If you are interested in starting a dumpster rental business (sometimes known as a roll-off dumpster business) but don't know where to begin, you are in the right place.
Renting out dumpsters can be a great recession-proof business that is simple to operate and can actually be run passively if you hire the right people. Once you have the truck and dumpster, all you need to do is (i) hire someone to take calls and schedule jobs and (ii) hire a qualified driver to drop off the dumpsters, pick them up, and properly dispose of the contents. Operationally, it's all really basic stuff.
In this beginner's guide, I will cover 10 essential steps to starting a dumpster rental business. Here's a preview of each step that we'll cover (of course, if you want to jump ahead to any of the individual steps, just click on the appropriate hyperlink below).
- Step 1: Avoid Disaster and Research the Market
- Step 2: Establish Your Business
- Step 3: Create a Business Plan For Your Business
- Step 4: Open Up a Business Checking Account and Credit Card
- Step 5: Obtain Funding
- Step 6: Obtain Licenses and Permits
- Step 7: Protect Your Business With Proper Insurance
- Step 8: Secure a Location and Hire Drivers (If Needed)
- Step 9: Create a Marketing Plan For Your Business
- Step 10: Set Up Your Accounting
Before we dive into the steps, I will cover some introductory questions you may have about the dumpster rental business, including whether a dumpster rental business is profitable, how much it costs to get started, and financing options.
If you want to skip the introductory stuff and jump ahead to the 10 steps, click here.
This post may contain affiliate links. If you click on a link and complete a transaction, I may make a small commission at no extra cost to you.
The information contained in this post is for informational purposes only. It is not a recommendation to buy or invest, and it is not financial, investment, legal, or tax advice. You should seek the advice of a qualified professional before making any investment or other decisions relating to the topics covered by this article.
Is a Dumpster Rental Business Profitable?
Dumpster rental companies can be profitable if you are able to effectively market your business and bring in a steady flow of customers.
The average cost to rent a dumpster is $469.29. If you charge that amount to your customers and are able to get 30 rentals in a month (which is certainly doable if you have enough containers and an effective marketing strategy), you will be able to generate a little more than $14,000 per month, minus operating costs, such as disposal fees, gas, maintenance, insurance, and other ongoing expenses.
One of the most important factors in determining profitability is how much you can charge for each dumpster rental, so let's turn to that.
What are Typical Rates for Dumpster Rentals?
The national average cost for renting a dumpster is $469.29, with prices ranging from $244 – $833. Actual costs will vary based on a variety of factors, including location, size of the dumpster, and the type of waste you are disposing (e.g., it costs more to dispose of hazardous waste). See the chart below for a price breakdown by dumpster size (20 yards seems to be most popular, so you may want to keep that in mind when buying containers).
|Container Size||Average Range of Costs||Average Cost to Rent|
|10 yard dumpster||$224-$524||$376.90|
|15 yard dumpster||$255-$589||$403.51|
|20 yard dumpster||$248-$632||$432.54|
|30 yard dumpster||$336-$785||$527.12|
|40 yard dumpster||$379-$853||$584.00|
Information sourced from Dumpster.com
As mentioned above, rates vary by region, so call local dumpster rental companies in your area and ask for quotes to find out what is market pricing in your area.
Note: Most companies will rent dumpsters out on a weekly basis, although there are companies that will rent out on a daily or even monthly basis.
How Much Does it Cost to Start a Dumpster Rental Business?
Starting a dumpster rental business can be expensive, with the largest initial expenses coming from the cost of your truck and dumpsters. I took a look at some of the new roll off trucks on commericaltrucktrader.com. They seemed to range between $50,000 to $200,000+ for high-end Peterbilts and Kenworths. A used truck is much more affordable, with high mileage vehicles starting as low as $15,000 to over $150,000 for higher quality trucks.
Fortunately, there are both financing and leasing options available that can help with these initial costs. Below is a list of companies that will offer financing for your new or used roll off trucks (many also offer leasing programs too). You will find companies below that offer no down payment options, even for start-ups.
Financing For New Roll Off Trucks
Financing For Used Roll Off Trucks
Buying the truck is not the only cost in starting your dumpster rental business – you also need containers. On average, a new container will run you between $4,000 to $7,000, depending on its size. Used containers are obviously cheaper, going for around $2,500. Like with trucks, plenty of financing options exist to help you buy containers.
