time investors and aspiring entrepreneurs.
2. Conduct Market Research and Feasibility Studies
- Demographics and Psychographics
The demographic and psychographics composition of those who hire the services of demolition and wrecking companies are not restricted to construction companies and real estate investors.
There is a wide range of both corporate and individual clients who cannot successfully dispose the demolition or wrecking of their facility without hiring the services of a standard and licensed demolition and wrecking company.
As a matter of fact, the target market for a demolition and wrecking company should involve, construction companies, farmers, property management companies, property development companies and players in the real estate industry amongst others.
So, if you are looking towards defining the demographics for your demolition and wrecking business, then you should make it all encompassing.
3. Decide Which Niche to Concentrate On
Most demolition and wrecking companies tend to operate general demolition and wrecking services that a standard demolition and wrecking company is expected to offer. That is why it seems that there are no niche areas in the industry.
But on the other hand, some demolition and wrecking companies may decide to major in some key areas or niche areas such as;
- Pre – demolition planning and analysis
- Total or selective demolition of buildings (e.g. offices, warehouses and apartments)
- Total or selective demolition of structures (e.g. sport stadiums and oil rigs)
- Demolition and rehabilitation of sites following fire or industrial explosion
- Environmental cleanup
- Asbestos removal
- Selective dismantling and facade preservation of historic buildings
- Implosion demolition of buildings and structures
- Removal, disposal and sale of materials from demolition sites, including recycling
The Level of Competition in the Industry
No matter the line of business you decide to pitch your tent, you are still going to compete with others and even the government who are into same area of business and the demolition and wrecking business is not an exemption.
The level of competition in the demolition and wrecking industry to some extent depends largely on the location of the business, your niche area of operation and of course the capacity of your demolition and wrecking company. If you can successfully create a unique niche for your demolition and wrecking company, you are likely going to experience little or no competition.
For instance, if you are the only demolition and wrecking company in your location that is into selective dismantling and preservation of historic buildings, you can successfully monopolize the market for a long time before you start having competitions.
It is important to also state that the competitions in the demolition and wrecking industry depend on the scale of your demolition and wrecking company. There are demolition and wrecking companies in the United States that are competing with government agencies that are into demolition and wrecking and other demolition and wrecking companies in the United States that can only compete with only demolition and wrecking companies at municipalities.
4. Know Your Major Competitors in the Industry
In every industry, there are always brands who perform better or are better regarded by customers and the general public than the others. Some of these brands are those that have been in the industry for a long time and so are known for that, while others are best known for how they treat their customers.
These are some of the leading demolition and wrecking companies in the United States of America and in the globe;
- Alarcon Bohm – Oakland, CA
- American Demolition/Concrete Cutting Inc. – Santa Ana, CA
- Bedroc Contracting LLC – Lyndhurst, NJ
- Bierlein Companies, Inc. – Midland, MI
- Brandenburg Industrial Service – Chicago, IL
- Cherry Demolition, Inc. – Houston, TX
- Cleveland Wrecking – Covina, CA
- H. Griffin Wrecking Co. Inc – Multiple Locations
- Ferma Corporation – Mountain View, CA
- Interior Removal Spec. Inc. – South Gate, CA
- LVI/Mazzochi Wrecking Inc. – East Hanover, NJ
- Manafort Brothers Inc. – Plainville, CT
- MCM Management Corp. – Bloomfield Hills, MI
- Midwest Steel Co., Inc. – Houston, TX
- North American Dismantling Corp – MI
- Nuprecon, Inc. – Snoqualmie, WA
- Robinette Demolition Inc. – IL
- B. Cox Inc. – Richmond, VA
- Testa Corp. – MA
- Two Rivers Demolition Inc – CA
When starting a demolition and wrecking business, you just have to get your costing cum economic analysis right if your intention of building the business is to generate profit, grow the business and perhaps expand the business and start competing at national level.
