10 Steps to Follow & Business Ideas: How To Start A Recycling Business?

Low angle rear view of young male worker in helmet, pollution mask, and reflective clothing observing waste falling from conveyor belt onto pile at facility.

Do you want to know how to start a recycling business? Recycling is a profitable business or even can be a part of your other existing business. It would be a great feeling to know that you are ultimately positively influencing the environment if you run this business. Successful recycling business is an initiative that allows you to make a profit while helping the environment.

This is a huge undertaking, of course, and you will face serious competition. You can start and manage your recyclable business by having a detailed plan, locking in finances, understanding legal requirements, and using good business sense.

The United States is one of the most environmentally conscious countries in the world, and recycling is on the rising for several years, according to the U.S. Environmental Protection Report. The municipal solid waste (MSW) was estimated in 2017, and that was near to 267.8 million tons or related to 4.52 pounds per person.


About 67 million tons of MSW products are recycling, and 27 million are composing. More than 94 million tons of MSW are recycling and composting, equal to a 35.3% recycle and compose rate.

On the other hand, 34 million tons of MSW (12.7% of the total) are just adjusting for power recovery. While it is essential to protect our environment, for hence many businesses are welcoming to waste recycling business.

10 Steps to follow how to start a recycling business:

There are 10 easy steps that you should consider before starting a profitable recycling business.

Selecting a niche

You may be familiar with a specific niche for your small venture. Opportunities may include fields:

  • Used building supplies
  • Junk collection service
  • Scrap metal collector
  • Scrap plastic or cardboard collector
  • Scrap palette collector
  • E-waste depot operator
  • Used clothing store

From this list, you can select your niche and get started your business as soon as possible. 

Research your niche

Before you start a business, it’s necessary to research your niche properly. You should have an interest in the niche you are going to select; otherwise, you won’t get success. You have to make sure that your market looks like a promising opportunity for success and be ready to face the challenges of starting your business.

Ask these basic questions and get the answers:

  • Are there any requirements for your expected products/services?
  • Who needs it?
  • Are other companies now offering similar products/services?
  • How’s the competition?
  • How does your business fit into the market?

Other aspects of business market research recycling may include:

Regulatory Barrier Review

Some items may be limited, and you will have no way to limit or dispose of them. In some cases, you may need a transportation certificate.

Recognizing Business Seasonality

Junk removal, especially in winter, can be a highly seasonal business of natural slowness. Consider seasonal dips when you are planning your business. One seasonal business is perfect for some people because it allows them to run in the off-season.

Competition analysis

This includes competitive prices and services. It is important to consider pricing and service rate expectations. Make sure to set aside what successful providers charge against new entrants. Since many entrepreneurs have short entry to the business, some newcomers may not charge enough to ensure their long-term effectiveness.

Choose a business name.

To open a recycling business or any other business in this regard, you need to choose a business name. You should have a list of products you will recycle and the services you will provide. Your business name will reflect your business name so that potential customers can easily identify your business.

Once you identify your business name, make sure it is available for use and checking through the internet to get a domain. Depending on the state of the business you are planning to open, you need to find the online business’s name with the Secretary of State or any other office associated with the state government.

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Write a business plan.

After researching and choosing a business name, you should consider planning and preparing for your recycling business. Now it’s time to write a formal document outlining all of it. It’s time to write a proper business plan on how you will proceed on.

In your business plan, you have to include an overview of the products and services you offer and find out how your business structure is. You need to analyze financial estimates, the amount of capital you will invest in the business, and some specific categories, including any other funding source.

Choose your business entity.

You have to choose a business structure or a business entity. This step is important because your business entity will determine how your business is taxed, how much liability protection you will have, and more. We recommend consulting with a business attorney or tax professional who can help you choose the business entity for your business.

Some of the most popular business organizations are:

  1. Sole proprietorships, 
  2. General partnerships, 
  3. Limited liability firms (LLCs)
  4. And corporations

Business planning

This is the entrepreneurial activities is may require a high level of investment. You will need a truck in an enterprise such as a scrap metal collector, pallet collector, or junk removal service provider. If you don’t have maintenance and other operating costs, you can hire a truck. Depending on your niche, you will need specific cargo straps, nets, cutters, and containers.

Get any license or permit.

This step of starting a recycling business can be incredibly different from state to state, so you should make sure to consult a lawyer to examine the laws and regulations of your state. Better yet, do your best when seeking professional help advice.

Remember that there may be more rules than just how your collected items are recycling. There may be additional rules around preserving the elements you plan to recycle.

Appropriate permits for your storage and recycling of materials, specific training for potentially hazardous materials, and other business articles you need to read depending on the state you are working in.

Apply for EIN

Although it is not necessary for every business, applying for an Employer Identification Number (EIN) is a useful step for any business owner. This step is necessary if you plan to hire employees, but apart from that, having an EIN can help you apply for business loans, pay taxes, get a bank account, and a bit more.

You can also easily apply for EIN online from the IRS, so there is no downside to applying for it. If you do not want to apply online, you can also apply by fax, phone, or mail. There are advantages to getting an EIN that you should not avoid when setting up your business.

Open a business bank account.

You need a business bank account wherever you want to operate your business to earn money or get any funds. You need a business bank account because it is important to keep your personal and business finances separate.

Bottom line

Once you decide to start a recycling business, follow the above steps, and bookmark later reading. Do the research properly and complete the paperwork. Remember that it is always best to check in with a business lawyer to ensure that no original paper or permissions are missing when opening your new business.

Reading more: 12 Steps To Follow: How To Start A Credit Repair Business

FAQ: How To Start A Recycling Business

Is recycling a profitable business?

The good news is that recycled cardboard, paper aluminum, and rigid plastics have the closest term and historical average price above processing costs and are profitable to recycle. PET plastic (beverage bottle) will earn $150 per tonne, split by municipality and recycling agency.

Which recycling business is most profitable?

Top 8 Profitable Recycling Business Ideas:

1. Waste Paper Recycling Business.

2. E-Waste Recycling. 

4. Garbage Recycling. 

5. Tyre Recycling. 

6. Aluminum Cans Recycling. 

7. Packaging Cartons Recycling. 

8. Scrap Metal Recycling. 

How do I start a recycling program?

6 Steps to Starting a Community Recycling Program:

Step 1: Build a team.

Step 2: Create a plan. 

Step 3: Choose which materials to recycle. 

Step 4: Figure out collection and processing.

Step 5: Plot a plan for preventing waste. 

Step 6: Educate the community.

How do I start a tire recycling business?

  • Understand the market. Identify potential customers for your recyclable materials. 
  • Find a site. Find a site in an industrial area or rural area where you can safely receive store, and process large tires. 
  • Set up a recycling plant.
  • Find the source of the feedstock. 
  • Get a license and permission.

How many cans do I need to make 100 dollars?

2000 cans; at the stated CRV value of $0.05/can. So you need $100/$0.05=2000 cans to make a profit of $100. If you get the above by-weight price of $1.60 per pound, you will need 62.5 pounds of cans to profit $100. At 31 cans per pound, you will need 1938 cans.

Read more: 5 Steps To Follow: How To Start A Pressure Washing Business