You will also need to spend some money on renting out a location to store your truck and containers, branding (e.g., vinyl lettering on your truck), marketing (especially if you use paid advertising channels), costs of setting up your business entity, as well as costs for getting insurance, licenses, permits, registrations, etc.
Step 1: Avoid Disaster and Research the Market First
The first thing you want to do is make sure that there is enough market demand to support your dumpster rental business. You don't want to dive in blind. If you do, you might spend a lot of time and money pursuing a business idea that is unworkable because the market is too small, too competitive or in a state of decline.
Identify Your Market
The first step is accurately identifying your market. You need to know who your customers are and whether there are enough of them to support your business.
Try to imagine your target customer. Are you going to pursue residential contracts? Then you will want to know the demographics of residents in your area (e.g., are they mostly homeowners who have money to remodel? Is the area's population growing? Is there a lot of real estate rehab activity?).
Will you be offering your services to commercial entities, like local builders in your area?
If you have a clear picture of your business, it should not be hard to figure out who your target customer is.
Armed with that knowledge, start looking into whether there would be room for another player to enter into the dumpster rental space. Talk to people already working in the industry in your area, engage with potential customers (builders, rehabbers, etc.) and see if their needs are currently being met and what would compel them to move to another provider.
Do your competitors seem to be thriving? Are people entering into this business and shutting down quickly or do they tend to survive? I know you may be excited and anxious to get started, but a little patience and research can save you a lot of time, money and regret down the road.
Conduct Competitive Analysis
You also want to research the competition.
I suppose it's possible that you will be the only game in town, but in all likelihood, you will be facing some degree of competition. The easiest way to find your competition is on Google.
You can simply type in “dumpster rental services near me” (or whatever city you are researching) and Google will pull up a list of local businesses that match your search along with a map that has pins on where those businesses are located. You can also go on Yelp and type in a similar search.
Between the two, you should be able to get a very good sense of the competitive landscape in your area. You should then study your competitors. Analyze their pricing and what they offer. Look for gaps or weaknesses and come up with a plan to thrive.
Step 2: Establish Your Business
Select Your Business Name and Logo
If you've done your market research and figured out the competitive landscape (and the results look promising), the next thing to do is establish your business.
The first step in that process is selecting a name and logo that you like.
Having trouble figuring out a name? Try Shopify’s business name generator. It’s free.
As for a logo, you can go on canva.com and check out some of their logo templates and start from there. It's a free option, but you will need to customize the logo templates to your liking. If you prefer a more ready-made solution, you can outsource this task.
One solid option is to go on Fiverr and hire someone to create your logo. There are tons of people who do this, and I have seen pricing as low as $5. For that price, you can probably try a bunch of folks and pick the logo that suits you best.
Or you can go with Looka. They are an AI-powered platform that will provide you a professional looking logo at reasonable prices.
Note: You want to make sure your name and logo are original to you and are not going to infringe someone else's intellectual property. If you are unsure, you can check the USPTO's trademark search tool as a starting point.
For more great strategies and tips on how to select the right name and logo for your business, check out my article on the topic: How to Choose a Company Name and Logo [16 Key Strategies and Tips].
Create a Website For Your Dumpster Rental Business
Don't neglect this step. Your business needs a website, period.
Your website doesn't have to be incredibly fancy or cost a lot of money to set up. There are a lot of resources available to help you with this.
In fact, Google allows you to build your first business website for free.
List Your Business So Customers Can Find You
It is also important to get your fledgling business on Google. You can do this by listing it on Google My Business. This way, people who are searching for a dumpster rental business in your local area can find you.
If you want to learn more about how to do this, check out this tutorial from Google.
Set Up Your Business Entity
You may want to set up a business entity like an LLC, corporation, or partnership for your dumpster rental business. Why do this? In most cases, setting up a business entity can help shield some of your assets held outside the business entity if there is a claim against the business.
If you want to make the investment of setting up a corporation, LLC, or some other business entity, you can hire a lawyer to help you, or you can use many of the online resources that can help you set up your business entity. For a handy table comparing the different types of business entities, check out my ultimate guide to starting a business.
