How to Start a Scrap Metal Business

Scrap metal business has three major priorities that should be first looked into before opening for business: the accumulation of scrap metal, the holding area, and the safety measures of the said holding area. Without these three, business may prove futile.

Scrap metal business may go by various monikers: metal recycling business, junk metal business, scrap metal recycling, scrap yard, waste metal recycling center, wrecking yard, breaker?s yard, etc.

scrap metal

In any case, starting a scrap metal business has a few fundamental rules that you may want to follow. This business is a very hands-on business, where owners and scrap workers work directly with the “product” – sometimes even handling junk and rusty pieces of metal.

Your first priority should be the accumulation of scrap: these are old, unwanted metal pieces that usually come from building supplies, discarded vehicle parts, and other surplus metal materials. Scrap metal is actually a very important commodity – and is usually almost always in demand for both production and recycling. Scrap metal or recycled metal is less costly than pure metal, and the market for scrap metal is expansive.

Scraps can be found almost everywhere – some are given for free, others have to be salvaged from wreckage or demolition sites, and others have to be bought outright. In order to remain competitive, owners of scrap metal businesses try to keep their rates low, and try to sell their scraps high.

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As an owner of a scrap metal business, your second priority should be your holding area or the lot with which to hold all your scraps. Some people call it a scrap yard. Depending on the size and location of your holding area, your business may or may not be open to “browsers” or customers who wish to scan available scrap metal. Some scrap metal businesses allow browsers to walk into the holding area and extract whatever they need, provided that the customers supply their own tools for extraction, and that they waive any liability from personal injury during the extraction process.

Larger scrap metal businesses usually segregate metals by piles according to quality and its recyclable parts. Buyers of scrap metal then “bid” for a specific pile: something like an auction of sorts, where the highest bidder gets the pile he so desires. Sale of scrap metal is always measured by weight, and never per piece or item.

Some scrap metal businesses even have dual purposes. On one hand, they sell scraps to the highest bidders or browsers and the less desired pieces are inevitably sent to smelting companies. In both cases, there is always a fast exchange of money, making this a very lucrative business enterprise.

However, one great major concern, and one that should be the third on your priority list, is safety and security. Obviously, scrap metal holding area poses a lot of risks when it comes to physical injury. Haphazardly placed metal pieces may eventually topple over especially when “browsers” are covering the lot. There is also concerns regarding health and environmental issues – radioactive materials have been found in scrap metal yards before. As the owner of a scrap metal business, you and your people will most likely handle a lot of junk that came from unknown sources. It is best if you have protective gear or at least a contingency measure should something quite undesirable turn up in your holding area.

Planning to Start a Scrap Business? Don't miss this Video.

