Do you want to start a recycling business from home? If YES, here is a complete guide to starting a waste recycling business with NO money and no experience. The recycling business is an eco-friendly business that can earn you a living and make you a business owner and an employer of labor.
Many misconceptions are out there and scaring people away from the recycling business, most people think a recycling business is all about collecting soda cans, bottles, and old paper, but in fact, most profitable recycling businesses concentrate on other items and materials, such as the gold found in computers and cell phones, used tires, or re-selling household goods.
What Does It Take to Start a Recycling Business?
All you need to start a recycling business requires a good knowledge of where to collect your goods and where to sell them, as well as strong entrepreneurial skills and perseverance. It is important to describe recycling as a concept; simply put, it is the act of processing used or abandoned materials for use in creating new products.
Words associated with the recycling business are; reuse, reprocess, recover, uphash, reclaim, etc. The aim of this write-up is to explicitly give you hints on how to start a recycling business. The recycling industry has become an integral part of modern society not only due to its social and economic impact but also because it plays a vital role for the future of our planet.
The use of recycled materials directly translates into fewer natural resources being used and considerably less energy being consumed when compared to production processes using virgin materials. This article’s intent is to show you how to venture into the waste to wealth business.
Steps to Starting a Recycling Business from Home
1. Understand the Industry
The recycling industry has become an integral part of modern society not only due to its social and economic impact but also because it plays a vital role for the future of our planet.
In the world today, it is estimated that over 1 trillion tons of waste at the household level and in industries is generated. Common materials for recycling include bottles, paper towels and aluminum cans.
Interesting Statistics About the Industry
According to experts, all sorts of used scrap metal may be profitable. The waste and recycling sector is a broad one though, and there are lots of areas that remain unexploited often because big recycling companies and Waste Management outfits believe the market value is too small.
Some environmental experts further say that the world market for waste, from collection to recycling, is worth around 300 billion Euros (US $410 billion). The recycling business is therefore a growing business that has futuristic benefits; there are markets in the developing world that can be tapped into especially in Africa, Asia and Latin America.
2. Conduct Market Research and Feasibility Studies
- Demographics and Psychographics
The demographic and psychographic composition of those who need the services of recycling businesses cuts across the government, the private sector, households, communities and people of different class and from all walks of life. Below is a list of the people and organizations that need the services of recycling companies;
- Households/Private Property Owners
- Government Agencies
- Industries
- Schools
- Estate managers
- Secondary Product manufacturers
- Stadia Managers
- Industrial layouts.
3. Decide Which Niche to Concentrate On
There are several recycling niche ideas to specialize into in the recycling business; some of this can be started off from scratch, while others cannot. Some of the niches include:
- Metals recycling
- Plastics Recycling
- Electronic Recycling
- Water Recycling
- Oil Recycling
- Glass Recycling
- Furniture Recycling
- Garbage Recycling
- Tire recycling
- construction waste recycling,
- paper recycling
- battery recycling
- cartridge recycling
- Industrial waste recycling.
The Level of Competition in the Industry
The recycling industry is an emerging one that is yet to be fully accepted globally, therefore there is little or no competition in the industry at the moment.
Although, there is a relationship between the emerging players as they cannot do without the other. Since the industry is a multi-stage one, there is need for collaboration among the players in order to have a win-win situation for all the players.
So, if you enter the industry today, you should brace up yourself for collaboration and prepare for serious competition in the nearest future as soon as the recycling industry enter it boom period, this period will definitely arrive especially in the developing world in little time when recycled product is seen in the same light as the new and “virgin” materials.
4. Know Your Major Competitors in the Industry
- Mid-Atlantic Recycling
- Terracycle
- ACI Global Corp
- Appliance Recycling Centers of America Inc.
- Armco Metals Holdings Inc.
- Brista Corp
- Carbios
- Carbon Green Inc.
- China Industrial Waste Management Inc.
- Blue Earth Solutions Inc.
- Banyan Rail Services Inc.
- CMA Corp Ltd.
- DRS Inc.
- E-Waste Systems Inc.
- Envipco Holdings NV
Economic Analysis
The recycling business is not an everyday buying and selling business that can be delved into by any individual, it is a new terrain that needs careful and patient navigation or else you will have to close down or better yet incur millions in damages and have legal fees to sort out.
