Are you about starting a scrap metal recycling plant? If YES, here is a complete sample scrap metal recycling plant business plan template & feasibility report you can use for FREE.
There are diverse niches – areas of specializations in the recycling industry and one of them that you can specialize on if you are interested in starting a business in the industry is to go into metal scrap recycling business.
It is a business that is highly profitable because there is hardly any country or city that you won’t find used and abandoned metal scraps.
Essentially, what you would need to put in place in other to successfully launch a metal scrap recycling business is the machines and equipment needed and how to operate them, a good knowledge of where to collect used and condemned metal and where to sell the raw materials generated from the recycling process, the legislation guiding the industry as well as strong entrepreneurial skills and determination.
The scrap metal recycling line of business is one of the largest lines of businesses in the recycling industry. Establishments in the scrap metal recycling industry are primarily involved in the collection, processing and recycling of condemned ferrous metals, such as iron and steel, and nonferrous metals, such as aluminum, copper and nickel.
Basically, the scrap metal recycling process involves sorting, shearing, shredding, torching and baling scrap metal to be sold to downstream metal smelters for further processing. Reports published by IBISWORLD shows that the Scrap Metal Recycling industry has been exposed to the full force of the global economy over the past five years.
While the industry quickly rebounded in 2010 and continued to improve through 2011 and 2012, domestic and international demand conditions have softened and the industry has yet to reach its prerecession high. However, the industry is expected to experience a less volatile period over the five years to 2022 as metal price fluctuations settle down
The Scrap Metal Recycling industry is indeed a very thriving industry in most countries of the world. It is a major sector of the economy of the united states and it generates a whooping sum of well over billion annually from about 611 registered and licensed scrap metal recycling companies scattered all around the United States of America. The industry is responsible for the employment of well over 35,987 people.
Experts project that the scrap metal recycling industry to grow at a -1.9 percent annual rate. Sims Metal Management is obviously the market leader in the scrap metal recycling industry; they have the lion market share in the United States of America.
If you are a keen follower of the trends in the scrap metal industry and of course any other recycling business, you will realize that players in this industry ensure that they position their recycling plant close to clients to reduce transportation costs and turnover time.
This is one of the major reasons why you can easily find scrap metal recycling plants located in manufacturing cum industrial estates, as well as highly populated urban areas to collect obsolete metal scrap.
Good enough, manufacturing facilities do not only supply industry operators with scrap metal from their operation processes but they also demand recycled ferrous and nonferrous metals from industry operators hence a win – win operation.
No doubt, the Scrap Metal Recycling industry has come to stay and the good part of it is that it enjoys the support of environmentalist and the government of various nations since it is a means to preserve the earth from degradation, greenhouse gas emissions and environmental pollution.
Despite the fact that establishing a Scrap Metal Recycling Company requires huge startup capital and rigorous processes to build a standard recycling plant, but it is a fact that it is indeed a profitable venture. The market for recycled scarp metal is large and can accommodate loads of investors.
Life Gate Metal Recycling®, LLC is a U.S based licensed and standard recycling company with strong bias for recycling scrap metal (ferrous and nonferrous metal). We have been able to secure a standard and well – positioned facility in an industrial estate in Dover – Delaware; a facility that is well positioned and highly suitable for the kind of scrap metal recycling plant that we want to build.
We are in the scrap metal recycling industry to contribute our quota in saving the earth and also to compete in the highly competitive recycling industry not only in Dover – Delaware, but also throughout the United States market.
Life Gate Metal Recycling®, LLC will initially be involved in the recycling of used and condemned metal (ferrous and non – ferrous metal) but will in the nearest future engage in the recycling of other highly marketable materials. Our business goal is to become one of the leading recycling companies in the United States of America and we will make sure that we do all we can to compete favorably with leaders in the industry.
Our workers are going to be selected from a pool of certified and highly experienced recycling engineers and technicians in and around Dover – Delaware and also from any part of the United States of America as the business grows.
We will make sure that we take all the members of our workforce through the required trainings that will position them to meet the expectation of the company and to compete favorably with leading scrap metal recycling plants in the United States and throughout the globe.
At Life Gate Metal Recycling®, LLC our client’s best interest will always come first, and everything we do will be guided by our values and professional ethics. We will ensure that we hold ourselves accountable to the highest standards by meeting our client’s needs precisely and completely.
We will cultivate a working environment that provides a human, sustainable approach to earning a living, and living in our world, for all our partners, employees and for our clients.
