What To Do When Your Kid Wants To Start a Junk Removal Business

Starting a junk removal business seems like a straightforward self-employment idea. It might also seem like a good prospective business for your kid especially if he is a teenager and your neighbourhood is one that has the market. People are looking to get rid of junk, and they pay you to do it. Better yet, in a time of affluent baby boomers and people reaching retirement, there is more opportunity than ever before for household junk services. While junk removal can be a very successful small business, here are eight points that your kid might weigh while he is deciding whether or not to enter this line of work.

Points to Consider

1. Perform a market research in your area

Regarding competitor analysis, find out who the local junk haulers are, and try to determine which ones are successful, and why. Call some of them and ask for junk removal prices. This search should include not only independent junk removal providers but also some of the larger junk removal franchise players and others. To be successful, you need to understand not only the prevailing rates charged but also your cost, including overhead, of properly disposing or recycling junk so that you can determine your profit. It is very possible that you do not have any idea of a junk removal business, so knowing the market helps you to get a better start and avoid making mistakes.

Another aspect of your market research might be to take a job with another junk removal company for an initial period so as to gain a better understanding of the business. If your kid is planning to make an investment to get into the new enterprise, this will help him gain an understanding of the business before investing in it.

You will need to find out rates for various types of junk. Some will go straight to the landfill, while others might be sold to scrap dealers, donated to charities, or other use, and as such impact your cost of removal.

2. Create a business plan

Your business plan spells out how you intend to start your business and make money. Start by stating your objective, vision and explaining what exactly you will do (which market you will serve, any specialties, etc.). Then, include your market research showing that there is room in the market for your business. Go on to explain your pricing model, startup costs, marketing strategy, and how you plan to fund your business. it is more like a sketch of what your business is all about and what entails it.

3. Check out the laws

There may be local, state and federal laws applicable to the lawful disposal of junk, and especially hazardous waste. There may be fines applied if disposal is not carried out legally. Acquire a business license. Register your company according to your local government requirements and guidelines for waste carriers. You may need to contact your local chamber of commerce branch to get more specifics on these requirements, as they vary between different counties and states. You will likely have to register a “doing business as” name with your local government, at the minimum. There may also be special permits or licenses you need for transporting scrap metal or just transporting junk. For kids that are below 18, special licenses may be needed for them to carry out certain junk work.

For example, some localities require that anyone hauling large amounts of materials as a commercial activity possess a license for doing so. Failure to obtain a license before hauling may result in fines or your arrest. Other localities may have specific waste removal permits. Try talking with other local business owners to see if they will help you with navigating your city’s permit requirements.

4. Obtain funding to get you started

Luckily, your kid doesn’t need to worry about setting up an office or leasing storage space to start a junk removal business. However, he will still need some money to get started. This could be arranged in the following ways. You could loan him the money to start after which you will be refunded when the business begins to gain profit or he could use his own money if he has any money that he has saved before. You could also loan him half if he has other money to add to it. Your startup funding needs to cover the cost of your truck, equipment, marketing efforts, and some working capital for your first few jobs.

5. Getting equipment

You can save some money by renting a junk removal trunk when needed instead of buying one immediately. Removing rubbish is a dirty and demanding job for which you will need durable work clothes and gloves. Loose-fitting trousers are suitable for both household and outdoor jobs. They are not only comfortable to wear for long hours but will prevent household and garden pests, which you will most likely encounter through your career as a waste collector, from biting you through your clothing. Other tools you should buy are a shovel and a rake. Use them to remove dirt, leaves, sand, and other similar debris. In the initial stage, your kid should not handle more hazardous debris but limit himself to only normal garbage’s.

6. Promote your business

Design flyers on your computer or hire a design & print agency to make them for you. The flyers should be formatted attractively and easy to read, including a brief description and contact details of your company. Pass out your flyers to everyone in your area, businesses, and homeowners, who might be interested in your services. Also, place them on utility poles and notice boards. Make sure the distribution of your flyers is according to the local laws. Also, consider placing an ad in your local newspaper to increase your brand’s awareness. However, keep in mind that doing so may be expensive and will only buy you a short amount of ad time. Once all this is done, wait for the first phone call to come in. Your initial advertising plan will likely be low-budget, so make it work any way you can. Ask your customers where they heard about your business. This will let you know which one of your advertising methods is working best.

7. Pricing

Your pricing model should be based on both your expenses and the prices charged by your competitors. Estimate your expenses (overhead, equipment, employee wages, disposal fees, and gas) and then work from there to determine a suitable pricing schedule.

Your pricing strategy is up to you. You can charge by weight (though this can be difficult or impractical), by how space in the truck is filled by the junk, or by the job in a sort of holistic, estimated way. Remember, this is just your initial plan; you can always adjust prices later as you become more experienced.

One strategy is to undercut more established companies by charging less than they do. You may not make as much profit, but you will earn some of their business

8. Season

The spring and summer are the busy seasons when it comes to junk removal. Anticipate that these will be your most active seasons, with things slowing down in the fall and winter.

Also, understand that if it does not take you much research or financial investment to get into the junk hauling business, then it won’t take much time for others, either. This situation is known as a low barrier to entry. What this means in effect is that new participants may be continually be cycling in and out of the industry, first entering and possibly underpricing their services, because they do not have a realistic picture of the overhead costs they will have to meet to remain viable. (Hint: differentiate your services to make them “above and beyond” to that customers will rave about you.)

Others have raised the bar on customer expectations for appearance, professionalism, and price. Professional customer service is imperative, however, you have the opportunity to customize your business approach to help differentiate yourself from the big brands.

Just work with your kid to implement the steps discussed above.