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856 Comments

  • steve mcdonald said on September 7, 2008
    IM LOOKING TO START A SCRAP METAL BUSINESS . I WOULD LIKE INFORMATION ON WHAT IS NEEDED TO START . THANX
  • Ronald Wainwright Jr. said on September 29, 2008
    I am thinking of starting a scrap metal and or a recycling business.Can I start a business with a relatively small investment and make it grow. What do I need?
  • Adam Adkins said on December 6, 2008
    Hey I've thought about starting a scrap yard, I mostly collect cans and have people save them for me, but I'll collect everything. I was wondering, do you need a license to start a scrapyard? And if I do, where would I go to get one?
  • Jasjeet Singh said on February 20, 2009
    please tell me more relevant details about establishing a scrap business and please tell me the minimum amount of capital to be invested in this business to make it start.
  • Nivesh Agarwal said on February 25, 2009
    I WANT TO KNOW ABOUT ALL ASPECTS POSSIBLE IN STARTING, HOW SHOULD I START THE SCRAP BUSINESS.. AND WHAT ALL THINGS I SHOULD KEEP IN MIND... I M FAIR INTERESTED
  • VASI SARWAR KHAN said on March 6, 2009
    sir, I m thinking to start to metal scrap business. But having problem in how to and from where to start. please give me your suggestion.
  • Edy said on March 6, 2009
    hi!! i am interested in starting a scrap yard business but i am having problems in formulating a proper business plan, and to know all the aspects of the business. Like you should contact first like ministry of forestry and stuff like that. So please help me!!!
  • SUMIT RUSTAGI said on March 7, 2009
    WANT TO KNOW ABOUT ALL ASPECTS POSSIBLE IN STARTING, HOW SHOULD I START THE SCRAP BUSINESS.. AND WHAT ALL THINGS I SHOULD KEEP IN MIND... I AM FAIR INTERESTED.
  • Keitsile Mabe said on March 11, 2009
    Hi, I would really like to start scrap metal business as to how to start and how much do i need, whom to register with and places where i will be able to sell the melted steel. Please if possible supply me with the business plan as this will be the first time starting a business. Also would like to know where to find information on how to differentiate the types of steel. What to do like washing the steel before melting what to be careful of. Please help!!
  • stevin muturi said on March 20, 2009
    i need to know how to start a small scrap metal business. I am along the highway. the area is about 15*20 ft.
  • josh p. said on March 21, 2009
    the problem is that there are no information about this topic on the Internet but i recently came across this site www.metal-scrap.net. I think its not the best, but at least it has really valuable info, hope that helps you guys
  • jitesh ptel said on April 3, 2009
    dear sir? i really wanna know about scrap business, please send me information about this business.. please.. thank u
  • snipes metal industries said on April 11, 2009
    I want to start my own scrap metal business, how do I get started?
  • krishnan chandran said on April 12, 2009
    dear sir? i want to start a scrap metal business i don't know how to start can u help me how to start the business. please send me information about the business. thank you......
  • Chandra Patl.comel said on April 22, 2009
    Could you please email me the related information about metal scrap business? I will highly appreciate it. My email is cbh2207@gmail.com
  • jaganathan said on April 27, 2009
    I want to start my own scrap metal business, how do I get started? cell no : +91-9884469900, please guide me ... thanks
  • md rizwan uddin said on April 29, 2009
    I want to start my own scrap metal business, how do I get started? and what's the minimum capital required. please send details to md_rizwan1001@yahoo.co.in thank u
  • Margi Williams said on May 2, 2009
    My husband's job will end in June and he has decided to start a metal recycling business. Any resources you can provide for his success would be very much appreciated. My email address is margiwilliams@yahoo.com.
  • shoaib shah said on May 3, 2009
    i wanted to join someone who does the scrap business. if you know someone then please let me know its very urgent and please guide me that how to start this scrap business and how much money will it need and how much time will it take to start this business. please contact me on 9920977345. please do call me its very important. please sir, thanks your obedient shoaib.
  • pankaj said on May 29, 2009
    I want to start my own scrap business. i don't know how to start. please help me. thanks
  • reinaldo altuve said on May 30, 2009
    I just started a few days ago my scrap metal recycling business. I am collecting and stripping cooper from the electronic and electric, I need some information about this matter to keep going in my recycling business.
  • stacey said on July 1, 2009
    Looking to start a small salvage yard out on the small farm of mine. I got a lot of sources of scrap I can get just looking for more info on starting a scrap yard
  • Tosin said on July 10, 2009
    i want to start scarp metal business but haven't got any idea about it. kindly contact me about the necessary requirement of starting and owning a scrap yard. my email address is toesyn@yahoo.com. Looking forward to receiving messages from you about my new business.
  • jenny said on August 11, 2009
    like others i too need to know how much investment is needed for this business and how to start?.....please reply via email. thanks
  • Queeny said on August 16, 2009
    I would like to know all aspects of starting a scrap metal business. I just wonder if it's possible that I buy scrap metals from metal recycling center then trade it. Do I need any license in this case? Could you send me more details? My email address is queenyfong@hotmail.com. Thank you!
  • BHUTTA TRADE IMPEX said on August 31, 2009
    Dear Sirs, IMPORT OF ALUMINIUM SCRAP.
    WE ARE EXTENSIVELY ENGAGED IN THE NON-FERROUS METALS BUSINESS HERE IN PAKISTAN AND ARE ENOUGH COMPETENT TO SELL SIZE-ABLE QUANTITIES OF ALUMINIUM SCRAP E.G. ALUMINIUM PVC CABLES SCRAP, ACSR WIRE SCRAP, AL-FOIL SCRAP IN BALES AND FRIDGE COMPRESSORS SCRAP.

