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Written by: Carolyn Young
Carolyn Young is a business writer who focuses on entrepreneurial concepts and the business formation. She has over 25 years of experience in business roles, and has authored several entrepreneurship textbooks.
Edited by: David Lepeska
David has been writing and learning about business, finance and globalization for a quarter-century, starting with a small New York consulting firm in the 1990s.
Published on February 9, 2022
Investment range
$21,050 - $47,100
Revenue potential
$78,000 - $260,000 p.a.
Time to build
1 – 3 months
Profit potential
$40,000 - $130,000 p.a.
Industry trend
Growing
Commitment
Flexible
Here is what you need to know before starting your dumpster rental business:
First, it’s important to clarify that a dumpster rental business rents dumpsters for short-term use, generally to homeowners doing remodeling projects or to construction firms disposing of debris from job sites. And the crucial element to keep in mind is that dumpster rental businesses must dispose of all the waste that ends up in their dumpsters, including recyclables and hazardous materials, according to local laws and regulations.
Starting a dumpster rental business has pros and cons to consider before deciding if it’s right for you.
Market analyst IBISWorld says an increase in construction activities in the US will drive demand for dumpster rental and other waste management services.
Trends in the dumpster rental industry include:
Challenges in the dumpster rental industry include:
Startup costs for a dumpster rental business range from $20,000 to close to $50,000. Costs include purchasing 3 dumpsters, which cost around $5,000 each, and a down payment on a roll off truck. Also included is the cost to rent a warehouse storage space.
You’ll need a handful of items to successfully launch your dumpster rental business, including:
| Start-up Costs | Ballpark Range | Average |
|---|---|---|
| Setting up a business name and corporation | $150 - $200 | $175 |
| Business licenses and permits | $100 - $300 | $200 |
| Insurance | $100-$300 | $200 |
| Business cards and brochures | $200 - $300 | $250 |
| Website setup | $1,000 - $3,000 | $2,000 |
| 3 dumpsters | $12,000 - $30,000 | $25,000 |
| Down payment on a roll off truck | $6,000 - $10,000 | $8,000 |
| Warehouse storage space | $1,500 - $3,000 | $2,250 |
| Total | $21,050 - $47,100 | $34,075 |
Costs vary based on the duration of the dumpster rental and the size of the dumpster. The average weekly rental price for a 10-yard dumpster is about $500. Your profit margin should be about 50% after expenses, including storage rental and part-time labor.
In your first year or two, if you consistently rent 3 dumpsters a week, you’ll bring in over $78,000 in annual revenue. This would mean a nice profit of almost $40,000, assuming that 50% margin. As your business grows and you add more dumpsters, you could rent 10 dumpsters a week. With annual revenue of $260,000, you’d make a healthy $130,000.
There are a few barriers to entry for a dumpster rental company. Your biggest challenges will be:
Now that you know what’s involved in starting a dumpster rental business, it’s a good idea to hone your concept in preparation to enter a competitive market.
Market research will give you the upper hand, even if you’re already positive that you have a perfect product or service. Conducting market research is important, because it can help you understand your customers better, who your competitors are, and your business landscape.
Research dumpster rental businesses in your area to examine their services, price points, and customer reviews. You’re looking for a market gap to fill. For instance, maybe the local market is missing an eco-friendly dumpster rental service that recycles and repurposes dumped materials.
You might consider targeting a niche market by specializing in a certain aspect of your industry, such as new construction.
This could jumpstart your word-of-mouth marketing and attract clients right away.
You might also provide junk removal service if you’re willing to go fully into waste management. Your company could also take care of debris and other trash and waste removal.
Your services are pretty straightforward but offering recycling and repurposing services can add revenue and help to build your brand. Dumpster rental services will generally just be dropping off, picking up, and appropriately emptying the dumpsters.
The average price for a dumpster rental is about $500 for a 10-yard dumpster for one week. Your ongoing expenses will be storage space rental, part-time labor, and fuel. You should aim for a profit margin of at least 50%.
Once you know your costs, you can use this Step By Step profit margin calculator to determine your mark-up and final price point. Remember, the prices you use at launch should be subject to change if warranted by the market.
Your target market will be contractors and construction firms, as well as landlords and building developers. You can find them on Facebook and LinkedIn. You could also partner with contractors and remodelers to get referrals to their customers.
Unless you have your own space to store your dumpsters and truck, you’ll need to rent out a warehouse storage space. Find commercial space to rent in your area on sites such as Craigslist, Crexi, and Instant Offices.
