How to Start a Recycling Business with a Small Investment?

Municipal solid waste (MSW) is a type of garbage that consists of everyday items, both biodegradable and non-biodegradable. With a yearly production of 1.2 billion tons of MSW and poor commercial waste management, the world is heading towards an environment filled with piles and piles of garbage.

But is there a solution?

Well, yes. There is not only a hard and fast solution but also opportunities that lie within those piles of garbage. There are tons of recycling business models, ones with small investment too! Both biodegradable and non-biodegradable waste contributes to the opportunities of starting recycling businesses with small investments.

So, what are the tips on starting a recycling business with a small investment? Keep reading on, you’ll down them down here.

1. Look for your Area of Interest

The recycling business has several niches, so when kickstarting your business, start by choosing a niche.

Starting a recycling business with a small investment is very much doable, as most of the capital that you would need can be purchased in a decent amount. Although there is stiff competition in the sector, there is a lot of scope with the amount of waste material generated by people.

Do your market research before diving straight into the most fashionable recycling business model or the one done by most people. Find the niche you have a natural inclination towards and is somewhat unique. Some of the famous niches in the recycling business that can be done with a small investment are:

• Paper Recycling
• E-Waste Recycling
• Food Waste Recycling
• Glass Recycling
• Domestic Waste Recycling
• Farm Waste Recycling

2. Develop A Business Strategy

A business is about making profits as much as it is about investment. The rates of materials like paper, glass, and plastic tend to fluctuate a lot, hence, developing a business strategy when starting a recycling business with a small investment is a must.

Think about the money you would need for yourself, before the recycling business stabilises and grows to the extent that you can live off it. Expenses like employee salaries, commercial space rents, machinery for recycling business and money required to purchase recyclables, all need to be covered in the initial phases by investment, and later on with the business itself. Most entrepreneurs, with a recycling business plan, start with an investment of 3-15 lakhs.

After you have evaluated all this, other things need to be figured out and tracked every few months, such as:

• Company’s goals,
• Target market,
• Selling techniques,
• Unique aspects of your business
• Competitors in the market
• Monetary goals
• Marketing strategies

3. Research And Get Done With The Legalities

Recycling business, just like any other business, needs to fall into three categories, namely- sole proprietorship, LLC, and corporation. The choice depends on the size and on the range of your business. With a sole proprietorship, you get the best tax benefits but not personal liability coverage. Corporations offering liability coverage charge very high rates, and LLCs take the middle-ground between the two. Once you choose this, there are other procedures that need to be followed, first is obtaining a Digital Signature Certificate from the Ministry of Corporate Affairs (MCA) and then preparing for INC-29, required for the allotment of Director Information Number.

4. Find A Space

When starting a recycling business with a small investment, you need some space to carry out the work of recycling. A small investment business can also run at home, and once you start getting more sales, you can go ahead with finding a bigger space.

While this might be possible with paper recycling and other simple waste recycling businesses, plastics recycling business, PVCs, or glass might require getting a permit before the area in charge raises the flags for your venture and with that, you would also need another place, from where you can run the business and get in touch with customers.

5. Invest in Marketing Activities

Now that you’ve started a recycling business with a small investment, how would you get the word out? Marketing and promotion is an activity that you can’t overlook if you want to remain in business for a longer time. You can use your own clientele base to spread the word about your products and services.

A recycling business model can follow the same expenditure pattern as other startups. As most startups spend a 20-25% reserve of their revenue in marketing activities, marketing investment for a waste recycling business can be anywhere between 75 thousand to 4 Lacs.

You can invest in advertisements, business cards, and flyers, to attract more people. Marketing budgets should be kept aside from all the expenditure, and that budget should be used to promote the venture from time to time. This way you will be at greater odds of attracting bigger clients.

6. Evaluate Profit and Loss

It is very important to make an evaluation based on the profits you’ve made and the losses you’ve incurred in the new business, as it will give you an idea of what you are doing right and what is going wrong.

When starting a recycling business with a small investment or any business for that matter, it is important to keep realistic goals and expectations about profits and losses. Thinking that you will start earning profits in the initial 6 months or 1 year would be completely unjustified. Also, investing more money than is invested in the initial phase should not be counted as a loss, as it is completely normal for a new venture to require more investment.

7. Expand the Business

Once you’ve invested in a good space, you get timely orders and are able to earn more than what you spend monthly on your business, it's time for expansion. You can hire more employees - ones who can contribute to the actual recycling work, one’s who can look after accounts and employees who can take care of marketing and sales. Another thing that can be done when expanding your recycling business is getting new advanced machinery or repairing the older ones.

Concluding Thoughts

Experts have predicted that by 2025, the world will be producing 2.2 billion tons of waste. While waste imposes a big threat, it also brings opportunities for growth and success for people wanting to start recycling business with a small investment. And with the above-mentioned tips, we hope you find the confidence in yourself, for starting one soon!

Also read:

1) Startups in India: Growth & Other Factors to be Considered for a Startup
2) What Are Some Good Startup Ideas?
3) Where to Get a Small Business License?
4) Startup Ideas: How do you know if your Startup idea already exists?

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FAQs

Q. Is a scrap metal recycling business with a small investment possible?

Ans. Yes, a scrap metal recycling business with a small investment is possible. One can set up the machinery and run the scrap centre at home itself.

Q. What types of environmentally friendly business ideas require huge investment?

Ans. Environmentally-friendly business ideas based on sustainable development models require huge investment. Some noteworthy examples of these are solar power plants, windmills, hydroelectric power plants and geothermal power plants.

Q. What are the different kinds of recycling businesses?

Ans. The different kinds of recycling businesses are carton box recycling, scrap metal recycling, computer recycling, aluminium can recycling, tire recycling, glass recycling, wood or furniture recycling, utensils recycling, farm waste recycling, and recycling solid wastes to make bricks.

Q. Is PVC recycling a profitable business?

Ans. Yes, PVC recycling is a profitable business idea. It is a material that is used in the manufacturing of pipes, tanks, and shades. Just like plastic, it is a non-biodegradable waste and discarded in huge amounts every year. So, setting up a PVC recycling business is not only profitable but also a unique business idea.

Q. Why is the plastic recycling business the most needed venture currently?

Ans. Plastic is a non-biodegradable waste. It is a big environmental pollutant, increasing water, land and air pollution every year. The good part here is that it can be recycled and reused, and tons of it is discarded every year. So, plastic recycling is not only a need of the hour but also a profitable venture.