How to Start a Recycling Business: Your Guide to a Greener Profit

Thinking about starting a recycling business? The stats back you up. By 2028, the global waste recycling industry will be valued at almost $90 billion. This article will guide you through the steps you need to start a recycling business. From the financial plans and legal requirements to the equipment recycling businesses need.

Why Start a Recycling Business?

how to start a recycling business

Starting a recycling business is a significant venture that has big benefits.

  • This type of business reduces the demand for raw materials and conserves natural resources. The EPA reports that in 2018, 186 million metric tons of greenhouse gas emissions were saved.
  • Grand View Research pegs recycling is a growing industry, projecting it will reach $81.3 billion by 2028.

A business like this creates employment all the way up from collection sorting to management and processing.

What Do Recycling Companies Do?

how to start a recycling business

Recycling companies work with a wide range of different materials.

Scrap Metal Recycling

Sources can include construction and demolition debris, electronic devices, and automotive parts. The materials can include different types of ferrous metals like iron and steel and non-ferrous metals like aluminum.

Plastic Waste Recycling

A new company needs the right equipment, including conveyor belts and shredders. The sources here include a variety of plastic polymers.

Paper Recycling

A paper recycling department in your new business will collect waste from municipalities, businesses, schools, and offices. This system needs to categorize different materials and separate cardboard, office paper, and newspaper.

Electronic Waste Recycling

Recycling this type of material conserves materials like copper, silver and gold. E-waste recycling reduces water and soil pollution. This type of recycling requires dismantling and sorting procedures.

CriteriaScrap Metal RecyclingPlastic Waste RecyclingPaper RecyclingElectronic Waste Recycling
Sources of Waste- Construction and demolition debris
- Electronic devices
- Automotive parts
- Variety of plastic polymers- Municipalities
- Businesses
- Schools
- Offices
- Computers
- Cell phones
- TVs
- Other electronics
Key Materials Involved- Ferrous metals (e.g., iron, steel)
- Non-ferrous metals (e.g., aluminum)
- Different types of plastics (e.g., PET, HDPE, PVC)- Cardboard
- Office paper
- Newspaper
- Copper
- Silver
- Gold
- Other precious metals
Equipment Needed- Metal shredders
- Sorting systems
- Conveyor belts
- Shredders
- Sorting systems
- Sorting systems
- Balers
- Pulping machines
- Dismantling tools
- Sorting systems
- Shredders
Environmental Benefits- Reduces the need for raw materials
- Decreases energy consumption
- Reduces plastic waste in landfills
- Conserves resources
- Conserves trees and forests
- Reduces landfill waste
- Reduces water and soil pollution
- Conserves precious metals
Processing Procedures- Sorting
- Shredding
- Melting
- Sorting
- Shredding
- Melting and pelletizing
- Collection
- Sorting
- Pulping
- De-inking
- Drying
- Collection
- Dismantling
- Sorting
- Recovery of materials

There are also specialized recycling programs, like those for recycling ink cartridges or those that facilitate business recycling program initiatives.

The Fundamentals of Starting a Recycling Business

how to start a recycling business

Before you can start recycling, you need to learn how to start a business. Here’s what you need to get started.

Research and Market Analysis of the Recycling Industry

Some points to consider include:

  • Researching collection methods. Take a look at the logistics and costs for different business models like drop-off centers and curbside pickup.
  • Look into the recyclable items in your area. Common ones include glass and plastics, cardboard, metal, and electronics.
  • Take a look at the market size and the potential for recycling growth. Look at the trends in waste and analyze government initiatives.

Creating a Business Plan for Your Recycling Business

Here are some tips for getting your business plan right. The business description needs to detail whether you’re starting a paper, recycling, or e-waste recycling venture. Be specific about what you’ll be handling.

The market analysis needs to describe the different segments and whether you will count on industrial, commercial, or residential clients.

Funding and Financial Planning

Financial planning for a startup business should include costs like marketing, insurance, licenses, and equipment plus others.

  1. You can get money for small business loans by going to banks or credit unions. The Small Business Administration offers programs.
  2. Family and friends might invest but you need to be clear about the terms to avoid any problems later on.
  3. Check out grants and subsidies from the government or industry associations to get funded.

Legal Requirements and Regulations for Starting a Recycling Business

how to start a recycling business

Recycling businesses need to stay compliant with regulations to minimize pollution and protect health. Noncompliance can have legal consequences.

Acquiring Necessary Permits

First, you need to pinpoint the kind of recycling venture you are going to start. These can vary depending on your location and the kind of materials you handle. Permits usually mean you’ll need to deal with federal state and local governments.

Environmental Regulations

Federally, you need to deal with the Environmental Protection Agency (EPA). Each state has its own agency. Cities and counties may have their own departments too.

Consider using an environmental consulting firm.

Health and Safety Protocols

Specific protocols depend on the type of business but here are a few general pointers.

