Running head: Opportunity Assessment Plan

Opportunity Assessment Plan:

Metro Waste, Inc. DBA Clear Choice Junk Removal
Zachary Koonts
James Madison University

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Abstract
Clear Choice Junk Removal is the next big name in the junk removal industry. Customers who
hire Clear Choice will receive fast, courteous service and competitive rates. Those who respond
to our effective advertisements will be impressed with how easy it is to get bulk trash items
removed from their home or business. For example, if a customer has a broken freezer in their
basement, they would start by calling clear choice. We would schedule an appointment with
them, same-day if available. The charge for a single item like that would fall into the minimum
category which would be $85. Our 2-man crew would show up to their home, pick up the
freezer, walk it to the truck and receive payment. They would then travel to the local disposal
facility where they would weigh in and pay approximately $8 to dispose of the freezer. There is
also a possibility that the freezer could be taken to a recycling facility and sold for about $10,
and Ill explain more about that later. After the freezer is gone, its on to the next customer. This
idea was generated based on a company I contracted with previously. They, along with several
other major companies, work in the Northern Virginia area removing junk. There is a great deal
of business available, but cost-effective advertising is the key to grabbing a sizeable share of that
market.

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General Information
Junk removal is a service intended for people who need to declutter or rid themselves of
unwanted bulk trash. This can be remodeling debris, old furniture, garage contents, basement
contents, dilapidated sheds or fences, and almost anything else than can be demolished and
hauled away. The target market would be professionals 25 years of age and older with limited
time and ability to dispose of their own bulk trash. They would live in the densely populated
Northern Virginia area where storage space cost is high, specifically Fairfax County.
The business would not require a storefront, but would need a place to store trucks, tools and
equipment along with a place to answer phones and conduct business. It could easily be a homebased business, which is probably the best option for a new venture.
Suppliers for this business would be related to the maintenance of the trucks and equipment.
Mobile mechanics would be utilized for most repairs. Gilleys Mobile Service and Marks Truck
and Equipment are two vendors in the Northern Virginia area that would be regularly utilized for
any issues with trucks, trailers or tools. They each charge $75 per hour for their repair services.
The business would also regularly utilize waste disposal facilities. The landfills and transfer
stations charge a fee based on the weight and type of trash being disposed of. Loudoun, Fairfax,
Fauquier and Prince William County landfills would be utilized primarily. These are local
government facilities that are relatively easy to set up accounts with and utilize. We would also
set up accounts at Rainwater Landfill in Lorton, Virginia, as well as C&D Recovery and
Industrial Disposal Service in Manassas, Virginia. These three are privately operated transfer
stations. The rates are similar at all facilities, the main differences are the geographic locations
and the hours of operation. The average disposal rate for these facilities is $63 per ton.
This is a service based business, so the labor requirement is relatively extensive. Each service
crew will consist of a driver and a loading helper. The driver will be required to meet basic
licensing requirements and have a clean driving record. The helper will be a general laborer with
little or no qualification requirement, other than lifting and carrying approximately 75lbs. At the
time of startup I will want at least one crew ready to operate. I will also hire an administrative
assistant who will answer the phone and help with work scheduling and answering the questions
of customers. I would share the responsibility of answering the phones, taking the more
technical calls and dealing with customer service issues. I would also be the driver for the
second crew until there was enough business to sustain a second crew full time. Each time a full
crew is staffed, I will begin by staffing the next truck until it is sustainable. I think 2-4 full-time
crews can be staffed in Fairfax County alone. As we expand into the other counties, we can add
additional personnel and equipment.
The business will be organized as an S Corporation. I will set it up as an S Corporation because
it is easier for the business to establish its own credit. It also limits the liability for the owners,
and avoids the problem of double taxation that is an issue for C Corporations. The main legal
issue that surrounds the business is the protection of the business methods. This business is very
susceptible to competition. Since it is relatively easy to start due to low overhead and startup

