Last Updated on May 27, 2020

When you envision the type of business that you dream of starting, going into the dumpster and waste industry might not be at the top of your list. But before you write off dumpster rental businesses, it’s important to realize that these businesses can be lucrative opportunities, especially if you’re located in an area with limited rental resources. Owning a dumpster rental business requires a fairly minimal time investment, since aside from customer phone calls and dumpster deliveries and pickups, you don’t necessarily have to be available on a set schedule. Read on to learn more about this business opportunity to see if it might be the right entrepreneurial move for you. 

Business Overview

Dumpster rental businesses provide important services for a variety of customers. These businesses typically offer a number of different dumpster sizes for rent. Residential, commercial, and industrial customers rent dumpsters for temporary or longer-term use. When a dumpster is rented, the rental company delivers it to the specific location, then picks it up again once the rental period is over. Some companies also periodically remove the dumpsters to dispose of their waste contents. 

Dumpster rentals mean that customers don’t have to worry about buying a dumpster that they’ll only temporarily need. Dumpster rental businesses enjoy rental fees on their dumpsters time and time again, allowing them to profit off of their dumpster purchases and possibly expand the business by buying more dumpsters. 

Industry Summary

According to IBIS World, the dumpster rental industry experienced 2.3 percent annual growth from 2014 to 2019. In 2019, the industry was expected to bring in $414.1 million in revenue. As of 2019, there were 262 businesses in operation, and industry employment was at 4,576. 

The industry’s performance and growth are closely linked to consumer spending. As profits and economic health increases, it drives construction activity, a major source of business for the dumpster rental industry. 

Industry Trends

The dumpster rental industry is influenced mainly by the needs and wants of its customers. According to U-Dump Trailers, one new and evolving trend is the increased use of digital services. Customers are increasingly researching dumpster rental companies online. They’re reading reviews, comparing pricing, and choosing the company that they want to work with. 

In response, dumpster rental businesses need to accommodate this online need for information and accessibility. Businesses should develop websites with FAQs and basic information. Some businesses have even created websites that allow customers to order rental dumpsters online. This digital dumpster rental trend is likely to continue to increase, so businesses should look toward their websites and social media pages to differentiate their business from others.  

Who is the target market for a dumpster rental business?

Most dumpster rental businesses offer services for residential, commercial, and industrial customers. Their target market is usually anyone with significant waste disposal needs, like those generated by a construction project, home renovation, or business. 

Skills, experience, and education useful in running a dumpster rental business

Starting a dumpster rental business doesn’t require a business degree, but certain skills and experiences can help to increase the chances of the business being a success. 

CDL training and education. According to Driving Tests, driving a roll-off truck requires a Commercial Driver’s License, or CDL. The requirements to earn a CDL vary from state to state, but most states require that drivers complete a CDL training and education program. 

Organization skills. A business owner with great organization skills can thrive in this industry. Maintaining schedules, tracking invoices, and following up with customers all require a well-organized approach. 

Customer service skills. Great customer service can earn a business repeat customers, and these loyal customers can also be a valuable source of referrals. Promptly returning phone calls, addressing customer concerns, and offering quality service will help to build a great reputation.

Attention to detail. Attention to detail is very important in this industry. When disposing of dumpster contents, it’s important to pay attention to the presence of hazardous materials to ensure they’re disposed of correctly. Scheduling and business organization can also involve lots of detail. 

Networking skills. Networking is a valuable skill in this industry, since it can help business owners to connect to new potential customers and to find new opportunities. 

Marketing skills. A dumpster rental business requires ongoing marketing, both to get the business started and to sustain it. If a business owner can do some or all of the marketing themselves, they can save money over hiring out their marketing services.

Costs to Start a Dumpster Rental Business

Starting a dumpster rental business can require a significant initial investment, especially if you plan to stock large-scale roll-off dumpsters. The major initial purchases will be a truck and dumpsters. Truck N Trailer has used roll-off trucks ranging from $60,000 up to $100,000, while new models start at $150,000 and up. Small dumpsters start at $1,000 new, but larger roll-off containers can cost $6,000 or more. Plan to spend $175,000 or more to outfit a small business with a truck and 10 dumpsters. 

Common startup costs for a dumpster rental business include: 

  • Truck
  • Dumpsters
  • Business uniforms
  • Website
  • Signage for the truck and dumpsters

Steps to Starting a Dumpster rental business

Step 1. Write your Business Plan

After coming up with the idea, the next step in starting your business should be to write a business plan.  Not only will a bank require you to have a business plan, but multiple studies have shown that a business plan helps increase the odds of starting a successful business.

