How to score a junk removal market using six factors you can check

What to take away

Why no places are named

A ranking of markets would need comparable disposal costs, wages, housing turnover, competitive density and facility access across thousands of areas. None of that exists in a comparable form, and the weighting between them differs for every operator.

An owner with a dump trailer and a tight budget wants a different market from one with a dump body and a crew. A published list cannot know which you are.

So here is a sheet. Score each candidate honestly and the answer is yours rather than borrowed.

Factor one: the facility drive

What to measure. Time from the geographic middle of the candidate area to the nearest permitted facility that will take your loads, driven at a working hour rather than estimated from a map.

Score high where it is short enough that a truck can make several runs in a day.

Score low where the drive would consume most of an afternoon, because that ceiling applies to every job you will ever do there.

This is the factor to check first, because a bad answer here cannot be compensated by anything else on the sheet.

Factor two: what the facility accepts and charges

What to ask. Accepted streams, refused streams, rate structure, minimum load charge, whether a commercial hauler needs an account, and what a separate stream costs.

Score high where the acceptance list is broad and the structure is simple.

Score low where several common household items are refused, since each refusal is either a lost service or an extra trip.

Ask your state environmental agency the same question in parallel. Paint and solvents, batteries, fluorescent tubes, tires, appliances holding refrigerant, electronics and anything wearing a hazard pictogram are commonly handled through separate programs, described in general terms by the EPA's overview of products with corrosive, toxic, ignitable or reactive ingredients.

Factor three: movement in the housing stock

What to look at. Sales activity, rental share, tenancy turnover, renovation permit activity, and how old the housing is. Older stock generates renovation and clearance work; new stock generates very little.

Score high where properties change hands and tenancies turn frequently.

Score low in a stable area of long-tenured owner occupiers, however pleasant it is to live in.

Demand in this trade follows movement rather than population, and the reasoning behind that is set out in the expansion and market guide.

Factor four: the professionals who generate referrals

What to count. Real estate agents, property management companies, estate sale organizers, senior move managers, storage facilities and active general contractors.

Score high where several of each exist, because these are the relationships that produce steady work.

Score low where you would be relying entirely on people searching for you.

This factor is easy to check and rarely checked. Half an hour with a map and a phone book gives you a number.

Factor five: labor availability and cost

What to check. What comparable physical work pays locally, and what else is competing for the same people. The Bureau of Labor Statistics publishes occupational employment and wage estimates by area, which gives you a defensible figure rather than a guess.

Score high where wages are affordable relative to what you can charge and there is a pool of people doing similar work.

Score low where a large employer has absorbed the available labor, however good the demand side looks.

Whether you can actually recruit there is a separate question from whether you can afford to, and both matter. The practical side is in the article on hiring reliable staff, and how to bring them to a standard is in the hiring and training guide.

Factor six: what the competition does not do

What to do. Call three existing operators as a customer and note five things: how fast they answer, whether they take photographs, what they refuse, how far out they book, and whether they explain disposal.

Score high where several of those are handled badly, because each one is a position you can take without competing on price.

Score low where the incumbents are genuinely good at all five, which does happen and is worth knowing before you commit.

A method for reading operators in a market systematically, rather than by impression, is set out in the article on companies worth watching.

Scoring it

Score each factor from one to five for each candidate, apply your own weights, and total it. The number is less important than the argument you had with yourself while producing it.

Then take the sheet to somebody who will challenge it. The Small Business Administration's counseling and guidance pages point at local advisers who will do that at no charge, and this is exactly the kind of decision worth an hour of somebody else's skepticism.

Common questions

Is a big city better than a small town?

Not automatically. Cities have volume and also traffic, parking problems and competition. A small town near a good facility with an active rental market can be a better business.

Should I go where there is no competition?

Find out why there is none first. Sometimes it is opportunity and sometimes it is a facility drive that makes the work unviable.

Can I serve two areas at once?

Only if they share a facility and a crew can work across both in a day. Otherwise it is two businesses.

How long does this exercise take?

An afternoon of calls per candidate, plus one drive to time the facility run. It is the cheapest research you will ever do.

What if my chosen area scores badly?

Then you have learned something before spending money, which is the entire point of doing it in this order.