How to Start a Waste Management Business

Garbage might be a dirty job, but someone’s gotta do it! That’s why US waste collection is worth $59 billion and the global market expects strong 6.2% annual growth through 2030. 

Waste management companies partner with businesses and local residents to pick up waste and take it to a landfill or recycling center. Although waste management may not be the most appealing line of work, it’s a necessary service and a potentially lucrative business venture.

But before you start looking for a garbage truck, you’ll need to know what it takes to launch a business. Fortunately, this step-by-step guide contains the tools and resources needed to start a successful waste management business. 

Step 1: Decide if the Business Is Right for You

Pros and cons

Before starting a waste management business, it’s important to consider the pros and cons.

Waste management industry trends

Industry size and growth

• Industry size and past growth – The US waste collection services market is worth $59 billion in 2022. It has grown around one percent annually since 2017.((https://www.ibisworld.com/industry-statistics/market-size/waste-collection-services-united-states/))
• Growth forecast – The global waste management industry is expected to grow at an annual rate of 6.2% through 2030.((https://www.grandviewresearch.com/industry-analysis/global-waste-management-market))
• Number of businesses – In 2022, 7,986 waste collection services businesses are operating in the US.((https://www.ibisworld.com/industry-statistics/number-of-businesses/waste-collection-services-united-states/))
• Number of people employed – In 2022, US waste collection services companies employ 235,374 people.((https://www.ibisworld.com/industry-statistics/employment/waste-collection-services-united-states/))

Trends and challenges

Trends within the waste management industry include:

• Technological advancements are helping waste management companies run more smoothly. Examples include the use of robots for garbage sorting and cutting-edge software to optimize collection routes.
• Cities and local governments are moving more towards “zero waste” policies and shifting waste management from traditional landfills to recycling facilities.

Challenges within the waste management industry include:

• Employee retention can be tough for waste management businesses, as waste collector jobs have high turnover.
• Adhering to safety standards in waste management is a must, but can be challenging. Successful companies need to spend a significant amount of time training employees to properly operate equipment and handle hazardous materials.

What kind of people work in waste management?

• Gender – 24% of waste management specialists are female, while 76% are male.((https://www.zippia.com/waste-management-specialist-jobs/demographics/))
• Average level of education – The average waste management specialist has obtained a bachelor’s degree.
• Average age – The average waste management specialist in the US is 43 years old.

How much does it cost to start a waste management business?

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:

• Collection vehicles
• Waste containers and dumpsters
• Computer
• Website
• Logo and branding

How much can you earn from a waste management business?

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.

What barriers to entry are there?

There are a few barriers to entry when it comes to starting a waste management business. Your biggest challenges will be:

• Competition with established waste management firms
• Building a steady customer base

Related Business Ideas

If you’re still not sure whether this business idea is the right choice for you, here are some related business opportunities to help you on your path to entrepreneurial success.

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Step 2: Hone Your Idea

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.

Why? Identify an opportunity

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. 

What? Determine your products or services

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.

How much should you charge for waste management services?

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.

Who? Identify your target 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.

Where? Choose your business premises

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:

• Central location accessible via public transport
• Ventilated and spacious, with good natural light
• Flexible lease that can be extended as your business grows
• Ready-to-use space with no major renovations or repairs needed

Step 3: Brainstorm a Business Name

Your business name is your business identity, so choose one that encapsulates your objectives, services, and mission in just a few words. You probably want a name that’s short and easy to remember, since much of your business, and your initial business in particular, will come from word-of-mouth referrals.

Here are some ideas for brainstorming your business name:

• Short, unique, and catchy names tend to stand out
• Names that are easy to say and spell tend to do better 
• Name should be relevant to your product or service offerings
• Ask around — family, friends, colleagues, social media — for suggestions
• Including keywords, such as “waste removal” or “waste collection”, boosts SEO
• Name should allow for expansion, for ex: “Jim’s Bakery” over “Jim’s Cookies”
• Avoid location-based names that might hinder future expansion
• Use online tools like the Step by Step 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 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.

Step 4: Create a Business Plan

Every business needs a plan. This will function as a guidebook to take your startup through the launch process and maintain focus on your key goals. A business plan also enables potential partners and investors to better understand your company and its vision:

• Executive Summary: Brief overview of the entire business plan; should be written after the plan is complete.
• Business Overview: Overview of the company, vision, mission, ownership, and corporate goals.
• Product and Services: Describe your offerings in detail.
• Market Analysis: Assess market trends such as variations in demand and prospects for growth, and do a SWOT analysis.
• Competitive Analysis: Analyze main competitors, assessing their strengths and weaknesses, and create a list of the advantages of your services.
• Sales and Marketing: Examine your companies’ unique selling propositions (USPs) and develop sales, marketing, and promotional strategies.
• Management Team: Overview of management team, detailing their roles and professional background, along with a corporate hierarchy.
• Operations Plan: Your company’s operational plan includes procurement, office location, key assets and equipment, and other logistical details.
• Financial Plan: Three years of financial planning, including startup costs, break-even analysis, profit and loss estimates, cash flow, and balance sheet.
• Appendix: Include any additional financial or business-related documents.

If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist at Fiverr to create a top-notch business plan for you.

Step 5: Register Your Business

Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business! 

Choose where to register your company

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. 

