Starting a waste management business is a feasible option for business enthusiasts, especially due to the size of the waste management industry. According to United Nation environment program as on first research 11 billion tonnes of waste is collected by waste management and recycling businesses all around the world and making a whopping $410 billion of revenue each year and catching the eyes of aggressive entrepreneurs increasingly.
While starting a waste disposal business, it is important to understand that this industry is very concentrated. The top 50 waste management companies earn more than half of the industry’s revenue in the US. Moreover, for developing countries, there is a huge opportunity to get into this business. And so, entrepreneurs are needed to excel in scalability and reach to the right audience to generate awareness for your brand about what makes your services different from the ones already available. Let us take a look at the steps that are needed to start a waste management business:
Understanding the Niche
The first and foremost thing to do, before starting a waste management business, is to understand your niche. Depending upon your budget, you can select your niche or even a combination of 2 or more types of wastes. There are several types of waste products and materials, each of these wastes requiring different means and procedures for disposal. Some of the different types of waste disposal businesses are:
- Hazardous or toxic waste disposal business
- Medical Waste disposal business (e.g.: used needles, syringes, soiled clothing, chemicals, medical devices, etc.)
- Biomedical Waste disposal business (e.g.: unclaimed dead bodies of human beings or animals)
- Electronic waste disposal business (like CDs, computer parts, mobile phones)
- Green waste disposal business (decomposable materials like leaves and grasses)
- Construction waste disposal business (e.g.: nails, insulation and electrical wiring, tree stumps, etc.)
- Nuclear waste disposal business.
- Household Waste disposal business (e.g.: rotten vegetables, newspapers, cardboard, etc.)
- Chemical waste disposal services (e.g. chemicals used in factories, laboratories, etc.)
- Industrial rubbish removal business (e.g.: wastes generated in mining, manufacturing, construction and metallurgical industries).
These can also be categories as commercial waste disposal business and household waste disposal. It’s totally upto you that know you understand your market to capture it.
For starting a waste management business successfully you will need-
- Location Rent: Rs. 1, 00,000/ month
- Employees: Rs. 2 lakh/ month
- Transportation Trucks: Rent charges depends on per kilometer/per day charges with the truck owners
- Equipment: Rs. 5,00,000
- Insurance Cover: Rs. 2 lakh/year
- Advertisement: Rs. 20,000/ month
Before starting your waste separation business, get a clear idea of your potential competitors, local junk haulers in your region and their pricing. Compare these with your costs to get an idea of the profits. Understand how tough the competition in the market that you are considering is. If the competition is too tough, you might need to think about starting your business in a different area where these services are not being provided or might have to choose a different niche. Look at major players and even smaller, competing businesses. Decide if you wish to focus on residential or commercial junk removal. Take a look at their advertising strategies, prices, and service areas.
Next, see how big is the market, whether you will be able to sustain or not. Research the prevailing junk disposal business in your area. Try to have a conversation with someone in the same business, in particular in a different city and is willing to discuss the industry with you. Also, figure out where you want to sell; to the landfill, scrap dealers, to nearby charities, or for some other use.
Create a business plan and state your business objectives. Explain what exactly you will do, what will be your target market, what are your specialties, what makes your business unique and better than that of your competitors etc. Explain your pricing model, startup costs, marketing strategy, and how you plan to fund your business.
Create a business plan to answer the following:
What waste materials you plan to recycle? These can be the ones with the maximum demand or depending on your business budget.
How do you plan to dispose of your wastes? For example, Nuclear wastes are meant to be disposed of by sealing the materials in lead barrels and bury them in the ground so that it doesn’t leak.
What would be your waste material collection plans? Proximity to your source is important to save in transportation costs.
Who would be the buyers for your end products? And how much would they pay for recyclables in the ready to use form?
How will you finance your business? These can be loans provided by the government and costs involved in setting up your business.
How do you plan to make your business more efficient and scalable? You might consider processes like sorting, baling, storage and delivery of recyclables for reuse.
Next thing which you have to sort out while making a business plan is deciding on how your business will fetch you revenue or you can say you have to prepare a revenue model of your business. There can be following options for generating revenue in case of waste management business.
- Charge directly from people from whom you are collecting wastes.
- Collect all the waste, separate out different types of wastes and then send to particular recycle business. E.g.: glass, plastic, paper, metal, medical waste. You can charge them money for supplying them recyclable wastes.
- Deploy your own ‘Recycle system’. Let us say you specialize in the recycling of glass. So, out of all the waste accumulated, you filter out and recycle it. Rest all items you sell out for recycling or simply dump them.
Set up Needed
Choosing a suitable location for your Waste Management Business becomes the next important thing. Starting a waste collection business comes with its own share of challenges so it is important to choose the location wisely. It is important to have a contract for a place where you plan to dump or burn waste, preferably away from the cities with the medium cost of transportation involved and to keep away the city from all sorts of diseases. For this reason, one cannot start a waste management company in residential areas, no matter which country they set up their business in. One can only do this in the land designated for waste collection and management companies and for waste recycling plants.
Next, comes important equipment needed to run a successful waste management business. Here is a list of important tools and equipment that are needed:
1) Waste Collection Truck: You can either use a second-hand van or truck or buy a new one to transport client’s waste to recycling or disposal facilities. To save money, you can also opt for a rented junk removal truck instead of buying a new one initially. The truck should have a large load capacity and good fuel economy.
2) GPS System: For those who do not have a smartphone or are unfamiliar with your service area’s layout, you would also need a reliable GPS system.
3) Heavy Duty Work Wears: To remove dirt and garbage, you would need durable work clothes, gloves, and rubber boots. Loose fitting trousers are suited for both indoor and outdoor jobs and are also comfortable. Clothes should be such that they prevent household and garden pests from biting you.