    PLEASE ASSIST US FAVORABLY EITHER OFFERING SAME MATERIAL FROM YOUR OWN SOURCES OR PLEASE FORWARD OUR INQUIRY TO THE RENOWNED EXPORTERS OF NON-FERROUS METALS SCRAP. ESTEEMING YOUR VALUED ACTION AND REMAIN, BEST REGARDS, M. YUNAS, BHUTTA TRADE IMPEX, LAHORE / PAKISTAN. TEL : 00 92 42 7315251/7364815/16 & 7227098 FAX : 7315087
  • Antoinette said on September 1, 2009
    Goodday,i would like to know in details what is needed in terms of Licenses, capital and on establishing a Steel Recycling company. could you please give your advice on how to start. how to write a Business plan and funding.
  • Carlos said on September 3, 2009
    I have 3 acres of vacant land and I would like to start a scrap metal business and was wondering what type of licenses or permits were needed and how do I get started.
  • Syless said on September 22, 2009
    Hi there, How to register to do the Scrap Metal Business and where and how can i find a yard and what are the terms and conditions we are looking at. How long does it take to set up. My cousin is in Business 3 years in Mauritius, well he is prepared to establish a Company in here. What do you advise I will be in partnership in the Company. Please reply. Thanks
  • john said on October 7, 2009
    why don't you start a job for scarp yard company and when you learn how to do it then open your place up
  • maaz said on October 11, 2009
    i want to know which type of scrap? i want to know all types of scrap and i want to start scrap business.
  • Ahmed Ismail said on October 15, 2009
    I'M LOOKING TO START A SCRAP METAL BUSINESS. I WOULD LIKE INFORMATION ON WHAT IS NEEDED TO START...please tell me more relevant details about establishing a scrap business and please tell me the minimum amount of capital to be invested in this business to make it start. do you need a license to start a scrapyard? And if I do, where would I go to get one? how much investment is needed for this business and how to start?.....please reply via email or contact me on my cell 714-553-8001
  • Ahmed Ismail said on October 15, 2009
    I am also Interested in doing it internationally. Import and export. And if anyone interested please let me know. Again my cell number is 714-553-8001 thank you.
  • Jay Partner Wanted said on October 17, 2009
    Hi there anyone interested in doing a joint venture with a scrap metal business in New Zealnd. please email me i have 16 years experience in the industry and export. but i am lacking funds to do it myself so anyone interested please get in touch. cgroup2009@hotmail.com
  • ABUBACKER said on November 10, 2009
    I would like to start a scrap metal business in INDIA in TAMIL NADU. Please give me advise regarding of how to set up and choosing place in TAMIL NADU. Thank You.
  • Bruno said on November 11, 2009
    DEAR SIRS, WE ARE AN IMPORTERS OF METAL SCRAP IN INDIA BASED AT EAST COAST CHENNAI REGULARLY IMPORTING H M S IN CONTAINERS. WE ARE INTERESTED TO COORDINATE WITH ANY INTERESTED PERSON WHO IS INTERESTED TO START or SELL THEIR MATERIALS FROM ANY DESTINATION. HIBISCUSSHIPPERS@GMAIL.COM CALL-BRUNO- +91 -9444 780 388
  • crazzzeeej said on November 11, 2009
    I was wondering why all these rag heads and Habibs want to be in the scrap biz? We gave you all the corner stores and convenience gas stations. Then came the hotels. Now you want the scrap biz!???
  • eli khoro said on November 20, 2009
    small town is king william town, eastern cape, south africa, with a small budget R5000.00 tell me how to start and make scrap business a success permanently
  • Jessica Bravo said on November 21, 2009
    I just have a quick question, do I need to have any sort of license or permit to export scrap metal from Florida or anywhere in the USA?
  • SHRIKANT TOSHNIWAL said on November 29, 2009
    how could i know the current rates of steel scrap & whether it acquire from companies & how could i sell to them?
  • Tony Olivas said on December 1, 2009
    I would like to start a scrap metal business in San Diego CA, USA. Any help?
  • Vasudev S Navadiya said on December 4, 2009
    Hi Sir, I want to start the scrap business in metal as well as glass and paper scrap. But I have not any basic idea. So please can you guide us how to start it and market it. Vasudev Navadiya, Auckland, New Zealand. MY contact email is vasudevnavadiya@yahoo.com
  • cisse said on December 5, 2009
    Dear Sir. We are end sellers of metal scraps in Guinea Conakry-senegal-dakar and we have our own stock yard and site visit is encouraged. We have in stock at present; Hms 1&2; Used Rails; Copper Scrap; gold dust in large quantity at very good rates. If interested get to us for more details. Thank you, Mr.Ahmed cisse +221-76-490-30-12, E-mail.m_cisse028@yahoo.com, cisse_m028@yahoo.com
  • dom jones said on December 19, 2009
    hey dom here i'm seriously thinking about buying a property and starting a small scrap metal yard on the outskirts of a tiny rural town in wairapa. would really appreciate any info on obtaining consents/licensing also whether i have to ask local council for permission and all other criteria to be covered. any help or info would be very appreciated this would be my first real business venture and would love some support and backing. call 0274697890 ask for Dom
  • SABAK ENTERPRISES said on January 2, 2010
    I have a registered scrap-business enterprise which has access or is capable of supplying thousands of tons of scrap-metals, preferably HMS1 to any country or destination. The metals are in Sierra Leone, but am living in Belgium. My email address is abukadarr.sesay@telenet.be and my telephone number is 0032-485057268, 0032-32-977304
  • sarfo naa said on January 7, 2010
    Sir, We are a local gold miner, we have mining concessions here in Ghana. At the moment we have 200 kilo grams of Alluvial gold dust of 23 carats and 94% plus ready for shipment. I will furnish you with more details as soon as I hear from you. E-mail us:sarfo_naa@yahoo.com. Waiting to hear from you soonest. Regards, Mr.Sarfo Naa, +233-208972673
  • jerry Carr iii beginner adviser said on January 7, 2010
    I am experienced in the scrap metal business. Email me firstfruitsinc@live.com or call 14132976527. If you have funds to start your scrap metal business I can help you! If you are looking for bulk scrap or even import or export trade scrap contact me. If you are looking to buy specific types of metals or even rubber tires. I can facilitate any demand for scrap. I currently have electric motor scrap $24,000 CIF to your port. Hurry this is a volatile market and prices adjust daily. If you want to make me offer on the $24,000 please no offers under $21,500. That price is per 22 ton container.