Starting a recycling firm needs very good workforce who are passionate about re-using of product and can put the finishing touch on every product.
So also, it is important to point out that the venture is very capital and labor intensive. Capital wise -you will be investing a bulk of your start –up capital into the purchase of costly and technical equipment that must be manned by professionals.
Hence, we are saying that you will be tying down your capital into equipment that can break down at any time and not into raw materials.
5. Decide Whether to Buy a Franchise or Start from Scratch
Everyone in the recycling industry right now knows that in the long-term they will reap huge profits from their investments and are not ready to sell their investments. If you are able to even find a franchise to buy, then you should look out for bad debts and legal damages to pay for and that can be really financially crippling for you as an entrepreneur.
It is important to state here that buying a franchise would have been a better option for you to break into the industry – especially if you are looking to acquire small scale firms that specialize in different aspects of the industry. However, it still remains best to start and grow from the scratch.
6. Know the Possible Threats and Challenges You Will Face
While there are several advantages to adopting habits such as recycling, it can be challenging for entire communities to embrace these tactics. Here are eight of the toughest problems facing the recycling industry;
- A recycling business takes time, effort and resources to setup.
- It is capital intensive
- It is labor intensive
- Sourcing for scraps and waste products may proof a challenge as it takes a great effort to gather a reasonable quantity. Also, this is a very big challenge because not all scraps are worth it. It is required that you sort out those scraps are useful and in high demand.
- This business involves dealing with garbage, so it is been perceived as a dirty business. You must possess an enduring spirit to be able to deal with this kind of business as it involves dirt and garbage. The business has to do with sifting through garbage.
- Some of these scraps are hazardous. So you are likely to sustain injuries when gathering some of these scraps, as some of them are sharp metal objects, examples of this sharp metals are; aluminum, copper, etc.
- Toxins are inevitable because the nature of this business involves sifting through waste, so you are likely to come across toxins and these toxins are harmful to humans.
- Transporting the scrap to the recycling plant might prove a challenge because most recycling plant are sited very far away and will require a lot of money to transport the scraps to the place of recycling.
7. Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)
When it comes to choosing a legal entity for your recycling firm you have the option of choosing from a general partnership, a limited partnership, an LLC, a “C” corporation, or a “S” corporation. It is important to clearly state that these different forms of legal structure for business has its own advantages and disadvantages; which is why you must weigh your options properly before making your choice on the legal structure to build your Recycling outfit on.
These are some of the factors you should consider before choosing a legal entity for your recycling company; limitation of personal liability, ease of transferability, admission of new owners and investors’ expectation and tax issues. If you take your time to critically study the various legal entities to use for a recycling company, then you will agree that Limited Liability Company; an LLC is the most suitable.
You can start your firm as a limited liability company (LLC) and in future convert it to a ‘C’ corporation or even a ‘S’ corporations especially when you have the plans of going public.
Upgrading to a ‘C’ corporation or ‘S’ corporation will afford you the opportunity to grow your recycling company so as to compete with major players in the recycling industry; you will be able to generate capital from venture capital firms, stock market, you will enjoy separate tax structure, and you can easily transfer ownership of the company; you will enjoy flexibility in ownership and in your management structures as well.
8. Choose a Catchy Business Name
When it comes to branding your recycling company with a name, there are no hard and fast rules to abide by. This is so because recycling companies are out to make profit like other business who hopes that their names can help them attract passersby who may just walk in to want to do business with them; you therefore have to be distinct, catchy, and well branded.
Here are some catchy business name ideas you can choose for your recycling company;
- Waste2Wealth Inc
- CleanWaste Limited
- ReUse International
- Sustainable Waste Limited
- Greener Earth Recycling
- Recycle-N-Regenerate
- Clean & Green Recycling
- Recycle Now!
- Recycling Central
- Re-genetronic
- Electro-cycle
- Green Tech
- Tech Revival
- Electro Revival
- Tech Salvage
9. Discuss with an Agent to Know the Best Insurance Policies for You
In most countries of the world today, you must invest in some form of insurance policies as a company, you will be required to present and renew insurance policies to cover a wide range of issues. This is one of the reasons why you have to go all out to acquire the best insurance policies.