I like using an online service called Incorporate because they can get you up and running quickly and easily. They also have some great resources to educate on what type of entity to choose and which may be the right state to choose for your new entity. If you want to learn more, check them out below.
Note: This can be a fairly complicated area and you don't want to make mistakes, so you may want to consult with your legal and financial advisors to make sure you understand the implications of setting up a business entity.
Step 3: Create a Business Plan For Your Dumpster Rental Business
A business plan is essentially a roadmap for your business.
It organizes your thoughts relating to your business into an actionable plan. Some things to include in your business plan are budgeting, identifying your target market and competition, marketing strategy (how will you get customers), pricing strategy, operational plans (will you have drivers, etc.), and growth projections.
Don’t stress too much about getting your business plan perfect. I would use it more as an organizational tool at this point. You can polish it up later if you need to.
Another benefit of having a business plan is that it can help you raise money from banks and investors (if your business has high starting costs, you may need to get some financing right away). This is when you will need to refine your business plan – these folks will want to see a professional-looking business plan as part of their lending or investing process.
Don’t know how to get started? The Small Business Administration has a great tool to help you write your business plan.
Step 4: Open Up a Business Checking Account and Credit Card
You should open a dedicated checking account in the name of your business. Make sure to run all business revenue and expenses (and only business revenue and expenses) through that account. This is especially important if you have a formal legal entity like a corporation or LLC because you do not want to mingle personal assets and expenses with business assets and expenses.
Why? Because you may risk losing the liability protection we discussed earlier if the business entity is deemed a sham because you did not treat it like a separate legal entity.
On a more practical note, having a separate account keeps things tidy from a recordkeeping and accounting perspective. It also signals credibility and professionalism when you write a check from your business account or ask someone to pay to your business account.
Now, let's turn to business credit cards. Credit cards can be really helpful to a new dumpster rental business, especially if an expensive truck repair pops up!
First, they are often easier to qualify for than a line of credit, especially when you are a brand new business. Even if you don't need to use it right away, it's nice to have the funds available in a pinch. Second, it's a great way to build your business credit rating, which will come in handy if you need to apply for a loan in the future to expand your business, etc.
Finally, you get to enjoy the benefits of points, cash back or other rewards that may come with having a business credit card. However, just like your business checking account, avoid intermingling business expenses with personal expenses on your credit card.
Step 5: Obtain Funding
As we covered already, starting a dumpster rental business can be costly, especially if you plan on buying a new dump truck.
Fortunately, there are a lot of equipment financing options for your truck and containers, which we covered above.
If you want to explore other funding options, consider the following:
- Personal savings. You will often need some skin in the game before lenders will work with you, so having some personal savings is important.
- Credit Cards. Due to high interest rates, credit cards are probably not an ideal choice, but if you must use one, try to snag a 0% teaser rate.
- Friends and family. Although they may be willing to lend you money, weigh that against the risk of souring your relationship with them if things go sideways.
- Banks. Banks are a traditional source of funding for new businesses, but they will often conduct extensive due diligence and underwriting before lending to a brand new enterprise.
- Online Funding. This includes includes getting a loan using peer-to-peer lending, funding through kickstarter campaigns, using online lenders, etc.
- SBA loans. Another funding source for your new business can be a loan guaranteed by the Small Business Administration.
Step 6: Obtain Licenses and Permits
If you plan on driving your roll off truck, you will need to get a Commercial Driver's License (CDL) (if you don't already have one).
However, there may be additional licenses, permits or registrations you may need to get, depending on where you plan on operating. You should check with your state and local municipalities to make sure you have all of the required licenses and permits you will need to operate your dumpster rental business.
In many cases, you will need to get a general business license (which is usually not too expensive or difficult to obtain), but there may be other, more specific, permits or licenses required, depending on where you live and the scope of activities you plan to engage in.
If you need help navigating all of this, your county clerk's office is the best place to start, but if you run into a wall, you can always hire a qualified lawyer to help guide you through the process.
Speaking of lawyers, you may need a lawyer to help draw up all of the legal contracts that you will need in connection with your business (e.g., customer agreements, waivers, etc.), so it's best to engage a qualified lawyer early on so they can help guide you through all of the legalities required for your business.
Finally, you should look into what limitations and rules apply when disposing of waste (and what happens if you violate them). You can do this by talking with local landfill operators. It also doesn't hurt to get friendly with these folks as you will be interacting a lot with them.
