Harsha Rathnayake

Harsha Rathnayake

Making money from rubbish

Entrepreneur and Sri Lankan immigrant Harsha Rathnayake worked three jobs to get his business off the ground, as Steve Dyson explains.

It was when he was offered an old tipper truck in lieu of his wages that Harsha Rathnayake realised there was money to be made from rubbish.

Born in Sri Lanka in 1983, he’d come to London 13 years ago to study automotive engineering at Kingston University, and then took a master’s degree in science and another in business administration at the University of Sunderland.

“I worked as a part-time driver for a waste removal company, regularly working 20 hours per week while studying for my degrees,” the 34-year-old recalls. “Rubbish collection was the only job I’d ever worked in England, so it felt right for me to continue once my studies were complete.

“But soon after this my boss decided to close the business and move to India. The only asset he had for the company was an old, 3.4-tonne Ford tipper truck, which was worth about £700. He offered me this truck instead of my last month’s wages, which I accepted, and from there Junk Hunters was born.”

That was back in August 2009 in North London, and one of Rathnayake’s first challenges was that English wasn’t his first language – he’d been brought up in a Sri Lanka village where no English was spoken. So, he learned English whenever he could in his spare time, teaching himself via online modules and YouTube videos.

When he began Junk Hunters he had no staff and so would handle all the calls, marketing, card payments and invoicing himself – as well as collecting the rubbish. But the biggest challenge he had was in overcoming the lack of any finance from banks or other lenders.

Harsha“Cashflow was a huge issue for me, as banks didn’t want to lend me money because I didn’t have a credit history in the UK,” he says. “When the banks wouldn’t help me, I didn’t know where else to seek advice – I didn’t have any connections. I realised I only really had one other option: to do it myself.

“This meant I funded the business through my own personal savings, which at the time was only about £160, and by working two part-time jobs. I woke up at 4.30am every morning to go to my morning job – doing the paper rounds for a local newsagent – which started at 5.30am and ended around 7.30am.

“I would then return home to take my truck and get on with rubbish collections for my business from 8am. I would finish at 5.30pm, and make my way to a local Indian restaurant at 6pm where I spent my evenings as a delivery driver until midnight.

I continuously worked like this for 19 hours per day including the weekends for a year to overcome this challenge, which I successfully managed to do.”

What Rathnayake quickly realised was that there’s a lot of money to be made in other people’s rubbish, and he managed to generate a profit in his first year on a turnover of around £70,000. But doing this on an average of about four hours sleep a night was hard, lonely work.

“I had a few good friends to help me occasionally with loading the trucks, but I never had any financial support from friends or family. Generating a profit in my first year and finally being able to ditch my part-time jobs was a real breakthrough moment for me. I could then afford to buy a second truck and employ two people. At this point I gave up my two other part-time jobs.”

Since that first year, Junk Hunters has bought new trucks year after year and today, after eight years, the company has steadily grown into a business that employs 14 full-time staff and turns over around £1.8m a year.

It operates as a simple on-demand “two-men-and-a-van” rubbish collection service, offering shiny trucks, a friendly and uniformed team, two-hour guaranteed arrival windows, upfront pricing and even sweeping up afterwards. It’s a competitive market, but one where Rathnayake has found it relatively simple to stand-out.

“My main aim is to keep existing customers happy,” he says, “as this is much cheaper than trying for new ones. Our first-class service prioritises customer satisfaction, and our competitive pricing structure only charges for the amount of waste collected. Plus, we’re committed to protecting the environment, as we recycle more than 80% of all the waste we collect.”

Junk Hunters’ prices range from roughly £60 for a maximum weight of 100kg to £160 for a maximum weight of 600kg. And Rathnayake now plans to steadily increase the company’s brand presence across the UK by offering two franchise business models. The first is as an “operator”, where the franchisee starts in a hands-on role with just one vehicle. The second is under a “management model”, which includes a range of tasks like sales and marketing, recruitment and training.

Junk Hunters will dispose of any rubbish that clients need removing. That mostly means old furniture, clothing, garden waste and large items of junk, but it also carries out removals from office and construction sites, which includes lots of old desks, computers and building waste. And occasionally, Junk Hunters’ teams will find the equivalent to a chunk of gold in the rubbish they’ve collected.

Rathnayake remembers one early discovery particularly well: “I once found a pair of first edition Charles Dickens novels in some rubbish we collected. They had an online resale value of about £500.”

However, most of the rubbish it collects is disposed of, and the company uses privately-owned waste transfer stations, which it always makes sure are licenced and registered with the Environment Agency. Although the main income is what people pay to have their junk collected, franchisees can re-sell a percentage of the goods they collect, providing additional revenues.

Junk HuntersOn average, Junk Hunters gets 90% of its revenue from what customers are paying, and another 10% by re-selling items like second-hand furniture and scrap metal. The company also donates a lot of goods to charity shops, which doesn’t make any money but provides a valuable service to the local community – improving its brand and its customer relationships.

Now married with two children and living in Stanmore, London, Rathnayake has plenty of advice for other start-up entrepreneurs: “Firstly, find the right business that suits your passion and lifestyle. Building a business is a medium- to long-term activity – it is likely to need a lot of planning and very large personal sacrifices. In my experience, success only comes with really hard work.

“One of the hardest parts is taking that initial step. Don’t waste time waiting for the perfect business plan: start now, fail, learn and try again. Be clear about your motivations and be honest about your level of ambition.

“Money should never be your sole aspiration, and you should be realistic about how much time you can commit to any project. Look after your cash flow before you begin to think about profits. If you don’t have enough cash to pay your bills then you can’t continue to run your company, no matter how profitable your business is.”

Rathnayake also has good advice for other immigrants who fancy their chances at becoming UK-based entrepreneurs: “I do think that immigrants can bring more to the British economy, but there are several barriers for them when starting and running a successful business in the UK. The language can be one of them, and it’s difficult to obtain visas to come to the UK as a business person if you’re from outside of the European economic area.

“Also, as an immigrant, banks are not willing to lend you the start-up money for a business as you do not have a credit history in the UK. This means you must think outside the box and work out the best way around these barriers. Aside from this, the UK is a great place to build your business.”

Despite describing such a difficult beginning, Rathnayake quickly shakes his head when asked if there’s anything he would do differently if he could start Junk Hunters again. “No,” he declares. “I did everything I could at the time to make the most of very limited resources. Looking back at these things after eight years, I have nothing to regret. It has been hard but I didn’t waste any time, I am always glad of that.

“And I’ll always remember the value of accepting that old tipper truck instead of my wages – that was the start of great things in my life, the moment when I realised that real money can be made from what other people feel is rubbish.”