How to Start a Junk Car Removal Business
Are you thinking of starting your own successful junk car removal business? Well, there’s no need to worry any more as we take you by the hand in this post and show you a step by step strategy in starting your own Junk car removal business.
The mechanics of a profitable junk car removal business
On the surface, the removal of junk cars will most appear to be a counter-intuitive business practice. Customers call your company to take off their rusted vehicles and instead of charging a bill; you pay them for your services.
Yet junk car removal business people are masters of margin action. Many junk cars may be dismantled and sold for parts and scrap metal. Now and again, you could come across a vintage vehicle that has worth for collectors. The trick is to know what you’ve got, how much its worth, and where to find buyers.
Requirements to start up a Junk Car Removal Business
The Start-up capital requirements for a junk car removal business are relatively low. However, there are a few basics that have to be in place before you begin to drop the currency on the old clunkers:
- Garage
After you pick up the cars, you would need commercial or industrial space to strip them and make preparations for the vehicles to undergo scrapping. This space doesn’t have to be fancy; however, importantly, it needs to be equipped with the right equipment and materials.
- Tow Truck(s)
You would need a way to safely and efficiently transport those junk vehicles that you spotted. Hence, a tow truck is a smart idea. However, a flatbed tow truck is even better since the majority of the cars that you will purchase won’t be safe to tow.
- Call Center
You would need the services of either a receptionist or a call centre employee to help and assist you in taking calls from customers. This person will also be in charge of pick-ups and all.
- Website
Have you thought about how your clients are going to find you? Most of your customers will see your company online these days. A high-quality business website that has been optimized for search engines is a must for profit-seeking junk car business owners.
- Industry Knowledge
It is difficult to survive in the junk car industry without detailed knowledge of scrap metal prices, vehicle values, component values and the demand for collectables.
Business Plan Mechanics for Junk Car Removal Business
At Legitsmallbusiness, we advise new business owners to keep the business plan simple. In the end, your business plan is meant to be a resource for you, the owner of the business.
Rather than just investing countless hours in a lengthy business plan, put the pen on paper now and document the basics with the knowledge that your business plan will undergo series of modification as your business progresses forward.
Read Also: 8 Reasons You Need a Business Plan for Your Small Business
Have an overview of the competition
Well, in ahead of time of opening a junk car removal business in your city, it’s a smart decision to find out what the competition looks like. You can go online to find a list of local competitors in your town when you want to conduct your search, type in your area, state and zip code to get a list of junk car removal companies near you.
Study how successful businesses have placed themselves in the industry, and then plan your business in a way that makes you stand out from the crowd.
Getting Advice from Seasoned Entrepreneurs
When you’ve finally completed assessing the competition, you need to talk to someone who’s already in the business. If you think that your local competitors will give you advice, you’re over-optimistic. It would be insane for them to teach you the business.
Fortunately, the owner of a junk car removal company in another city can be a perfect learning resource for you as long as they don’t see you as a direct competitor. Many business owners are willing to give guidance to new entrepreneurs. We estimate that you will need to contact a lot of business owners to find someone interested in sharing his expertise with you.
So, what could you do to locate a junk car removal business founder on the other side of the country to talk to?
It’s so simple, Just Let your fingers do the walking around and visit Google by typing “junk car removal businesses + city”, then hit the search button.
The reason you should purchase rather than start from scratch
It’s no big surprise that entrepreneurs have a strong drive to build businesses from scratch. However, a healthier and safer approach would be to acquire an existing junk car removal business.
Existing junk car removal companies are proven to operate with reliable revenue sources. When you buy, you also obtain the freedom to set aside all the trial-and-error that comes standard with every junk car removal company start-up.
Is franchising the best option for you?
You could perhaps know that your chances of doing well in business will improve drastically if you sign up for franchises instead of doing it all on your own.
Before you get too far in your plan to open a junk car removal business, you should consider whether buying a franchise might ease your start-up process.
Another alternative would be for you to conduct franchise research to see if there is a franchise for you. You might even find something that points you in a different direction.
Marketing Your Junk Car Removal Business
We understand that the most excellent junk car removal business entrepreneurs tend to hold good marketing skills. Yet in this industry, the character traits of ready and willing marketers are sometimes not apparent. The right market approach allows smaller junk car removal businesses to stay competitive with much larger enterprises. What smaller companies lack in resources, they can make up for in terms of marketing intelligence and competence.