Step 7: Protect Your Business With Proper Insurance
You are doing all of this work to eventually build a valuable business. So it only makes sense that you protect your business and yourself.
That's where insurance comes in. It's even more important for this type of business because you are operating a vehicle that could be extremely dangerous to yourself and others if something goes wrong. And you are dealing with very heavy containers that could damage driveways, vehicles, lawns, etc. if you are not careful.
The good news is that there is a robust insurance industry that specifically caters to the waste removal industry. Here are a couple of companies that offer specific insurance for dumpster rental companies.
Step 8: Secure a Location and Hire Drivers (If Needed)
As I mentioned above, you are going to need a place to store your truck and containers when they are not in use. You will want to find a location that doesn't charge you an arm and a leg, but one that isn't too far from your target neighborhoods.
It will be a bit of a balancing act because the more remote your location, the cheaper it will be to your store your stuff, but the more you will likely pay in gas, mileage, time, and general wear and tear on your truck.
Now let's turn to employees.
If you are going to be an owner-operator, then you won't need any other drivers (at least at first). But if you are not going to be driving or want to position your business for growth as soon as possible, you will want to hire qualified drivers.
Here are some tips to recruit drivers:
- Have a very clear idea of what the job requires and write a comprehensive job description. If you have clean driving requirements, or other requirements, clearly list them.
- Cast a wide net to get candidates. Post online and through local venues, ask around for referral candidates, etc.
- Interview promising candidates and select them based on their qualifications (you need to make sure you do not discriminate on a prohibited basis, like race, color, religion, sex, etc. during both the interview and hiring process).
- Make sure you have the right infrastructure in place to manage payroll. There are tons of payroll administration providers who can take care of the legal and other requirements for you.
Step 9: Create a Great Marketing Plan
One of the things you absolutely need to get right is getting a consistent stream of customers coming in. It will be the one thing that can make or break your business.
So how do you do this?
Here are some practical strategies to acquire customers on a consistent basis.
- Set up a Google My Business, so that people looking for your type of business can find you. You want to encourage people to leave good reviews there for you if they like your business. Research has found a strong relationship between the number of online reviews a business and the revenue that it generates.
- Get a great website that draws traffic to your business. You can use the free website offered by Google that we mentioned earlier, but if you really want to draw traffic (and customers) to your website, you may want to hire an online marketing expert to help you optimize your website for traffic and leads.
- Get on Yelp for business and let your customers find you. They are an extremely well-known brand, and many people look there when searching for local businesses. Check them out below to learn more.
- In addition to advertising on Yelp, you can buy online ads from other online and social media outlets (Facebook, etc.)
- If you want to go old school, you can also advertise in your local newspapers, circulars, or through direct mail, etc.
If you want to service the construction industry, reach out to local builders and landscapers to see if they have a need for dumpster rental services. Do some research on how much your competitors are charging and beat them on pricing. You may need to offer deep discounts in the beginning to land those contracts, but once you have developed a good reputation, you should be able to operate without offering those types of steep price cuts.
Ultimately, you want to experiment with various marketing strategies – you may be surprised at what works best.
Step 10: Set Up Your Accounting
Ok – we're almost there.
The final step is making sure that you don't lose track of your revenues and expenses. When tax time rolls around you are going to need accurate records of all transactions that took place in connection with your business.
Of course, if you can't stand the thought of bookkeeping, you have a few options. First, you can hire one through Fiverr or any number of online platforms where gigs are offered.
Another option is to use software to keep track of your business transaction and activities. You will still need to do the data entry, but it makes the task much easier. Quickbooks and Freshbooks are popular options if you want to explore this option.
So there you have it – 10 steps to start a dumpster rental business.
Hope this has been helpful. If you want to learn how to make passive income in the trucking business, check out my article on trucking investing for passive income. We cover three different ways to do this, with some pretty unconventional ideas. I think you will find it an interesting read.
For the ultimate guide to transportation business ideas, check out article on the topic here. I discuss over 30 business ideas that you can start in the transportation industry (with helpful info and tips on how to begin). We cover businesses you can start with semi-trucks, box trucks, dump trucks, cargo and passenger vans, pick-up trucks and even regular old cars. So whatever your budget and experience, there will be ideas that can work for you.