How To It is possible to start a scrap metal business.
Tough economic times make metal recycling and scrapping a lucrative business.It's a dirty and dangerous job, but high metal prices can dictate large financial returns.Some people will pay you to haul away junk which you can then break down and sell to buyers, which is how a scrapping business can end up making money.Find out if starting a scrap metal business is a good investment of time and resources.
Step 1: You should be able to identify and sort different metals.
Specific metals will be purchased by the pound.Identifying your scrap for sale is important.If the metal's ferromagnetism sticks, use a magnet to check it.This information should be weighed with the metal's appearance, weight, and item of origin.The majority of your scrap will be made up of five major metals.The most common metal you'll be scrapping is iron and its alloy steel.Iron is ferromagnetic, strong, and lighter than other metals.It becomes a reddish brown when it is different shades of gray.It is light and non-ferromagnetic.Like iron, it's ubiquitous.Lower grades of pure copper are reddish brown.It tarnishes into a green color.Iron is heavier than copper.Quality cookware and wiring contain copper.Bronze is less valuable than copper.It is almost gold in color.It is found in instruments and valves.Lead is heavy and soft.It is used to make bullets and radiation shielding.When handling anything you suspect to contain lead, use protection because it is extremely toxic.There are many different grades with their own properties within these basic categories.Most of the steel is non-ferromagnetic.If you scrap electronics, you will find rarer valuable metals.Before you start your business, study these.
Step 2: You can learn how to disassemble objects.
You will need to break down larger items into smaller parts in order to sort your scrap.Some objects can be easily taken apart with simple tools, while others will require a blow torch or metal saw.The item type will tell you what you need to do.Before you scrap something you haven't worked with before, look up information online.Some scrappers choose to strip themselves of wiring in order to get the full copper value.If the difference in price is more than the cost of time and labor, you need to figure it out.When you're first starting your business, stripping wire may be worth it.
Step 3: Track metal prices.
To be aware of what to pay for scrap, check metal prices regularly.Simply use the Internet to find commodity trading prices.If your area sells at a different rate, be sure to ask your local contacts.When buying scrap, it may be a good idea to offer a fixed rate and ask buyers for close to the market rate.
Step 4: Purchase or rent a car for your business.
Pick a truck or van large enough to carry a lot of scrap metal.If your business is focused on scrapping smaller high tech items, you may be able to use a personal sedan.It's a good idea to protect the inside of your vehicle.Make sure the rental company allows commercial use of the vehicle.Choose a vehicle with good fuel efficiency.
Step 5: There is an area for your scrap.
There is a place to sort, disassemble, and store scrap metal.This could be as small as a storage unit or trailer, depending on how much you want to collect.You will have to lease or purchase an open space if you want a large yard.It is important that the space is secure to prevent theft and liability in the event of an injured person.
Step 6: Invest in protective gear.
It can be dangerous to deal with scrap metal, as it can cause cuts, tetanus, blunt trauma from falling objects, and even radioactive or hazardous waste.When near stacked metal, hardhats should be worn.When working with scrap, wear gloves and boots that are spill- resistant.If hazardous particulates are present, they need to be protected.When cutting metal, wear welding goggles.
Step 7: Insurance coverage for your vehicle and property can be obtained.
Liability issues will need to be covered if your site is open to the public.Before entering the site, customers should sign liability waivers.In the event of theft or a natural disaster, having insurance will help you recover costs.
Step 8: Business expenses and income should be kept accurate.
The need for accurate records is universal regardless of tax laws.You will need to file an IRS form if you live in the US.All sales should be reported.Deductible business expenses can reduce your tax burden.The Internal Revenue Service's Cash Intensive Businesses Audit Techniques Guide is a good reference.The document is free on their website.
Step 9: Discuss licenses and permits with your county or town.
Local municipalities may require scrap metal businesses to obtain licenses or permits.If you run a scrap yard that is open to the public, you may have to deal with issues like traffic, parking, and safety.You may need to demonstrate your safety practices, show proof of insurance, pay a fee and/or indicate your knowledge of local laws because of this.
Step 10: Speak to a lawyer.
Make sure you have everything covered by hiring an expert to scrap or similar businesses.Ask if you need to address tax, licensing, or occupational safety issues.If you live in the United States and have at least one employee, your business must be in compliance with OSHA standards.Before hiring, make sure you read the requirements on OSHA's website.
Step 11: Find a business partner or hire an employee.
If you're strong and in good shape, scrap hauling is a two person job.Determine a fair salary for an employee or share in the profits with a partner.If you only focus on wires and electronics, you can start your own business.
Step 12: Make plans to collect scrap.
Businesses that use and discard metal and homeowners throwing away bulky items are major sources.You can buy used cars at scrap prices.Depending on the business transaction you get from obtaining your scrap.Payment is required from many commercial sources.You can often get scrap for free if you advertise as a junk-disposal business.
Step 13: Your new business should be advertised.
You can take out ads in your local newspaper, post your business on online forums, and flyer door to door.Let your neighbors know that you are starting a scrap metal business and ask them to send any leftover metal to you.
Step 14: You can find buyers for your scrap metal.
There are options for a larger scrap yard.You can also sell scrap metal.If you decide to start a scrap yard, it can be open to the public at certain times.
Step 15: Put together a schedule.
organize your time to increase the efficiency of your business.To get scrap, sort and dismantle metal, and deliver it to buyers, set aside different days.Make sure your operation runs smoothly by keeping at it.The work can build up if you neglect any of the three tasks.