How to Start a Metal Salvage Business
According to the Bureau of International Recycling, iron and steel comprise the largest tonnage of recycled materials. Old cars, planes, ships, retired trains, tanks, silos, military equipment, demolished buildings, aluminum cans and everyday appliances obtained from sanitation companies, garages, manufacturers, demolition contractors and individuals are broken down in order to extract valuable metals that are then reused by steelmakers around the world, which saves them thousands in processing costs. The scrap metal business is booming; a savvy entrepreneur familiar with the various metal properties and sources of demand could do very well for himself.
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Things You'll Need
- Stormwater permit
- Business permit
- Insurance
- Shredder
- Baling press
- Scale
- Storage drums
- Storage container
- Commercial vehicle
Instructions
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Learn the difference between magnetic, non-magnetic and precious metals. Ferrous metals include iron, steel, stainless steel, carbon steel and alloy steel; nonferrous metals include aluminum, nickel, copper and magnesium. Learn the process for extracting each, the equipment required and the processing cost. Start by visiting Steelforge.com.
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Contact your state's Environmental Protection Agency to learn the rules and regulations governing your scrap metal plant and information on how to obtain a stormwater permit. Review Department of Transportation regulations on packaging and labeling waste. Learn what, if any, government assistance your recycling facility is eligible for. Additionally, obtain a green energy certification from the U.S. Green Building Council, Green Seal or a similar certifying authority.
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Move into an old plant and outfit it with a 24-hour surveillance system and secure fence.
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Purchase hydraulic shears to cut down large chunks of steel, baling presses for compacting the metal, industrial scales, shredders to extract iron and steel, equipment for screening for radioactive contamination, storage drums for draining fluids, cranes, a computer system, storage containers and commercial trucks for picking up scrap metal. Attend equipment demos and thoroughly review manuals prior to operating any machinery.
Implement measures for identifying, documenting, storing and disposing of hazardous waste that fall within the EPA regulations.
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Invest in liability insurance for your scrap metal business. Visit the Institute for Scrap Recycling Industries, Inc for information on insurance considerations for your industry, as well as access to industry news, conference and expo information, seminars, training, equipment, potential clients and manufacturers.
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Hire qualified employees who understand the importance of safety and hold CDL's (if necessary). Train all employees on proper handling of the equipment and safety measures as laid out by the Occupational Safety and Health Administration.
Implement a regular inspection schedule of your facilities and equipment to ensure that you are upholding OSHA standards. Implement preparedness and prevention plans as well as contingency plans and emergency plans.
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Price the metal you accept according to the amount of effort you must undergo to separate the metal.
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Find scrap metal companies in which to sell your metal. Start at sites such as Steel Spider, which connect scrap metal sellers and buyers, Scrap Price Bulletin and American Metal Market.
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Tips & Warnings
Depending on the size of your operation, start-up costs could easily exceed $100,000. If you intend to procure financing, start by developing a detailed business plan that identifies your competition, metal suppliers and buyers, in addition to operating expenses, equipment costs, licensing and insurance requirements.
Metal theft is a legitimate concern in the industry. Require customer identification to ensure that you do not accept stolen goods.
Offer free appliance pickup.
References
Resources
- Photo Credit scrap heap image by hazel proudlove from Fotolia.com
