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Do you want to start junk removal business plan?
Do you want to start a junk removal business? Junk removal is a service in which you are required to haul the unwanted items as required by your customers never to be seen again.
If you are thinking about how to start a junk removal business, you need not worry, as this business does not require a very large investment for a business plan or the setting of an office.. You can start the service by yourself or by renting a few vehicles and hiring a few persons.
In either case, you have to document the operational and financial objectives of your business and how they are to be realized in the form of a junk removal business plan. If you are wondering how to write one, we are here to help you by providing this sample business plan for a junk removal startup named, ‘Orlando Junk Removal’.
Executive Summary
2.1 The Business
Orlando Junk Removal will be a bonded, insured and licensed junk removal business for both residential and commercial junk removal, with its office located in Bryn Mawr Street, Orlando, USA. Business will be owned by Bradley Hanks who has been driving trucks for two years in Orlando. To yield profit in the field he is in, he has decided to start his own business with trucks.
2.2 Management
If you are starting a junk removal business, your success will be dependent upon your management, and how quickly do you respond to a request of junk removal. Thus, before starting a hauling business, Hanks has decided to train his staff for fast and efficient service.
He has hired a general manager to help him preparing for the startup and to ensure that the junk is transported properly to recycling or disposal facilities.
2.3 Customers
Our target customers will include people living in residential communities, commercial buildings and real estate agents. They will require our services for removal of junk from their home, offices, companies and construction sites.
2.4 Business Target
We aim to become the best junk removal business in Orlando within next five years of our startup. Our financial target to be achieved in one year is to balance the initial cost of the startup with earned profits by the end of the first year.
Company Summary
3.1 Company Owner
Orlando Junk Removal will be owned by Bradley Hanks, who has been driving trucks for two years. Hanks has earned a great fame and trust during his service due to his honesty and responsibility.
3.2 Why the Business is being started
After receiving the shares from his legacy, Hanks wanted to invest in a business to yield much more than he got. As he is experienced with trucks and had relations with several truck drivers during his job, so he decided to opt for the junk removal business.
He won’t face any difficulty as he knows all about how to start a garbage collection business, where to dispose the junk and what are the methods to dispose various types of junk.
3.3 How the Business will be started
Although Hanks had a profound knowledge about starting junk removal business, yet he decided to work sysytematically to be organized and managed. The first step he took was to make a junk removal business plan with the help of financial experts and marketing analysts.
Hanks has decided to start the business by procuring an office on rent in Bryn Mawr St., Orlando. He will rent 5 trucks initially with the services of 8 truck drivers. Truck drivers will be given a two week training to remove and transport the junk efficiently and to fix any technical problem regarding trucks. A general manager will help in organizing the deals timely, an IT expert will be hired to manage the company’s official and social sites.
The start-up requirements are as follows:
| Start-up Expenses | |
| Legal | $55,300 |
| Consultants | $0 |
| Insurance | $32,750 |
| Rent | $32,500 |
| Research and Development | $32,750 |
| Expensed Equipment | $32,750 |
| Signs | $1,250 |
| TOTAL START-UP EXPENSES | $187,300 |
| Start-up Assets | $0 |
| Cash Required | $332,500 |
| Start-up Inventory | $32,625 |
| Other Current Assets | $232,500 |
| Long-term Assets | $235,000 |
| TOTAL ASSETS | $121,875 |
| Total Requirements | $245,000 |
| START-UP FUNDING | $0 |
| START-UP FUNDING | $273,125 |
| Start-up Expenses to Fund | $11,875 |
| Start-up Assets to Fund | $15,000 |
| TOTAL FUNDING REQUIRED | $0 |
| Assets | $23,125 |
| Non-cash Assets from Start-up | $18,750 |
| Cash Requirements from Start-up | $0 |
| Additional Cash Raised | $18,750 |
| Cash Balance on Starting Date | $21,875 |
| TOTAL ASSETS | $0 |
| Liabilities and Capital | $0 |
| Liabilities | $0 |
| Current Borrowing | $0 |
| Long-term Liabilities | $0 |
| Accounts Payable (Outstanding Bills) | $0 |
| Other Current Liabilities (interest-free) | $0 |
| TOTAL LIABILITIES | $0 |
| Capital | $0 |
| Planned Investment | $0 |
| Investor 1 | $332,500 |
| Investor 2 | $0 |
| Other | $0 |
| Additional Investment Requirement | $0 |
| TOTAL PLANNED INVESTMENT | $695,000 |
| Loss at Start-up (Start-up Expenses) | $313,125 |
| TOTAL CAPITAL | $251,875 |
| TOTAL CAPITAL AND LIABILITIES | $251,875 |
| Total Funding | $255,000 |
Services for customers
Hanks has decided the services he will provide to his customers before framing junk hauling business plan. If you are looking for how to start a junk removal company and which services to provide initially, you can take help from here.
