Do you want to start a tire recycling plant? If YES, here is a complete guide to starting a tire recycling business with NO money and no experience.
Okay, so we have provided you an in-depth sample tire recycling business plan template. We also took it further by analyzing and drafting a sample tire recycling marketing plan backed up by actionable guerrilla marketing ideas for tire recycling companies. In this article, we will be considering all the requirements for starting a tire recycling business. So put on your entrepreneurial hat and let’s proceed.
Table of Content
- Why Start a Tire Recycling Business?
- 1. Understand the Industry
- 2. Conduct Market Research and Feasibility Studies
- 3. Decide Which Niche to Concentrate On
- 4. Know Your Major Competitors in the Industry
- 5. Decide Whether to Buy a Franchise or Start from Scratch
- 6. Know the Possible Threats and Challenges You Will Face
- 7. Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)
- 8. Choose a Catchy Business Name
- 9. Discuss with an Agent to Know the Best Insurance Policies for You
- 10. Protect your Intellectual Property With Trademark, Copyrights, Patents
- 11. Get the Necessary Professional Certification
- 12. Get the Necessary Legal Documents You Need to Operate
- 13. Raise the Needed Startup Capital
- 14. Choose a Suitable Location for your Business
- 15. Hire Employees for your Technical and Manpower Needs
- 16. Write a Marketing Plan Packed with ideas & Strategies
- 17. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity
Why Start a Tire Recycling Business?
If there is any industry or line of business that is gaining support from key stakeholders in our world today, it is the recycling industry. This is so because the recycling business is an eco-friendly business that can earn you a living and make you a business owner and an employer of labor.
There are diverse niches in the recycling industry, and one of them that you can specialize in if you are interested in starting a business in the industry is tire recycling. It is a business that is highly profitable because there is hardly any country or city that you won’t find used tires.
Fundamentally, what you need to launch a tire recycling business are the machines and equipment needed and the knowledge of how to operate them; a good idea of where to collect used tires and where to sell the raw materials generated from the recycling process, strong entrepreneurial skills and determination.
If you are interested in starting a tire and rubber waste recycling company, then you should be ready to conduct thorough feasibility studies and market survey before committing your money and other resources to it.
Starting a Tire Recycling Business – A Complete Guide
1. Understand the Industry
The recycling industry that tire and rubber waste recycling is a subset of has become an integral part of our modern society not only due to its social and economic impact but also because it plays a vital role in the preservation of our planet. In the world today, it is estimated that over 1 trillion tons of waste is generated at the household level and in industries.
Common materials for recycling include tires, bottles, paper towels and aluminum cans et al and the niches available in the recycling industry are metal recycling, plastic recycling, electronic recycling, water recycling, oil recycling, glass recycling, furniture recycling, garbage recycling, tire recycling, construction waste recycling, paper recycling, battery recycling, cartridge recycling and industrial waste recycling et al.
Used tires can constitute a nuisance in our communities if they are not recycled and reused as raw materials in the manufacturing of new tires and other related products.
Players in the Tires and Rubber Waste Recycling industry basically collect, separate, sort and process used and condemned tires. Tire and Rubber Waste Recycling companies make money/profits basically by selling raw materials generated from of recycled tires.
In it is on record that the united states of America generates hundreds of millions from the recycling of used/condemned tires every year, constituting the country’s largest source of rubber waste. Used/condemned tires pose a threat to our environment and public health because they serve as breeding grounds for disease – carrying mosquitoes and they release toxic chemicals into the air and ground if they catch fire. This is the reason state and local governments have passed legislation regulating the proper disposal of tires.
Some environmental experts further say that the world market for waste, from collection to recycling is worth around 300 billion Euros (US $410 billion). The recycling business is therefore a growing business that has futuristic benefits; there are markets in the developing world that can be tapped into especially in Africa, Asia and Latin America.
The Tire and Rubber Waste Recycling industry is indeed a very thriving industry in most countries of the world. It is a major sector of the economy of the United States and it generates a whooping sum of $959.2 million annually from several registered and licensed Tire and Rubber Waste Recycling companies scattered all around the United States of America.
The industry is responsible for the employment of several thousand people directly and indirectly. Experts project that the Tire and Rubber Waste Recycling industry to grow at a 6.5 percent annual rate. There is no establishment in this industry that has a dominant market share in the United States.