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costs, it can draw a lot of competition from within. All employees that come to work for the
company will be required to sign non-disclosure and non-compete agreements. A lawyer will be
required for the initial formation of the S Corporation, along with drafting the universal noncompete and non-disclosure agreements for the employees. While these agreements are difficult
and costly to enforce, they are a scare tactic to keep people from breaking off and starting their
own companies.
The market in Fairfax County appears to be strong. Fairfax County has a population of
1,116,200 and a growth rate of .4% per year, according to the 2014 census data. 50.3% of that
population falls into our target market in terms of age range, and the median household income is
$111,079. The average median income in the United States for the same time period was
$50,046. This means that residents of Fairfax County are likely to have the income necessary to
hire services like junk removal in order to make their lives easier. Operating in an area with a
high population density and a high median income will give the business the greatest chance to
reach its goals, and ultimately succeed.
My skills as an entrepreneur are limited, but probably adequate to take on a project of this size.
Before beginning this venture, I will have a bachelors degree in business management from
James Madison University, and probably an MBA from an accredited institution. I have
experience working as a contractor to a business in this industry, so I have quite a bit of inside
knowledge related to its operation. I also possess a great deal of management experience (10
years), that will assist me in hiring, training, retaining and motivating a good staff of employees.
Finances
The startup capital for this venture would be approximately $132,700. This would consist of the
following:
Two pickup trucks valued at $15,000 each, purchased used.
Two 7x14 dump trailers valued at $7,500 each, purchased new.
One 20office trailer valued at $2,500.
One 45 storage container valued at $1,000.
One Computer, phone and printer valued at $1,000 total.
Two tool kits containing saws, hammers, drills, shovels, brooms, etc. valued at $750 each.
One year of lot rent would be approximately $1500/month if the venture is not able to be run
from a home storage location for zoning or other reasons.
One year of prepaid advertising at a yearly budget of $30,000 for the first year.
One year of prepaid fuel at a yearly budget of $22,500 (150 miles per day per truck x 250
working days @ 10 miles per gallon @ $3.00 per gallon).
One year of prepaid utilities expense (phones, internet, etc) at approximately $5400 per year.

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One year prepaid general liability insurance and inland marine tool coverage @ $1,000 per year
One year prepaid automobile insurance @ $2,800 per year for the two vehicles and trailers.
Ideally I would like to see the business get those expenses paid up front as listed so there is room
to breathe during the initial startup year. The expenses that would remain for the business
revenue to take care of monthly would be as follows:
The personnel budget would be $78,000 for employees other than me (One driver @ $15/hour,
one laborer and one office worker @ $12/hour each).
Salary for myself @ $75,000 per year.
Tipping expense should be 10% of gross revenue, which is approximately $30,000.
Note payable monthly for the $132,700 startup expense @ 5% for 5 years = $2504.21
This would make the expenses for the first year $15,254.21 per month, with a projected revenue
of $25,000 per month with related expenses prepaid. Year two expenses would be $21,895.88
per month, with a projected revenue of $26,250 per month.
The main revenue source for this business will be the fees charged for removing bulk junk from
residences and businesses. We will charge by volume. $85 will be the minimum charge, $130 for
a truck load, $250 for a half truck load, $375 for of a truck load and $500 for a full truck
load. The truck size is based on a truck bed that is 14 feet long, 8 feet wide, and 5 feet tall. The
volume is estimated as the truck is loaded. The customer is charged based on what they wish to
throw away. The service is not one that would be utilized by every household in the country.
Many have pickup trucks and time to take large items to disposal facilities. The goal would be to
find as many customers as possible in Fairfax County and then branch out into neighboring
counties. Keeping customer locations close together and close to tipping facilities will be very
beneficial to the efficiency of the operation. Close proximity helps to minimize travel time
between jobs, as well as to and from the disposal facilities. Travel time is very costly to a
company of this nature because it is unbilled time and the employees are still on the clock and
assets are still getting worn and utilizing fuel. The projected service revenue for year one would
be $300,000. The projection for year two would be an increase in revenue by 5% or $315,000.
A secondary revenue stream for the business would be metal recycling revenue. This would be
generated by taking the metal received during the course of the operation to a recycling facility
that purchases metal. Since tipping fees are typically 10% of gross revenue, and the tonnage rate
is an average of $63 per ton, we can assume that the business will dispose of approximately 476
tons of waste if the $300,000 revenue goal is reached. If 10% of the waste collected is recyclable
metal, and metal is being purchased for an average of $10 per one hundred pounds, then the
revenue generated from recycling the metal would be $9,520 for year one. This is a conservative
estimate, and the amount is not huge, but its secondary revenue that can go straight to the
bottom line.

