Junk hauling business in Nigeria and anywhere in the world goes with the saying that “One Man’s Trash is Another Man’s Treasure”. Junk or waste management business is one of the best investments you’ll ever thank yourself for investing on.
Although this business is belittled by most people in the world because it’s not a fancy job. Most people prefer sitting in office, working for a boss and gets underpaid. But let me tell you that with this waste management business in Nigeria, you can make millions of naira while your mates are busy looking for white-collar jobs.
You may be thinking…
Is Junk Hauling Business in Nigeria Really profitable?
Yes! It’s profitable. And of the reasons why it’s profitable is because very few people are aware of this business (no high competition).
Apart from competition;
The junk hauling industry is valued at $55 billion, with an expected growth rate of 2.7% in the United States of America. Despite being lucrative, only 12,383 junk hauling businesses are operating in the industry.
… apart from the government waste management scheme, only few private investors or entrepreneurs are into junk hauling business in Nigeria and that’s a great head-up for you to start before people are aware of secret behind this business.
But you may want to know…
How Much Can I Make with Junk Hauling Business in Nigeria?
There is ample opportunity to step up and grab a chunk of the profitable junk hauling industry.
If done correctly, the junk hauling business can help you make $1000 to $3000 (or N360,000 to N1m) in a month easily.
But here is a misconception;
Most people assume that having a pickup truck and a phone connection is enough to start earning thousands of dollars. While they will help you get your business going, you need more than a pickup truck to establish yourself as a credible business.
In this article, we will discuss 5 pro-tips to help you start a profitable junk hauling business in Nigeria.
To be successful, you must know your market, must develop a business plan to give you direction & to secure funding, must legalize your business, must invest in effective marketing, and must remember to be patient & persistent.
Now, let talk about these pro-tips;
5 Pro-tips to Start Junk Hauling Business in Nigeria
Tip 1 – Conduct Market Research
Market research is the first logical step before starting any business. To make informed decisions about your junk hauling business in Nigeria, ask yourselves the following questions:
- What is your Target Market?
Which geographical area are you going to serve? What type of junk will you collect? What kind of junk collection is most profitable and suitable for a new business?
For instance, you may focus on consumer/home junk, office junk, or industrial junk. Most established businesses offer all of these services, but since you are a beginner and have limited resources, figure out which type of junk will be most profitable in the area you plan to serve.
- Determine the Cost of Operations
Develop an estimation of the amount of money it will cost you to start the business. Think in terms of office space, vehicle, gear, equipment, utility bills, and workers.
- Determine Estimated Revenue
How much can you make from the junk hauling business in Nigeria? Develop an accurate, projected revenue. You can do so by asking industry specialists, interviewing people already working in the industry, or by taking a job in a junk hauling business in your city.
- Analyze the Competition
It is vital to know your competition. Determine the number of international, national, or local junk hauling companies operating in your area of interest. What services are they offering? What is their pricing strategy? Do they have a competitive advantage? What target market are they serving? Do they have a loyal clientele?
Knowing the answer to these questions will help you establish a unique brand identity. It will also give you insight into market needs, gaps, and the opportunity to attract consumers to your business.
- Analyze Barriers to Entry
Are there any hurdles in starting the business? For instance, it may be difficult to obtain local, state, or federal permits for a junk hauling business in Nigeria.
- Franchise Vs. New Business
Analyze the market to determine whether it is more profitable to purchase a franchise license or to start a business of your own from scratch. Create a pros and cons list to analyze your options and make an informed choice.
- Pricing Strategy: How Much Will You Charge?
If you decide to start your own business, it is imperative to determine a consistent and competitive pricing strategy. In most cases, new businessmen change prices randomly from one job to the next.
A consistent pricing strategy makes you look professional and increases business profitability.
Tip 2: Prepare a Business Plan
A business plan is a formal document that contains details about your business and business strategy. A business plan includes the name and purpose of the business, business strategy, financial strategy, marketing strategy, and exit strategy (expansion plans). It will not only guide your actions but will also help you attract investors and funding.
If you go to a bank for loan, hedge fund, or any organization that gives money to startups, they will ask to see your business plan to determine whether it is worth it.
Recommended: How to Write Business Proposal like a PRO
Tip 3: Legalize Your Business
It’s essential to register your business as a separate legal entity. Firstly, it is important because you will need to obtain licenses and permits for your business, and that cannot happen unless you have a registered company.
The second reason to form a business entity is to make sure that it is separate from your personal finances. God forbid if your company goes belly up, it won’t make you personally liable to pay off business debts and loan. You can file bankruptcy top avoid paying out of pocket.
