Have you considered starting a scrap metal recycling business? Although this is a capital-intensive business, requiring between $2,000 and $10,000 of start-up capital, and you’ll need to have a lot of technical knowledge, it’s also quite lucrative. Regardless of whether you want to recycle copper, gold, lead, nickel, silver, or tin, there are some things you must know to get your business up and running.

The scrap metal recycling industry has become a billion-dollar industry. 90 tons of metal is recycled and reused every year. Humongous costs and natural resources of the country get saved this way. Scrap metal is broken into individual metals through recycling. It is a fast, convenient and economical process.

There is a scope of doing scrap metal removal business as well. You can sell the unwanted metal to these industries and make profits. So if you don’t want to set up an industry, you can make money by scrap metal collection and selling. You can go through the best guide for starting a recycling business for further help.

Read more – Best Guide for Starting a Recycling Business

There are certain essential aspects to remember before starting a scrap metal recycling business. They are as follows –

  • Research your target market.
  • Analyze demand and supply ratio.
  • Find out the possible sources of scrap metal.
  • Study the current practices of scrap metal recycling center.
  • Research current trends, plus legal and tax issues.
  • Make sure you know the VAT rules for transactions concerning scrap metal.

Keep this checklist handy for a smooth transition in the scrap metal recycling business. It may seem a lot of work, but this is in the beginning only. These efforts are all worth it as there are immense benefits of metal recycling.

Let us take you to step by step guide on how to start a recycling business!

1. Setting up Shop

Before you head out and start investing money in your new business venture, make sure you talk to an attorney and learn about what licenses and permits your town requires you to have. You also need to know how to handle things like taxes (e.g. registering your business with the IRS and handling accounting). There are also websites available that will tell you what you must do to run this type of business.

It doesn’t matter where you find the information. What matters is that it’s correct and you follow it to the best of your ability. You must do all of this before moving on to the next step.

2. Invest in Your New Business

Once you have all your paperwork in line, there are some monetary investments you must make:

  • Protective gear including heavy gloves and a jumpsuit to protect your hands and clothing
  • Recycling management computer software
  • Advertising materials, such as business cards and flyers
  • Scrap metal haulers and containers for sorting and transporting the metals
  • Containers for sorting and transporting the metals
  • A storage unit or trailer with plenty of room (maybe even a yard too) for sorting the metals. Make sure it’s secure so that your metal isn’t stolen before you can exchange it for money.
  • A truck, van, or SUV that’s large enough for transporting the metal. It must not only be in good condition, but it must also have an interior that rust and sharp metal edges won’t damage.
  • Insurance coverage for your vehicle is important, as is insurance on your property, especially if your site is open to the public because then you may have liability issues.
  • It is crucial to gain knowledge about the USA government’s laws and regulations regarding scrap metal recycling. You can go through this interactive map informing you of every jurisdiction’s all metal recycling laws.
  • Once you are aware of the law, you must prepare a list of mandatory permits and licenses. You can acquire these licenses yourself. And you can also hire a legal consultant to help you with the paperwork and formalities.
  • Getting your business insured is as crucial as getting the permit. Find out the suitable type of insurance for scrap metal recycling and take it before starting your operations.

3. Start Collecting Scrap Metal

Once you have everything you need, it’s time to start collecting scrap metal from businesses, homeowners, and construction sites. To reach out to these sources, you’ll want to advertise in your local newspaper, as well as online websites e.g. Craigslist. As you engage in advertising, make sure you watch the market as the price of metal fluctuates on a regular basis. You not only need to know what the different types of metal are, but also what people are paying for them.

You also want to have metal collectors and processors, e.g. local scrap yards and recycling centers, lined up to sell your scrap metal too. Sometimes you can also sell to others simply by advertising what you have available. Herein you’d engage in yet another business: operating a scrap yard that’s open to the public during certain hours.

Scrap metal transshipment port.

Don’t forget to check out these spots around your community for the regular supply of scrap metal –

  • Nearby Residential Societies & Apartments
  • Local Businesses and Offices
  • Construction Sites
  • Garages & Auto Repair Centers

It is essential to know that all kind of metals is not recyclable. Following is the list of the type of metal which is recyclable –

  • Aluminum
  • Steel
  • Nickel Lead
  • Cast Iron
  • Brass
  • Tin
  • Zinc
  • Copper

Also, check out the following list of metals that can’t be recycled –

  • Mercury, in fluorescent light tubes
  • Radioactive metals such as Plutonium and Uranium
  • Lead, often found in cathode ray tubes in old TVs
  • Some automobile parts
  • Motor oil and paint cans
  • Propane gas tanks
  • Pots and pans

Also Read – Recycling Aluminum Cans & Aluminum Foil

4. Keep These 5 Challenges in Mind and Overcome Them

As with any other business, you’re bound to meet some challenges along the way. By keeping these in mind, you can do your best to avoid them along the way. These include:

  • Metal is sharp and you must handle it with extreme care so you don’t injure yourself.
  • Some scrap metal is too bulky so if you don’t have a crane or pulley available, don’t collect things like scrap motor parts and zinc.
  • This is a time consuming business because you must sort all the metal before recycling it.
  • You’re exposed to toxins, e.g. lead, which can cause severe health problems like lead poisoning.
  • It takes a lot of time, money, and work. Set up a schedule and stick to it so that you can slowly grow a profitable business.