Start a grease removal business by following these 9 steps:
You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple guide to starting your grease removal business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
STEP 1: Plan your Business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
- What are the startup and ongoing costs?
- Who is your target market?
- How much can you charge customers?
- What will you name your business?
Luckily we have done a lot of this research for you.
What are the costs involved in opening a grease removal business?
The price of direct materials to open the business is remarkably low. Supplies such as a putty knife, gloves, and scooper will cost less than $100. However, owners also need to factor in the cost of marketing and commercial insurance. The drainage system can be significantly impacted if the grease remover makes a mistake, so they’ll need liability insurance to ensure they don’t have to pay for damages out-of-pocket.
What are the ongoing expenses for a grease removal business?
Liability insurance, permit renewal fees, and tool maintenance are the biggest costs for a grease removal businesses. Certain factors, such as liability insurance, are heavily dependent on the neighborhood a business owner operates out of. However, these expenses are generally fairly low in most areas.
Who is the target market?
Most grease removal businesses target restaurants or other food-service establishments (e.g., nursing homes, etc.) who need their grease traps cleaned on a regular basis. High-volume restaurants may need their traps cleaned out at least once a month, which can provide a lucrative target market for a removal business.
How does a grease removal business make money?
Grease removal businesses make money buy cleaning out the grease hoods at restaurants and other food service establishments
How much can you charge customers?
Grease trap removal is a special skill, which means you can charge anywhere from $75 to $150 for a single job. Check rates in your area to learn more about what the expectations are for business owners who pay for grease removal so you can set competitive rates.
How much profit can a grease removal business make?
Because the cost of business is so low, a successful grease removal business can make plenty of profits. Just completing two jobs a day at $150 will add up to $78,000 a year minus direct expenses.
How can you make your business more profitable?
Owners can consider offering general handyman services for restaurants once they get their primary business off the ground. Most grease removal owners are good with their hands and they have an opportunity to really learn about different types of restaurant equipment when going from business to business. They can use this knowledge to their advantage by offering additional services and maintenance for dishwashers, plumbing systems, etc.
What will you name your business?
Choosing the right name is very important. Read our detailed guide on how to name your business. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.
After registering a domain name, consider setting up a professional email account (@yourcompany.com). Google's G Suite offers a business email service that comes with other useful tools, including word processing, spreadsheets, and more. Try it for free
STEP 2: Form a legal entity
Establishing a legal business entity such as an LLC prevents you from being personally liable if your grease removal business is sued. There are many business structures to choose from including: Corporations, LLC's, and DBA's.
Form Your LLC
Read our Guide to Form Your Own LLC
Check out the Top Business Formation Services from our friends at StartupSavant.
You should also consider using a registered agent service to help protect your privacy and stay compliant.
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It's really easy and free!
You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.
STEP 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.
Open a business bank account
- This separates your personal assets from your company's assets, which is necessary for personal asset protection.
- It also makes accounting and tax filing easier.
Recommended: You can get $300 when you open a Chase Total Business Checking® account with qualifying activities. Learn More.
Get a business credit card
- This helps you separate personal and business expenses by putting your business' expenses all in one place.
- It also builds your company's credit history, which can be useful to raise money and investment later on.
STEP 5: Set up business accounting
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
STEP 6: Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate a grease removal business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits.
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses.
For information about local licenses and permits:
- Check with your town, city or county clerk’s office
- Get assistance from one of the local associations listed in US Small Business Associations directory of local business resources.
Grease removal businesses should consider requiring clients to sign a services agreement before starting a new project. This agreement should clarify client expectations and minimize risk of legal disputes by setting out payment terms and conditions, service level expectations, and so on.
Labor Safety Requirements
Working in the grease removal industry means you will be working with tools and chemicals that could be dangerous if handled incorrectly. Therefore, you should make sure your business follows all labor safety requirments which can be found here.
STEP 7: Get Business Insurance
Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.
There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.
Learn more about General Liability Insurance.
Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
How to promote & market a grease removal business
Because it’s such a local service, business owners are encouraged to make local relationships. The more people see your face and see your dedication, the more they’ll begin to trust you. You can also try online ads if you feel a neighborhood is severely underserved. However, the demand in your area may not be enough to justify the expense.
How to keep customers coming back
Customers are going to want to see a clean drain each and every time. They’re going to want a grease removal owner to show up on time and quickly do your job with as little disruption as possible to daily business. Grease removal owners should be courteous, efficient, and professional at all times.
STEP 9: Establish your Web Presence
A business website allows customers to learn more about your company and the products or services you offer. You can also use social media to attract new clients or customers.
Start A Grease Removal Business In Your State
Select your state below for an in-depth guide on completing each of these steps in your home state.
Is this Business Right For You?
This business is excellent for those who are good with their hands and don’t mind getting them a little dirty. Grease removal isn’t glamorous, but it's necessary to avoid major disaster and to stay compliant with local water safety laws.
What happens during a typical day at a grease removal business?
Most days will be spent on the road, traveling from business to business to perform the actual grease removal. There will also need to be time devoted to marketing and invoicing clients.
What are some skills and experiences that will help you build a successful grease removal business?
People should have some type of experience working with grease traps in the past. They should be familiar with the kinds of traps used for both large- and small-scale operations. Owners should also understand the regulations that dictate what type of grease trap is appropriate for each type of operation, and have a basic system of keeping tabs on who owes what.
What is the growth potential for a grease removal business?
It may be difficult to get a foothold in grease removal if there’s already a lot of competition in the area. However, there is always potential for someone who finds an angle that isn’t being served. For example, if an owner can offer their services for a much lower price, or if they can quickly adapt to a wide variety of grease traps. Clients often don't realize how important their grease traps are, so educating them about the consequences is a smart way to boost the growth potential of the business.
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Take the Next Step
Find a business mentor
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
Resources to Help Women in Business
There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:
If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.
What are some insider tips for jump starting a grease removal business?
The best place to start with a grease removal business is to first learn the exact details of grease removal rules and recommendations in your area. From fines to shut-downs, failing to comply with local laws can really land a business in hot water. For example, communities may choose their department of water to check up on food-service establishments who have grease traps. In-ground outside grease traps may need to be cleared out when as little as ¼ of the trap becomes full of solids or grease (or at least once every three months.)
Chances are the restaurants you’re visiting will have their own means of grease removal, so your job is to convince them why they should choose you. This usually means going from door-to-door to meet business owners and to leave them with a business card or short pamphlet that tells them what you do. Ask them how they're currently removing their grease, and if they're aware of how quickly grease can build up. Make them aware of how you can take over the practical details of grease removal — including documentation, maintenance, and direct cleaning. Your efforts ultimately ensure their businesses don’t end up with a non-compliance notice or a fine from the enforcers of the law.
If food service establishments are having their employees complete the job, chances are it's not being completed accurately (thus risking the drainage or wastewater system.) A clog can not only cost thousands of dollars worth of water damage, it can also have a significant impact on the restaurant’s direct business. If the clog interferes with the service and general operation of the restaurant, the reputation loss can be significant. You should also have a way of clear means of charging for your services (most will go by the job as opposed to by the hour) as well as a clear method of invoicing your clients. This can save billing nightmares and tax headaches down the line.
How and when to build a team
Most people begin this business as a means of making extra money as opposed to assembling a full squad of employees. You can consider hiring qualified handyman to help only when you’ve built up a sufficient clientele.