    Firstfruitsinc@live.com || Scrap Business Adviser

  • jerry Carr iii beginner adviser said on January 7, 2010
    Hi everyone I just closed a great deal for electric motor scrap. I have an exclusive contract for more than 500 tons of electric motor scrap! I quoted a minimum price of $21,500. Well I have a super deal for you. My new price is $17,000 CIF. that's right $17,000 CIF. You can start your scrap metal business with $17,000. There are buyers willing to pay $4-7,000. More than this price. Yes you can pay $17k today and sell it today and make minimum $4,000! Email your orders now. Firstfruitsinc@live.com hurry before the price starts to climb

    Firstfruitsinc@live.com || Scrap Business Adviser

  • Felix lim said on January 11, 2010
    Dear all scrap owner, if you have more than 3000/mt HMS1/2 monthly supply then please contact with me, we can buy large quantities of HMS from any country, if you need help or question please email me at felix@eciint.com.
  • martin wilson said on January 14, 2010
    southwales, uk. i would like to purchase unstripped copper cable in order to strip myself have the stripping machines 07977212915
  • S N Krishnamoorthy said on January 24, 2010
    I would like to venture into scrap metal business in Chennai, Tamil Nadu, India. Those who are in the same business are requested to share the tips and guide me. Thanks
  • hameed said on February 9, 2010
    sir please tell me i want to start a scrap business in andhra pradesh please tell me how much the capital required and explain the busines and where i have to send it please sir
  • fofori beginner adviser said on February 10, 2010
    hello, thank you for your inquiries, i am a scrap buyer and i see that you are looking to start the business you need to have a capital of $200,000.00usd for a starting the business is very lucrative and if you are sure that you want to buy it i can send you the picture of the scrap i have and you choose the one you want to buy. then i will try to come and ship it or you come so that i can come your country to show you how to do it. thanks my email oforijeffy@hotmail.com

