A recycling program provides a service to the community, while also proving a profitable business when done well. With space, equipment, and crew, the start-up costs of a full force recycling program can be cost-prohibitive, which makes it difficult to get much-needed programs in place in many municipalities. Here is a list of the top five things to consider when starting a recycling business.
1. Do Your Research
The total cost of a recycling program depends upon what types of materials you’ll be processing, and how you’ll be doing that processing. This means you need to pick a niche to fill. Try choosing materials that are easy to process and will be easy to sell once you’ve baled them.
You’ll most likely be competing with other recycling companies in the area, so you’ll also need to do market research to determine your competition. Is there enough volume to support multiple recycling businesses? Are there materials that are being overlooked by the current recycling companies in your area? Make sure your research helps you pick both profitable materials and a niche that you can compete in.
Once you’ve chosen which materials will be best for your company to recycle, check out The U.S. Environmental Protection Agency. They offer valuable insight into the basic needs of every local recycling program. These include:
- Processing centers
- Drop-off centers or pick-up programs
- A team that can handle both the technical and business aspects of the program
Processing equipment is also a necessity, so do your research to find well-designed equipment that limits the use of electricity. This will increase the environmental-friendliness of a recycling start-up.
2. Figure Costs
While the costs of starting your own recycling program remain consistent in terms of what you need, expenses vary widely based upon how a business is operated. Having individuals drop recycling off at your facility, or providing drop-offs in the form of dumpsters, is generally less expensive than curb-side pick-up, for instance, due to the reduction in workers required for the task.
Doing recycling in a facility without easy public accessibility will also generally be cheaper, since accessible real estate usually comes at a higher cost. However, this can be problematic if you want people to bring their recycling in for treatment.
Consider these basic start-up costs (with some possible costs) and shop around for the best deal:
- Processing facility ($1500/mo)
- Drop-offs ($1000 per unit)
- Employees, bare bones staff of five at $10/hour ($2000/wk + taxes, insurance, social security)
- Equipment ($5000 – $10,000)
- Utilities
All in all, you’re looking at a $20,000 to $30,000 first month in business for a smoothly-operating recycling business, which is why the EPA recommends finding backers from the community to offset initial fees. One backer you might consider is the government. They offer lower-rate loans that you may qualify for because your business benefits both local residents and the environment.
3. Ensure You’ll Make Profits
When keeping costs low, it’s important to keep in mind that profits may suffer from your original cost-cutting decisions. For instance, individuals are far less likely to participate in a program that forces them to come to you, than a program that puts everything they need at their door. This means you will have less recycled scrap to sell, cutting into your profits, and that you’ll also be keeping less waste from landfills.
The type of equipment you buy will also impact your profits down the line. While standard equipment may be cheaper up front, and will get the job done, electricity-saving equipment will reduce utility expenses later on. Your profits will increase as you save money on utility expenses each month.
4. Ask for Help From Your Government
As a benefit to the public, people with good business plans looking to start recycling programs are entitled to grants in many states. So, before you begin a recycling program locally, check with the state to see how much funding you can get. Often, you’ll be able to get free money to offset any loans required to get your business off the ground.
No matter what your niche or stage in the recycling business process, General Kinematics is ready to help with long-lasting, high-performing recycling equipment.
