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How to Start a Small Recycling Business

Recycling Business Steps to Success

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Thinking of starting a small recycling business? Whether your goal is to start a small junk removal business, scrap collection service or other enterprise, here are some basics to consider towards your new launch.

Choosing a Niche

You may have already gravitated towards a specific niche for your small enterprise. Opportunities may include areas such as:

  • Junk collection service
  • Scrap metal collector
  • Scrap plastic or cardboard collection
  • Scrap pallet collector
  • E-waste depot
  • Do Your Research

    Before starting a business in a niche that interests you, you will want to make sure that there seems like an opportunity to succeed in your market area, and that you are ready for the challenge of starting a business. A useful starting point is Alyssa Gregory’s Starting a Business Quiz.

    Gregory suggests asking four basic questions. These are:

  • Is there a need for your anticipated products/services?
  • Who needs it?
  • Are there other companies offering similar products/services now?
  • What is the competition like?
  • How will your business fit into the market?
  • Other aspects of recycling business market research can include:

    Competitor analysis, including competitor pricing and services. Pricing and service expectations are important to consider. Make sure to differentiate what proven successful providers charge versus newer entrants. Because many entrepreneurial businesses have a low barrier to entry, some newcomers may not charge enough to ensure long term viability.

    Review of regulatory hurdles. Some items may be restricted, and you will have limited or no means of disposal. In some instances you may require a transportation certificate.

    Seasonality. Junk removal in particular can be a highly seasonal business, naturally slower during the winter. Take seasonal dips into consideration when you are planning your business.

    Make a Business Plan

    The creation of a formal business plan should help ensure the success of your enterprise. For this reason, a formal business plan is a must if you are looking for outside financing for your entity. At minimum, develop a simple business plan.

    Planning Finances

    One of the attractions of entrepreneurial activities is that they may not require a high level of investment. In such enterprises as a scrap metal collector, pallet collector or junk removal service provider, you will need a truck. As such, you should incorporate the cost of the truck if you don’t have one already, as well as maintenance and other operating expenses. Depending on your niche, you will require specific items such as cargo straps, netting, cutters, and containers.

    Choosing a Business Structure

    For your small business, you may choose to create a sole proprietorship, a partnership, a limited liability company (LLC) or a corporation. Gregory stresses that the business structure you choose will influence such factors as your business name, your liability, to how you file your taxes.

    Pick and Register Your Business Name

    Choosing the right business name is an important consideration. From marketing purposes to potential geographic expansion to potential liability issues, there are many things to consider when choosing your business name.

    You will also need to check your proposed name to ensure that it is not trademarked or currently in use, before registering it. A sole proprietor name will be registered with either their state or county clerk. Corporations, LLCs, or limited partnerships will typically register their business name when the formation paperwork is filed.

    Get Licenses and Permits

    There are a variety of small business permits and licenses that may be applicable to your business. Be sure to check them out.

    Other aspects of starting your new business include business location, accounting system and promoting your small recycling business. Be sure to check back soon for updates to these topics.

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