If you want to start a business, your first idea probably wasn't the salvage business. A salvage business might not rank among the most common types of start-ups, but for anyone willing to put in the hard work, it generates revenue and offers a lot of personal rewards. A salvage company helps the environment and helps people and businesses get rid of unwanted junk. Successfully operating a salvage business, however, requires a specific personality. You must see profit in junk. You must know how to organise junk. Basically, you must love junk. If you do love junk, you should start a salvage business.
- Skill level:
- Moderately Challenging
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Purchase acreage or, if you already own land, allow enough acreage for use. For instance, if your business grows, you will need 20 to 30 acres of land dedicated to salvage materials, machinery, and office space.
Determine what type of salvage you want to purchase. For instance, some salvage businesses specialise in cars. Others specialise in scrap metal. Others accept a variety of material ranging from old antiques or furniture to scrap building materials.
Establish partnerships with insurance companies. Insurance companies deal with wrecked cars and trucks. When someone totals an automobile, the insurance company will contact a preferred salvage dealer to haul the car away.
Buy at least one tow truck. Some people might have salvage you can get cheap if you haul it yourself. A tow truck with a winch and an inclinable flatbed allows you to securely haul heavy objects, cars or trucks back to your salvage yard. A tow truck provides you a versatile solution to hauling heavy junk metal.
Set up a security system. Salvage material might consist of junk, but it still maintains value. Protect your investment with on-site security cameras, on-site security guards or dogs, and signs stating that you will prosecute trespassers. Install tall fences with barbed wire along the top.
Obtain liability insurance. You will need an insurance rider that covers your state minimum coverage requirements. State minimums vary, but you can often get £0.6 million in coverage for £65 per month.
Ensure you have enough start-up capital. You will need between £325 to £65,000 depending on your needs. If you own a truck and a remote farm with lots of land, you can start a salvage business for less than £650. If you need a truck and land, you might need £32,500 to £65,000, depending on real estate costs in your state.
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