    oforijeffy@hotmail.com || Scrap Business Expert

  • Nehal shah said on February 13, 2010
    Toronto, Canada I want to start scrap metal trading business, i am located at Toronto, canada so please send me a relevant business
  • Dave Sassman said on February 14, 2010
    Hi, I own a very large Industrial Plot in the Western Cape Province of South Africa (Robertson) and would like to start/open a Scrap Metal Business there. I contact the Local Authority and was told that I DO NOT need a license to operate such a business. What equipment will I need and what is the suggested workforce compliment? How much money will I need and what kind of a return can I expect?. Kind regards, DAVE
  • M.ABDUL SATHAR said on February 17, 2010
    I Am M.ABDULSATHAR CHENNAI Doing All Type Of Used Cranes & All Type Scraps Buyers & Sellers Commission Agent. If Anybody Buy & Sell HMS1&2, Copper, Aluminum please Contact My E-Mail: msathar_41@yahoo.in Mob:09382198464.
  • Fereidoon Shayesteh said on February 21, 2010
    Philadelphia PA US. I want to start scarp metal Business but i have not enough money for start and I have not holding area. please guide me. Thank you, Fereidoon
  • Elumalai.M said on February 22, 2010
    Chennai, Tamilnadu, India. Sir, i'm going to start a new scrap business, i'm new to this field, i want to shine and expose the business. shall u give me a best idea to develop the business. pls do the needful to me. pls contact me:9840508856. Tanx
  • ali said on February 24, 2010
    ali shah, brooks alberta canada. hi there please guide me i have no clue how i am suppose to start this business
  • John W. said on February 27, 2010
    My friends call me John W. I am in Charlotte, NC & am interested in Scrap metal business. I was in construction & used to sell left over aluminum to these scrap metal shops. I thought that this would make a lucrative business to be in. My question would be how did you get the word out to potential buyers & sellers? I need some guidance in general questions please. Thank you
  • jitesh said on March 3, 2010
    i want to know about the iron scrap business workplace is along and the what is the minimum capital investment required to start business and i have no exp regarding that so can you give me some advise
  • chand muhammad said on March 7, 2010
    sir i want to know about the fresh copper scrap business workplace is along and what is the minimum capital investment requirement to start business so can you give me some advise and also suggest me that how i contact to the company which directly deals in copper. I have a capacity to purchase 1 ton copper every day. Thank You, Chand Muhammad(Meerut), Cont.No +919358466499, +919897722872
  • Barbara said on March 10, 2010
    Dear Sir/Madam, I am having many clients for purchasing and selling of Metal Scrap in India and other European countries. But I am unacknowledged of this business. Kindly advise us suitably for the same.
  • RP said on March 11, 2010
    Dear Sir/Madam, I would like to start a Scrap Metal Business in Brooklyn, NY area, and would like your help as to how to start it, what kind of licenses I need, and how much capital do I need. Any relevant information you can send, will be very helpful and appreciated.
  • Muchiranji Julius said on March 13, 2010
    i would like to start scrap metal business, please advise of any available financing and or partnerships. Masvingo, Zimbabwe
  • chris said on March 15, 2010
    Dear Sir, I have tones of metal scraps including used rail track metal. The material is in Nigeria. I ship both in bulk and container load. If you want a trail order, i can ship that to you. Are you interested to buy?. I wait for your reply thanks. Chris chrisakwu4@yahoo.com
  • allen jeremy said on March 17, 2010
    Hi, I would like to start a metal scrap trading business here in the United Arab Emirates. I would appreciate it if you could help me with a business plan (sample). Thanks.
  • Gregan said on March 23, 2010
    Hi, I currently live in South Africa, Mpumalanga, Nelspruit. There are a couple of scrap metal recycling businesses in the region, but none of them want to help with the details in starting from scratch. In about 2 months, i will have about R100 000 to start-off with. Can you please give me pointers to start in the scrap metal business? Kind regards, Gregan
  • sara said on March 25, 2010
    I am planning to start my own business for metal scrap, currently located in los angeles, USA, please advice. sara
  • Imran said on March 26, 2010
    Hi, I am from mumbai (India), and like to open my own scrap business or I can join someone who is interested kindly help how to start with minimum capital waiting. Regard's Imran
  • Subhash Panchal said on April 8, 2010