- Residential Junk Removal: We’ll take away all the unwanted objects from your house such as old electronic devices, used rugs, mattresses, construction waste, furniture and other appliances etc. We’ll also sweep the area where we worked before leaving.
- Commercial Junk Removal: If local trash carriers have refused to haul your excess trash or garbage, we will be there to help you in removing your office furniture, cabinets, cubicles, construction waste and much more.
- Donating your unwanted items: We’ll take your unwanted items to donation and charities if you want us to do so.
- Transporting Construction Material: We will offer discounts to contractors to contact us for transporting and hauling the required construction equipment and material for their work.
Our services can either be acquired by visiting our office or by our official website. Customers can also pay us via PayPal or online bank transfer.
Marketing Analysis of Junk Removal Business
If you are starting a junk hauling business, the most important part of your business will be the accurate market analysis. You will have to face much more difficulties after starting a trash removal business, if you fail to adequately market your services. So, if you are taking a junk removal business start up, focus on to make a complete and effective marketing plan.
An effective marketing plan includes thorough analysis of the market in which you are going to serve, understanding of the demands of your customers, planning to take a lead upon your competitors and finally methods to advertise your services.
Hanks acquired the services of an expert marketing analyst to do an accurate analysis of market in which Hanks was starting a junk removal business i.e. Orlando. You can also take help from here if you are looking for junk removal business tips.
5.1 Market Trends
The junk removal business has its scope round the year especially in the active seasons of spring and summer. According to a report by IBISWorld, there are more than 11 thousand junk removal business start-ups currently running in the United States. Moreover, this business has generated a revenue of $49 billion in 2018. According to IBISWorld, the waste removal businesses have employed more than 217,000 people in the US. This business is one of the few businesses which have seen a constant increase in revenue along with the increase in business locations with time.
Junk removal services are required by every business and every commercial or residential estate. After identifying these market trends, it is clearly evident that the junk removal business start up is always blooming and can be immensely profitable provided that you plan your business successfully.
5.2 Marketing Segmentation
If you are able to identify that who will be your customers before planning about how to start junk removal business, you will be at great ease. After identifying your target customers, you will be able to understand their demands and deciding the services you should provide them.
Our target market will comprise of the residents of Orlando, commercial estate owners or managers of other companies. We have divided our customers in three groups to focus on the requirements of each group separately.
The detailed marketing segmentation of our target audience is as follows:
5.2.1 Commercial Organizations: The biggest consumer of our services comprises of the companies and commercial estate owners. The companies can contact us for doing any heavy lifting, and taking their electronic waste, furniture or paper waste for recycling or proper disposal.
Our trucks will also pick up your construction waste such as bricks, concrete, damaged wood etc. if you are a construction company.
We’ll offer various discounts to this group of our customers to build long term relations with them for repeated offerings of junk removal.
5.2.2 Residents: Our second target group will be the people living in Orlando. They will require our services whenever they want to remove junk from their house in bulky amount or whenever they want to donate their appliances and used things to a charity.
The things they want us to remove can be yard waste removal, mattress disposal, garbage removal, refrigerator removal, electronic appliances such as television disposal etc. We ensure this group that our workers won’t leave junk or any mess on the place, we will also sweep the area so as to make it again ready for the customer’s use.
5.2.3 Food Organizations: Our third target group consists of the large hotels and food manufacturing organizations which will require proper disposal of their garbage almost every day. We’ll also offer various discounts to this group, as to get repeated orders from them.