Life Gate Metal Recycling®, LLC is a private registered business that will be owned by Engr. Merrick Alexander a recycling engineer per excellence who graduated with from Illinois Institute of Technology with degree in Metal & Metallurgical Engineering and his friend and business partner for many years David Brown (B.Sc. Business Management).
They have a combine experience that can help them build Life Gate Metal Recycling®, LLC to favorably compete with other leading recycling plants in the United States of America and throughout the globe.
Life Gate Metal Recycling®, LLC was established with the aim of maximizing profits in the scrap metal recycling industry.
We want to compete favorably with the leading scrap metal recycling plants in the United States which is why we have but in place a competent quality assurance team that will ensure that every recycled metal material or products that leaves our recycling plant meet and even surpass our customers’ expectations and meet with best practices in the industry.
We will work hard to ensure that the products and brand of Life Gate Metal Recycling®, LLC is not just accepted in Dover – Delaware but also in other cities in the United States of America. Our products and services are listed below;
Our Business Structure
Life Gate Metal Recycling®, LLC is a scrap metal recycling company that intend starting small in Dover – Delaware, serving smaller industries (cottage companies) within our locations, but hope to grow big in order to compete favorably with leading scrap metal recycling plants in the industry both in the United States and on a global stage.
We are aware of the importance of building a solid business structure that can support the picture of the kind of world class business we want to own. This is why we are committed to only hire the best hands within our area of operations.
At Life Gate Metal Recycling®, LLC, we will ensure that we hire people that are qualified, hardworking, creative, customer centric and are ready to work to help us build a prosperous business that will benefit all the stake holders (the owners, workforce, and customers).
As a matter of fact, profit-sharing arrangement will be made available to all our senior management staff and it will be based on their performance for a period of five years or more as agreed by the board of trustees of the company. In view of the above, we have decided to hire qualified and competent hands to occupy the following positions;
Chief Executive Officer – CEO:
Head, Technical Services:
Admin and HR Manager
Sales and Marketing Manager
Accountant / Cashier:
Recycling Plant Engineers (2) and Technicians / Machine Operators (8)
Truck Drivers
Client Service Executive
Life Gate Metal Recycling®, LLC engaged the services of a core professional in the area of business consulting and structuring to assist our organization in building a well – structured scrap metal recycling business that can favorably compete in the highly competitive recycling industry in the United States and the world at large.
Part of what the team of business consultant did was to work with the management of our organization in conducting a comprehensive SWOT analysis for Life Gate Metal Recycling®, LLC. Here is a summary from the result of the SWOT analysis that was conducted on behalf of Life Gate Metal Recycling®, LLC;
Our core strength lies in the power of our team; our workforce. We have a team of certified and highly trained and experience recycling engineers and technicians / machine operators, a team with excellent qualifications and experience in various niche areas in the recycling industry.
Aside from the synergy that exists in our carefully selected workforce, our product will be guided by best practices in the industry and our scrap metal recycling plant is centrally positioned in an industrial estate and it is built to fit into the design of a 21 st century recycling plant.
As a new scrap metal recycling plant in Dover – Delaware, it might take some time for our organization to break into the market and gain acceptance especially from top profile clients (big time manufacturing / production companies that make use of recycled metal materials) in the already saturated and highly competitive recycling industry; that is perhaps our major weakness.
Another weakness is that we may not have the required cash to pump into promoting our business the way we would want to.
No doubt, the opportunities in the scrap metal recycling industry is massive considering the number of individuals and manufacturing companies who are now switching over to alternative source of raw materials basically to save cost and energy. As a scrap metal recycling company, we are ready to take advantage of any opportunity that is available in the industry.
Aside from unfavorable government policies, one of the major threats that we are likely going to face is economic downturn.
It is a fact that economic downturn affects purchasing / spending power. Another threat that may likely confront us is the arrival of new scrap metal recycling plants in same location where our target market exists and who may want to adopt same Business model like us.
One obvious trend in the scrap metal recycling industry and of course in other recycling related industry is that players in this industry leverage on saving the earth and balancing the ecosystem to promote their business.
As a matter of fact, governments all over the world and even international Non – Government Organizations are in the forefront when it comes to campaigning in favor of recycling materials to generate raw materials for industries as against tapping virgin raw materials. This is so because it will help save cost and energy and the earth that we live in will be the better for it.
If you are a keen follower of the trends in the scrap metal industry and of course any other recycling business, you will realize that players in this industry ensure that they position their recycling plant close to clients to reduce transportation costs and turnover time.