When conducting costing and economic analysis for your demolition and wrecking business, you just have to critically examine these key factors; place, pricing and promotion. As a matter of fact, you would have to continue to review these key factors at regular intervals while running your demolition and wrecking business. As a demolition and wrecking business owner, you just have to have a proper grasp of your competitive landscape if indeed you want to maximize profits and be in the frontline of the industry.
It is important to note that heavy duty demolition and wrecking tractors, trucks fueling, servicing and maintenance cost is one of the most important factors contributing to the overall cost of a demolition and wrecking business and should be considered as a major factor when carrying out your costing and economic analysis.
This is why standard demolition and wrecking companies would prefer assembling an in-house maintenance and servicing team as against contracting the maintenance of their heavy duty tractors and trucks to an automobile maintenance and servicing garage.
5. Decide Whether to Buy a Franchise or Start from Scratch
When it comes to starting a business of this nature, it will pay you to start from the scratch as against buying a franchise.
Besides, it is easier to start and run a demolition and wrecking company from scratch to profitability without leveraging on a known brand name. People will patronize your services based on accessibility and pricing as against relying on a brand name.
Please note that most of the big and successful demolition and wrecking companies around started from the scratch and they were able to build a solid business brand.
It takes dedication, hard work and determination to achieve business success and of course you can build your own demolition and wrecking company to become a successful waste collection and management company in your area of specialization and even go ahead to start competing at national level.
6. Know the Possible Threats and Challenges You Will Face
If you decide to start your own demolition and wrecking business today, one of the major challenges you are likely to face is the presence of well established demolition and wrecking companies in your target market location and even the government public works department.
The only way to avoid this challenge is to create your own market; concentrate on households, individuals and also start-up construction companies who need the services of a demolition and wrecking company.
Some other threats and challenges that you are likely to face when you start your demolition and wrecking company are mature markets, bad economy (economy downturn), stiff competition, volatile costs, and rising fuel prices.
So also, unfavorable government policies, seasonal fluctuations, demographic/social factors, downturn in the economy which is likely going to affect consumer spending and of course emergence of new competitors within the same location where yours is located.
There is hardly anything you can do as regards these threats and challenges other than to be optimistic that things will continue to work for your good.
7. Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)
When considering starting a demolition and wrecking company, the legal entity you choose will go a long way to determine how big the business can grow; some demolition and wrecking companies design their business and services for regional market, while others for national market.
Generally, you have the option of either choosing a general partnership, limited liability company which is commonly called an LLC, or a sole proprietorship for a business such as demolition and wrecking company.
Ordinarily, sole proprietorship should have been the ideal business structure for a small scale demolition and wrecking company especially if you are just starting out with a moderate start-up capital. But people prefer limited liability Company for obvious reasons.
As a matter of fact, if your intention is to grow the business and operate all across the United States of America and perhaps other countries of the world, then choosing sole proprietor is not an option for you. Limited Liability Company, LLC or even general partnership will cut it for you.
For example, Setting up an LLC protects you from personal liability. If anything goes wrong in the business, it is only the money that you invested into the limited liability company that will be at risk. It is not so for sole proprietorships and general partnerships.
Limited liability companies are simpler and more flexible to operate and you don’t need board of directors, shareholders meetings and other managerial formalities.
These are some of the factors you should consider before choosing a legal entity for your demolition and wrecking company; limitation of personal liability, ease of transferability, admission of new owners, investors’ expectation and of course taxes.
If you take your time to critically study the various legal entities to use for your demolition and wrecking company, you will agree that limited liability company; an LLC is most suitable. You can start this type of business as limited liability company (LLC) and in future convert it to a ‘C’ corporation or an ‘S’ corporation especially when you have the plans of going public.
Upgrading to a ‘C’ corporation or ‘S’ corporation will give you the opportunity to grow your demolition and wrecking company so as to compete with major players in the industry; you will be able to generate capital from venture capital firms, you will enjoy separate tax structure, and you can easily transfer ownership of the company; you will enjoy flexibility in ownership and in your management structures.