Experts projected that the demand for the industry’s recycled tires and rubber products is expected to grow strongly. On the other hand, growth in government support for the industry’s recycling activities is expected to slow to a certain degree as the market becomes more saturated.
At present, more than 95.0 percent of the used and condemned tires generated each year are recycled or otherwise managed in an environmentally sustainable manner. As this percentage gets close to 100 percent, state and local government funding of the industry is forecast to slow as the need for an expansion of industry services declines.
No doubt, the Tire and Rubber Waste Recycling industry has come to stay and the good part of it is that it enjoys the support of environmentalists and the government of various nations since it is a means to preserve the earth from degradation, greenhouse gas emissions and environmental pollution.
Despite the fact that establishing a Tire and Rubber Waste Recycling Company requires huge startup capital and rigorous processes to build a standard recycling plant, but it is indeed a profitable venture. The market for recycled tires and rubber waste is large and can accommodate loads of investors.
Just like any other business, if you are able to conduct your cost analysis, market research and feasibility studies before launching your tire recycling company, you are more likely not going to struggle to grow the business because there are loads of manufacturing companies out there who get supply of raw materials from the tire recycling industry.
By and large, starting and operating a tire recycling company can be challenging, but the truth is that it can be rewarding at the same time. One good thing about the industry is that it is open to both big time investors who have the capacity to start the business on a large scale with world class recycling plant, and aspiring entrepreneurs who may want to start on a small scale.
2. Conduct Market Research and Feasibility Studies
- Demographics and Psychographics
The demographic and psychographic composition of those who need raw materials from tire and rubber waste recycling companies can be restricted to manufacturing companies who manufacture products with rubber components and rubber products.
So, if you are looking towards defining the demographics of your tire and rubber waste recycling business, then you should target manufacturing companies such as tire production companies, automobile manufacturing companies, electronics manufacturing companies, ship manufacturing companies, manufacturers and distributors and entrepreneurs and startups who would need recycled tire and rubber waste raw materials.
3. Decide Which Niche to Concentrate On
Basically, there is no clear – cut niche area in the tire and rubber waste recycling industry, although a tire and rubber waste recycling company can decide to specialize in either recycling tire and rubber waste or rethreading worn out tires. But on the average, almost all tire and rubber waste recycling companies engage in recycling all forms of tire and rubber wastes.
The Level of Competition in the Industry
Irrespective of the line of business you decide to pitch your tent, you are still going to compete with others and even the government who are into same area of business and tire and rubber waste recycling business is not an exemption.
The recycling industry is an emerging market that is yet to be fully embraced globally, therefore there is little or no competition in the industry at the moment; although, there is a relationship between emerging players as they cannot do without each other. Since the industry is a multi-stage one, there is need for collaboration among the players in order to have a win-win situation for all the players.
Without a shadow of doubt, there are loads of big time investors that have stakes in the tire and rubber waste recycling industry; but one thing is certain, there is room big enough to accommodate all players. So, if you enter the industry today, you should brace up yourself for collaboration and prepare for serious competition in the nearest future as soon as the recycling industry enters it boom period, this period will definitely arrive especially in the developing world when recycled product is seen in the same light as new and “virgin” materials.
4. Know Your Major Competitors in the Industry
In every industry, there are always brands that perform better or are better regarded by customers and the general public than the others. Some of these brands are those that have been in the industry for a long time, while others are best known for how they conduct their businesses and the results they have achieved over the years.
These are some of the leading tire and rubber waste recycling companies and general recycling companies that also recycle tires and rubber wastes in the United States of America and in the globe;
- Genan Tire Recycling Company
- Liberty Tire Recycling Company
- Rubberform Rubber Products LLC
- The Green Rubber Group
- Lakin Tire East, Inc.
- Lakin Tire West, Inc.
- Tyremil Tyre Recycling Company – Australia
- Granutech-Saturn Systems
- Lindner-Recyclingtech GmbH
- TOMRA Sorting GmbH.
- Eldan Recycling A/S
- Sentry Tire and Rubber Inc.
- Southern States Rubber Mulch
- Sofscape Caribe Inc.
- MTB Recycling S.A.
