How to Start a Recycling Business? – 11 Steps to Get the Desired Start

keyKey Takeaways:
  • It takes careful planning and research to start a recycling business.
  • It’s crucial to decide which type of recycling business you want to start.
  • A thorough business strategy will assist you in obtaining funding and attracting clients.
  • For businesses in the recycling sector to succeed, it is essential to have strong networks of suppliers and buyers.

The recycling business is considered the “economic engine,” which generates more than 500,000 jobs in the USA alone and is only expected to grow daily. The recycling industry is forecasted to be at a market value of 88.1 billion USD by 2030.

A market of such enormous size and its future safe will surely offer brilliant business opportunities. Moreover, with the size of waste increasing exponentially, even the governments want more and more business establishments in recycling management.

Multiple horizons can be explored in the recycling business. Paper, plastic, metal, and rubber recycling are some of the most fruitful options. To pursue the goal of operating a recycling business, be sure that you go through the article on how to start a recycling business and understand the basics of it. 

Let’s look at some of the latest recycling trends to know, which will be helpful for working in the industry of recycling and waste management.

  • The global waste recycling services market was worth 55.1 billion US dollars in 2020 and is valued at 60.41 billion US dollars in 2022. The market is expected to expand significantly in the coming years as consumer awareness of the environmental consequences of waste grows. The global recycling services market is expected to reach nearly 90 billion US dollars by 2028, growing at a CAGR of 4.8% between 2022 and 2030.
  • The Asia-Pacific market is expected to expand rapidly during the forecast period due to increased demand for recycled plastics as a sustainable solution to plastic waste, with a wide range of applications, including bottles, sheets, fiber, and strapping.
  • Major clothing companies, businesses, and environmental organizations have begun using plastics in their fabrics to reduce plastic pollution. In terms of quality and texture, recycled plastic clothing is identical to conventional clothing. As a result, the use of these plastics in textiles is rapidly increasing.

11 Effective Steps to Start a Recycling Business

A successful recycling business will necessitate extensive market research and implementation. But, to make things easier for you, here are the 11 effective steps to starting a recycling business.

1. Research the industry

Conduct market research to determine who your competitors are, how successful they are, and whether your area has enough volume to support another recycling business. Are there any materials that the current recycling companies are ignoring? Make sure your research assists you in selecting both profitable materials and a competitive niche.

Once you’ve decided which materials your company should recycle, look into the local government and environmental protection agency. These agencies offer grants and special loans that can cover the processing costs, costs of your facility, staff, electricity, equipment, transportation, storage, handling of materials, and other expenses.

The basic start-up costs for a recycling business can be high in the first month, considering the low-interest loans provided by the government. Also, the incentives typically vary from one to another, so make sure to research the state where you intend to operate your recycling business.

2. Determine the associated costs

Once you have chosen your niche, you must create a budget to fund all associated operations. The budget should account for the costs of obtaining the necessary licenses and permits, a location to store and recycle the materials, pay for any employees you hire, equipment and tools needed for the recycling process, cash for the recyclables, and vehicles.

Determine the associated costs with recycling business

For instance, recycling at a facility a little outside of town will also help you save money because real estate costs fall as you get farther from a city center.

3. Create a business plan

After all the research you have done, it’s time to create a recycling business plan, which is a formal document outlining how you will develop and operate your business. 

It will help you stay focused as you move forward with the creation of your company and will also give potential lenders the information they need to judge the viability of your project. A thorough section on each of the following subjects needs to be included in your business plan:

  • Your company’s goals
  • What type of materials would you recycle?
  • How is your business unique from its competition
  • How your business will be managed and structured
  • How will you process materials and sell products
  • Understanding the profit margin in a recycling business
  • How much money will you need, what will you need it for, and how much will you need to borrow

4. Choose a business structure 

Choose a good business name. The name should be straightforward to read and say. Once you register your recycling business names ideas, it’s time to define the business structure. Some requirements behind registering your business are paying taxes, raising funds, and opening a bank account.

Choose a business structure for recycling business

Making a business structure will define your role within the organization, which is the next step. You could opt for either sole proprietorship, partnership, limited liability company, or S corporation.

5. Get licenses and permits

The recycling sector requires several licenses. You will need to apply for several permits before you can start your smoothly-operating recycling business. The following are some instances of common licenses and permits needed:

  • Employer Identification Number (EIN)
  • Business license for operations
  • Environmental department’s permission
  • Business license to collect material

6. Look for a facility

The next step is deciding where to start your recycling business. You must buy or rent a building to store, process, or sell recyclable materials. Choose a spot close to any landfills or waste management facilities but far away from residential areas. 

