How to start a successful scrap metal business

Written by steve brachmann
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How to start a successful scrap metal business
Scrap metal can be sold for hundreds of dollars per ton. (Photodisc/Photodisc/Getty Images)

In a difficult business landscape, many entrepreneurs search for business ideas that can create a successfully profitable venture without many overhead costs. One such idea is selling scrap metal to recyclers. A scrap metal collection business can be started with only a vehicle and some computer software, if desired. A scrap metal business can be made successful through industry research and growth in business contacts.

Skill level:


  1. 1

    Raise enough capital through investors and business loans to start on your scrap metal business venture. Start-up costs for a scrap metal business can range from £1,300 to £6,500, according to "Entrepreneur." Draw up a business plan outlining your planned operations and profitability to provide to potential investors and financiers.

  2. 2

    Buy the equipment necessary to operate your scrap metal business. This includes a flatbed truck or another vehicle capable of carrying large loads over long distances and an electronic scale to weigh scrap metal. You may also want to have a computer with spreadsheet software, or spend extra for specialised business software if you believe you will need to track many orders from many different clients.

  3. 3

    Research different buyers of scrap metal in your area and the rates they pay. Buyers of scrap metal typically include recycling centres or larger scrap metal processors. You may also be able to find local metal auctions where scrap metal lots are sold to high bidders.

  4. 4

    Research the scrap metal industry to ensure that you receive current market pricing for the scrap metal you sell. Many regularly updated scrap metal pricing databases are maintained online. Read trade journals on the scrap metal industry, such as "Metal Management" or "Metal Center News," to find more pricing guidelines.

  5. 5

    Start collecting scrap metal from various sources, including personal residences and businesses in your area. Make contact with businesses that may have excess scrap metal, such as car junkyards, dentist offices, photo processing centres or any business using disposable products. The most successful scrap metal businesses are able to increase their metal collection through persistent business practices, such as cold calls and personal business meetings. The more groundwork and research you're willing to perform, the better the chances that you will find new sources of scrap metal for your business.

Tips and warnings

  • Reading trade journals may help you identify current best practices in operating your scrap metal business.
  • Contact scrap metal businesses in other areas who may be willing to give you business advice without reducing their own prospects.

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