Starting a recycling company is a good way to generate income and be environmentally friendly. Every day the number of people who become aware and recycle what they throw away increases. In addition, governments are creating new initiatives for society to recycle, and they put in place grants and subsidies for businesses that engage in this activity.
The best thing is that there are still few businesses in this sector, and although it is an industry that has a lot of potential, few are the companies that are dedicated to it. If you want to enter this booming industry, and form your own recycling company, here I show you the 7 steps you must take to create your own recycling business.
How to start a recycling company
1. Choose the type of recycling you want to do
The first thing you should think about is what kind of recycling company you are going to start. There are many options here: recycling paper, metals, plastics, even car tyres.
However, you should not do it based on what you like, but on the possibilities that are around you. Maybe you want to start a glass recycling company, but if the area where you will start your business has hardly any glass waste, you will not be very successful. So it is vital that you first do some research into which materials are most commonly thrown away in your area and which could be recycled.
After that, it is also important that you check if there are other businesses in that area that are dedicated to recycling the materials you have chosen. These businesses are not like a clothing shop or a restaurant, where there may be 3 or 4 different businesses of this type on various streets. In a recycling business, unless you have a very good strategy to differentiate yourself, the competition can be very tough.
2. Find out who your buyers will be
You may have thought about what materials you are going to recycle, the machines needed to do it… But who will buy the recycled material from you? You should research who the customers you sell to will be because that part of the process will be the one that really pays off. In a recycling company, your buyers will usually be other businesses. So take a good look at who your potential customers might be.
Here are some ideas of customers you could look for:
- Small and medium-sized businesses that sell some kind of recycled product (paper, notebooks, furniture made from recycled materials).
- Small and medium sized offices that use recycled materials (such as pens, paper, paper clips and staples, etc.)
- Companies that distribute products to large surfaces such as shopping centres or chain shops.
- Schools and universities (you can also sell them notebooks, wastebaskets, seats made from recycled wood, etc.).
- Public administrations such as town halls or ministries, as these government bodies are the first to show an awareness of the environment.
- Businesses that manufacture products only or mostly with recycled materials.
- Craft workshops that are dedicated to making objects with recycled material.
If you have a little more budget for this business, a good idea would be to rent a place where your small recycling factory is in the back, and in the front you could put a shop where you can sell recycled items.
For example, if you decide to recycle paper, you could rent a space with enough space to put recycling machines in the back to make office supplies, and a stationery shop in the front.
3. Create your business plan
Every new business should have a business plan to guide the first steps, and to help if any problems arise in the future. So if you already know what materials you are going to recycle and who you are going to sell them to, make a good plan with the rest of the important issues for your business.
Every good business plan should provide answers to essential issues such as:
- What will be the product or service that will be sold.
- What is the potential market for the project.
- What competitors are there or what competition may arise.
- What is the available budget, how much it will cost to start the project, and whether or not (and how to get) funding.
- Who will make up the company (how many employees there will be, who will be the director or owner and what tasks they will perform, etc.).
- What profits are expected to be generated, making calculations between what production will cost and the final sales price of the product.
- The basic steps for setting up the project.
- And what will be the marketing and sales strategy to be implemented.
4. Check the subsidies and apply for an opening permit
The education of citizens often begins with governments themselves. And in each country, these bodies set up systems of aid and subsidies for those businesses that want to engage in recycling. That is why it is a good idea to go to your local council or the Ministry of the Environment and Development to find out about any financial aid available to you.
There are also subsidies for new entrepreneurs that you can take advantage of to finance your recycling business. So find out before you ask the bank for a loan if you don’t have enough money to start your project. In addition, it is important that you take the necessary steps to register your business and obtain an opening licence. For this type of business you usually need a permit to resell objects (even if they are recycled) such as gold, car wheels, and other delicate materials.
5. Choose how you will collect the materials
To start this business, you will also have to think about where you will collect the raw material that will start your project. There are several ways you can implement to collect waste that will then be recycled. For example, you can set up a clean point in a busy area where you put a container for the material you have chosen to recycle, so that people will throw away the waste for free. The second option would be to offer to go house to house to collect the waste; here you can make the service free, or pay a small amount to remove it from the homes. Remember that here, if you decide that the collection is free, you will have to count on the petrol costs of the truck you provide the service with. As a third option, you can agree with different businesses and companies to collect the materials they no longer use on their premises free of charge, and take them to your small recycling plant.
Here you can collaborate with offices that frequently throw away paper and cardboard if you want to recycle paper, or with bars and factories if you are going to reuse materials such as oil, metals, plastics or glass.
6. Find a recycling facility
Now that you know where to get the materials, customers to sell to, and a good business plan, it’s time to find a location for your recycling business. Depending on the products you’re going to recycle, you’ll need a larger or smaller place, and it can be located in the middle of the city or on the outskirts.
If you want to recycle paper, you can rent a small shop in the city centre; but if your business is going to be a glass business, the shop must be bigger because items made from this material usually take up more space than paper. The most important thing here is that you check the necessary space, because there are machines for these businesses that usually occupy more than other types.
7. Contact with the manufacturers of the machinery
This is the final step in starting your recycling business. When you have seen a few premises to rent, contact different manufacturers of recycling machinery and ask each one for a quote to know their prices.
Depending on the money you have to invest in this, you can rent or buy the machines you need. Not all manufacturers offer the option of renting them, but every day more are doing it because they see that it is more profitable for them than selling just one machine. My personal recommendation is that at the beginning you should rent the machinery in case your business does not turn out as you expect; this way the investment will be lower and you will run less risk.
And if you can agree on a rental with an option to buy in the future, so much the better. Take a good look at the conditions of sale (guarantees, repairs, etc.) offered by each supplier, and what price is the most suitable for your budget. Once you have taken all these steps, you will only have to start collecting the materials, press the power button of your machines, and recycle and get income! A recycling business can be a very lucrative project if you know how to manage it, and you’ll sleep better at night knowing that you’re doing something valuable to change the world.