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Written by: Natalie Fell
Natalie is a business writer with experience in operations, HR, and training & development within the software, healthcare, and financial services sectors.
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 June 20, 2022
Investment range
$30,800 - $72,100
Revenue potential
$180,000 - $600,000 p.a.
Time to build
3-6 months
Profit potential
$81,000 - $150,000 p.a.
Industry trend
Growing
Commitment
Full-time
Vital aspects to consider when kicking off your waste management enterprise:
Before starting a waste management business, it’s important to consider the pros and cons.
Trends within the waste management industry include:
Challenges within the waste management industry include:
Startup costs for a waste management business range from $35,800 to $72,600. Costs include down payments on collection vehicles, dumpsters and containers, website, and marketing expenses.
You’ll need a handful of items to successfully launch your waste management business, including:
| Start-up Costs | Ballpark Range | Average |
|---|---|---|
| Licenses and permits | $300-$1,000 | $650 |
| Insurance | $500-$1,000 | $750 |
| Marketing and advertising | $1,000-$3,000 | $2,000 |
| Software | $200-$500 | $350 |
| Computer | $800-$1,600 | $1,200 |
| Waste containers | $5,000-$10,000 | $7,500 |
| Collection vehicle down payment | $20,000-$50,000 | $35,000 |
| Employee wages | $3,000-$5,000 | $4,000 |
| Total | $35,800-$72,600 | $51,450 |
The average cost of residential waste management is $30 per month. Commercial customers typically pay an average of $200 per month. Assuming you’re using existing landfills to dispose of your waste, your profit margin should be around 45%.
In your first year or two, you could provide waste management services to 75 commercial customers at a monthly rate of $200, bringing in $180,000 in annual revenue. This would mean $81,000 in profit, assuming that 45% margin.
As your business grows, you could increase your customer base to 200 and raise your monthly rates to $250. At this stage, you’d purchase more equipment and hire additional staff, reducing your profit margin to around 25%. With annual revenue of $600,000, you’d make a handsome profit of $150,000.
There are a few barriers to entry when it comes to starting a waste management business. Your biggest challenges will be:
Now that you know what’s involved in starting a waste management 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 waste management 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 a waste management company for construction businesses.
You might consider targeting a niche market by specializing in a certain aspect of your industry, such as medical waste or food waste.
This could jumpstart your word-of-mouth marketing and attract clients right away.
As a waste management company, you’ll be responsible for picking up garbage and waste from homes or businesses and taking them to a local landfill for processing. Over time, you may choose to acquire your own waste treatment facility or landfill. Some waste management companies also have recycling capabilities.
Most waste management companies charge customers a monthly rate for services. When determining your rates, factor in the cost of reusable waste containers or dumpsters and any fees associated with the use of local landfills.
Monthly costs for residential customers range from $25 to $40. For commercial customers, rates range from $150 to $300. If you handle specialized waste, like chemical or medical, your rates may be much higher. After factoring in operating costs, your profit margin should be around 45%
Once you know your costs, you can use this Step By Step profit margin calculator to determine your mark-up and final price points. Remember, the prices you use at launch should be subject to change if warranted by the market.
Your potential customers will be households or businesses looking for reliable waste disposal solutions. Attract residential customers by focusing marketing efforts on popular social media platforms like Instagram, Facebook, and TikTok. Network with commercial customers through professional platforms like LinkedIn.
Many small waste management companies partner with local landfills and recycling facilities. They allow them to dispose of waste there for a fee. In the early stages, you may want to run the administrative portion of your business from home to keep costs low.
But as your business grows, you’ll likely need to hire additional workers for various roles and may need to acquire your own waste management facility or rent an office. You can 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:
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 sets 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 are planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to waste management.
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 waste management 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 are 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 option, other than friends and family, for funding a waste management business. You might also try crowdfunding if you have an innovative concept.
Starting a waste management business requires obtaining a number of licenses and permits from local, state, and federal governments.
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 waste management 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 TRUX, WasteWORKS, or CurbWaste to schedule collections, track vehicle maintenance, and bill customers.
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 services like WordPress, Wix, or Squarespace. 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 waste management 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 waste management 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 waste removal business, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in waste management 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 waste management. You’ll probably generate new customers or find companies with which you could establish a partnership.
If you’re starting out small from a home office, you may not need any employees. But as your business grows, you will likely need workers to fill various roles. Potential positions for a waste management 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.
Starting a waste management company requires a significant financial investment, along with hard work to attract and retain customers. But you’ll be providing a crucial service and your efforts are likely to be rewarded with strong profits.
Now that you’ve done your homework, it’s time to get out there and start picking up trash, along with big-time paychecks!
Yes, waste management companies can be very profitable. The key to success is in building a large base of loyal customers and charging competitive rates for your services.
To market a waste management company, identify your target market and create a marketing strategy that focuses on their needs and preferences. Utilize various marketing channels such as social media, email marketing, print advertising, and local events to promote your services.
The different types of waste management include collection, transportation, processing, and disposal of different types of waste, such as municipal solid waste, hazardous waste, biomedical waste, electronic waste, and construction and demolition waste.
The most expensive waste to dispose of is hazardous waste, such as chemicals, batteries, and medical waste. Hazardous waste requires special handling, transportation, and disposal methods to minimize the risk of environmental contamination and health hazards.
The most profitable item to recycle depends on the current market demand and pricing for specific materials. Generally, high-value materials such as copper, aluminum, and steel can be profitable to recycle. However, it is essential to consider the environmental impact and sustainability of recycling these materials and ensure that they are recycled in a responsible and ethical manner.
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