The detailed market analysis of our potential customers is given in the following table:
| Market Analysis | |||||||
| Potential Customers | Growth | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | CAGR |
| Commercial Organizations | 32% | 11,433 | 13,344 | 16,553 | 18,745 | 20,545 | 13.43% |
| Residents | 48% | 22,334 | 32,344 | 43,665 | 52,544 | 66,432 | 10.00% |
| Food Organizations | 20% | 12,867 | 14,433 | 15,999 | 17,565 | 19,131 | 15.32% |
| Total | 100% | 46,634 | 60,121 | 76,217 | 88,854 | 106,108 | 9.54% |
5.3 Business Target
You must set the short and long term targets you want to achieve before planning about how to start a trash removal business, this pre planning will help you to work tirelessly for your aim. We i.e. Orlando Junk Removal aim to become the best junk removal business start up in Orlando within next five years of our startup. Our financial target to be achieved in one year is to balance the initial cost of the startup with earned profits by the end of the first year.
Our targets to be achieved later include achieving the net profit margin of $10k per month by the end of the first year, $15k per month by the end of the second year, and $25k per month by the end of the third year.
5.4 Product Pricing
Before you think about how to start a junk hauling business, you must decide whether you will compromise the quality of your service or your earning. It will be better to save some resources for the early few months of the launch, as you will probably need to keep prices low in the initial stages.
After considering the demands and quality of his service, Hanks has decided to price all his services in the similar ranges as of his competitors. The price, however, is not fixed, it is dependent upon the type and amount of junk you want to haul.
Strategy
After knowing how to start a trash hauling business, identifying market demands and trends, the next step is to formulate a strategy to introduce and sell your services. After exploring on how to start a hauling company, you must explore what is missing in your current competitors, and then develop a business strategy to do better than them in the market.
6.1 Competitive Analysis
We are starting our Orlando Junk Removal service from scratch, yet we are confident that we’ll take a lead upon all our competitors in a very short period of time. All our workers are well trained to do high-quality work and unlimited revisions until the client is fully satisfied. Our workers will value your property and will maintain a professional appearance while interacting with you.
Although all our workers are highly trained, yet we haven’t left even a single deficit in our strategy, our company is general liability insured and property insured, and all our employees are insured each having their employee identification number. So, while taking services from our company, you will be totally stress-free and will not be liable to pay for any damages.
6.2 Sales Strategy
- We will advertise our business in relevant business magazines, newspapers and social media
- We will introduce our services to various companies by sending introductory letters and brochures
- We will offer a 25% discount on our services for the first three months of our launch and 20% discount on receiving order from the same client
6.3 Sales Forecast
| Sales Forecast | |||
| Unit Sales | Year 1 | Year 2 | Year 3 |
| Residential Junk Removal | 1,887,030 | 2,680,320 | 2,588,240 |
| Commercial Junk Removal | 802,370 | 815,430 | 823,540 |
| Donations | 539,320 | 770230 | 1,002,310 |
| Moving Construction Materials | 265,450 | 322,390 | 393,320 |
| TOTAL UNIT SALES | 3,494,170 | 4,588,370 | 4,807,410 |
| Unit Prices | Year 1 | Year 2 | Year 3 |
| Residential Junk Removal | $140.00 | $150.00 | $160.00 |
| Commercial Junk Removal | $600.00 | $800.00 | $1,000.00 |
| Donations | $700.00 | $800.00 | $900.00 |
| Moving Construction Materials | $650.00 | $750.00 | $850.00 |
| Sales | |||
| Residential Junk Removal | $2,149,800 | $2,784,000 | $3,383,200 |
| Commercial Junk Removal | $120,050 | $194,500 | $268,500 |
| Donations | $50,110 | $71,600 | $93,000 |
| Moving Construction Materials | $139,350 | $194,600 | $249,850 |
| TOTAL SALES | |||
| Direct Unit Costs | Year 1 | Year 2 | Year 3 |
| Residential Junk Removal | $0.70 | $0.80 | $0.90 |
| Commercial Junk Removal | $0.40 | $0.45 | $0.50 |
| Donations | $0.30 | $0.35 | $0.40 |
| Moving Construction Materials | $3.00 | $3.50 | $4.00 |
| Direct Cost of Sales | |||
| Residential Junk Removal | $989,300 | $1,839,000 | $2,679,700 |
| Commercial Junk Removal | $66,600 | $119,900 | $173,200 |
| Donations | $17,900 | $35,000 | $52,100 |
| Moving Construction Materials | $19,400 | $67,600 | $115,800 |
| Subtotal Direct Cost of Sales | $1,294,100 | $1,699,400 | $2,104,700 |
6.4 Sales Monthly
6.5 Sales Yearly
Personnel plan
The success and failure of a startup is greatly dependent upon its workers. Keeping in view the services you will provide, you must make a personnel plan, earlier than the launch of the business.
