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If you have a passion for saving the planet and a drive to make some green while going green, getting into the business of recycling may be the right route for you to take.
However, starting a recycling business is not as easy as placing some bins around your city and collecting what people drop in them every week.
There is much more that goes into this type of work. If you’re considering starting a recycling business but don’t know where to begin, we are here to help.
Because though it seems simple, you need to make sure that this business is profitable enough to be worth your while, determine what you need to get things started, and prepare for some challenges that you may face along the way.
Read on to find out what you need to know to start your recycling business today.
Top Business Formation Services to Start a Recycling Business
If you want to start a recycling business, you’ll need a business formation service. Here’s the best options to complete all the important paperwork:
- ZenBusiness – Best overall value
- Incfile – Best low-cost formation services
- Northwest Registered Agent – Best registered agent services
- Rocket Lawyer – Best for ongoing legal advice
- LegalNature – Best for managing business formation documents
- Inc Authority – Best free LLC setup
- LegalZoom – Best range of business formation services
- Incorporate – Best for C-Corps and S-Corps
- Swyft Filings – Best customer support
- MyCompanyWorks – Best for fast setups
- MyCorporation – Best for free EIN
You can read our full reviews of each business formation service here.
5 Steps to Start a Recycling Business
Starting a recycling business is easy when you break it down into attainable steps. Follow these instructions to get started:
- Research the industry
- Determine the costs involved
- Register the business
- Find a facility
- Get equipment
The Easy Parts of Starting a Recycling Business
Not all of the recycling business has to be difficult.
In fact, there are some fun parts of it that you will enjoy, aside from helping the environment, of course.
Here are a couple of easy decisions that you want to get started thinking about.
CHOOSING WHAT YOU WANT TO RECYCLE
When many people think of the term “recycling,” they often refer to it as a general term that encompasses all sorts of waste and materials.
But, when you’re on the inside and working in the industry of recycling, you learn that things get much more specific.
The specifics start with deciding what kind of materials you want to recycle. You may opt to do just one of these, or you may want to attack recycling multiple.
Here are the most popular types of waste and materials to recycle.
- Food Waste. You would be amazed at the amount of food that gets wasted in the United States every year. According to Nutrition Connect, in 2020, 80 billion pounds of food was thrown away. Think about the difference you can make if you find a way to recycle that!
- Glass. This is a fairly easy material to recycle, as it can easily be melted and made into all sorts of things that people use in their daily lives, including drinking glasses.
- Plastic. Plastic is the most common type of recycling that exists today and is something that our country uses a great deal of. So instead of having it end up in landfills, you can work to recycle it.
- Paper. Recycling paper is, for the most part, very easy. You simply have to sort the paper into different types, remove the ink, bleach the paper, and make it into something new. This form of recycling tends to be more profitable since the costs are minimal.
- Ink Cartridges. Did you know that ink cartridges take up to 1000 years to decompose? We don’t want to dump our current problems on future generations so it’s important to get started on recycling this material today. You may want to consider a recycling business that allows people to refill their ink cartridges, which saves not only the environment but also money for the consumer. Ink cartridges are not cheap.
- Batteries. Batteries are filled with all sorts of chemicals, many of which are harmful to the environment. That’s why they should be recycled rather than thrown away.
- Computers. The materials that computers are made of typically consist of plastic and metal, which can both be recycled. Consider taking apart computers and recycling their materials.
- Tires. Tires take a long time to decompose and burning them creates a lot of pollution due to their high rubber content. Instead, consider recycling tires by melting them and molding them into new materials.
- Clothing. Second-hand clothing is making a big comeback, so you may want to consider jumping on this bandwagon. You can either re-sell used clothing or recycle clothing to be used in manufacturing new items.
- Scrap Metal. The costs of this type of recycling business are low and only require a few tools.
DECIDING HOW TO COLLECT THE WASTE MATERIAL
There are a few different ways that you can opt to collect the recycled materials that you plan to work with.
- Facility Drop-Off. With this method, you can have a facility that people can bring their recycled materials to where you sort them.
- Curbside Pick-Up. This method means you have a team that collects recycled materials from peoples’ homes and businesses on a regular basis.
- Drop-Off Centers. You can opt to set up drop-off centers throughout a city and have your team collect from them regularly.
If you opt to either do the curbside pickup or the multiple drop-off centers options, then you may want to consider using an app called BusyBusy.
Created by a contractor, this app can be a great help to recycling businesses in tracking teams and equipment from any smartphone or computer.
By using this app to track operators and machines in your recycling business, you can determine how productive different drivers are as well as how profitable the routes are that they’re using.
On top of that, the app can be used by each of your employees to clock in and out and also to select the project or activity that they’re working on for the day. Specific equipment can be logged with the amount of time it is being used so that you can see whether the equipment you invested in is really worth the costs.
The Difficult Parts of Starting a Recycling Business
Unfortunately running a recycling business is not all fun and games, and sometimes the going gets tough.
But, as a business owner, the tough get going, and to help you stay on the path of success with your recycling business, we are sharing some of the difficult parts that you want to prepare for.
DETERMINING PROFITABILITY
Before you get too deep into your business ideas, you want to make sure that the recycling industry is profitable for you.
This means understanding what equipment you need (which varies depending on the type of recycling you opt to get into).
