One of the great things about owning a junk removal business is the low fixed costs. One of the largest and easiest target areas for savings is your junk removal office space. You have a few different options when it comes to choosing an office. You can rent a flex space office/warehouse combination, rent a storage unit, or run the business from your home.
The first option – and by far the cheapest – is to run your business from your home. With this option, you would park your vehicle at your home, your truck team would meet at your house, and all non-job-related business would be conducted at your home. There are a few positive aspects of doing business out of your home. The first is obviously the cost savings – rent for your junk removal office is free. And you can write off your rent or house payment by the percentage of space in your home you use for business. Nice!
However, the disadvantages of using your home as your junk removal office are numerous. The first is the fact that you will have team members coming to you at all times and six days a week. If that doesn’t bother you, wait until you have a team member who gets mad at you. That will make you feel a bit uncomfortable, even if the team member never does anything harmful. Also, parking a truck at your home is against many HOA rules. You will want some sort of warehouse place to store junk from time to time, especially if you have jobs to do after the dumps close for the day. You’ll need some tools and an air compressor to maintain the truck as well as a storage area for supplies. You will also likely need to conduct interviews for new team members at a coffee shop or restaurant (NEVER bring a stranger into your home for an interview). If you have a garage/shop area and are willing to allow junk to be stored there and team members to access it, then running a business from your home can certainly be a cost effective way to go.
Your second option is using a storage unit. For this option, you will need to rent both a unit and a parking spot. For a one or two truck operation, a 10′ x 20′ unit is normally large enough. Furnish the office with a desk and a few office chairs, an air compressor, truck tools, and shelving to store supplies such as paper towels and trash bags. Make sure the parking spot is large enough not only for the truck, but for up to two cars per truck. Team members will need a spot to park. When the truck isn’t parked, they can park their cars in the spot.
Check with management before renting a spot to find out a few things. Number one is whether you have access to an electrical jack to plug in an air compressor. Most of the time the unit will not have power. You can see if they will let you add an outlet, but that answer is usually “no.” Most of the time, you will have to run an extension cord out to an exterior power outlet. The other question is whether they allow you to do basic truck maintenance such as oil changes (if you plan on doing them yourself). Just make sure to be super clean and responsibly dispose of your oil or you will quickly draw the ire of the property manger.
The storage unit route is a great way to go. You normally will spend only about 1/3rd as much on a unit and parking spaces than you would if you rented a flex space. You will also have a month to month lease, so moving is super easy. We typically try to deal with the mom and pop operations and not the Real Estate Investment Trust (REIT) companies such as Public Storage and Extra Attic. These large corporations are typically much stricter on their rules.
If you rent a storage space, you will still want a space at your home to use as the actual business office. However, this is still a great route for running the truck operations. Once you have three trucks running fairly often, you can probably look into getting a flex space and feel confident that meeting your rent month after month will not be a problem. However, if you have a good home office, a storage unit might be all you need until you start to hire other office personnel. Again, it just depends on your situation.
The best, most convenient, and most professional option for your junk removal office is the flex office space. This will have an office area as well as a warehouse space. If you are getting a flex space when you first open, don’t get overly ambitious and go too large (one of the few times I’ll say don’t get overly ambitious). It will take some time to scale up your business and rent is one of the few fixed expenses you have in junk removal. If funds are limited, it’s better to spend money on acquiring new customers than on rent at a fancy office. Typically, an office of about 100-200 square feet and a warehouse of around 500-600 square feet will adequately meet your needs.
When renting a flex space for your junk removal office, you ideally want a space with a drive-in door large enough to fit your truck. For Isuzu trucks, you’ll need a door over 9 foot wide – preferably 10 – and 9 feet high. This isn’t a deal breaker, but it is a huge bonus if you find a space with such a setup. A drive-in door is preferable to other arrangements, including a loading dock. Drive-in doors allow you to securely store your truck indoors and provide you with a safe, covered area to unload or perform maintenance on trucks.
Another factor to consider is a bathroom. Most flex spaces come equipped with a bathroom, and if you are paying flex space rates you should have one. Like with storage facilities, make sure the property managers understand what you will be doing. Make sure they are good with overnight parking and basic vehicle maintenance. You may not perform any of the maintenance on your trucks in-house, but you will at least want to be able to inflate your tires.
You don’t need road frontage or a location in the best part of town for your flex junk removal office space. You will save a lot on rent if you aren’t in the trendy area. However, some of these warehouse areas can be in shady neighborhoods. You want to make sure the area is well lit at night and that you will feel safe there at different hours of the day and night. The other issue with a location in a particularly bad area is theft and vandalism of trucks. The batteries on these Isuzu trucks are valuable for both resale and scrap because they are heavy. They can also be easily removed. In addition, the DPF filter is very valuable and can be cut off and sold/scrapped.
When parking vehicles in an area that isn’t gated, a competitor could slash your tires or vandalize your truck. As crazy as it may sound, each one of the scenarios listed has happened to us in the past. Just to give you an idea, if the DPF filter gets stolen, it costs over $3,000 to replace and will result in several days of downtime. Preferably, you will want the office to have gated parking and/or night security. At minimum, it will need to be well lit.
Your junk removal office rent is one of the few fixed costs you will have when starting your junk removal business. Be wise when you make this decision. If you have the right set-up and are comfortable doing it out of your home then that is a great option. We suggest starting with a storage unit. You have month to month leases, can park vehicles in a gated area with video cameras, and have storage space for junk and supplies. If you need assistance with choosing an office space please call our office at 919-617-1975. Remember, assistance with choosing an office space is INCLUDED for those of you who purchase our complete business package.
Don’t want to give control away? Partner with JRA!
-Lee Godbold
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