    Hi, I am currently living in Canada and I would like to start a metal scrap trading business here in the Canada. I would appreciate it if you could help me with a business plan (sample). Thanks.
  • Tomorrow said on April 10, 2010
    we want to import the recycling of scrap metal come china! if you can or your friend can do this pls let me know, thank you very much my email: lufy-deng@163.com
  • Rob said on April 11, 2010
    I am in south Florida, and would like to know how much money I should expect to make if I start collecting scrap metals, and sell it to a local scrap yard. Please send me information at robertkerner12@hotmail.com.
  • Musa Jubary said on April 13, 2010
    I am intended to start a business in Canada in HMS i.e. Heavy Melting Steel. Could I have the information how I may start it and what's the minimum requisite fund I need to invest. C/O - Md. Motaher Khaled, 2600 Finch Avenue West, North York, ON, M9M 2G4
  • Musa Jubary said on April 13, 2010
    how do i start a scrap metal business in Higashi-Shinsaibashi, Chuo-ku, Osaka, Japan
  • praveen bhatia said on April 15, 2010
    I would like to know how to measure bulk stock of scrap available with us, its approx 10000 mt ton. Secondly would like to know how to maintain scrap stock so any time can take physical stock as our usage of scrap for production per day is approx 100-120 mt ton, presently we do not have any system to measure and use. Please advise with minimum cost how to maintain. Thanks Praveen Bhatia
  • Parbachan singh said on April 15, 2010
    I am intended to start a business in usa in HMS i.e. Heavy Melting Steel. Could I have the information how I may start it and what's the minimum requisite fund I need to invest. Thank you so much psingh
  • Juan Lopez said on April 17, 2010
    I am super interested in starting a scrap metal business in Texas, and I would like to know what is all that I have to do to accomplish my goal, is there any permits or licenses I need to obtain please help me out I really need some advice. joselopez0429@yahoo.com
  • Larry said on April 17, 2010
    I'm from Trinidad and I want to start u a scrap metal business, I would like to establish foreign contacts who buy to forge a partnership. Can you help me or let me know a bout an online forum for such?
  • shoaib subhani said on April 18, 2010
    hi i am shoaib...from INDIA...ANDHRA PRADESH, HYDERABAD..i am seriously interested in starting up my own SCRAP business..i have enough funds to start it..but i dnt have a proper business plan to start it up right away...would really appreciate...if any one can help me out ....and who are interested in partnership...are most welcome...looking forward...for all u guys..for the valuable suggestion...your reply and your guide lines would be most appreciated...regards SHOAIB...my email id is Cooldude_shoaib@yahoo.co.in waiting for your reply...
  • STEVE said on April 22, 2010
    Hello, My name is Steve Uded. am an agent in AMAICO SL LTD. in sierra leone west africa. the end exporter of scrap metals. There is a huge quantity of used rails and hms 1&2 ready for export, I will forward you more pictures as soon as you reply back and indicate your interest in buying them, the price is very good. I will look forward to receive your reply soon. Best Regards, Steve Uded. +232 77 422031 stevegadis@yahoo.com
  • Kenneth said on April 23, 2010
    hi my name is Kenneth and i am interested in starting my own scrap metal business in Vancouver, British Columbia Canada. I am about to buy a pick-up truck but i need some help in order to start it. Can you provide me with some knowledge in order to do so. Thank you.
  • sachin jain said on April 24, 2010
    hi i am based at NAGPUR geographical centre of india, trying to collect more information on metal scrap trading/ import business pl guide further on this business and opportunities
  • kay said on April 24, 2010
    Hi I'm placed in Toronto, I want to start my own scrap business, tell me from where i can pick up scrap. Thanks u in advance..
  • simon said on April 25, 2010
    hey. My name is simon, now in toronto. i am interested in starting scrap metal trading business in toronto. could you please tell me some information about the metal scrap at details. attaching marketing plan will be appreciated. my contact method is : wangqi86@msn.com
  • LOUIE said on April 29, 2010
    Hi i live in Melbourne, Australia. What do i need to start this business, Please write me in details about the tools i need and the investment , and the permits and licenses needed, Thanks a lot Hope to hear from u soon. Cheers
  • hankim said on May 4, 2010
    I looking for scrap copper 20m/ton per month, origin u.s.a. thank you. My company location at los angeles, e-mail add; hankim7372@yahoo.com
  • diep said on May 5, 2010