- Re-Tread Products, Inc. (RTP)
When starting a tire and rubber waste recycling business, you just have to get your costing cum economic analysis right if your intention of building the business is to generate profits, grow the business and perhaps expand the business and start competing at the national level.
When conducting costing and economic analysis for your tire and rubber waste recycling business, you just have to critically examine these key factors; place, pricing, and promotion. As a matter of fact, you would have to continue to review these key factors at regular intervals while running your tire and rubber waste recycling business. As a tire and rubber waste recycling business owner, you just have to have a proper grasp of your competitive landscape if indeed you want to maximize profits and be in the frontline of the industry.
It is important to note that truck fueling, servicing and maintenance cost for the recycling plant and trucks are some of the most important factors contributing to the overall cost of operating a tire and rubber waste recycling business and should be considered as a major factor when carrying out your costing and economic analysis. This is why standard tire and rubber waste recycling companies would prefer assembling an in – house maintenance and servicing team as against contracting the maintenance of their haulage trucks and recycling plant to an automobile maintenance and servicing company.
5. Decide Whether to Buy a Franchise or Start from Scratch
If you are looking towards starting a tire and rubber waste recycling company, you would have to start from the very scratch because you can hardly get the franchise of a tire and rubber waste recycling company to buy except you want to partner with an established recycling company. It is a business that is open to all and sundry.
Besides, starting a tire and rubber waste recycling company from the scratch is less stressful when compared to other related businesses which usually require detailed groundwork before launching the business. With a tire and rubber waste recycling company, you should just try as much as possible to secure a standard facility in a good and easily accessible location, secure your business license, purchase the required recycling machines, equipment and trucks and then leverage on every marketing tool within your disposal especially the internet when it comes to marketing your recycled tire and rubber waste materials.
Please note that most of the big and successful tire and rubber waste recycling companies around started from the scratch and they were able to build a solid business brand. It takes dedication, hard work and determination to achieve business success and of course you can build your own tire and rubber waste recycling company brand to become a successful brand with robust clientele in your city and from all across the length and breadth of the United States of America.
6. Know the Possible Threats and Challenges You Will Face
If you decide to start your own tire and rubber waste recycling business today, one of the major challenges you are likely going to face is the presence of well – established tire and rubber waste recycling companies in your target market location. The only way to avoid this challenge is to create your own market; concentrate on startup production companies who need raw materials from a tire and rubber waste recycling company.
Some other threats and challenges that you are likely going to face when you start your tire and rubber waste recycling company are bad economy (economy downturn), stiff competition, volatile costs and rising fuel prices. So also, unfavorable government policies, seasonal fluctuations, demographic/social factors, downturn in the economy which is likely going to affect consumers spending and of course emergence of new competitors within the same location where yours is located. There is hardly anything you can do as regards these threats and challenges other than to be optimistic that things will continue to work for your good.
7. Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)
- Best legal entity to use for this type of business
You can either choose a general partnership or limited liability company for your tire and rubber waste recycling company. Ordinarily, general partnership should have been the ideal business structure for a small scale tire and rubber waste recycling company especially if you are just starting out with moderate startup capital in a small neighborhood supplying recycled tire and rubber waste materials to a handful of manufacturing companies.
But if your intention is to grow the business and supply recycled tire and rubber waste materials to big time production companies in major cities all across the United States of America and other countries of the world, then choosing sole proprietorship is not an option for you. Limited Liability Company, LLC will cut it for you.
Setting up an LLC protects you from personal liability. If anything goes wrong in the business, it is only the money that you invested into the limited liability company that will be at risk. Limited liability companies are simpler and more flexible to operate and you don’t need a board of directors, shareholder’s meetings and other managerial formalities.
These are some of the factors you should consider before choosing a legal entity for your tire and rubber waste recycling company; limitation of personal liability, ease of transferability, admission of new owners, investors’ expectation and of course taxes.
If you take your time to critically study the various legal entities to use for your tire and rubber waste recycling company with the ability to supply recycled tire and rubber waste materials to big time production companies all across major cities in the United States of America, you will agree that limited liability company; an LLC is most suitable. You can start this type of business as limited liability company (LLC) and in future convert it to a ‘C’ corporation or an ‘S’ corporation especially when you have the plans of going public.