This is one of the major reasons why you can easily find scrap metal recycling plants located in manufacturing cum industrial estates, as well as highly populated urban areas to collect obsolete metal scrap.
Good enough, manufacturing facilities do not only supply industry operators with scrap metal from their operation processes but they also demand recycled ferrous and nonferrous metals from industry operators hence a win – win operation.
In spite of obvious recessionary challenges and in the wake of a consumer preference shift toward green products and growth in environmental regulations that encourage recycling of scrap metal, the scrap metal recycling industry is expected to experience healthy growth going forward as purchases of metal related products (ferrous and non – ferrous metal products) drive demand for the recycling of obsolete products and regulation for the industry increases.
Lastly, more and more manufacturing industries are beginning to see the benefits of going for recycling materials as against going for virgin raw materials in the production of their products. This is the reason why the industry is expanding and becoming more profitable and viable.
Before starting our scrap metal recycling business in Dover – Delaware, we conducted a market survey and feasibility studies and we are certain that there is a wide range of manufacturing / production factories that cannot successfully run their businesses without sourcing for recycled scrap metal materials from us.
In view of that, we have created strategies that will enable us reach out to various manufacturing / production companies who we know can’t afford to do without our products / recycled raw materials. Below is a list of the people and organizations that we have specifically market our products and services to;
Our Competitive Advantage
The recycling industry is an emerging market that is yet to be fully embraced globally, therefore there is little or no competition in the industry at the moment. Although, there is a relationship between the emerging players as they cannot do without the other.
Since the industry is a multi-stage one, there is need for collaboration among the players in order to have a win-win situation for all the players. Without a shadow of doubt, there are loads of big time investors that have stakes in the scrap metal recycling industry; but one thing is certain, there is room big enough to accommodate all players.
So, if you enter the industry today, you should brace up yourself for collaboration and prepare for serious competition in the nearest future as soon as the recycling industry enter it boom period, this period will definitely arrive especially in the developing world in little time when recycled product is seen in the same light as the new and “virgin” materials.
Our competitive advantage lies in the power of our team; our workforce. We have a team of certified and highly trained and experience recycling engineers and technicians / machine operators, a team with excellent qualifications and experience in various niche areas in the recycling industry.
Aside from the synergy that exists in our carefully selected workforce, our product will be guided by best practices in the industry and our scrap metal recycling plant is centrally positioned in an industrial estate and it is built to fit into the design of a 21 st century recycling plant.
Lastly, all our employees will be well taken care of, and their welfare package will be among the best within our category (startups scrap metal recycling companies in the United States) in the industry. It will enable them to be more than willing to build the business with us and help deliver our set goals and achieve all our business aims and objectives.
Life Gate Metal Recycling®, LLC is established with the aim of maximizing profits in the scrap metal recycling industry and we are going to go all the way to ensure that we do all it takes to meet and surpass the expectations of all our clients. Life Gate Metal Recycling®, LLC will generate income by selling and supplying the following products;
One thing is certain, there would always be manufacturing / production companies who cannot but source their raw materials from scrap metal recycling plants.
We are well positioned to take on the scrap metal recycling industry and we are quite optimistic that we will meet our set target of generating enough income / profits from the first six month of operations and grow our scrap metal recycling company to enviable heights.
We have been able to critically examine the scrap metal recycling market and we have analyzed our chances in the industry and we have been able to come up with the following sales forecast. The sales projections are based on information gathered on the field and some assumptions that are peculiar to similar startups in Dover – Delaware.
Below are the sales projections for Life Gate Metal Recycling®, LLC, it is based on the location of our business and of course the wide range of our products and target market;
N.B: This projection is done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown and there won’t be any major competitor within same location where our scrap metal recycling plant is located or where our target market exist. Please note that the above projection might be lower and at the same time it might be higher.
Some environmental experts stated that the world market for waste, from collection to recycling is worth around 300 billion Euros (US $410 billion). The recycling business is therefore a growing business that has futuristic benefits; there are markets in the developing world that can be tapped into especially in Africa, Asia and Latin America.
We are mindful of the fact that there are stiffer competitions in the scrap metal recycling industry especially in the United States; hence we have been able to hire some of the best marketing experts to handle our sales and marketing.
Our sales and marketing team will be recruited based on their vast experience in the scrap metal recycling industry and they will be trained on a regular basis so as to be well equipped to meet their targets and the overall business goal of Life Gate Metal Recycling®, LLC.