7.1 Company Staff
If you need help regarding how to start a trash out business or are facing trouble in determining the staff you will need, you can take help from this sample personnel plan of Orlando Junk Removal Company.
- 1 General Manager to manage the business operations
- 1 Accountant to maintain financial records
- 2 Sales Executives responsible for marketing and discovering new ventures
- 8 Truck Drivers trained for hauling junk
- 1 Technician to handle serious technical issues of trucks and to teach the drivers about resolving small technical issues
- 1 Web Developer/IT Expert to manage company’s websites and online payments
- 1 Customer Representative to interact with customers and record their orders
7.2 Average Salary of Employees
| Personnel Plan | |||
| Year 1 | Year 2 | Year 3 | |
| General Manager | $85,000 | $95,000 | $105,000 |
| Accountant | $45,000 | $50,000 | $55,000 |
| Sales Executives | $145,000 | $152,000 | $159,000 |
| Truck Drivers | $345,000 | $352,000 | $359,000 |
| Technician | $45,000 | $48,000 | $51,000 |
| Web Developer/ IT Expert | $42,000 | $45,000 | $48,000 |
| Customer Representative | $45,000 | $48,000 | $51,000 |
| Total Salaries | $707,000 | $742,000 | $777,000 |
Financial Plan
Before thinking about how to start a waste management company, you have to decide several things including the amount you can spend on your startup. If you are going to start junk hauling business on a large scale, you will, of course, need a large amount to invest on buying trucks and required equipment and hiring many people. However, if you want to start on a smaller scale, it will be both easier and better. By smaller scale it means to just work by yourself or by taking a few trucks on rent and hiring a few people.
In each case, you have to map in the form of a financial plan all the details about the startup costs and strategy of your company to recover the startup costs by the earned profits and to yield more and more profit. Hanks sought the services of an expert financial adviser to make an efficient and detailed financial plan for his business. If you are new to writing a business or financial plan by yourself or if you are still looking for how to start a garbage business, you can take help from this sample junk removal business plan free of cost.
8.1 Important Assumptions
| General Assumptions | |||
| Year 1 | Year 2 | Year 3 | |
| Plan Month | 1 | 2 | 3 |
| Current Interest Rate | 10.00% | 11.00% | 12.00% |
| Long-term Interest Rate | 10.00% | 10.00% | 10.00% |
| Tax Rate | 26.42% | 27.76% | 28.12% |
| Other | 0 | 0 | 0 |
8.2 Brake-even Analysis
| Brake-Even Analysis | |
| Monthly Units Break-even | 5530 |
| Monthly Revenue Break-even | $159,740 |
| Assumptions: | |
| Average Per-Unit Revenue | $260.87 |
| Average Per-Unit Variable Cost | $0.89 |
| Estimated Monthly Fixed Cost | $196,410 |
8.3 Projected Profit and Loss
| Pro Forma Profit And Loss | |||
| Year 1 | Year 2 | Year 3 | |
| Sales | $309,069 | $385,934 | $462,799 |
| Direct Cost of Sales | $15,100 | $19,153 | $23,206 |
| Other | $0 | $0 | $0 |
| TOTAL COST OF SALES | $15,100 | $19,153 | $23,206 |