When choosing a commercial space, you may want to follow these rules of thumb:
Here are some ideas for brainstorming your business name:
Discover over 260 unique dumpster rental business name ideas here. If you want your business name to include specific keywords, you can also use our dumpster rental business name generator. Just type in a few keywords and hit “generate” and you’ll have dozens of suggestions at your fingertips.
Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these.
Finally, make your choice among the names that pass this screening and go ahead with domain registration and social media account creation. Your business name is one of the key differentiators that set your business apart. Once you pick your company name, and start with the branding, it is hard to change the business name. Therefore, it’s important to carefully consider your choice before you start a business entity.
Here are the key components of a business plan:
If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist to create a top-notch business plan for you.
Registering your business is an absolutely crucial step — it’s the prerequisite to paying taxes, raising capital, opening a bank account, and other guideposts on the road to getting a business up and running.
Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business!
Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you’re planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to dumpster rental businesses.
If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state.
Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your dumpster rental business will shape your taxes, personal liability, and business registration requirements, so choose wisely.
Here are the main options:
We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using an online LLC formation service. They will check that your business name is available before filing, submit your articles of organization, and answer any questions you might have.
Choose Your State
The final step before you’re able to pay taxes is getting an Employer Identification Number, or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN.
Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.
The IRS website also offers a tax-payers checklist, and taxes can be filed online.
It is important to consult an accountant or other professional to help you with your taxes to ensure you’re completing them correctly.
Securing financing is your next step and there are plenty of ways to raise capital:
Bank and SBA loans are probably the best options, other than friends and family, for funding a dumpster rental business.
Starting a dumpster rental business requires obtaining a number of licenses and permits from local, state, and federal governments.
To operate your truck you’ll likely need a commercial driver’s license (CDL), which you can obtain through your department of motor vehicles.
Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), health licenses and permits from the Occupational Safety and Health Administration (OSHA), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits.
You may also need state-level and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more.
You could also check this SBA guide for your state’s requirements, but we recommend using MyCorporation’s Business License Compliance Package. They will research the exact forms you need for your business and state and provide them to ensure you’re fully compliant.
This is not a step to be taken lightly, as failing to comply with legal requirements can result in hefty penalties.
If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.
Before you start making money, you’ll need a place to keep it, and that requires opening a bank account.
Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your dumpster rental business as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.
Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account.
Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.
Here are some types of insurance to consider:
As opening day nears, prepare for launch by reviewing and improving some key elements of your business.
Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks.
You may want to use industry-specific software, such as Docket, DRS, or ServiceCore, to manage your online booking, dumpster tracking, dispatching, and invoicing.
Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism.
You can create your own website using website builders. This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech-savvy, you can hire a web designer or developer to create a custom website for your business.
They are unlikely to find your website, however, unless you follow Search Engine Optimization (SEO) practices. These are steps that help pages rank higher in the results of top search engines like Google.
Here are some powerful marketing strategies for your future business:
Unique selling propositions, or USPs, are the characteristics of a product or service that sets it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your dumpster rental business meets their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire.
Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your dumpster rental business could be:
You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running a dumpster rental business, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in dumpsters for years and can offer invaluable insight and industry connections.
The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in dumpster rentals. You’ll probably generate new customers or find companies with which you could establish a partnership.
You’ll probably run the business on your own, and just hire a few part-time workers to do drop-offs and pickups. If your business gets larger, though, Potential positions for a dumpster rental business include:
At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need.
Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed, Glassdoor, or ZipRecruiter. Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent.
Dumpsters might not sound very exciting, but you’ll be excited when the cash starts rolling in! The US dumpster rental industry is a half-billion-dollar market and it’s expected to continue growing, so why not grab a piece of that pie? You can even expand later and offer other similar services such as junk removal, or you can widen your coverage area. There are many possibilities.
You’re off to a great start, having honed your knowledge about starting a business, so get ready to launch your dumpster rental services and turn trash into your big success story!
Yes, a dumpster rental business can be profitable, even if you only start with three dumpsters. Average prices to rent a dumpster are about $500 for a week, so if you can keep them consistently rented, you can make good money.
You can choose a niche market for your dumpsters, such as construction companies or remodeling businesses. You could also price your dumpster rentals slightly lower than the competition.
Dumpster sizes range from 10 yards to 40 yards. The size used depends on the needs of the customer. For something like a small remodeling job, you might only need a 10 yard dumpster.
There are several types of dumpsters, including front-load and rear-load dumpsters, which are smaller and used for regular waste disposal. Roll-off dumpsters are larger and typically used for construction or demolition projects. Compactors are specialized dumpsters that compact waste using a hydraulic press for more efficient disposal.
Your dumpster rental business’ growth potential is only limited by the number of dumpsters you have and how big you can grow your operation in your local area.
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