Marketing Collateral
Each piece of collateral your junk car removal company generates is a quantifiable representation of your brand’s unique and core values. Some components of insurance can be tailored for recipients, whereas others serve a more general purpose.
Either way, you’ve got a stake in making sure it’s in the right hands. Premium mailing lists from established vendors can protect the value of your investment for direct mail campaigns. If you’re like most company owners, you’re investing significant resources in producing quality collateral.
If you don’t invest similar resources in mailing lists and other distribution channels, your junk car removal business investment in collateral will be useless.
Strategic Partnerships
If several organizations come together in a strategic alliance, junk car removal businesses acquire a new approach to the marketplace, grounded in the pursuit of mutual goals. Joint advertising campaigns, mailings and other promotional efforts may be implemented either on a short-term or long-term basis, as long as each partner participates in the creation of a message and has the approval authority over the content that is released.
Read Also: Reasons for Business Partnership Failure
Viral Marketing
Viral marketing is among the most elusive marketing tactics in the arsenal of small business owners. Viral marketing takes its intestines, and if it is fully integrated into the marketing strategy of a junk car removal business, there is no guarantee that your efforts will be rewarded.
Although complete control is unfeasible, the correct actions at the right time can encourage the viral distribution of brand messages. One approach is to initiate a viral marketing campaign by welcoming a small group of clients to check your products and share their impressions on their social networking sites.
Mistakes to Avoid When Starting a Junk Car Business
Essential: These mistakes are things that you can avoid as a potential business owner, they are points we have dealt with above, however, and we just that reiterating below with a few more discussion might drive it home for you. SO don’t be surprised if you come across points we treated before. It was intentional
We all want to be bosses of our own. For someone else, the corporate world can be wearying. Setting up a business is never simple because of the many challenges involved. You can make your success with the right amount of planning and brainstorming.
If you’re a car enthusiast, a junk car company can be a career change or even just an entrepreneur. Junk car removal business might seem to be a simple counter-intuitive business where people call you to take away their beat and rusty vehicles.
Instead of paying you, you’re charging them. Throughout this post, some errors often trigger problems for start-ups when starting a junk car company.
Below are mistakes to avoid when starting up:
Neglecting the business plan Mechanics for your Junk Car Removal Business
Having a clear business plan is a vital part of the success of every company. If you don’t have a good business plan, you’re in a lot of trouble. The business plan is intended to be a guide for you, the owner of the company. Document the essentials and also save yourself long hours of having to write business plans. Seek expert advice on the most effective business plan for your junk car company.
Neglecting the essential start-up requirements
Without capital, your business is not a business. For you to intend to start a junk car business, then you have capital. The very next step is to gain an understanding of the basic requirements of a junk car company, what’s required to run the business?
Below are some Junk car removal business essentials to look into:
- Knowledge of the industry
- A garage
- Tow Trucks
- Call centre
- Website
- Not accessing the competition.
Before actually updating your business plan, it would be an intelligent decision to get to know the situation on the ground, what the competition appears to look like in the location you intend to start up. Get a list of local competitors in your municipality and find out how those existing companies have positioned themselves on the market. It helps you plan your company in a unique way that sets you apart from the others.
Neglecting to seek expert Advice
Speaking to somebody who is already in business would be a smart thing to do. The owner of a junk car company in another city may be a valuable and excellent learning resource for you. As long as they don’t see you as a threat, they would be happy to offer you advice as a new entrepreneur. Contact a lot of business owners and get someone willing to share their wisdom with you.
Make the internet, your friend, search online for business owners and even get advice online. There is a lot of knowledge about the junk car business.
Neglecting to consider other options like franchising
Franchising instantly increases your chances of doing well in business, so rather than doing it all by yourself, think about buying a franchise.
Evaluate whether buying a franchise will indeed enhance your start-up process before getting too far into your plans to open a junk car business. Research on existing franchise opportunities that could benefit you, you never know, you might end up with something good.
Should You Purchase rather than Starting?
Entrepreneurs have the urge to build up businesses from the ground up and take credits or their success. There are, however, healthier and safer strategies. Buying an existing junk car business can be a great way to get started. The current ones are tested and have stable revenue sources. By purchasing, you get to sidestep of all the trial-and-error that accompanies the standard junk car removal business start-up.
Employing Traditional Methods of Advertising
Effective advertising is essential to the success of the business. The easiest way to go is online, using traditional forms, such as brochures and flyers, may be helpful, but at this time and age, most people are online. The possibility that your customers will be online is so high. Use this to your advantage and see your business rocket at higher altitudes.