Therefore as a recycling company you must have the following insurance policy cover;
- Public and employer’s liability Insurance
- Plant and machinery Insurance
- Stock and business interruption Insurance
- Fire Insurance
- Commercial Property Insurance
- Waste Fleet Insurance
- Waste Liability Insurance.
- Employees Health Insurance
- Workers Compensation.
- Combined Liability Insurance
- Material Damage Insurance
- Motor Fleet Insurance
- Directors and Officers Liability Insurance
- Legal Expenses Insurance
- Group Personal Accident Insurance
- Rehabilitation Insurance
10. Protect your Intellectual Property With Trademark, Copyrights, Patents
In the recycling industry there is not so much to be patented expect for the company name and the registered trademark.
If you are going into a new area of recycling and you need to patent your product, you should just to file for intellectual property protection and also register your trademark in the united states, then you are expected to begin the process by filing an application with the USPTO. The final approval of your trademark is subjected to the review of attorneys as required by USPTO.
11. Get the Necessary Professional Certification
The recycling industry is highly regulated so as to prevent costly gaseous emissions that will endanger the wellbeing and health of the citizens.
It is for this reason that if you are looking towards beginning a recycling company by reducing gas flaring and other environmental hazards, then you should acquire health and safety certifications; it will give you edge amongst your competitors.
The truth is that, the more certifications that you and your team have, the easier it is for you to convince people to patronize your services. Here are some professional certifications that you or your key staff should look towards acquiring;
- Health, Safety, and Environment (HSE)
- Processing operator (Pennsylvania)
- Compost Facility Operator (Maryland, New Jersey, New Mexico and Pennsylvania)
- Waste Auditors (under development by Recycling Council of Ontario)
- Certified Safe Driver (CSD)
12. Get the Necessary Legal Documents You Need to Operate
In The United States of America and of course all over the world, the recycling industry is amongst the industries that is highly regulated so as to avoid costly environmental breaches in the country. If you are considering starting a recycling company, then you are expected to meet the legal documents requirements as stipulated in the constitution of your country.
These are some of the basic legal document that you are expected to have in place if you want to start a Recycling company in the United States of America;
- Certificate of Incorporation
- Business License
- Business Plan
- Non – disclosure Agreement
- Memorandum of Understanding (MoU)
- Apostille
- Employment Agreement (offer letters)
- Operating Agreement
- Company Bylaws
- Operating Agreement for LLCs
- Insurance Policy
13. Write a Business Plan
If you are planning towards floating a recycling company, then one of the first steps that you are expected to take is to consult experts to help you write a good and workable business plan. The truth is that, in order to successfully run a recycling company, you would need to have a good business plan in place.
A Business plan is the blueprint that is needed to successfully run a business; with a workable business plan in place, you will reduce the trial and error approach of doing business. You will be able to manage your business with purpose and perhaps precision; you will know what to do per time and how to handle challenges, growth and expansion.
So if you want to start a recycling company, you are required to write a detailed business plan that can pass reality test when subjected to it; you should work with the facts, figures and other indices in the recycling industry as it applies to the country you intend starting the business.
The whole idea of writing a business plan is not just for the sake of having a business document in place; but a detail guide on how to effectively run your business from the scratch. Your business plan should outline and cover strategies on how you intend to manage and grow your recycling company.
The rule of thumb in writing a business plan is to try as much as possible to be realistic and never to over project when putting figures on income and profits et al. As a matter of fact, it is safer to underestimate when writing a business plan so that you won’t be so disappointed when reality sets in.
14. Prepare a Detailed Cost Analysis
The costs of starting a recycling business can vary widely depending on the services you wish to provide. Because many aspects of the waste management lifecycle, such as recycling, can be sub-contracted out, you can start off very small on little money and then grow organically.
If you are involved predominantly in waste collection, buying a van will probably be your biggest expense. If you plan to run a ‘production’ type business (see below), the initial costs will be far higher, as you will need to factor in equipment and premises.
It is important to state that the location you choose to launch your business will definitely impact on the overall cost of starting the business which is why it is very important to have concluded and analyzed your feasibility studies and market survey before drawing up a budget and sourcing for funding for your business.
