Do you need a commercial property to operate your junk removal business? There are a lot of pros to having a dedicated commercial space for your business. A few of these vast advantages include:

  • Safe and Organized Storage. As a junk removal business, you have a lot of equipment. This ranges from smaller items like dollies to larger items like your junk removal trucks. A commercial property allows you to safely store these items. It also makes it easier for you to keep an accurate inventory of your equipment.
  • A Central Base for Your Team. A physical building with your company name on the door cultivates a sense of pride and community. When your business has a base of operations, it allows all your staff to congregate in one place. This makes it much easier to hold meetings, host training sessions, and conduct job interviews. Plus, you can list your address on your Google Business Profile for increased online visibility.
  • Improved Work-Life Balance. Some people work well from home, but others simply don’t. For those who struggle to separate “work” from “life,” then a commercial property will do them wonders. By leaving office business at the office and home life at home, the divide is firmly set.
  • Personal Fulfillment. Many junk removal business owners just feel good walking to their base of operations and seeing their company filled with life. Watching people pour through the doors in the morning and working together to make day-to-day operations happen can be a very rewarding sight.
  • Increased Revenue. A commercial space provides additional opportunities to bring revenue into your business. For example, if your local landfill is closed on Sundays, having a space where you can temporarily store junk will allow you to be open and take jobs seven days a week. You can also use your commercial space to create a landfill diversion program where items can be stored and vendors will come to you to purchase and repurpose items.

The advantages of a commercial property are abundantly clear. The question is, what is best for your junk removal business? Should you rent? Or should you buy?

When to Rent

When you launch your junk removal business, if you have $35K-$50K leftover, you may be able to go out and rent a building from the very start. Otherwise, if you’re below that, a self-storage facility or lot rental may be the way to go. With this option, commitments are low, there is parking available for your vehicles, and there is plenty of storage room, too. 

Let’s say that your business is not able to rent a dedicated space right out of the gate. Well, no worries. You can grow and reach that point. When you have a free cash flow of about $100K into your business, and you have approximately $70K saved up, then it’s time to start looking into a commercial property to rent.

The important thing is that the commercial property you rent is what your business needs to grow. That way, you can expand your company, earn more money, and eventually reach the point where it makes more sense to buy rather than rent.

When to Buy

Eventually, your cash flow will be so great that you can pay off your expenses and still have a good deal left over. Is it time to consider buying? First, save up 20 to 25 percent of the expected down payment. For example, for a $600K building, you’ll need to save up to $120K. You will also need to consider what you will be paying on the mortgage. Commercial property mortgages tend to be 10 to 15 years. Your monthly payment will depend on your specific mortgage, so be sure to do the math and see how feasible the payment is for your income.

An important thing to consider when buying a commercial property is whether it provides enough space for you to grow. You also don’t want to buy if it prevents you from making necessary investments into your junk removal business. Make sure your business is running well, then consider making the investment into real estate. The time will come when you have the assets needed for every aspect of your business in addition to a commercial building. 

Learn More at JUNKCON™

Ready for more insights from seasoned junk removal business owners? Join us for JUNKCON™ ’22 at the Raleigh Convention Center Oct. 12-14. Meet multi-million dollar business owners and network with hundreds of fellow entrepreneurs who are trail-blazers of the junk removal industry. Learn More