Choose your business structure

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:

• Sole Proprietorship – The most common structure for small businesses makes no legal distinction between company and owner. All income goes to the owner, who’s also liable for any debts, losses, or liabilities incurred by the business. The owner pays taxes on business income on his or her personal tax return.
• General Partnership – Similar to a sole proprietorship, but for two or more people. Again, owners keep the profits and are liable for losses. The partners pay taxes on their share of business income on their personal tax returns.
• Limited Liability Company (LLC) – Combines the characteristics of corporations with those of sole proprietorships or partnerships. Again, the owners are not personally liable for debts.
• C Corp – Under this structure, the business is a distinct legal entity and the owner or owners are not personally liable for its debts. Owners take profits through shareholder dividends, rather than directly. The corporation pays taxes, and owners pay taxes on their dividends, which is sometimes referred to as double taxation.
• S Corp – An S-Corporation refers to the tax classification of the business but is not a business entity. An S-Corp can be either a corporation or an LLC, which just need to elect to be an S-Corp for tax status. In an S-Corp, income is passed through directly to shareholders, who pay taxes on their share of business income on their personal tax returns.

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 ZenBusiness’s 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. 

Step 6: Register for Taxes

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.

Step 7: Fund your Business

Securing financing is your next step and there are plenty of ways to raise capital:

• Bank loans: This is the most common method but getting approved requires a rock-solid business plan and strong credit history.
• SBA-guaranteed loans: The Small Business Administration can act as guarantor, helping gain that elusive bank approval via an SBA-guaranteed loan.
• Government grants: A handful of financial assistance programs help fund entrepreneurs. Visit Grants.gov to learn which might work for you.
• Friends and Family: Reach out to friends and family to provide a business loan or investment in your concept. It’s a good idea to have legal advice when doing so because SEC regulations apply.
• Crowdfunding: Websites like Kickstarter and Indiegogo offer an increasingly popular low-risk option, in which donors fund your vision. Entrepreneurial crowdfunding sites like Fundable and WeFunder enable multiple investors to fund your business.
• Personal: Self-fund your business via your savings or the sale of property or other assets.

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. 

Step 8: Apply for Licenses/Permits

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.

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.

Step 9: Open a Business Bank Account

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. 

Step 10: Get Business Insurance

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:

• General liability: The most comprehensive type of insurance, acting as a catch-all for many business elements that require coverage. If you get just one kind of insurance, this is it. It even protects against bodily injury and property damage.
• Business Property: Provides coverage for your equipment and supplies.
• Equipment Breakdown Insurance: Covers the cost of replacing or repairing equipment that has broken due to mechanical issues.
• Worker’s compensation: Provides compensation to employees injured on the job.
• Property: Covers your physical space, whether it is a cart, storefront, or office.
• Commercial auto: Protection for your company-owned vehicle.
• Professional liability: Protects against claims from a client who says they suffered a loss due to an error or omission in your work.
• Business owner’s policy (BOP): This is an insurance plan that acts as an all-in-one insurance policy, a combination of the above insurance types.

Step 11: Prepare to Launch

As opening day nears, prepare for launch by reviewing and improving some key elements of your business. 

Essential software and tools

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.

Accounting

• Popular web-based accounting programs for smaller businesses include Quickbooks, Freshbooks, and Xero. 
• If you’re unfamiliar with basic accounting, you may want to hire a professional, especially as you begin. The consequences for filing incorrect tax documents can be harsh, so accuracy is crucial.

Marketing

Some of your business will come from word of mouth or online visitors, but you should still invest in digital marketing! Getting the word out is especially important for new businesses, as it’ll boost customer and brand awareness. 

Once your website is up and running, link it to your social media accounts and vice versa. Social media is a great tool for promoting your business because you can create engaging posts that advertise your products:

• Facebook: Great platform for paid advertising, allows you to target specific demographics, like men under age 50 in the Cleveland area. 
• Instagram: Same benefits as Facebook but with different target audiences.
• Website: SEO will help your website appear closer to the top in relevant search results, a crucial element for increasing sales. Make sure that you optimize calls to action on your website. Experiment with text, color, size, and position of calls to action such as “Book Now”. This can sharply increase customers.
• Google and Yelp: For businesses that rely on local clientele, getting listed on Yelp and Google My Business can be crucial to generating awareness and customers.

Kickstart Marketing

Take advantage of your website, social media presence and real-life activities to increase awareness of your offerings and build your brand. Some suggestions include: 

• Signage – Put up eye-catching signage at your store and website 
• Flyering – Distribute flyers in your neighborhood and at industry events 
• Sponsor events – You can pay to be a sponsor at events that are relevant to your target market
• Post a video – Post a video about your waste management business. Use humor and maybe it will go viral!
• Email marketing/newsletter – Send regular emails to customers and prospects. Make them personal. 
• Start a blog – Start a blog and post regularly. Change up your content and share on multiple sites.
• Seek out referrals – Offer incentives to generate customer referrals to new clients.
• Paid ads on social media – Choose sites that will reach your target market and do targeted ads.
• Testimonials – Share customer testimonials about how your waste management business helped them

Develop your website

Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism. 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. 

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.

Focus on USPs

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:

• Sustainable waste management for the eco-conscious 
• Professional commercial waste collection at affordable prices
• Reliable trash collection for busy construction sites

Networking

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. 

Step 12: Build Your Team

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:

• Waste Management Technicians – Drive collection trucks, pick up waste 
• Office Manager – Send bills to customers, manage collection schedule
• Marketing Lead – Manage social media accounts, run advertising campaigns

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. 

Step 13: Start Making Money!

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!