The following under listed are the expected expenses to be incurred in floating a
- The Total Fee for incorporating the Business in United States of America – $750.
- The budget for Insurance, permits and license – $5,000
- The Amount needed to rent a suitable office and industrial facility with enough space in the United States of America (Re – Construction of the facility inclusive) – $50,000.
- The Cost for equipping the office (computers, printers, fax machines, furniture, telephones, filing cabins, safety gadgets and electronics et al) – $15,000
- The cost for acquiring recycling equipment (Cranes, Vibratory feeders, Recycling screens, Balers, Compactors, Pulverizers, Grinders, Shredders) – $75,000
- The Cost of Launching an official Website – $700
- The cost of acquiring pick up vans – $40000
- Additional Expenditure (Business cards, Signage, Adverts and Promotions et al) – $2,500
- Other miscellaneous – $1,000
Based on report from research and feasibility studies, we will need about $170,000 to set up a small scale recycling firm in the United States. On the average, you would need over $300,000 to start a medium scale enterprise but if you choose to start on a large scale, then you should look towards budgeting about 3 million US dollars and above.
15. Raise the Needed Startup Capital
If you choose to start your recycling business on a small scale, you might not need loads of resources to launch the business, but if you decide to start on a large scale, you will sure need to raise the required start – up capital to launch the business.
When it comes to financing a business, one of the first thing and perhaps the major factors that you should consider is to write a good business plan.
If you have a good and workable business plan in place, you may not have to labor yourself before convincing your bank, investors and your friends to invest in your business. Here are some of the options you can explore when sourcing for start – up capital for your company;
- Raising money from personal savings and sale of personal stocks and properties
- Raising money from investors and business partners
- Applying for Loan from your Bank / banks
- Pitching your business idea and applying for business grants and seed funding from donor organizations and angel investors
- Source for soft loans from your family members and your friends.
16. Choose a Suitable Location for your Business
If you intend to build a successful recycling firm, you can pitch your business in any part of the world and still make success out of the business- especially if you run a garbage recycling firm. But note that if you are just starting out; especially if you are a fresh face in the industry, it is important that you locate your business in an area with healthy business activities.
These are some of the factors that you should consider before choosing a location for your Recycling outfit;
- The demography of the location
- Accessibility of the location to raw material
- The numbers of recycling firms in that area
- The local laws and regulations in the community / state that guide recycled product
- The acceptability of recycled products in such area
17. Hire Employees for your Technical and Manpower Needs
If this recycling business looks good to you based on what have been analyze so far, then you should be ready to invest in costly equipment and staffing, these are some of the core technical aspect you are expected to spend part of your startup capital.
Some of the equipment needed include the following;
- Recycling process management software
- Business cards
- Waste collection vehicles such as trucks, open end vans, etc.
- Conveyors
- Hydraulic lifts
- Industrial loaders
- Magnets
- Cranes
- Vibratory feeders
- Recycling screens
- Balers
- Compactors
- Pulverizers
- Grinders
- Shredders.
When it comes to choosing between renting and leasing an industrial space, the scale of the firm you want to start will be the judging criteria and your entire budget for the business should influence your choice.
If you have made up your mind to go large scale, then you should consider the option of leasing a facility for your firm when you lease, you will be able to work with long term planning. Regarding the number of employees that you are expected to kick start the business with, you should consider your financial capacity before making the decision.
But good enough, you don’t have to maintain a large staff to work with, just start off with few qualified ones who will later train other individuals who will work in your firm.
The Service Delivery Process of the Business
Recycling includes the three steps below, which create a continuous loop, represented by the familiar recycling symbol. Whether as a recycling company you place recyclables at curbside or drop them off at a local collection depot, just where does the material go next?
The specific route depends on the item in question, but there are some common threads. They have to do with words like collector and hauler, resale, transportation and energy. They have to do with conserving, and with saving natural resources and fossil fuels and materials.
They have to do with insuring that we preserve our state as we know it for generations to come. But the process of collecting and re-manufacturing recyclable materials, outlined here, is only part of recycling. Buying and using a recycled product completes the circle.
