Opening a scrap metal collection point

Do you want, but do not know how to open a scrap metal collection point? Then today's article is for you! A scrap metal business today is a reliable investment for tomorrow. Don't believe? Read and see for yourself!

Brief business analysis:
Business setup costs: 1.5-2.5 million rubles
Relevant for cities with a population: from 15 000 people
Situation in the industry:service market is saturated
The complexity of organizing a business: 3/5
Payback: from 6 months to 1 year

In the USSR and in Russia

Do you know such names as Vladimir Potanin, Alisher Usmanov, Oleg Deripaska? Of course, you have heard them more than once. Do you know what all these people have in common, except that they are considered the richest businessmen in our country? The fact that they all made part of their fortune on the "metal". That is, being engaged in mining, buying up, processing, and selling ferrous and non-ferrous metals.

Of course, to the level of world-famous entrepreneurs, novice businessmen “walk and walk”, but maybe it is after reading this publication that another person from among the readers of my blog will join this company in the country in a few years?

How to open a scrap metal collection point - this topic is considered, among others, by most future entrepreneurs who are looking for ideas for their own business. From the implementation of the project they are stopped only by the high, according to the established wrong opinion, the price of the "entry ticket" to this market. Which, by the way, is actually much lower than if you wanted, for example, to open a tire recycling business. I hope that after today's article, many of you will try to start your own scrap metal business and earn your first "big" money.

Let's take a brief excursion into history, from the era of the Soviet Union to the present day, in order to understand how one of the leading industries of the country several decades ago, providing enormous profits, today suffers losses, despite the fact that the acceptance of scrap metal in the country has increased significantly compared to previous years. Those who feel that this information is not useful to them can skip this section and go to the next one.

After all, a few decades ago, the collection of scrap metal was mandatory for many organizations and enterprises, and all the delivered metal remained in the country and went exclusively for its needs.

In fact, the turning point not only in metallurgy, but also in many other industries occurred in the 90s of the last century, then the first oligarchs appeared (including those mentioned at the beginning of the article), who managed to quickly orient themselves in the situation, evaluate business prospects, and take control of the industry, which until then was exclusively under the jurisdiction of the state, into their own hands.

Over the decades that have passed since that time, it has become clear that it is more profitable to sell metal abroad at a price several times higher than that offered for a ton of scrap metal here at home. And while the relevant amendments to restrict the import of strategic raw materials have not been introduced into the legislation, the situation does not seem to change.

How to assess the prospects for opening a metal collection point in your city

To begin with, try to assess your chances of organizing such a business in your city, how you can organize the collection of scrap metal in your locality. To do this, first of all, analyze how many competing companies are already operating at the present time, find out their prices for scrap metal acceptance, try to get information about which wholesale dealers or metallurgical plants they transport the purchased metal to, which scrap metal collection points plan to expand, and which ones may be eliminated.

Determine for yourself what kind of metal you will work with. Many of the receivers are engaged either only in black or only in non-ferrous scrap. But we would still advise you to consider taking both categories of metal. Also, evaluate the possibility of buying up (including self-delivery) metal in your region from the countryside. It is there, in the collapsed collective farms and state farms, that the remains of old iron equipment, various metal structures, etc. are now “rotting”.

A lot of scrap is obtained after the dismantling of old buildings and houses to be demolished; replacement of water and other pipes; slightly smaller volumes can be found in car services. I advise you to first visit companies engaged in similar work in your city and conclude a cooperation agreement with them.

We are looking for a site for the reception and storage of scrap metal

It was not in vain that we wrote that you must decide on what kind of metal you want to work with - non-ferrous or black, because an ordinary garage will be enough for you to receive the first one, and for the second one you will need a larger area. And, much more.

The noise produced often becomes a "stumbling block" between the owner of the reception points and the residents of nearby houses. All such points should be taken into account at the stage of creating a business plan for a business in order to minimize errors at the start and avoid unnecessary expenses.

Perhaps the only "weighty" requirement for the site, according to Decree of the Government of the Russian Federation of May 11, 2001 N 369 "On approval of the Rules for the treatment of scrap and waste of ferrous metals and their alienation" is the presence of a solid (asphalt or concrete) coating on it .

How to set up your business

Before opening a scrap metal collection point, you need to obtain a license to engage in this type of activity. To do this, you must already have:

• officially registered individual entrepreneur or LLC. You will learn about the necessary steps to register your business by clicking on the links;
• documents for the territory or building in which metal will be accepted;
• documents for machinery and equipment used in the work;
• confirmation of the qualifications of the personnel involved in the acceptance of scrap metal.

In general, there are enough of their "pitfalls", as in any other type of business. The main one is the “origin” of the imported or imported metal, which often turns out to be illegal. To the above, it remains only to add that a license for the acceptance of ferrous and non-ferrous metals is issued for a period of 5 years, and that all these documents must always be at your scrap acceptance site.

Well, for those who decide to open a scrap metal collection point without obtaining a license, I can suggest reading the Codes: on administrative offenses, criminal, and tax, which describes in detail the consequences of doing illegal business.

Necessary equipment

A lot of equipment is specified in the requirements for opening a scrap metal collection point as mandatory, but often (of course, bypassing the rules) sites are opened without it, preferring to resolve issues that arise with regulatory authorities, using other (contrary to the law) methods . So, you will need:

• a vehicle with a large carrying capacity for the transportation of scrap metal and the implementation of self-delivery of metal. Alternatively, if it is not possible to purchase your own car at first, you can conclude an agreement with a cargo transportation company, purchase a car on lease or rent;
• scales, preferably electronic. Moreover, separately for the reception of ferrous metals, separately for non-ferrous;
• press for baling metal, or press scissors for cutting (mandatory condition!)
• gas cutting equipment;
• a crane for moving metal around the site and loading onto a car or loader;
• magnet to determine the category of scrap;
• tools for conducting radiation monitoring of metals (mandatory condition!)

As you can see, the “entry ticket” to a business can really be expensive, if you do not take into account that when starting a business, you can do just fine without half of all the equipment listed. In addition, there are many options for how to reduce the cost of organizing a business:

• purchase used equipment;
• to use rent, leasing;
• etc.

Staff

A novice entrepreneur often cannot afford to keep a large staff, so most of the work, at first, will have to be done by yourself. But still you can not do without auxiliary workers. Typically, the staff of the scrap metal collection point contains:

• several loaders (2-4 people);
• metal receiver, he is a packer;
• driver;
• gas cutter;
• security guard.

Of course, additional equipment and machinery, as well as self-collection of scrap metal, require the involvement of other specialists. Well, and, of course, we must not forget that one person can combine several positions.

It can also be mentioned here that detailed, clear instructions should be drawn up for all personnel on behavior in dangerous situations, rules for detecting criminally obtained scrap, radioactive metals, etc.

And in conclusion, we would like to remind you once again that many of today's successful projects started on the "bare" enthusiasm of their founders, without having a lot of start-up capital. Why are you worse than them? Now you know how to open a scrap metal collection point - go ahead, your profit is already waiting for you! Good luck in implementing your plans!