8. Choose a Catchy Business Name
Normally, when it comes to choosing a name for your business, you should be creative because whatever name you choose for your business will go a long way to create a perception of what the business represents.
Typically, it is the norm for people to follow the trend in the industry they intend operating from when naming their business.
If you are considering starting your own demolition and wrecking business, here are some catchy names that you can choose from;
- Bernard Parker® Demolition and Wrecking Company
- Julius Anderson Demolition and Wrecking Services, Inc.
- Chaps Nelson and Sons Demolition and Wrecking Company
- Crest Concrete Cutters Ltd.
- Alpha Zebra Demolition and Wrecking Company
- Miller Jeb Groups, Inc.
- Brass Concrete Cutters Company
- John Bonds Demolition and Wrecking Company
- Inland Demolition and Wrecking Company
- Noel Brothers Corp.
9. Discuss with an Agent to Know the Best Insurance Policies for You
In the United States and in most countries of the world, you can’t operate a business without having some of the basic insurance policy covers that are required by the industry you want to operate from.
Thus, it is imperative to create a budget for insurance policy cover and perhaps consult an insurance broker to guide you in choosing the best and most appropriate insurance policies for your demolition and wrecking business.
Here are some of the basic insurance policy covers that you should consider purchasing if you want to start your own demolition and wrecking business in the United States of America;
- General insurance
- Health insurance
- Liability insurance
- Equipment and Auto Insurance
- Risk Insurance
- Workers Compensation
- Overhead expense disability insurance
- Business owner’s policy group insurance
- Payment protection insurance
10. Protect your Intellectual Property With Trademark, Copyrights, Patents
If you are considering starting your own demolition and wrecking business, usually you may not have any need to file for intellectual property protection/trademark.
This is so because the nature of the business makes it possible for you to successfully run the business without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties.
On the other hand, if you just want to protect your company’s logo and other documents or software that are unique to you or even your operational concepts, then you can go ahead to file for intellectual property protection.
If you want to register your trademark, you are expected to begin the process by filing an application with the USPTO. The final approval of your trademark is subject to the review of attorneys as required by USPTO.
11. Get the Necessary Professional Certification
If you intend starting a demolition and wrecking company in the United States of America, you are strongly encouraged to pursue professional certifications; it will go a long way to show your commitment towards the business.
These are some of the certifications you can work towards achieving if you want to run your own demolition and wrecking business;
- LEED Certified
- Gold Seal Certified; COR Certified
Please note that all demolition and wrecking companies, especially those that also operate hazardous Waste Management are mandated to obtain the appropriate certifications.
12. Get the Necessary Legal Documents You Need to Operate
The essence of having the necessary documentation in place before launching a business in the United States of America cannot be overemphasized. It is a fact that you can successfully run any business in the United States without the proper documentations. If you do, it won’t be too long before the long arm of the law catches up with you.
These are some of the basic legal documents that you are expected to have in place if you want to legally run your own demolition and wrecking business in the United States of America;
- Business and liability insurance
- Commercial Vehicle Operator’s Registration for haulage trucks
- Appropriate driver’s licenses for drivers
- Assistant’s licenses for assistants
- Health inspection Certificate
- Proof of ownership, proper identification and vehicle license
- Copy of license for the service support facility and/or a recent inspection report
- Tax Payer’s ID
- Fire certificate
- Certificate of Incorporation
- Business License
- Business Plan
- Non–disclosure Agreement
- Employment Agreement (offer letters)
- Employee’s Handbook
- Operating Agreement for LLCs
- Insurance Policy
- Apostille (for those who intend operating beyond the United States of America)
13. Raise the Needed Startup Capital
Starting a standard and well equipped demolition and wrecking business can be capital intensive especially if you choose to launch a large demolition and wrecking company with the capacity to service your immediate community and also to engage in waste management and recycling.
