Recycling Company

How to Start a Recycling Company: All You Need to Know

If you are an entrepreneur looking for a new business venture and you have a keen sense of environmental responsibility, it is worth looking into starting up a recycling company. In the US alone, the recycling industry generates more than $100 billion in revenue.

There is also a growing awareness of environmental issues around the world and a willingness on the part of the public to increase the waste that they recycle. As oil prices continue to rise, the profitability of recycling products derived from oil, such as plastics, also becomes more lucrative. If you are considering moving into the recycling industry, there are some key points to note, and these are discussed here.

Firstly, Research the Market

Recycling Company


Before you commit capital to a recycling venture, it is imperative that you undertake thorough market research. Firstly, you must determine who your competitors are in the marketplace and what share of the recycling market they hold locally. If the area where you intend to set up your startup business is already well-served by recycling companies, then it may be difficult to gain market share from established companies.

However, there is a wide variety of materials that are recycled today, from paper to metals, and it may be that your competitors do not have facilities to recycle certain materials. In a highly competitive market, it can be profitable to focus on a niche area of recycling and ensure that you deliver this service more effectively than your competitors.

Determine Government Incentives

Recycling is a high priority for most governments around the world. As such, there may be government incentives that are given to companies that specialize in recycling. For example, in Asia, the governments offer tax incentives in the form of reduced VAT payments for recycling businesses. In China, the government offers a 50% VAT refund on certain recycling activities once relevant criteria have been met.

As part of your business and market research, it makes sense to evaluate the government incentives that are available locally for recycling operations and factor this into your financial projections. There may also be government loans available at lower interest rates to encourage you to set up a recycling company. These will make the purchase of facilities and equipment less expensive.

Decide on the Location 

Recycling Company


You will need to determine the location of your recycling facility. Clearly, it makes sense to set up a facility in areas of low land rental costs to minimize these costs, and these areas tend to be out of urban centers and in industrial zoned land. Another consideration on the location is determined by the service you offer. If you are planning to collect waste materials from successful startup businesses or residents, then the transportation of materials to the recycling facility will be conducted by your employees.

Conversely, if you are offering a recycling center where businesses and the public are expected to drop off their own waste, then location becomes more important. The recycling center must then be within a reasonable travel distance for your service users and not be in a location that is too remote, or it will discourage people from taking their waste products to you.

Plan Your Equipment Requirements

One of the key costs (apart from the cost of your premises) in any recycling business is the cost of recycling machinery and equipment. Depending on what waste materials you are recycling, you will need equipment such as balers, forklift trucks, crushers, shredders, and scales, to name just some.

Companies such as offer a wide range of recycling balers or compactors and will be able to assist in sourcing this vital equipment. It is vital to make a complete list of the equipment you will require and cost it appropriately to work out what your total recycling equipment costs will be. In addition, if you plan to collect waste materials from your customers, you will need to budget for recycling bins and vehicles used to pick up and transport the recycling.

Also Read: 6 Tips to Open a Second Business Location

Registering Your Company and Legal Requirements

Recycling Company


Once you are certain that the venture will be profitable and have determined the location and type of recycling service you will offer, you will need to register your business. In the US, this is done by registering with the IRS to obtain an Employer Identification Number.

You will also need a business license to operate your business legally. At this stage of your business preparation, it is a wise idea to take on the help of legal specialists to guide you through registering your company. Another point of note is that if you plan to recycle hazardous materials such as mercury (from electronics products), you may need to abide by certain environmental laws. Having a legal specialist in this field will be of great benefit to ensure your business is compliant with all relevant legislation.