Starting a Car Recycling Business

This old automoblie may seem like junk, but it's still worth hundreds of dollars as recyclable steel.

Starting a car-recycling business may not seem glamorous, but potential returns make a scrap yard seem like a modern gold mine. As globalization continues, the demand for resources such as metal and rubber grow, which opens the market for new competitors. There aren't many startup costs involved with starting a car-recycling business, and since the operation benefits the environment, you will receive a positive response from state government.

Things You'll Need

• Scrap yard
• Operating license
• Tow truck
• Car crusher
• Computer
• Website

Instructions

1. Find the right location. You'll need plenty of space on an industrial lot to store and recycle scrap vehicles. Commercial real estate agents and your local zoning board can help in this regard.

2. Contact the business licensing office in your state. Some states heavily regulate scrap yards, and procedures for attaining an operating license may be more stringent in some.

3. Staff your business. If you already know a lot about car parts to the extent that you can identify and remove just about any one of them, you can run the business by yourself. However, if you don't possess knowledge of car and truck parts -- or you simply worry about early business growth -- hire qualified mechanics.

4. Buy a tow truck to salvage destroyed or abandoned vehicles. With your own tow truck, you will be poised to respond faster in auto retrieval, which will give you a competitive advantage.

5. Buy a car crusher. Once you've stripped all the vehicle parts that can be sold or recycled individually, you will be left with 2,000 to 3,000 pounds of scrap steel. Recycling it will be a major revenue source for your business.

6. Invest in a good security system for your yard. So much valuable metal on-site is almost sure to attract criminal activity.

7. Buy an insurance policy. Shop around for the best deal on comparison websites and phoning insurance companies. Your business coverage is specialized in the sense that you will be working regularly heavy machinery, perilous inventory and potential environmentally hazardous substances, so you'll need to spend considerable time finding the coverage that suits you best.

8. Open the floodgates. Advertise your scrapping business online with a professional website and register your site with Google Maps Local. Also, it's best to advertise directly to your target market: car buyers and car owners. Set up an advertising campaign in local car dealerships and garages.

References

• Profitable Recycling: Junk Car Recycling