One of the many questions I get a lot in this business is: “The dump fee is the only major expense for you guys, right?”
Short Answer: No.
Longer answer: Many times when we deliver a quote to a customer, they don’t fully understand how we determine our prices. So in the spirit of being transparent, I’d like to go over the expenses that we incur running our business doing junk and trash removal.
In many cases the customer is only thinking about the dump fee. And, yes, that is included; but, like any other business, there are other expenses we need to take into consideration. Take a look at the pie chart (below).
Dump Fees: 34%
You will notice that the dump fee makes up less than 35% of our total expenses. Many times a customer will say “well that will only cost me $ _______ to get rid of at the dump”. And they are correct, but they don’t see the full breadth of the expenses we have to provide them with the service.
Fuel is another huge expense for us, making up nearly 20% of our total expenses for the year.
- payroll comes in at around 20%
- advertising at 10%
- truck and trailer maintenance at almost 8%
- commercial insurance with liability insurance included comes in at about 6%
- roughly 3% is administrative fees (including bank fees, software, subscriptions for estimating, apps etc.)
- and last is supplies coming in just over 2%. Supplies would be everything from shovels, rakes, bungees, gloves, tarps, and anything else that we would keep on the truck with us.
So, as you can see, there are a lot more expenses than most think involved in running a junk removal service. It’s not just the dump fee! And in many cases, more than a third of the expense of a job is taken up just in the process of arriving at the job with the equipment and manpower ready to go.
Hope this was helpful. Have a great day!
~ Jonathan Iianga, owner