Written by

Jennifer Carlson

May 6, 2025

Edited by

Kristen Cramer

Fact-checked by

Tara Farmer

How to start a junk removal company

Are you wondering how to start a junk removal business but don't know where to begin? Owning a junk removal company can be very profitable, making up to $60,000 to $80,000 per year in profit with the right planning and execution. This guide outlines the essential steps to launch a successful business.

1. Conduct market research

Understand your local market by identifying competitors, customer needs, and pricing strategies. Analyze what services competitors offer and how you can differentiate yourself. This research will help you set competitive rates and target the right audience.

Choosing a memorable brand and eye-catching logo design can help set you apart from similar companies in your area.

2. Create a business plan

A business plan is critical for defining your goals, structure, and financial projections. Include elements like an executive summary, service list, market analysis, marketing strategy, and budget. A solid plan also helps you attract investors or secure loans. Your plan should include:

• Cover page: Feature your business name, logo, and contact details prominently to create a professional first impression.

• Executive summary: Provide a concise overview of your business, highlighting startup requirements and what makes your services unique.

• Business overview: Outline your business structure, registration date, and other essential foundational details.

• Services offered: List the specific junk removal services you plan to provide to customers.

• Competitive analysis: Evaluate local competitors and detail how your business will differentiate itself in the market.

• Marketing strategy: Describe your advertising approach, target audience, and budget allocation for marketing efforts.

• Employee plan: Specify your hiring timeline, employee roles, and responsibilities to ensure smooth operations as you grow.

• Financial overview: Summarize startup costs, operating expenses, projected revenue, and your overall budget plan for the business.

3. Register your business

After you choose a unique name and logo, register with local authorities. Obtain an employer identification number (EIN) from the IRS as well as a local business license and any necessary permits, especially if you'll handle hazardous materials like chemicals or asbestos. Compliance with regulations is essential to avoid fines.

During this process, you'll also have to choose the business structure or entity, which can affect what you'll pay in taxes. Consider these options:

• Limited liability company (LLC) is best for protecting personal assets from lawsuits or debt.

• Sole proprietorship is best for a one-person operation and gives the owner complete control.

• Partnership is best if you're starting a company with one or more business partners.

4. Get business insurance

Junk removal involves various risks, such as potential damage to a client’s property or injuries from lifting heavy items. Business insurance safeguards your company, employees, and customers in the event of accidents or unforeseen incidents.

At a minimum, your insurance policy should include these options:

• General liability insurance covers property damage and personal injury claims.

• Commercial property insurance protects your office space and equipment from damage.

• Business income insurance ensures your business can recover financially after a disaster or incident.

• Commercial auto insurance provides coverage for your company vehicle.

• Workers’ compensation insurance covers employee injuries sustained on the job.

5. Set up finances

While starting a junk removal business is relatively affordable, it still costs $2,000 to $50,000+, depending on the scale of your business and whether you have a suitable vehicle already. If you don't have the funds to start on your own, you'll need to get a loan, credit card, or small business grant.

Before you get started, you'll need to find a way to keep track of your income and expenditures. If you're working solo, you may be able to manage this yourself. Otherwise, consider hiring a bookkeeper or accountant to handle bills, payroll, invoices, and taxes.

6. Set your rates

To ensure profitability, your pricing should cover labor, materials, and overhead costs. Follow these steps to set competitive and profitable junk removal rates:

• Choose a pricing method: Decide whether to charge based on time, weight, or truck volume (cubic yards). You can use all three methods and pick the best one for each job.

• Research competitor rates: Check local competitors’ prices to understand customer expectations and set competitive benchmarks.

• Calculate overhead costs: Add monthly expenses like rent, insurance, payroll, and utilities. Divide this by your monthly billable hours to find your hourly overhead rate. Apply this rate to every hour of labor.

• Include additional costs: Factor in materials, local landfill or disposal fees, travel time, and taxes, and aim for at least a 15% profit margin. Make sure your pricing allows for profitability at every job.

7. Buy equipment

Depending on the size of your junk removal business and the services you offer, you may need to buy the following items in order to start:

• Construction gloves

• Hard hat

• Safety glasses

• Screwdrivers

• Hammer

• Wrench set

• Sledgehammer

• Crowbar

• Reciprocating saw

• Heavy-duty extension cords

• Shovel

• Rake

• Construction broom

• Long cut snips

• Orange vehicle flag

• Packing tape

• Tarps

• Moving blankets

• Ratchet straps

• Forearm forklift

• Hand truck or dolly

• Laundry cart

• Large trash bins

• Garbage bags

If you don't have a moving vehicle, flatbed, or box truck, consider investing in or renting one for efficient hauling. For larger jobs, dumpsters might be necessary, but they are costly. Renting dumpsters can be a more budget-friendly option until you can afford the investment.

8. Market your business

Once you're up and running, you'll need to use ads and other marketing strategies to attract and retain customers. Join HomeGuide to increase your visibility to potential clients, build your online reputation, schedule jobs, network, and manage your business.

Here are some other tips to keep in mind:

• Use business cards with your name, logo, and contact information.

• Register on Google Business, Yelp, and other directories.

• Implement a referral program and ask for customer reviews.

• Use decals or custom wraps to promote your business on the go.

• Establish a presence on platforms like Facebook or Instagram.

• Send mailers to potential customers in older communities.

• Use Google and Facebook ads to reach specific audiences efficiently.

9. Grow your company

As your junk removal business grows, you may have to hire more staff to handle increased demand. Consider taking on new hires if you can't manage every job on your own, you want to offer more services, or you'd rather handle management and shift the daily work to employees instead.

Make sure you properly vet any new employees and train them in customer service and safety. This will prevent accidents or incidents that could negatively impact your business.

FAQs about how to start a rubbish removal business

Is junk removal a good business?

Junk removal can be a profitable business due to strong demand and scalability. With effective marketing and pricing, businesses can grow rapidly, earning significant profits. Successful operations can scale to earn up to $1 million annually.

Challenges include managing overhead costs and maintaining competitive pricing, but overall, it offers a viable entrepreneurial opportunity.

What do I need to start a junk removal business?

To start a junk removal business, you need a solid business setup, including registration and insurance. Essential equipment includes a reliable truck, safety gear, and tools like dollies and shovels.

Plan for startup costs, which can range from $2,000 to $50,000+, and focus on effective marketing and customer service.

Where do junk removal companies take the junk?

Junk removal companies usually take unwanted items to various destinations depending on their condition and type. They take recyclable materials to recycling centers, and many companies donate gently used items to charities.

They dispose of non-recyclable items at landfills, although many companies try to minimize landfill usage through more eco-friendly practices.

Do I need a business license for junk removal?

Yes, you need a business license to operate a junk removal business legally. Licensing requirements vary by location and may include permits such as a waste hauler permit, contractor’s license, or transportation permit. Some areas also require specific licenses for handling hazardous materials or construction debris.

Check with your local government or Chamber of Commerce to determine the exact requirements for your area. States like California, Texas, and Florida have unique licensing rules, so research thoroughly to ensure you comply with local regulations.