How to Start a Plastic Recycling Business

Starting your own plastic recycling business is a serious undertaking. It demands a lot of research and typically requires a sizable startup investment. The business actually is much more involved than simply collecting scrap plastic and selling it to a consolidator for processing. Opening a recycling business means handling the plastic from start to finish. Despite the challenges, here are some tips for those who are determined to get into this potentially lucrative and ecologically "green" business.

Instructions

1. Determine who will be supplying the scrap plastic you will be recycling. Ask possible sources what type of plastic they supply: thermoplastic or thermoset. You'll probably want only thermoplastic, because it can be melted and remolded; thermoset plastic cannot. There are many variations of thermoplastic, but you should deal only with one kind to avoid incompatibility. Also ask providers about the thickness of the plastic, how much they can provide, whether the scrap will be wet or dry, and the type of contaminants that can be be expected with their materials. Get firm pricing information and do not sign a contract until you have procured a business location and machinery.

2. Base the location on how much area you will need for the scale of your business. Try to find a locale that is relatively remote so residents and community businesses will not be bothered by the noise and dirt associated with recycling. Make sure the area is properly zoned for a plastics recycling business. The ideal location will have access to a water treatment system to handle the dirt removed from plastic scrap, and a paved roadway for delivery trucks.

3. Consider the type of machinery you will need: a sorter that can handle the type of scrap you will have (wet or dry), a shredder and granulator, washing machines, and a centrifuge for drying. You will need to devise how the recycling process will flow. Meet with several plastic recycling equipment suppliers to fine-tune your plans and to compare equipment prices.

4. Find out what the market will be for your recycled scrap plastic. Think in the long term by considering that there will be fluctuations in price and availability at times. Calculate the profit you can expect after all startup and maintenance costs are accounted for to see whether your project is viable.

5. Write up your business plan. Include all information regarding startup costs as well as operating expenses. Detail long-term (five year) income expectations. For help with creating your business plan, consult the Small Business Administration (see Resources below).

6. Obtain financing for your recycling business. If you don't have enough in startup funds, apply for a small business loan or consider looking for an investor.

7. Have all necessary inspections done to make sure your business is up to code. Hire employees and prepare advertising and marketing materials.

Tips & Warnings

• Be aware that at times your incoming plastics will have contaminants your machinery will be unable to handle and repairs will have to be made. Don't forget to account for this downtime.

Resources

• Find out how to write a business plan via the SBA's guidelines