Securing a landed facility, heavy duty tractors, fleet of haulage trucks, building a waste recycling plant and purchase of equipment are part of what will consume a large chunk of your start-up capital, but if you choose to start the business on a small scale with just one heavy duty tractor and haulage truck, you may not have the need to go source for fund to finance the business.
No doubt when it comes to financing a business, one of the first things and perhaps the major factor that you should consider is to write a good business plan. If you have a good and workable business plan document in place, you may not have to labor yourself before convincing your bank, investors and your friends to invest in your business.
Here are some of the options you can explore when sourcing for start – up capital for your demolition and wrecking business;
- Raising money from personal savings and sale of personal stocks and properties
- Raising money from investors and business partners
- Sell of shares to interested investors
- Applying for loan from your bank/banks
- Pitching your business idea and applying for business grants and seed funding from government, donor organizations and angel investors
- Source for soft loans from your family members and your friends.
14. Choose a Suitable Location for your Business
Starting a business such as demolition and wrecking company comes with its own challenges; it is a business that should be located out of residential facilities and close to construction sites.
It cannot be overemphasized that the location you chose to start your demolition and wrecking company is key to the success of the business, hence entrepreneurs are willing to rent or lease a facility in a visible location; a location where the demography consists of people and businesses with the required purchasing power, and a location that has minimal hurdles to cross especially as it relates to construction of a waste recycling plant (optional).
15. Hire Employees for your Technical and Manpower Needs
When it comes to starting a standard demolition and wrecking business with the capacity to carry out removal, disposal and sale of materials from demolition sites, including recycling, you will need the following equipment/machines; heavy duty tractors, concrete cutters, waste haulage trucks, Rigid Outer Containers promote accessibility via lid options, Attached Lid Containers, AFL Industries’ Specialty Wastewater Treatment, Two-Sided Carts to increase picking/stocking efficacy, Hazardous Material Overpacks, Toledo Metal Spinning Cleanline Waste Receptacles and Garbage Sorting recycling amongst others. It is important to state that these equipment can be purchased as fairly used if you are operating on a low budget.
When it comes to choosing between renting and leasing a facility for your demolition and wrecking company, the size of the demolition and wrecking company you want to own, and your entire budget for the business should influence your choice.
If you have enough capital to run a pretty large and well equipped demolition and wrecking company with a standard waste recycling plant, then you should consider the option of long lease or out rightly purchasing a land; when you lease, or purchase a land, you will be able to work with long – term planning, structuring and expansion.
As regards the number of employees that you are expected to kick start the business with, you would need to consider your finance before making the decision. Averagely, when it comes to starting a standard demolition and wrecking business on a large scale, you would need the services of the following professionals; Chief Operating Officer (you can occupy this position), Admin and HR Manager, Transport and Logistics Manager, Marketing and Sales Executive (Business Developer), Accountant, Hazardous and Non – Hazardous Waste Operators/Cleaners, Waste Truck and Tractor Drivers and Customer Services Executive/Front Desk Officer.
Over and above, you would need a minimum of 5 to 15 key staff members to effectively run a medium scale but standard demolition and wrecking company. Please note that there will be times when you are expected to go out of your way to hire experts to help you handle some job functions.
If you are just starting out you may not have the financial capacity or required business structure to retain all the professionals that are expected to work with you which is why you should make plans to partner with specialists in the industry.
The Service Delivery Process of the Business
The operation process as it relates to demolition and wrecking companies depends largely on their niche areas of operations. For example, the operations of a demolition and wrecking company that also carry out hazardous waste collection and management is far different from a demolition and wrecking company that just carry out demolition, wrecking and concrete cutting. Those that are involved in hazardous waste collection and management business are extra careful and they pay attention to details because of the nature of the business.
Basically, the process as it involves demolition and wrecking companies starts with securing a contract to carry out demolition or wrecking of a property. Before the contract is sealed, the nature of the job to be carried out with will be noted. That is before the bidding process for the contract, assessment of the property and the needed manpower and machine will be noted amongst other key factors.
