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 another 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:

  • Used building supplies
  • Junk collection service

Do Your Research

Before starting a business in a niche that interests you, you will want to make sure that there seems like a promising 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 these basic questions:

  • 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:

Analyzing competitors, 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 their long-term viability.

Reviewing 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.

Recognizing business 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. For some people, a seasonal business is perfect because it allows them to pursue other passions in the off-season, or perhaps another seasonal business which peaks while the other one is dormant. 

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.

Picking and Registering 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.

Don't Forget 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.