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Southern Rubbish Founder Speaks - Month 1
The Founder and CEO summarizes his experiences and challenges in month 1 of founding a junk removal company.
by Philip Hoang, Owner of Southern Rubbish (http://www.southernrubbish.com/)
While I was still making a good salary at Waste Management, I went to a truck dealership and financed a box truck to use as my junk removal vehicle for $13,000. My last day at Waste Management was February 28th and my first day at Southern Rubbish was March 1st. A week prior I had taken the truck to get decals put on it. I paid $900 for it to display my company name, phone number, and a few other bits of information on every side of the truck. The logic behind this is of course that if I'm driving the truck around town servicing customers that people will see the “Junk Removal” posted on my truck and they'll call us for work. I was totally right.
I was driving the truck home and someone called my cell phone number which was posted on the truck and set up an appointment. My first customer! I was thrilled but was completely unprepared for the call. I had no way of quoting him over the phone. He said he had a “few” items in the house and garage, so I said it would cost $150. When we finished the job, it filled up the entire truck and we should have charged him a full truckload, but I knew that customers are never happy about getting quoted one amount and then paying an amount higher than what was agreed. So instead of getting $395 for the job, we got $150. But the customer was happy, so I was happy.
Aside from getting customers from seeing the truck, we also advertised on Google. You can pay Google to display a link to your website on their search results. So, if you do a search query for “junk removal,” the top 3 links will usually be paid ads. These ads can get pretty expensive and its on a pay-per-click model, meaning that every time someone clicks on your link, you get billed. And I've seen it as high as $20 for a single click. Crazy, right?
These AdWords, as Google calls them, certainly have their place and did get us a decent amount of customers. However, the sales that we received from AdWords never surpassed the amount of money we spent on them. Needless to say we don't use them anymore. If you plan on using Google Adwords to generate awareness for your business in the first few months, make sure that you know what you're doing. It took me 3 months of wasted dollars before I figured out how to do it effectively. Get a book on the subject or read AdWords blogs on Google.
At the end of month 1, we serviced 4 residential customers and generated $681 in sales. Pretty sad right? I certainly don't think so. I was shocked we had any sales at all. Next month was when I started panicking. ;)
Learned Lessons from Month 1
Don't overpay for a truck. For your first truck, try and pay cash because the monthly payment will piss you off. Also, shop around for a couple months to find the best price. Go out of state if you have to. I'm doing business in Atlanta, GA but a month after I bought my truck for $13,000 I found another one for sale on Craig's List for $7,000 in South Carolina. Get a truck with a hydraulic dumping function if you can, but if you can't then a box truck works fine; you'll just have to throw stuff out of the truck at the dump.
Use a friend or family member for your helper. Junk removal requires at least two people per truck. And labor is expensive, so I had my brother help me for $10 an hour. So if we had work, I paid him and if we didn't then I didn't pay him.
Be cautious about Google AdWords. They work and get you the exposure you want, but its expensive and its not always customers that are clicking on your ad. A lot of times, its telemarketing companies looking for small businesses to sell services to. AdWords is good for the first couple months before your SEO starts working. More on SEO later.
Don't Rent an Office Yet. Its just you and a truck right now. What do you need an office for? Park your truck outside your house and use your home address as your business address. Register your business address with Google, so that you show up in search results for local junk removal services. This process Google does for free.
Get a Website, Facebook Page, and Google Plus Page. All three of these pages you can do yourself. If you can set up a personal facebook page then you know how to make one for your business. Same deal with Google Plus. For your website, web design programs are so easy to use now that a child could do it. We use Vistaprint, but I also hear that Word Press is a good one. Our website is Southern Rubbish.com if you want to check it out. Its simple and straightforward, which is all you really need. If you have the money, you can hire a company to do this and manage your search engine optimization for as low as $250 a month. Some companies charge as much as $1000 a month for the same service, so be careful.
You will need tools. My dad loved working on cars, so he had a ton of tools that I could use in my business. I was able to get screw drivers, a sledge hammer, a dolly, a drill, and an electric saw all for free. You're also going to need a push broom and dust pan for cleaning up after your self. The equipment I just listed is really all you're going to need in the beginning.
Check the Fees at Your Landfills. There are two landfills near my home office. One takes garbage and scrap metal. The other just takes construction debris. You should be aware of which landfills take what and how much they charge per ton compared to each other.
Use a Lead Generating Site. Lead generators send potential customers your way, but its your job to close the deal. We use Thumbtack and we really like it. It charges us $3 per quote that we send to customers. And it allows us to choose which customers we want and which ones we don't want. Half of our residential sales come from Thumbtack.
Scope Out the Competition. You need to know who else is servicing your market area. Find out how much other junk removal companies are charging. This will make it easy to price your services.
Get Uniforms. All you really need is a polo shirt with the company logo on it and matching pants. We use Vistaprint for our shirts. They charge $25 per shirt plus shipping, but they have deals literally every month. So utilize their discount codes. I suggest dark colored pants like brown, blue or black because it hides dirt.
Know Your Target Market. Your customers are upper middle class Americans. These customers will usually be going through some sort of life event if they are calling you. Life event being, moving into or out of a house, moving an elderly parent into a nursing home or they just bought a foreclosed property and need to get it cleaned out so they can put tenants in there. The majority of the time, it is people moving out of their mcmansions that will call you.
Find more info at http://www.southernrubbish.com
Southern Rubbish Junk Removal