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Requirements for Success

There is a need for bulk trash disposal in many areas of the country. Fairfax County in Northern
Virginia is definitely an area that has a solid market for this type of service. Trash services exist,
but to reduce labor costs many of them have stopped taking oversized items. They only take
what is within the confines of a specific trash can that is designed to be emptied automatically
into their truck. Large items are difficult to move and require large vehicles to transport. If an
item is in an apartment complex or the basement of a home, it will be a challenge to get the item
out and to a proper disposal facility. There are other companies that perform the same services in
the same area, so the keys will be competitive pricing, fast service and effective advertising.
Good employees are key to the success of the company. Employees need to be trained well since
they are the face of the service and business as a whole. They will need to know how to move
items safely and efficiently without damaging homes or businesses. They will also need to know
how to charge fairly and accurately. Since the charge is by volume, the employee doing the
loading is the one who decides how much it is. It will be important to make sure that the
employee doesnt overcharge, but also that they dont give any services away either. Monitoring
the tipping charges versus revenue will be the most effective way to ensure they are accurate. If
the tipping fees are greater than 10% of gross, they might be undercharging.
Reliable equipment is another key to success. Providing a timely service is very important to
developing a successful venture. If the equipment is less than reliable, it will be nearly
impossible to do this. Selecting the right trucks and trailers will be important. Having an
effective mobile mechanic on call will also be a necessity.
The biggest key to success in the junk removal business is advertising. We will be using several
types of advertising including internet based (craigslist and google), direct mail, flyers and
roadside yard signs. Yard sign type advertising is very effective because its not easy to do. It
can put a company in front of a large amount of people quickly for a relatively low cost. Traffic
counts are high on Northern Virginia roads, and well-placed sign can have 80,000 cars pass it
daily. Utilizing yard signs is difficult because it requires labor and perseverance. You may put
out $500 worth of signs that only stay up for 3 days. The hope is that the advertising effect was
great enough to overcome the sign cost and labor expense. My experience says that it is. Most
large companies wont utilize signs because they get negative attention from municipalities and
the labor cost to place the signs is high. I think this is where a small business owner can put a lot
of sweat equity into the business. Spending night after night placing signs in highly populated
areas will generate a great deal of calls. Staying consistent and utilizing this form of advertising
regularly will help establish and grow the business.
Potential Flaws
This service should be able to run relatively smoothly unless there is a major catastrophe in the
Northern Virginia area. Things that could affect the ability to operate would include the
temporary or permanent closing of waste disposal facilities, fuel availability problems, labor
availability problems, or municipality restrictions regarding advertising or waste disposal. The
advertising restrictions might include localities outlawing or imposing fines regarding the use of