  • Employees need to be trained on potential hazards and safe workplace practices.
  • Everyone needs to understand the proper use of Personal Protective Equipment (PPE). That includes gloves and face shields. etc.
  • Safe handling procedures and an up-to-date Material Safety Data Sheet (MSDS) need to be included.

Startup Costs to Consider for Your Recycling Business

how to start a recycling business

If you want to make money with a recycling business, you must start by knowing what costs.

Equipment and Machinery

Here’s a list with some prices.

For Material Handling

  • Forklifts start at $10,000.
  • Conveyor belts move materials for sorting. They cost up to $10,000 per linear foot.
  • Shredders can cost up to $100,000.
  • Bailers and compactors can cost somewhere between $2000 to $50,000

Heavy Equipment

Depending on the material you might need crushers, excavators, and loaders. Heavy equipment costs anywhere from $50,000 to several hundred thousand dollars.

Location and Processing Facilities

Before you commit to a location, conduct a feasibility study and site assessment. Make sure the location lines up with regulatory and zoning compliances.

Marketing and Branding

Showcase your service and how it contributes to broader social goals. For example, highlight how it supports green initiatives. Brand it as a company that reduces landfill waste.

How to Start a Profitable Recycling Business

how to start a recycling business

Here are a few tips to make your business profitable.

Choosing a Niche

Analyse and research the market demand. Plus you want to look at the competition and the availability of materials.

Quality of Recyclable Materials

The number one thing to look out for here is contamination. Visual inspections can identify contaminants like food waste and trash.

Partnerships and Collaborations

Organizations and businesses that parallel your operations make for good partners and collaborations. Search for other recycling businesses that share your environmental responsibility goals.

Put together an excellent value proposition highlighting your benefits, resources, and expertise.

Types of Recycling Services to Offer

how to start a recycling business

A recycling business can provide different services.

Community Recycling Programs

These programs collect recyclables from residential properties. The residents sort recyclables and put them in bins. They get picked up curbside.

Corporate Recycling Services

These programs work with businesses. They provide processing, sorting and collection services for materials like metals, plastics and paper.

Waste Management Services

These services look after collection and disposal. They collect recyclables from the curb and include sorting and environmentally responsible treatments.

Steps to Launch Your Recycling Business

how to start a recycling business

Here’s a step-by-step guide to launching a recycling business.

Procurement of Raw Materials

You can start by establishing partnerships with waste management companies or local cities and municipalities. Other entrepreneurs can set up their own curbside collection programs and/or drop-off locations.

Setting Up the Processing Facility and Recycling Centers

There are two commonly used options here. The manual sorting facility needs a location where trucks can deliver recyclables. You’ll need a lot of space for sorting equipment.

An automated sorting facility requires fewer workers. However, it does need a computerized control system to adjust and monitor the processes.

Implementing Marketing Strategies

Here are the three most successful marketing options for a recycling program.

  1. Use customer testimonials and/or case studies.
  2. Master community engagement and local partnerships. Don’t forget local schools and community organizations.
  3. A responsive website needs educational content and updated contact information.

How to Run a Successful Recycling Business

how to start a recycling business

Running a successful business includes the following:

Effective Resource Management

Optimizing and analyzing your processing and sorting operations is top of the list. Effective resource management means improving your efficiency and maximizing your material recovery rates.

Customer Engagement

Look for feedback and share educational content to build a loyal customer base.

Sustainability Measures

One of the top metrics is the waste diversion rate. It’s the percentage of waste that gets diverted away from landfills.

FAQs: How to Start a Recycling Business

How profitable is a recycling business?

The market price for the recyclable items you are working with is a big factor. By 2028, the industry is forecast to be worth US$90 billion.

What types of recycling are most profitable?

There are several sustainable business ideas within the recycling industry. Metal recycling and electronic waste are the two that generate the most money.

Is starting a recycling business good for the environment?

Yes, in several ways. A recycling business diverts glass, plastics, paper, and metal from landfills. These businesses reduce the need for processing raw materials.

What are the risks involved in a recycling business?

Like any business, there are risks with a recycling process. If contamination and quality control aren’t done properly, processing costs increase.

Market prices for items like plastics paper and metal can be volatile for those who want to sell recyclable materials.

How does a recycling company work with municipalities?

Municipalities often offer contractual agreements to recycling companies. These companies can operate curbside collection services for the municipality. They can also manage and establish drop-off centers. Both are recycling program options.

Image: Envato Elements

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Rob Starr Rob Starr is a staff writer for Small Business Trends and has been a member of the team for 7 years. He is a graduate of Ryerson University in Toronto with a Bachelor of Journalism degree. His print credentials include employment with various Toronto area newspapers and three works of fiction: The Apple Lady (2004), Creekwater (2006) and Sophistry By Degrees (2008) published by Stonegarden Press In California.