- Collection and Processing
- Manufacturing
- Sales of Manufactured recycled product
18. Write a Marketing Plan Packed with ideas & Strategies
So when you are drafting your marketing ideas and strategies for your recycling company, make sure that you create a compelling personal and company’s profile which must include the profile of your product in a compelling and quality way.
If you have a showcase of quality product and services, it will definitely give you leverage in the market place than your competitors to market your products effectively; which is why you must do all you can to maximize any opportunity that comes your way.
The under listed are means you can walk through to market your product and services;
- Advertise your business in relevant business magazines, TV and radio station and also make yourself available for renewable product related talk shows and interactive sessions on TV and Radios)
- List your business on local directories / yellow pages (both online and offline)
- Attend recycling and renewable resources expos, seminars, and business fairs et al
- Leverage on the internet to promote your business
- Join local chambers of commerce in your state
- Promptness in bidding for contracts
- Create different packages for different category of clients in order to work with their budgets.
- Engage in direct marketing, referral marketing and also email marketing.
19. Develop Iron-clad Competitive Strategies to Help You Win
If you possess the required expertise and equipment to execute recycling without environmental breaches, then you are likely not going to struggle to compete in the industry. Hence, ensure that you put in your best whenever you have the opportunity to handle any contract with potential customers. You should be known for delivering efficient services and quality products at all times.
So also, ensure that your organization is well positioned and if possible form strategic partnership with other companies that are beneficial to your stage of recycling; it will sure give you competitive advantage over your competitions as they are now your partners not competitors.
20. Brainstorm Possible Ways to Retain Clients & Customers
When it comes to business no matter the industry you choose to pitch your tent in, one of the easiest ways to increase customers’ retention and perhaps to attract new customers is to satisfy your customers always. If your customers are satisfied with your services delivery, they can hardly source for alternative service provider or products.
Statistics has it that one of the major reasons why customer’s source for alternative service provider or product is when there is a drop in quality. Another reason is poor customer service. If you can continue to improve on the quality or your services and your customer service delivery, then you won’t struggle to maintain your loyal customers.
You can introduce new products and prices to them without any hitch, you can felicitate with them on their birthdays and other anniversaries, you can keep track of their progress, you can send bulk text messages and customized e – mails and above all you can easily receive compliant and feedback from them).
21. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity
It is pretty important to work with your consultants to help you map out publicity and advertising strategies that will help you walk your way into the heart of your target market.
First and foremost, you should ensure that your brand is visible and well communicated which is why you should make provisions to work with different class of people in the society. All your publicity materials and jingles should be done by some of the PR firms in the industry. The following are the means to boost your branding;
- Introduce your business by sending introductory letters alongside your brochure to all the corporate organizations, community leaders, schools, hospitals, hotels and government offices in your target area.
- Advertise your business in relevant magazines and websites
- List your business on local directories / yellow pages (both online and offline)
- Promote your business on satellite TV stations and radio stations.
- The internet is a good way to reach your customers (social media platforms and your official websites) to promote your business
- Ensures that your workers wear your branded shirts at all times during working hours and also make sure you brand all your company’s official vans, trucks and cars et al.
22. Create a Suppliers / Distribution Network
So far you are churning out quality products with every batch of production; you will always have suppliers and distributors surrounding you. Your products will definitely make them smile to bank; therefore they are ready to pitch their tent with you and not with other individuals.
So also, as a company that will rely so much on raw materials that are already used by the end consumers, a reliable supply of the materials are needed day in-day out. Regular payment of the supplier’s product will guarantee they supply you regularly.
23. Tips for Running a Recycling Business Successfully
You have to first overcome the Issues that may exist with using compost made from human waste sludge. Establish and build relationships and trust with customers to help shield from future competition. Starting a recycling business makes you an entrepreneur with a sustainable means of livelihood.
The reason is because unlike other industries that are dying, the green or eco-conservation industry is just emerging and still holds a lot of untapped potentials. The green movement is on and people are becoming more eco-conscious, so why not profit from this trend.
Consider these points to succeed in the industry:
- Expand rapidly to control the market.
- Offer reasonable prices.
- Get investment.
- Be versatile in outlook
- Employ professionals in your delivery.
- Look out for partnership opportunities with municipal councils, household association etc.