Last Updated on February 16, 2023
Sustainable lifestyles are trending making starting a recycling business a profitable option for just about anyone. If you have a passion for saving our planet, it could be the right business for you.
While recycling seems simple, a lot goes into starting any business, including recycling. Knowing how profitable it may (or may not) be, what you need to start, and the struggles you may face are important before you start a recycling business.
Check out our guide on how to start a recycling business below.
Is Recycling a Profitable Business?
When done right, a recycling business can be profitable. The key is to find an underserved niche. Look for a product that isn’t being recycled or areas without adequate resources to recycle and capitalize on it. If you were to join the masses and recycle plastic or cardboard in a popular area, for example, the competition may be fierce and profits minimal.
Instead, look for a niche that’s underserved in your area or underserved areas. If you’re starting your business in 2021, you’re in luck. The U.S. government implemented many tax deductions and incentives for recycling businesses. They include depreciation of recycling equipment and sales and income tax incentives.
Like any business, a proper business plan and model is the key to a profitable business. Market research, a financial analysis, and revisiting your business model is the key to a profitable business.
Which Recycling Business Is Most Profitable?
Your recycling profits depend on two factors:
- Amount of reserves – If you recycle a product with limited natural resources, there’s greater profit in the business. If you choose a product that’s already heavily recycled, the profits may be minimal.
- Energy requirements – Products with heavy energy requirements to manufacture have greater recycling profits. But products that require excessive energy use to recycle have lower profits. Your profits depend not only on the materials you collect, but the amount recycling companies will pay you to bring the materials to them.
While most recycling businesses can be profitable, e-waste recycling has the largest profits. Recycling electronics protects the environment from lead and phosphorous which electronics contain large amounts of, and they often turn double the investment paid to start the business.
Learning how to start a recycling business that recycles electronics could be your path to high profits.
How Much Does It Cost to Start a Paper Recycling Business
Paper waste makes up 23 percent of the total waste in the world, which makes paper recycling business a high demand business.
Fortunately, the costs to start a paper recycling business are among the lowest startup costs for any recycling business.
Since you’re recycling products people bring to you, the most important materials you need include:
- A method of transportation (truck or trailer)
- Permits as required by your state or county
- Containers to collect the paper and spread around town
- Area to store the paper (most people start in their home)
- Scale to measure the paper
The largest expense is usually the area to store the paper and the method of transportation (if you don’t already own a truck). You’ll also need the time to drive around and collect the full containers and transport them to the recycling plant.
How Much Money Can You Make Recycling Paper?
Since each recycling center pays business owners a different amount to transport paper to them, the profits vary. If you recycle part-time , you’ll make an average of $300 – $500 a week. If you make it a full-time gig and market it well, you could make well into the six-digit figure income each year.
How Can I Start a Recycling Business with No Money?
Since recycling businesses rely on goods from other companies or individuals, there are few startup costs. This makes it easy for anyone to start a recycling business with little to no money.
If you already have a truck and containers to collect your chosen materials, you can start your business with little upfront investment. You may need to purchase a business license or permit, though, so check with your area’s requirements.
Starting with little money is easy if you have the materials to start. Once you make a little money recycling your chosen material, you can invest the money back into your business to grow its market reach and the equipment you have to own a profitable business.
The Struggles You May Face Starting a Recycling Business
All business start-ups have struggles. Here are the most common struggles faced by recycling business owners:
- It may be more expensive than you think. If you don’t scale down to a specific niche, you may incur extra costs you didn’t expect when dealing with different recycling plants.
- If you don’t have basic materials including transportation and collection bins already, the startup costs can be high.
- Marketing can be hard if you live in an area that doesn’t embrace recycling. While most of the world recycles, it’s not as prevalent in certain areas.
- It’s hard to use your time efficiently since you rely on businesses/individuals to provide the materials and recycling companies to process the products.
Is Starting a Recycling Business Right for You?
If you’re passionate about recycling, you could turn your passion into a business. With dedication, a marketing plan, and a little equipment, you can learn how to start a recycling business that’s profitable and helps the environment.
Before you start, check out the competition in your area. What companies already exist and what products do they recycle? Determine if there’s a higher demand for the service than what competitors offer. If not, consider providing a unique recycling service, such as a tire or electronics recycling business.
The sky is the limit for recycling businesses today, giving you many options when starting a business. Take your time, assess your current resources, and financial situation, and start a business that makes the planet a better place.
Tip: This article is next in the series of How-To. If you are interested in other business ideas, please check out the previous articles.