Our corporate goal is to grow Life Gate Metal Recycling®, LLC to become one of the top 5 scrap metal recycling brands in the United States of America which is why we have mapped out strategy that will help us take advantage of the available market and grow to become a major force to reckon with not only in Dover – Delaware but also in other cities in the United States of America.
Life Gate Metal Recycling®, LLC is set to make use of the following marketing and sales strategies to attract clients;
We have been able to work with our in house brand and publicity consultants to help us map out publicity and advertising strategies that will help us walk our way into the heart of our target market.
We are set to become the number one choice for manufacturing / production companies in the whole of Dover – Delaware and beyond which is why we have made provisions for effective publicity and advertisement of our scrap metal recycling company. Below are the platforms we intend to leverage on to promote and advertise Life Gate Metal Recycling®, LLC;
At Life Gate Metal Recycling®, LLC we will keep the prices of our recycled scrap metal materials below the average market rate for all of our customers by keeping our overhead low and by collecting payment in advance from manufacturing companies who would hire our services.
In addition, we will also offer special discounted rates to all our customers at regular intervals. We are aware that there are some one – off jobs or government contracts that are always lucrative, we will ensure that we abide by the pricing model that is expected from contractors or organizations that bid for such contracts.
The payment policy adopted by Life Gate Metal Recycling®, LLC is all inclusive because we are quite aware that different customers prefer different payment options as it suits them but at the same time, we will ensure that we abide by the financial rules and regulation of the United States of America. Here are the payment options that Life Gate Metal Recycling®, LLC will make available to her clients;
In view of the above, we have chosen banking platforms that will enable our client make payment for farm produces purchase without any stress on their part.
Our bank account numbers will be made available on our website and promotional materials to clients who may want to deposit cash or make online transfer for the purchase of our recycled ferrous and non – ferrous metal materials (raw materials).
In setting up any business, the amount or cost will depend on the approach and scale you want to undertake. If you intend to go big by renting a place, then you would need a good amount of capital as you would need to ensure that your employees are well taken care of, and that your facility is conducive enough for workers to be creative and productive.
This means that the start-up can either be low or high depending on your goals, vision and aspirations for your business. The tools and equipment that will be used are nearly the same cost everywhere, and any difference in prices would be minimal and can be overlooked.
As for the detailed cost analysis for starting a standard scrap metal recycling plant; it might differ in other countries due to the value of their money. However, this is what it would cost us to set up Life Gate Metal Recycling®, LLC in the United of America;
Going by the report from the market research and feasibility studies conducted, we will need about four hundred and fifty thousand (450,000) U.S. dollars to successfully set – up a medium scale but scrap metal recycling plant in the United States of America.
Generating Funds / Startup Capital for Life Gate Metal Recycling®, LLC
Life Gate Metal Recycling®, LLC is a business that will be owned and managed by Engr. Merrick Alexander and his friend and business partner for many years David Brown. They are the sole financial of the business which is why they decided to restrict the sourcing of the start – up capital for the business to just three major sources.
These are the areas we intend generating our start – up capital;
N.B: We have been able to generate about $100,000 (Personal savings $70,000 and soft loan from family members $30,000) and we are at the final stages of obtaining a loan facility of $350,000 from our bank. All the papers and document has been duly signed and submitted, the loan has been approved and any moment from now our account will be credited.
The future of a business lies in the numbers of loyal customers that they have the capacity and competence of the employees, their investment strategy and the business structure. If all of these factors are missing from a business (company), then it won’t be too long before the business close shop.
One of our major goals of starting Life Gate Metal Recycling®, LLC is to build a business that will survive off its own cash flow without the need for injecting finance from external sources once the business is officially running.
We know that one of the ways of gaining approval and winning customers over is to sell our recycled metal materials a little bit cheaper than what is obtainable in the market and we are well prepared to survive on lower profit margin for a while.
Life Gate Metal Recycling®, LLC will make sure that the right foundation, structures and processes are put in place to ensure that our staff welfare are well taken of. Our company’s corporate culture is designed to drive our business to greater heights and training and retraining of our workforce is at the top burner.
As a matter of fact, profit-sharing arrangement will be made available to all our management staff and it will be based on their performance for a period of ten years or more. We know that if that is put in place, we will be able to successfully hire and retain the best hands we can get in the industry; they will be more committed to help us build the business of our dreams.
Check List / Milestone