4) Shovel and Rake: These are needed to remove dirt, leaves, sand and other debris.
5) Heavy-duty Protection: These include facial masks and goggles, dirt and product separator to prevent any contamination from dust and dirt.
6) Incinerators, trash cans, dustbins, and waste bags.
7) Hose and pipes for the continuous supply of water.
The number of employees that you should consider for starting your business depends on the budget of your business. Particularly in a waste management business, services from the following professionals are needed:
- Chief Operating Officer
- Admin and HR Manager
- Transport and Logistics Manager
- Business Developer
- Waste collection team (around 8-10 on-site workers)
- Truck drivers (3-4)
- Technical team (3-4 employees)- to separate out the wastes and recycle them)
- Front Desk Officer
Initial funding to start a waste management business is required to cover the cost of setting up an office or leasing storage space, cost of trucks, equipment, marketing activities and hiring workers. One can opt for banks or investors for initial funding. But in this kind of business, you should raise funds at least for 2 years of operations.
First thing is to register your company name according to the requirements of your local government and guidelines for waste carriers. Contact your local chamber of commerce to gain more insights for this as registration laws differ for every country and state.
Special permits or licenses will also be taken for transporting scrap metal or any kind of scrap. In some areas, licenses are needed to haul large amounts of materials for commercial purposes, failure of which can impose heavy fines. There are also special waste removal permits in major cities worldwide which must be obtained before starting the business. In some countries, you will need a certificate from the transportation department to transport your scrap metal. Additionally, one might also need an employer identification number to hire employees. For choosing a legal entity for your business, one can choose from the general partnership, a limited partnership, an LLC, a ‘C’ corporation or an ‘S’ corporation, depending on the scalability and city of operation of your business.
Also, in most countries, one cannot operate a business without having some of the basic insurance cover required by the waste management industry. A budget for insurance policy cover should be allocated too. Some of the insurance policies one should consider purchasing to start a waste collection and management business in the different countries are:
- General insurance
- Health insurance
- Liability insurance
- Equipment and Auto Insurance
- Risk Insurance
- Workers compensation
- Overhead expense disability insurance
- Business owner’s policy group insurance
- Payment protection insurance
A successful waste management business requires finding the right customers because most homeowners and landlords already have a waste management provider and wouldn’t be too keen to switch to a new player that easily. Hence, it is important to contact RWAs of residential societies, government offices, hospitals and commercial offices to educate people about your business.
Your brand should be more visible and unique to acquire new customers. It is important to make sure that your messaging highlights the uniqueness of your company and services so that users can differentiate you from other players in the market. This unique factor can either be price, efficiency, or scope of services or motivate new customers to come onboard and avail your services. Make social viral videos on cleanliness and upload them on various social networking sites. Also, publish articles on health-related issues caused due to different types of waste through your blog.
Keep your initial advertising plan low on budget and make it work. You can consider parking your vehicle in an easily accessible location, cold calling potential customers, or placing a small ad in a local newspaper or magazine.
Thank you Neha ..Can u help me how at abroad the things works for waste management !!!
For which country you wanna know details? And want you wanna know? You can even mail us at firstname.lastname@example.org if you want to know something specific.
Can anyone tell me the minimum budget for a new waste management company ?
It will completely depend on the niche and on your operating location.
Thank you very much for this piece of information. I would like to start my business in medical waste management, so can you please share how to acquire customers in this niche? Also, can you help me to find a mentor related to this field in Mumbai location?
In the majority of cases when you start a b2b business then market research plays an important role. In your case, bottom-up research is needed. Once you find that there is a gap then only it is wise to start a medical waste business.
So if there is a gap then you need to visit hospitals one by one. No shortcut is there for sales.
Honestly I don’t know any mentor specifically for your location but you can buy our course Business Crux. Hopefully, you won’t feel any urgency for mentor then. Here is the link
thank you neha it was very help full.
Thanks a lot for the information. it was very helpful.
Hi, I want to understand budget and space requirement for waste management.
Also wanna understand profit margins.
Space, profit margin, and budget are completely dependent on the nice you are choosing and on the locality of your business.
You need to be very specific in asking your questions then only I would be able to tell you nearby figures.
You could even mail on official email id of business alligators.
Wanted to know about the initial investment needed for medical waste management and e-waste management around Delhi NCR.
Hi there, My name is Saijid, I am from Kashmir Srinagar, I want to start a waste management business here. Can anyone help me ? As what all I need to do? For example if I want yo start a chemical recycling company.
I would like information on starting a waste and recycling business in southwest Virginia, how much land space is needed equipment, plus what type of permit and licenses.
Thank you so much
I want to start this business so please give me some knowledge about this business and licences
How to start a waste management business in Srinagar (J&K) and what will be the initial investment?
Could you please share information on starting a waste and recycling business in Nepal? How much land and equipment are needed? Could you share some more ideas regarding waste management techniques?
It is not about starting in Nepal or any other location. All the questions which you are asking come under Market Research (Primary Research and Secondary Research).
If you don’t know how to do these researches then you can check our course Business Crux. We have covered a lot of important topics besides market research in the course. Here is the link
Mam, please tell me one thing, how will we earn money or we can say profit in this business?
You can earn in two way, one by charging people/resident/companies and second is taking a contract from the government for a particular region.
Sir, I want to start waste management at Taluka place, will you provide me some help?
We can guide you regarding business strategies so that you can penetrate your market. But cannot help you with personalized legal stuff.
Hi, can you help me in starting medical biowaste plant?
I can help in making the strategy to penetrate the market.
Thanks for sharing the business idea of waste management.