The labor market is getting uglier by the day. Just look at the facts: there are 14.5 million jobless and counting, falling incomes, widespread salary cuts, raises difficult as hell to come by and weekly jobless claims topping 600,000.
In many cases, this labor chaos is sparking an intensive pursuit of new careers. I'm not a job counselor, but how does the junk business strike you? That means picking up and delivering junk. Please, if you're about to shake your head with indignation and gripe that's an insulting suggestion, degrading work, something you would never do and it's too iffy a business, think again.
Why? Because as demeaning as you might consider such work, there's a big-bucks opportunity in becoming a junkman. In dollars and cents, for example, there are people earning $250,000 in their first year, with some topping $400,000. And in four to five years, it could increase to $1 million a year. Or, if you're the enterprising type like the fella you're about to read about, you could even be the architect of a $100 million a-year business.
In 1954, songwriter Irving Berlin struck paydirt with "There's No Business Like Show Business," which was written for the film Annie Get Your Gun.
Judging from what I hear from 39-year-old Brian Scudamore, the nation's most prominent junkman, a worthwhile follow-up song might well be there's no business like the junk business.
Scudamore, who became smitten with this business in his teens and is making it his life's work, is living proof there's gold in junk. At age 18, in need of money to pay his way through college, the youthful entrepreneur, who never finished high school, bought an old Ford truck for $700 and then went from door to door, introducing himself and pitching people on the idea of getting rid of their junk, such as old furniture and appliances and debris in their basements and their garages. In turn, it would be delivered to a transfer station, which is generally owned by a municipality.
Scudamore turned out to be a good salesman. Sales ballooned at an average junk removal job of $358, and after three years, he built a growing business that would not only pay his way through college, but one that he felt had the potential to become a much bigger business. So he scrapped college and created a company -- 1-800-GOT JUNK? -- chiefly a franchised operation that exploded and now boasts 224 franchised partners, 1,000 trucks, the bulk of which are spread across 46 states, and more than $100 million in annual sales.
Headquartered in Vancouver, B.C., the firm, which also has franchisees in Canada and Australia, posted 2008 sales of $110 million, down from its peak 2007 volume of $128 million. That decline reflected a slumping housing market and a restructuring of the business, which involved hiring former Starbucks president Launi Skinner as the company's operating chief.
That restructuring reflected the next phase of the company's drive -- a goal, Scudamore tells me, designed to achieve $1 billion in annual sales in seven years.
For argument's sake, let's say you share his belief that there's gold in junk. To become a junkman and hop aboard the 1-800-GOT-JUNK? bandwagon requires an estimated $100,000 of liquid working capital, which would cover start-up expenses, a franchise fee, a down payment on two truck leases and marketing materials.
A possible return: about $250,000 in annual sales per truck (two trucks are required), with a prospective bottom line of 5% of gross sales.
How many of the firm's franchisees fail? Less than 5%, well below the average of the franchising industry, Scudamore says.
Actually, he can thank his dad for a good part of his success. His father, a liver transplant surgeon, refused to give him financial aid to help him get through college, since he believed this is something a person does on their own.
Asked if he is ever embarrassed at being labeled a junkman, Scudamore notes that "it's not the sexiest business, but my family and friends are proud of what I've achieved."
How does he realistically view his chances of building a $1 billion annual business? Scudamore believes it's quite doable, noting his company has massive room for growth. In the U.S., he observes, only about 3% of the population ever heard of 1-800-GOT-JUNK? That means, as he sees it, great potential: 97% down the road.
What do I think? That we may be looking at another lion-fighting Samson, that anyone who can parlay a $700 truck into a $100 million-plus yearly business is clearly not an idle dreamer, but an entrepreneurial force to be reckoned with.