Media platforms such as Facebook and the website will help you a lot to reach your target clientele. If you have a problem with creating content, you may request the services of freelance content creators to work on content for your online platforms and websites.
Thinking that mechanic Knowledge is not needed.
If you’re going to deal with cars, you might want to improve your mechanic expertise as well. You’re going to need these skills in pricing parts as well as dismantling junk cars that you’re going to take to your industrial garage. This insight is handy in the sale of vehicle parts. How else do you know what a client wants if you don’t even see the car parts?
It’s quite a task to work your way through a junk car business. However, the long-term rewards are also quite enormous. A great deal of work and commitment is required to make a significant advance in this sector.
No matter how good your ideas are, it doesn’t matter if you don’t have a clear business plan and the right information about starting and running a junk car company. Be willing to work all the hours of the day as the pick-up calls come through.
The more effort you make, the more the chances of success increase. You would also need to clean your mechanical skills.
Eight Things you need to consider before starting a Junk Car Removal Business
Looking to start a junk removal business seems like a simple idea of self-employment. People are trying to get rid of garbage, and they’re paying you to do it.
Better still, there are more prospects than ever before for household junk services in a time of wealthy baby boomers entering retirement and downsizing (or at least de-cluttering).
Even as junk removal can be a successful small business, here are eight points that you could weigh while deciding whether or not to join this field of business.
- Perform thorough market research in your area
In the competition analysis, find out who the local junk hauliers are, and find out exactly which ones are successful, and why. This quest could also include not only independent junk removal providers but also some more massive junk removal franchise players such as 1-800-GOT-JUNK? And the rest like that.
To be successful, you need to understand not only the current rates paid but also the cost of disposing or recycling junk, including overhead, so that you can determine your profit. Call some local companies and ask for junk removal rates.
You’ll need to find out the prices for different types of junk. Some will go directly to the landfill, while others may be sold to scrap vendors, donated to charities, or other uses that will affect your removal costs.
- Be Sure to Check The Regulatory Hurdle
There may be local, state, and federal laws likely to apply to the permissible disposal of junk — especially hazardous waste — and penalties may be used if the disposal is not conducted out lawfully. For instance, in Oregon, you will need a transportation certificate to transport scrap metal.
- Accept a Junk Removal Job
Some other part of your consumer research would be to take a job with some other junk removal company for an initial duration to get a deeper understanding of the industry. If you’re considering investing in getting into a new business, this will help you gain an understanding of the market before investing yourself.
- Consider Craigslist
If you have a pick-up truck, you might want to advertise on Craigslist or another listing, and take a few cash jobs, to see how you like it. Now that your initial market research has been completed, you have an idea of how much to start charging.
- Study Much Bigger Brands
The introduction of 1-800-Got-Junk?, And many others have set the bar high on customer expectations of appearance, professionalism, and price. Professional customer service is a must; nevertheless, you have the chance to tailor your business approach to help you make a distinction of your brand from the other big brands.
- Understand the Barriers to Entry
If you don’t need a lot of research or monetary investment to get into the junk hauling business, it apparently can’t take a lot of time for others either.
This process is known as a low entry barrier, which means that new participants can continue to cycle in and out of the industry.
First, having entered and possibly undervaluing their services, because they do not have a realistic assessment of the overhead expenses, they will have to meet to remain viable. Your best bet is to distinguish your services to make them exceptional so that your customers will love you.
- Seasonality should be kept in mind.
Spring and summer are busy seasons when it comes to Junk Car removal. Envisage that these are the most productive seasons, with activities winding down in the fall and winter.
- Put Together a Solid Business Plan
After doing the analysis, you’re ready to develop a business plan for your junk removal business. According to Susan Ward, “A business plan is a document that summarizes the operational and financial objectives of a business and contains detailed plans and budgets that show how the objectives are to be achieved.” Because the business plan includes detailed financial projections, business performance forecasts and a marketing plan, it is an incredibly useful business plan tool.
Final Tip
Work for Repeat Business
Work to impress individuals or organizations that would offer you a repeat of your business. These may include local government bodies, property managers, construction companies, or other local businesses. If necessary, manage the arrangement with this customer in a structured agreement that involves special pricing or the elimination of priority garbage.
An essential metric in the junk removal business is how quickly you can respond to a removal request. Well-run junk removal companies can often clear up the customer’s location within a day or two.
In conclusion
To get started on your way to starting and running a successful Junk car removal business, you first have to understand the basics of the market, and this is what we have stressed in our complete guide.