    Hi, i am diep live in san jose, CA. Please teach me how to start scrap metal business and how to get grants, loan with bad credit. Thanks you very much....
  • kumar said on May 5, 2010
    hi sir i want start scrap metal unit and set up cost i am planing to start in india..plz can tell me how much cost total setup cost.
  • Tim C said on May 5, 2010
    I am starting a scrap metal and salvage business in Los Angeles. Here are a few things that I can share that will hopefully help you. Make sure you get information on any permits and licenses that may be required so you can avoid any fines and penalties. Next thing is to find out who are the buyers of scrap metals. This can be done with an internet search using the search words "buyers of bulk scrap metals" many of the sites will list numerous companies and may require you to join their site. Most of them are free to join or have little cost. Contact these buyers either by phone or email and find out their rates and weight requirements. many of them only deal in large quantities either less than truckload or truckloads. Some of these companies will take materials in tons and very few will take the materials in pounds. Once you establish a few buyers you can now figure out how much scrap you will need to collect to be profitable. Another source of sales is metal smelters. Again you can find these online. Many of them buy scrap and are looking for suppliers. This way you can collect your scrap in a shipping container and once filled send it to the smelter without having to have to handle it more than once. Another source is utility companies. Some of them sell salvage and have a process whereby you can bid on their salvage items. Some of this stuff have large quantities of copper, iron and steel. Place ads in small circular publication asking for scrap metal. you can ad value offering a pick up service. many people have scrap but no way of getting it to a dealer. You can pay them a little less to offset your cost for picking it up. As far as the cost of starting this business is concerned, that depends on number of factors. If you are going to have to rent a yard you will need to figure out your monthly rent. If you have a yard you will need equipment such as a fork life, and metal sorting bins, shipping containers, and a truck. You probably will need to hire at least one employee and that will have to be factored in as well. You are going to need to advertise so that must also be factored in. I would estimate that $50,000 should give you a good start. There is a lot more info and ideas that I can share you can contact me (Tim) at gwescal@gmail.com. Hope this was helpful.
  • Jerry said on May 5, 2010
    You dont need 50K to start a scrap metal business, Get yourself a truck and a magnet and about $500 and Start out collecting and Buying scrap from various sources. and then as you are progressing in collecting lots of scrap then go get your DBA License.
  • Ehsan said on May 7, 2010
    I am already in tool design business. I want to enter into metal recycling business. I have money. I have yard facility and i have some knowledge of the trade. Please guide me through, what steps should i take to enter the new business. Ehsan, 2585 Drew Rd.Unit 1, Mississauga On, L4T1J1 Canada
  • onkar mande said on May 9, 2010
    I have clients to purchase and sell scrap metal abroad but need some help in starting this business as i am living here in san diego california, 92115.
  • paul said on May 9, 2010
    hi i am interested in staring a scrap yard what do i need to start and where do i get them from
  • Surender Yadav said on May 12, 2010
    I am interested in doing the scrap business in India based on gurgaon which is the automobile hub and also the scrap hub. I want to know the procedure to start it. Does I need any kind of license or registration. thanking you surender yadav
  • Mike D said on May 13, 2010
    For those of you who are interested in starting the business with limited capital, it might be necessary to utilize your creative resourcefulness. By this I mean utilizing the wastefulness of others, and capitalizing on their laziness!! I know this is a broad statement, but if you think about it, you can put it to some good use and slowly build your cash base. When you have achieved a certain milestone in cash and people resource, you can then broaden your operating base in the areas more specific to your design. Hopefully this will inspire you to generate some good ideas that can help you get to your goal!
  • Allen said on May 13, 2010
    I buy Non Ferrous or Ferrous metals send me an email when you have the material. I am located in California. metallen@yahoo.com
  • Tim C said on May 14, 2010
    Hi All, sorry for the long post but I’ve gotten a few emails and wanted to pass along some info that may be helpful to others.