Irrespective of people dropping the waste at drop-off units or you decide to do pick-ups, you must have a facility drop-off to carry out the actual process of recycling.

You need to verify with your city’s zoning commission, planning, and development department, or building division regarding the zoning rules for that area. This will help you save on transportation costs while also allowing you to network with relevant authorities frequently and effectively.

7. Get the right equipment

Your business’s success depends on the tools you use. Here’s a list of some of the tools you’ll need:

  • Crushers
  • Shredders
  • Baler
  • Forklift
  • Containers
  • Scales
Get the right recycling equipment

The equipment will make up most of your initial recycling start-up costs, so do your homework and speak with business experts to identify the long-lasting, high-performing recycling equipment to purchase.

8. Get insurance for your business

Business insurance is an area that is frequently overlooked, even though it can be critical to your success as an entrepreneur. Insurance protects you from unanticipated events that can be disastrous to your business.

Here are some insurance options you can consider:

  • General liability
  • Equipment breakdown insurance
  • Business property
  • Professional liability

9. Hire a team of professionals

The next step is to assemble a team and recruit a few experts to manage the work. You will need employees to manage the register and assist customers in loading their purchases if you want to run a secondhand store. 

Hire a team of professionals for recycling business

When collecting recyclables, employees must drive the vehicles and lift large, heavy objects. You will need a separate processing facility to operate your equipment if you are processing recyclables. In addition, consider hiring individuals to help with bookkeeping and marketing tasks.

10. Promote your recycling business

For new recycling businesses, word-of-mouth promotion is essential because it will raise client and brand awareness. You should invest in a quality website because it serves as your online presence and convince prospective clients.

Promote your recycling business

Once your website is up and running, connect your social media accounts. It’s an excellent tool for business promotion because you can use social media to create engaging posts that advertise your business.

Facebook is a great platform for paid advertising because it lets you target particular demographics. Also, SEO will assist in moving your website up in relevant search results, which is essential for boosting sales. Make sure your website is optimized for calls to action. Try different combinations of text, color, size, and placement for calls to action like “Recycle Now.” Your collection of recyclable materials could significantly increase as a result.

11. Integrate a route planning software

Route planning software comes as a lifesaver for a new business. Recycling companies require heavy commercial vehicles to pick up and take them to the drop-off centers for recycling. Without proper experience or tools, this job can be a demanding one. When starting a new business, you may have to devote your time and resources to multiple tasks.

Don’t make your job tougher. Make sure that you use an intelligent and effective tool, like Upper, that will help plan an optimized route and utilize the available resources to the best of their limits.

Switch to Automated Route Planning with Upper

Instantly channelize your material pick up and drop offs for recycling. Let Upper find the fastest driving route for a better routing experience.

FAQs

Some of the recycling business ideas are:

  • Plastic recycling business
  • Paper recycling business
  • Scrap metal recycling business
  • Computer recycling business
  • Glass recycling business
  • Aluminum can recycling

Steel and aluminium are the types of materials most recycled in North America. Aluminium cans are the simplest items to recycle because they are 100% recyclable. Using used aluminium cans to make new ones uses 95% less energy than creating an aluminium can from scratch.

Here are the top recycling companies:

  • Waste Management(WM)
  • Republic Services(RSG)
  • Waste Connections(WCN)
  • Clean Harbors(CLH)
  • Veolia

Here is an estimate of how much money you could make per ton of materials:

  • Cardboard: $25
  • Paper: $2.50
  • PET plastic: $150
  • Aluminum: $1,325

Let’s say you recycle 15 tons of waste daily, five days a week, earning nearly $300,000 per year in your first year or two. Assuming a 40% profit margin, this equates to a recycling profit of around $120,000. Your capacity may increase to 30 tons per day as your brand grows in popularity, and your operating hours may be extended to six days per week.

There are many types of recycling businesses, and each one has a different level of profitability, but companies recycling paper are the most profitable.

Conclusion

If you are looking to start a recycling business, you will need a proper business model and a good legal and financial understanding to stand out from the competitors. It is not easy to set up any new business, but surely with the right knowledge, market study, hard work, and effective tools, the job can get much easier. 

As the market demand grows, so does the need for raw materials and recycling centers. A recycling business can supply raw materials, refurbished and recycled goods or can even create new products from recycled materials. The options are truly limitless. Hence, this entire article will help you to work on your business idea and turn it into a profitable recycling business.

Author Bio
Rakesh Patel
Rakesh Patel

Rakesh Patel, author of two defining books on reverse geotagging, is a trusted authority in routing and logistics. His innovative solutions at Upper Route Planner have simplified logistics for businesses across the board. A thought leader in the field, Rakesh's insights are shaping the future of modern-day logistics, making him your go-to expert for all things route optimization. Read more.