Once the proper permits and documentation are done, then men and machine will be moved to the site where the demolition and wrecking will be done. After the demolition and wrecking, the wreckages will then be cleared.
It is important to state that a demolition and wrecking company may decide to improvise or adopt any business process and structure that will guarantee them efficiency and flexibility; the above stated business cum services process is not cast on stone.
16. Write a Marketing Plan Packed with ideas & Strategies
The fact that the entry barrier for starting a small scale demolition and wrecking business is low means that there is bound to be more players in the industry no matter the location you choose to start yours. In essence, you must come up with creativity and innovations if you must carve out a market for yourself within the available market in your community, city, state or country.
So, when you are drafting your marketing plans and strategies for your demolition and wrecking company, make sure that you create a compelling personal and company’s profile. Aside from your qualifications and experience, it is important to clearly state in practical terms what you have been able to achieve in time past as it relates to demolition and wrecking services. This will help boost your chances in the market place when marketing your services.
Please note that in most cases, when you bid for demolition and wrecking contracts from corporate organizations/industries, you will be called upon to defend your proposal, and so you must be pretty good with presentations.
Here are some of the platforms you can utilize to market your demolition and wrecking services;
- Introduce your business by sending introductory letters alongside your brochure to construction companies, farmers, property management companies, property development companies and players in the real estate industry amongst others in the United States (if you are just starting out, you may want to concentrate on start – ups and smaller businesses).
- Promptness in bidding for demolition and wrecking contracts et al.
- Open your demolition and wrecking company with a party so as to capture the attention of residence who are your first targets.
- Advertise your services in community based newspapers, local TV and radio stations.
- List your business and products on yellow pages ads (local directories).
- Leverage on the internet to promote your demolition and wrecking company.
- Engage in direct marketing and sales.
- Encourage the use of Word of mouth marketing (referrals).
- Leverage on the internet to promote your business (when you blog regularly on key issues as it relates to your business, people would consider you an expert in the field).
- Join local chambers of commerce and industries around you with the main aim of networking and marketing your services; you are likely going to get referrals from such networks.
- Engage the services of marketing executives and business developers to carry out direct marketing for you.
17. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity
If you are in business and you are not deliberate about boosting you brand awareness and communicating your corporate identity, then you should be ready to take on whatever the society portray your business to be. One of the secrets of larger corporations is that they are willing to spend fortunes year in and year out to boost their brand awareness and to continue to communicate their corporate identity the way they want people to perceive them to be.
If your intention of starting a demolition and wrecking company is to grow the business beyond the city where you are going to be operating from to become a national and international brand, then you must be ready to spend money on promotion and advertisement of your brand.
In promoting your brand and corporate identity, you should leverage on both print and electronic media and also social media (the internet). As a matter of fact, it is cost effective to use the internet and social media platforms to promote your brands, besides it is pretty much effective and wide reaching.
Another strategy is to sponsor relevant community based programs, TV and radio programs, advertise your business in relevant magazines and newspapers. Below are the platforms you can leverage on to boost your brand and to promote and advertise your business;
- Place adverts on magazines and related newspapers, radio stations and TV stations.
- Encourage the use of word of mouth publicity from your loyal customers.
- Leverage on the internet and social media platforms like; YouTube, Instagram, Facebook, Twitter, LinkedIn, Snapchat, Badoo, Google+ and other platforms to promote your business.
- Ensure that you position your banners and billboards in strategic positions all around your city.
- Distribute your fliers and handbills in target areas in and around our neighbourhood.
- Contact your friends, people in your neighbourhood and everyone on your mailing list et al by calling them up and informing them of your online gambling and casino company.
- Advertise your business in your official website and employ strategies that will help you pull traffic to the site
- Brand all your official heavy duty demolition tractors, trucks and cars and ensure that all your staff members and management staff wears your branded shirt or cap at regular intervals.