    Licensing: check with your local authority regarding any permits, licenses and taxes. Some areas have rules some don’t. Last thing you want is to sell a nice load only to have to give your money it back in the way of fines. If the material that you are going to get had chemicals on or in it there is a good chance that some kind of requirement such as a materials safety data sheet (msds)has to be with it.

    Quality of the scrap: more than likely you are going to have to sort and separate your scrap so you can sell it at a premium. mixed scrap pays less.

    Limited capital: if you are limited on funds you will have to keep your operation simple. You need to be able to sell your scrap as soon as you get it and put ALL!!!! of your money back into the business. You will have gas and advertising funds for expenses and the remainder for savings. Or you can wait awhile and save more funds.

    Turn around in this business: This largely depends on you and operation but I would set a goal of two years to show a consistent profit and have plan for profit gain over the next 5 to 10 years. The longer you are doing this business the better and cheaper you should be able to do it so this is a realistic goal. A good business plan will chart your path for sustained profit.

    Business plan: You really need a business plan so you can have a way of measuring the health of your business. It doesn’t have to be super fancy but just cover the basics of your business. It also helps you figure out how to run all of the important aspects of you business. It will also keep you focused. Go online and get a sample of "the elements of a business plan" it really will help you organize your thoughts about the business.

    As far as writing one is concerned, contact the school of business at the local university or post an ad at the college. Some starving college accounting and business kid, in their senior year will be more than happy to do the analytics and writing for a few bucks Or you can pay a professional service to do it for you.

    Finding buyers: I can't stress this enough. You should identify buyers for your scrap and know how much they pay and in what condition they are going to buy it in. Have a few of them so you can have your backside covered. The last thing you want is scrap that you can't store or sell for a profit. Contact exporters in your area and see if they have scrap buyers. If you know that you have buyers you can now figure out how much scrap you can move and your earning potential.

    Information about the business: There isn't a lot of published information about the scrap business you really have to dig around. But join any salvage organizations that you can. Take a trip to a salvage yard and spend some time and see the operation. Don't be shy to talk to the workers and tell them that you are thinking about the business. You will be surprised most of them have no problem talking to you and giving you advice.

    Consulting/partnership/investors: I want to start a network of recycle and salvage centers worldwide. A network where a data base of material buyers are available so that each center can be profitable. I have a lot of ideas of how to do this but not a limited staff. I have some knowledge about this business and see how to make it profitable. I also have some capital. I'm in the process of writing a plan and would like to find interested partners/investors.
    gwescal@gmail.com
  • Nigish Mohan said on May 15, 2010
    Hi, I would like to commence a Scrap trading business in Umm Al Quwain, UAE. Its my first time on entering a business. I would request all of yours valid tips and suggestions on the above. Thanking you, Nigish +971 50 1629533 nigishmohan@gmail.com
  • Brando Maitland said on May 19, 2010
    I am a South African who has a clean track record with the police and has been in business for myself for the past 18 years. Things are getting tough now and I have started a small scrap metal business in a residential area. The Police in that area have already given me a hefty fine for operating without a permit as no permits are granted for residential areas. They closed me down and threaten to lock me up if I continue. I am now in a predicament of not being able to continue in the residential area and have to look for a site in the industrial area. For the past month I have acquainted myself tremendously with the second hand goods act and am in a position to run a scrap yard very efficiently. I would like to make a call on anyone in or outside of South Africa to contact and/or meet me to establish a relationship with regard to operating a scrap yard for you in Port Elizabeth. I will run the scrap yard for you on an agreed basis when we have met and I can assure you that my integrity has always been my strongest trademark. I will not let you down. Thank You Brando Maitland Mobile: - 0837691375 Email : - jescarava@hotmail.com

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