Related:
How to write a business plan
Free sample business plans

Step 2. Form a Business Entity

A business entity refers to how a business is legally organized to operate. There are four primary business entities to choose from which include the sole proprietorship, partnership, corporation and LLC.  Each type of entity has its own pros and cons such as liability exposure, costs and administrative requirements. 

Related: Comparison of Business Entities

Step 3. Select your Location

While many dumpsters will spend most of their time at customers’ sites, the business needs a location where they can be stored when they’re not rented out. Rental costs for a storage lot will vary depending on the lot’s size and location. Remote locations tend to cost less, but a location that’s closer to larger towns or cities could potentially save time and gas for deliveries. 

Related: Choosing a business location

Step 4. Apply for Business Licenses and Permits

There are no specific licenses for a dumpster rental business, however drivers will likely need a CDLf.  There are also general business registrations at the local, state and federal level that a dumpster rental business might need such as a sales tax permit, Employer Identification Number, and Occupancy Permit among others. 

Related: Common business licenses, permits and registrations by state

Step 5. Find Financing 

Coming up with a good business idea and having the skills to run it are one thing, but getting the funding to start a dumpster rental business is another.  Funding to start a dumpster rental business can be difficult.  In order to get a loan, the borrower(s) will need to have good credit and be able invest 15-25% of their money towards the total start-up costs. 

Related: Finding the money to start a business  

Step 6. Get your Marketing Plan in Place

Good marketing is essential to getting the business established initially. Because customers rent dumpsters temporarily, a business also needs to market continuously to bring in a steady stream of new customers. With more customers turning to the internet to find dumpster rentals, online paid advertising and social media are valuable marketing strategies. Dumpster rental businesses might also explore print advertising, direct mail, and email marketing. Marketing costs will vary depending on the type of marketing being performed. 

Related: Low-cost ideas to market a new business

Step 7. Get Insurance

 A dumpster rental business will need several types of insurance for full coverage: 

  • General liability insurance protects the business if a customer is ever injured, such as during a dumpster drop-off or while on the business’ property. This insurance can cover costs like legal fees and expenses. 
  • Commercial property insurance protects the business against the loss of property because of an event like a fire or a storm.
  • Commercial automobile insurance helps to protect the business against expenses that can occur if a business vehicle is ever in an accident. 
  • Worker’s compensation insurance helps to cover expenses like medical bills or lost wages if an employee is ever hurt while working. 

Insurance policy costs will vary because of factors like the cost of the business’ equipment and the number of employees on staff. To get an accurate idea of insurance costs, request quotes from multiple providers. When comparing the quotes, pay particular attention to details like each policy’s coverage limits and exclusions, premiums, and deductibles. 

Step 8. Hiring Employees

While a dumpster rental business may be able to initially handle all of the work associated with the business, as the business grows, an additional driver may be helpful. According to Indeed, waste management truck drivers earn an average of $17.11 per hour. 

In addition to budgeting for salaries, the business’ budget will also need to incorporate expenses like workman’s comp insurance, paid time off, and health insurance contributions. 

Related: Hiring your first employee

How much can you potentially make owning a dumpster rental business? 

Dumpster rental business profits will depend on many variables, like the business’ size, location, and years in business. According to Home Guide, 10- to 15-yard dumpsters bring in an average $363 weekly rental fee. A business with 10 of those dumpsters could earn as much as $3,630 per week before expenses like waste disposal and general operating expenses. Businesses that run efficiently and have most or all of their dumpsters out on rent at any given time stand the best chance at bringing in significant income. 

Things to consider before starting a dumpster rental business

Before starting a business, it’s important to research the competitors and the opportunities in your area. Get details on the size of the dumpsters that competitors have, as well as the rates that they charge. Look for opportunities that other companies may have missed, whether it’s serving a certain area or marketing toward a customer base that’s been overlooked.

During your initial research, contact local landfills and research your local waste disposal restrictions. If you can establish a relationship with landfill owners, you may be able to negotiate a discounted disposal rate, which can pay off with big savings for your business. This is also the time to learn about materials that require special disposal, like hazardous waste materials. These restrictions will affect the rates that you need to charge. When you’re familiar with these restrictions and regulations, you can use that knowledge to design your own business rules and rates to reflect the additional costs and trouble you’ll face if customers dispose of these materials. 

Resources: 
Institute of Scrap Recycling Industries, Inc.
National Recycling Coalition
National Waste & Recycling Association
Solid Waste Association of North America