You also want to make sure to price the costs of processes such as:
- Sorting
- Baling
- Storage
- Delivering recyclables
The profitability of this business is also determined by how much processing costs, which depends on the material you’re recycling.
It is important to keep in mind that products that have heavy energy requirements tend to have a greater recycling profit. However, you don’t want to go too far, as some products that require excessive energy to recycle will result in lower profits. It’s all about finding that happy medium.
CREATING A BUSINESS PLAN
This is a step you want to take before you dive into starting the business.
You need to take the time to have theoretical discussions about the business and document what you find. You also need to research (which we discuss in more detail below) to find actual numbers to use in your business plan.
You can either opt to write the business plan yourself or hire a professional consultant to do it for you. The choice is yours (but should be determined by how much time you have to spend, and how much experience you have in business plans).
DETERMINING YOUR BUYERS
Once you have recycled the materials, what will you do with them?
Make sure that you do your research to find out which industries have a demand for the materials that you’re planning to recycle and look into how much buyers will pay for your recyclables in a variety of forms.
Step 1: Research the Industry
The recycling industry should be heavily researched before moving forward with your business ideas.
You need to take the time to evaluate the market and see where things are. Here are the two most important parts of research.
Look at Competition
Do market research to determine who your competition is, how successful they are, and whether there is enough volume in your area to support another recycling business (yours).
Is your competition only recycling paper so that means you can jump on other materials that they are ignoring? Take a look at what niche is best for you to compete in that allows you to be profitable.
Also, be aware that some cities and counties provide their own recycling services. If you live in one of these, you may need to get creative to compete with city hall.
Look into Government and Environmental Agency Incentives
Government and other environmental agencies often offer grants or special loans that can help you with costs including your facility, staff, electricity, equipment, transportation, storage, handling of materials, and more.
Because the start-up costs for a recycling business can be high in the first month, you may want to consider the government’s low-rate loans.
The incentives offered usually vary from state to state so be sure to research the state in which you plan to run your recycling business.
Step 2: Determine the Costs Involved
The costs involved in your recycling business are determined first by the type of business you opt to have.
This includes the type of materials that you choose to recycle as well as the type of recycling system you have.
Having people drop things off at a facility or setting up drop-off stations throughout the city will usually come at a lower cost than a curbside pick-up. This is mainly because with curbside pick-up, you need to have more workers to get the job done.
Recycling in a facility that is a bit outside of town is also going to lower your costs since real estate is cheaper as you get further away from a city center. However, this can be an issue with ensuring that people come to your facility to drop off their recyclables. You will need to weigh the pros/cons of this.
Here are some general costs for starting your recycling business:
- Processing facility (ranges depending on your city, but usually starting at around $1500/month and going up from there)
- Drop-off units (around $1000 each)
- Employees (at least minimum wage, maybe more)
- Equipment (between $5,000 – $10,000 to start)
- Utilities for running your facility
- Transportation
- Recycling bins
Step 3: Register The Business
Before you begin any operations with your recycling business, you need to register the business with your local government.
Because this will take a lot of time for a business such as this, you may want to consider hiring a lawyer to help with this process.
Find someone who has a great deal of experience in registering businesses similar to recycling and that can get the paperwork done correctly and on time so that you can get things started as soon as possible.
Step 4: Find a Facility
Whether you opt to have people drop off their recyclables at your facility or you choose to do pick-ups, you need a facility to perform the actual process of recycling.
So, the next step in the process is finding a facility.
You need a place that is large enough for you to store all of your equipment and that also can serve as an office for you and your employees.
Thus, you must take the time to find a facility that serves all the purposes you need it to for your recycling business. Because of the high costs of a facility like this, as mentioned above, you may have to go a bit outside of the city to find something that is a reasonable price.
And once you do, it is advised that you either rent or lease the space rather than purchase it. This helps to keep your spending low, as a large portion of your money will be going towards equipment to use in the facility.
Step 5: Get Equipment
Speaking of equipment, that brings us to the next step of actually investing in equipment for your recycling business.
The success of your business relies greatly upon the equipment that you use. Here is some of the equipment you will want and need:
- Baler
- Crushers
- Shredders
- Forklifts
- Scales
- Containers
The equipment will be the bulk of your spending when you start the business so make sure that you take the time to research and talk to experts so that you invest in the best machinery.
Once you’ve got your equipment, you will love using the BusyBusy app to track your workers, the time they work, and their usage of the various machinery you purchased.
It also helps with avoiding payroll mistakes, which your employees will thank you for.
There is a free version of BusyBusy available that offers:
- Time tracking for projects, sub-projects, job codes, and equipment
- Employee time tracking
- Advanced reports on web and mobile for the past 7 days
- Clock in / clock out GPS
- Employee digital timecard signature
- Equipment app
- Custom user permissions
- Priority phone and web support
- Custom overtime calculations
The paid Pro version is priced at $9.99/user/month with an additional $11.99/month charge. This version offers everything that the free version does as well as:
- Supervisor and kiosk time tracking
- Advanced reports on web and mobile for all times
- Supervisor tools
- Project photos and notes
- Daily project report
- Safety report
- Scheduling
- Kiosk (facial recognition with AI notification)
- Time accuracy sign-off
- Third-party integrations
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