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signage. Yard signs are very effective, but they do draw unwanted attention at times. I find the
best way to avoid any unwanted attention is to use a toll free forwarding phone service to
advertise and utilize a DBA company name on the signs. The corporation will have one name
(Metro Waste, Inc.) and the DBA would be Clear Choice Junk Removal. This keeps the
company address or registered agent from being found easily and makes it difficult for the
company to receive notices or fines regarding improperly placed signs. Since signs are typically
placed by employees, its difficult to say when they are placed somewhere they should not be.
Taking the feedback over the phone and making changes in sign locations will work fine.
Capital requirements for this business are not unrealistic. It is not a business that will require
massive amounts of capital to start or continue operations. The funding should be relatively easy
to obtain because most of it will be secured by equipment. The most difficult to finance and also
most important continuous operating expense is advertising. This business requires a lot of
advertising of various types. Constantly promoting the service and utilizing new and creative
forms of advertising is how you will beat the competition. The service is relatively simple and
straight forward. The key is getting in front of the right people, staying there. That task is a lot
more difficult than it sounds.
Competition can be fierce in the junk removal industry. Major competitors in Fairfax County
include College Hunks Hauling Junk, 1-800 GOT JUNK?, and Dirty Deeds Junk Removal.
Some of these other companies utilize roadside signs, so there can be some level of sabotage
with that. Sometimes companies who wish to advertise in the same area will place signs for their
company and simultaneously take down the signs of another company. This can be costly
because signage is very expensive. It will be important to promote good will amongst
competition and not engage in petty rivalries. Creating a hostile rivalry situation will end up
costing both companies a lot of money and time, while reducing productivity.
Junk removal is a young industry. This is another hurdle to overcome for the business. Some
people may not know what a junk removal service does or why they would need one. Internet
based advertising can help combat this by answering questions people may ask on their favorite
search engine. How can I get rid of a couch in Fairfax, VA? would be an example of a search
term that should be included during the implementation phase of a search engine optimization
campaign.
Conclusion
I believe this idea is viable and the opportunity is strong. Clear Choice Junk Removal could
easily be a profitable venture. Trash and junk are constantly being generated by people and there
will constantly be a need for viable disposal options. The fact that few options for disposal are
available in urban areas created the opening for the junk removal industry. As recycling and
environmental responsibility become more popular, the junk removal businesses will be able to
adapt and continue to offer valuable services to clients. In terms of timeline, it would take
approximately six months after financing was arranged to hire, train and establish advertising.
The company would begin generating some revenue within that initial six month period, but
would not be stable until after that initial startup phase. I am a good fit for this business because

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I have first-hand market and operations experience with this industry, and I know a strong market
exists in Northern Virginia. Advertising and customer service are the two most important focal
points, and I have learned that first hand. If we can do well in those areas, we can develop a
successful business. My only concern is continuous long-term growth. I dont think this venture
could grow exponentially in a single market. It could easily continue to grow with the
population, but that is only .4% per year. This is not impressive enough growth potential for me
personally. Perhaps venturing into other markets could yield more money, but its a very difficult
business to manage remotely. It could be done in some fashion, but there would be a lot of
growing pains associated with it. My other expansion concern is the strength of other markets. I
dont think there are many markets in the country with as high a median income and population
density as Fairfax County in Northern Virginia. There are some, but the expenses associated
with the business are also much higher in those areas. The competition appears to have found
success in franchising, which may turn out to be the best option for long-term large-scale
success. Im very excited about the opportunity and potential of Clear Choice Junk Removal.
My biggest apprehension would be starting a business that I feel may have a glass ceiling. From
my perspective, its much easier to make a wage than it is to run a small business. If I feel that
the business could never possibly grow exponentially, I may not be able to get involved with it
whole-heartedly. If that ends up being the case, I would be better off continuing to make wages
at a business that belongs to someone else or exploring another opportunity.

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References
Fairfax County Demographics. (2014). Retrieved July 8, 2015, from
http://www.fairfaxcounty.gov/demogrph/demrpts/report/fullrpt.pdf
Getting Started In the Junk Removal Industry. (2014, April 14). Retrieved July 8, 2015, from
http://www.junkgonetoday.com/junk-removal-cleveland-ohio/rubbish-removal-clevelandohio/getting-started-junk-removal-industry/
Thurston, Susan. "Decluttering Is Cool? Junk Removal Business Buried in a Heap of Success."
Tampa Bay Times. Tampa Bay Times, 8 Aug. 2014. Web. 13 June 2015.
<http://www.tampabay.com/news/business/decluttering-is-cool-junk-removal-businessburied-in-a-heap-of-success/2192125>.
Hisrich, Robert D., and Michael P. Peters. Entrepreneurship. 9th ed. New York, NY: McGrawHill/Irwin, 2013. Kindle Edition.