Starting a scrap metal collection company is a great way to earn money while making the planet a little greener. While you may feel ready to begin collecting, noting the various steps to starting a scrap metal business keeps you on the right track.
Once you have a name in mind, you’ll need a plan, licenses, insurance, and the right equipment to obtain success.
Devise a Plan
Creating a solid plan is the key to prosperity. You’ll mainly have to consider the costs of owning a scrap yard, prices for customers, who your target market will be, and how you’ll market your business. By analyzing this before registering as a company, it becomes easier to excel.
As you plan, remember to account for necessary tools and equipment for scrap recycling. Investing in quality tools may seem expensive, but if you get durable tools, you’ll save money over time. You’ll need a forklift, magnets, wire strippers, and a standard set of tools.
Get Registered
Now that you have a plan in place, you need to establish yourself as a business structure, whether that’s a sole proprietorship, corporation, or another type.
You’ll also need to register for taxes. The way you pay taxes depends on which business structure you choose. As you account for taxes, remember to factor in national, state, and potential local taxes since state sales taxes are different for every location. After doing this, acquire any necessary permits or licenses.
Pro Tip:
Create a separate bank account for purchasing assets keeping track of your profits. Don’t lump the money in with a personal account; this makes it easier to make a mistake as you file for taxes. Keeping it separate will come in handy when you file for business insurance since you’ll know what you can afford.
Obtain Scrap Metal
The final steps to starting a scrap metal business are to begin the marketing and collection process. Make marketing simple by creating a website so potential customers can easily reach out to you with questions or concerns. Other ways to advertise your business include the following:
- Online or Paper Ads: It’s an easy way to get attention.
- Attending Local Business Events: Meet other business owners and form partnerships.
- Engaging With Community Members: Word-of-mouth marketing goes a long way.
As businesses begin contacting you and asking about price, keep your business plan in mind and charge a fair rate. By following these steps, you’ll make running a successful scrap metal yard look simple!