Another reason to register your business separately is tax policy; the tax for companies is separate from personal tax. If you don’t register your business, it can be contused as tax evasion, which is a punishable offense. Moreover, small and micro businesses are often given tax concessions, which can actually be more feasible financially.
You don’t necessarily need to setup your own junk hauling business. In fact, you can partner up with other junk hauling and dumpster business and get yourself up and running right of the bat. Fortunately, you can rent a dumpster from a company and upsell it to your customer. There are a lot of other creative methods you can use.
Here is what you need to do to legalize your business:
- Register Your Business as a Separate Legal Entity
There are several business structures for small businesses, including Sole Proprietorship, Partnerships, Limited Liability Company (LLC), and Corporation, etc.
- Register for Taxes
Once your business is officially registered, you need to file an Employer Identification Number (EIN) or Federal Tax Identification Number (FTIN) from the IRS.
The EIN number is like a social security number for your business. It is essential because, without an EIN, you cannot open a business bank account, hire employees, and keep your business separate from your personal finances.
You can register for an EIN online, via telephone or email for free.
- Obtain Permits and Licenses
You must file for local, state, or federal permits and licenses required to operate a junk hauling business in Nigeria. Every state and locality have their own requirements, therefore check with the local SBA to get information about the permits and licenses you will require to operate your business.
If you run your business without a license or a permit, you will be liable to hefty fines and even jail time.
- Create a Business Account
Open a business bank account to manage the flow of expenses and income. A business bank account is a reliable method to track your company’s finances. It is essential for audit purposes, as well.
- Purchase Business Insurance
Purchase business insurance as a safeguard. If you hire employees, you will be legally required to purchase worker’s compensation insurance. Check here for the top 10 insurance companies in Nigeria.
- Implement Business Accounting Practices
Manage your company’s business accounts to keep an accurate record of all expenses and incomes. Small Business Association, the US Chamber, and the local clerk’s office will have guides that you can follow to maintain your accounting books. You may hire a professional consultant to manage your books as well.
Keeping a detailed account of the financial activity of your business will be useful when filing for tax.
Tip 4: Invest in Marketing
No business can begin and survive without effective marketing today. To start a successful business, you need to invest in marketing. It is understandable that a startup will not have a huge marketing budget. You must determine your marketing budget (however small) and the marketing channels that will be most effective for your target market within your resource constraints.
Luckily, it does not take a lot of money to run an ad in the local newspaper or radio. You can even purchase a spot in the local yellow book for an affordable price. You can buy billboard space, print flyers, or advertise your business on city buses to get the word out.
Marketing practices will keep your business relevant and thriving. Here is what you should do:
- Build Brand Identity
What benefits does your brand offer its consumers? Think about characteristics like cost leadership or differentiation. Highlight the values of your company; for example, sustainable and ethical, etc.
A brand is like a person that consumers want to have a relationship with. If you have a clear brand identity, you are more likely to attract consumers and keep a long-lasting relationship with them.
- Build Brand Recognition
Make your brand known; When consumers know that your business exists, they are more likely to reach out. Increase brand awareness and recognition by positing advertisements and establishing a local presence.
- Create an Online Presence
Most people search for businesses online. How many times have you searched google for the nearest restaurant or the best shoe shop in town?
Maintain a professional website and social media handles (Facebook, Instagram, Twitter, & YouTube, etc.).
- Increase Your Online Ranking
When people search google for a junk haul business, the name of your company must come on the first page.
Let’s be real, no one clicks on the second page ever. We always check out the first 5 or 6 websites on the google search page.
Therefore, you must maintain an online presence so that the name of your business always comes on the first page.
- Focus on Customer Relationship Management
Repeat customers are your best bet for succeeding in any business. Therefore, you should offer excellent customer service to keep your clients happy. A happy client is more likely to avail your services again. Moreover, satisfied clients give great reviews to their friends and family and encourage them to use your service as well.
Tip 5: Be Persistent and Patient
Rome was not built in a day; your business won’t be either! Keep in mind that you will probably not start making profits in the first few months. Don’t get frustrated, keep working hard, and your persistence will pay you premium once your business takes off!
… That’s it – How to Start Junk Hauling Business in Nigeria
I know you might be thinking that this business is too dirty but let me tell you that if you want to make it in Nigeria (and anywhere in the world), you need to change how you view opportunities in Nigeria.
And one thing is that you have high edge to make money with this business because the government who claimed to be responsible for waste management in Nigeria, are not functioning to the core.
Most of these government trucks only deal with the state capitals and other popular places in Nigeria. But you can help them pack trash from these unattended places and gradually become a big money maker in junk hauling business in Nigeria.
Feel free to comment down below and I’ll be happy to answer your questions (from my deep researches). Also, if you think this blog post is helpful, kindly share with your friends by clicking on the floating social media icons.
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