| Gross Margin | $293,969 | $366,781 | $439,593 |
| Gross Margin % | 94.98% | 94.72% | 94.46% |
| Expenses | |||
| Payroll | $138,036 | $162,898 | $187,760 |
| Sales and Marketing and Other Expenses | $1,850 | $2,000 | $2,150 |
| Depreciation | $2,070 | $2,070 | $2,070 |
| Leased Equipment | $0 | $0 | $0 |
| Utilities | $4,000 | $4,250 | $4,500 |
| Insurance | $1,800 | $1,800 | $1,800 |
| Rent | $6,500 | $7,000 | $7,500 |
| Payroll Taxes | $34,510 | $40,726 | $46,942 |
| Other | $0 | $0 | $0 |
| Total Operating Expenses | $188,766 | $220,744 | $252,722 |
| Profit Before Interest and Taxes | $105,205 | $146,040 | $186,875 |
| EBITDA | $107,275 | $148,110 | $188,945 |
| Interest Expense | $0 | $0 | $0 |
| Taxes Incurred | $26,838 | $37,315 | $47,792 |
| Net Profit | $78,367 | $108,725 | $139,083 |
| Net Profit/Sales | 30.00% | 39.32% | 48.64% |
8.3.1 Profit Monthly
8.3.2 Profit Yearly
8.3.3 Gross Margin Monthly
8.3.4 Gross Margin Yearly
8.4 Projected Cash Flow
| Pro Forma Cash Flow | |||
| Cash Received | Year 1 | Year 2 | Year 3 |
| Cash from Operations | |||
| Cash Sales | $40,124 | $45,046 | $50,068 |
| Cash from Receivables | $7,023 | $8,610 | $9,297 |
| SUBTOTAL CASH FROM OPERATIONS | $47,143 | $53,651 | $59,359 |
| Additional Cash Received | |||
| Sales Tax, VAT, HST/GST Received | $0 | $0 | $0 |
| New Current Borrowing | $0 | $0 | $0 |
| New Other Liabilities (interest-free) | $0 | $0 | $0 |
| New Long-term Liabilities | $0 | $0 | $0 |
| Sales of Other Current Assets | $0 | $0 | $0 |
| Sales of Long-term Assets | $0 | $0 | $0 |
| New Investment Received | $0 | $0 | $0 |
| SUBTOTAL CASH RECEIVED | $47,143 | $53,651 | $55,359 |
| Expenditures | Year 1 | Year 2 | Year 3 |
| Expenditures from Operations | |||
| Cash Spending | $21,647 | $24,204 | $26,951 |
| Bill Payments | $13,539 | $15,385 | $170,631 |
| SUBTOTAL SPENT ON OPERATIONS | $35,296 | $39,549 | $43,582 |
| Additional Cash Spent | |||
| Sales Tax, VAT, HST/GST Paid Out | $0 | $0 | $0 |
| Principal Repayment of Current Borrowing | $0 | $0 | $0 |
| Other Liabilities Principal Repayment | $0 | $0 | $0 |
| Long-term Liabilities Principal Repayment | $0 | $0 | $0 |
| Purchase Other Current Assets | $0 | $0 | $0 |
| Purchase Long-term Assets | $0 | $0 | $0 |
| Dividends | $0 | $0 | $0 |
| SUBTOTAL CASH SPENT | $35,296 | $35,489 | $43,882 |
| Net Cash Flow | $11,551 | $13,167 | $15,683 |
| Cash Balance | $21,823 | $22,381 | $28,239 |
8.5 Projected Balance Sheet
| Pro Forma Balance Sheet | |||
| Assets | Year 1 | Year 2 | Year 3 |
| Current Assets | |||
| Cash | $184,666 | $218,525 | $252,384 |
| Accounts Receivable | $12,613 | $14,493 | $16,373 |
| Inventory | $2,980 | $3,450 | $3,920 |
| Other Current Assets | $1,000 | $1,000 | $1,000 |
| TOTAL CURRENT ASSETS | $201,259 | $237,468 | $273,677 |
| Long-term Assets | |||
| Long-term Assets | $10,000 | $10,000 | $10,000 |
| Accumulated Depreciation | $12,420 | $14,490 | $16,560 |
| TOTAL LONG-TERM ASSETS | $980 | $610 | $240 |
| TOTAL ASSETS | $198,839 | $232,978 | $267,117 |
| Liabilities and Capital | Year 1 | Year 2 | Year 3 |
| Current Liabilities | |||
| Accounts Payable | $9,482 | $10,792 | $12,102 |
| Current Borrowing | $0 | $0 | $0 |
| Other Current Liabilities | $0 | $0 | $0 |
| SUBTOTAL CURRENT LIABILITIES | $9,482 | $10,792 | $12,102 |
| Long-term Liabilities | $0 | $0 | $0 |
| TOTAL LIABILITIES | $9,482 | $10,792 | $12,102 |
| Paid-in Capital | $30,000 | $30,000 | $30,000 |
| Retained Earnings | $48,651 | $72,636 | $96,621 |
| Earnings | $100,709 | $119,555 | $138,401 |
| TOTAL CAPITAL | $189,360 | $222,190 | $255,020 |
| TOTAL LIABILITIES AND CAPITAL | $198,839 | $232,978 | $267,117 |
| Net Worth | $182,060 | $226,240 | $270,420 |
8.6 Business Ratios
| Ratio Analysis | ||||
| Year 1 | Year 2 | Year 3 | Industry Profile | |
| Sales Growth | 4.35% | 30.82% | 63.29% | 4.00% |
| Percent of Total Assets | 4.35% | 4.71% | 5.80% | 9.80% |
| Accounts Receivable | 5.61% | 4.71% | 3.81% | 9.70% |
| Inventory | 1.85% | 1.82% | 1.79% | 9.80% |
| Other Current Assets | 1.75% | 2.02% | 2.29% | 27.40% |
| Total Current Assets | 138.53% | 150.99% | 163.45% | 54.60% |
| Long-term Assets | -9.47% | -21.01% | -32.55% | 58.40% |
| TOTAL ASSETS | 100.00% | 100.00% | 100.00% | 100.00% |
| Current Liabilities | 4.68% | 3.04% | 2.76% | 27.30% |
| Long-term Liabilities | 0.00% | 0.00% | 0.00% | 25.80% |
| Total Liabilities | 4.68% | 3.04% | 2.76% | 54.10% |
| NET WORTH | 99.32% | 101.04% | 102.76% | 44.90% |
| Percent of Sales | ||||
| Sales | 100.00% | 100.00% | 100.00% | 100.00% |
| Gross Margin | 94.18% | 93.85% | 93.52% | 0.00% |
| Selling, General & Administrative Expenses | 74.29% | 71.83% | 69.37% | 65.20% |
| Advertising Expenses | 2.06% | 1.11% | 0.28% | 1.40% |
| Profit Before Interest and Taxes | 26.47% | 29.30% | 32.13% | 2.86% |
| Main Ratios | ||||
| Current | 25.86 | 29.39 | 32.92 | 1.63 |
| Quick | 25.4 | 28.88 | 32.36 | 0.84 |
| Total Debt to Total Assets | 2.68% | 1.04% | 0.76% | 67.10% |
| Pre-tax Return on Net Worth | 66.83% | 71.26% | 75.69% | 4.40% |
| Pre-tax Return on Assets | 64.88% | 69.75% | 74.62% | 9.00% |
| Additional Ratios | Year 1 | Year 2 | Year 3 | |
| Net Profit Margin | 19.20% | 21.16% | 23.12% | N.A. |
| Return on Equity | 47.79% | 50.53% | 53.27% | N.A. |
| Activity Ratios | ||||
| Accounts Receivable Turnover | 4.56 | 4.56 | 4.56 | N.A. |
| Collection Days | 92 | 99 | 106 | N.A. |
| Inventory Turnover | 19.7 | 22.55 | 25.4 | N.A. |
| Accounts Payable Turnover | 14.17 | 14.67 | 15.17 | N.A. |
| Payment Days | 27 | 27 | 27 | N.A. |
| Total Asset Turnover | 1.84 | 1.55 | 1.26 | N.A. |
| Debt Ratios | ||||
| Debt to Net Worth | 0 | -0.02 | -0.04 | N.A. |
| Current Liab. to Liab. | 1 | 1 | 1 | N.A. |
| Liquidity Ratios | ||||
| Net Working Capital | $120,943 | $140,664 | $160,385 | N.A. |
| Interest Coverage | 0 | 0 | 0 | N.A. |
| Additional Ratios | ||||
| Assets to Sales | 0.45 | 0.48 | 0.51 | N.A. |
| Current Debt/Total Assets | 4% | 3% | 2% | N.A. |
| Acid Test | 23.66 | 27.01 | 30.36 | N.A. |
| Sales/Net Worth | 1.68 | 1.29 | 0.9 | N.A. |
| Dividend Payout | 0 | 0 | 0 | N.A. |
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I started junk removal first then I just picked up 10-yard dumpsters on wheels
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