8. Choose a Catchy Business Name
Usually, when it comes to Choosing a name for your business, you should be creative because whatever name you choose for your business will go a long way to create a perception of what the business represents. Typically, it is the norm for people to follow the trend in the industry they intend operating from when naming their business.
If you are considering starting your own tire and rubber waste recycling business, here are some catchy names that you can choose from;
- Caddy & Paddy Tire Recycling®, LLC
- Piston Jones® Tire and Rubber Waste Recycling, Inc.
- Robert Heinze & Sons Tire Recycling Company
- Back Street Heritage™ Tire & Rubber Waste Recycling Ltd.
- Green Haven® Tire & Rubber Waste Recycling Company
- Capsid Lane® Tire & Rubber Waste Recycling Company
- Silver Lining Tire and Rubber Waste Recycling Company
- Save the Environment Recycling Company
- The Tire Recycling People Company
- Tally Dem Group® Tire and Rubber, Inc.
9. Discuss with an Agent to Know the Best Insurance Policies for You
In the United States and of course in most countries of the world, you can’t be allowed to operate a business without having some of the basic insurance covers that are required by the industry you want to operate from. Hence, it is imperative to create a budget for insurance policy cover and perhaps consult an insurance broker to guide you in choosing the best and most appropriate insurance policies for your tire and rubber waste recycling business.
Here are some of the basic insurance policy covers that you should consider purchasing if you want to start your own tire and rubber waste recycling business in the United States of America;
- General insurance
- Health insurance
- Liability insurance
- Equipment and Auto Insurance
- Risk Insurance
- Hazard insurance
- Workers Compensation
- Overhead expense disability insurance
- Business owner’s policy group insurance
- Payment protection insurance
10. Protect your Intellectual Property With Trademark, Copyrights, Patents
If you are considering starting your own tire and rubber waste recycling business, usually you may not have any need to file for intellectual property protection/trademark. This is because the nature of the business makes it possible for you to successfully run it without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties.
On the other hand, if you just want to protect your company’s logo and other documents or software that are unique to you or even operation concepts, then you can go ahead to file for intellectual property protection. If you want to register your trademark, you are expected to begin the process by filing an application with the USPTO.
11. Get the Necessary Professional Certification
Apart from the results you produce as it relates to properly recycling tire and rubber waste, professional certification is one of the main reasons why some tire and rubber waste recycling companies stand out. If you want to make an impact in the tire and rubber waste recycling industry, you should work towards acquiring all the needed certifications in your area of specialization. Certification validates your competency and shows that you are highly skilled, committed to your career, and up-to-date in the market.
Here are some of the certifications you can work towards achieving if you want to run your own tire and rubber waste recycling business;
- ISO Certified Tire and Rubber Waste Recycler
- Recycling Industry Operation Standard (RIOS) Certification
Please note that all tire and rubber waste recycling companies are required by law to obtain the appropriate business license, permits and certifications.
12. Get the Necessary Legal Documents You Need to Operate
The essence of having the necessary documentation in place before launching a business in the United States of America cannot be overemphasized. It is a fact that you cannot successfully run any business in the United States without the proper documentations. If you do, the long hand of the law will catch up with you faster than you expect.
These are some of the basic legal documents that you are expected to have in place if you want to legally run your own tire and rubber waste recycling business in the United States of America;
- Tire and Rubber Waste Material Dealers License
- Business Incorporation Certificate
- Commercial Vehicle Operator’s Registration for haulage trucks
- Appropriate driver’s license for drivers
- Assistant’s license for assistants
- Health inspection Certificate
- Proof of ownership, proper identification and vehicle license
- Copy of license for the service support facility (recycling plant) and/or a recent inspection report
- Tax Payer’s ID
- Fire certificate
- Certificate of Incorporation
- Business License
- Business Plan
- Non – disclosure Agreement
- Employment Agreement (offer letters)
- Employee’s Handbook
- Operating Agreement for LLCs
- Insurance Policy
- Apostille (for those who intend operating beyond the United States of America)
13. Raise the Needed Startup Capital
Starting a standard and well – equipped tire and rubber waste recycling business with the capacity to supply recycled tire and rubber waste materials to large production companies can be capital intensive especially if you choose to launch a large tire and rubber waste recycling company with the capacity to supply recycled tire and rubber waste materials to production factories not just in your immediate community, but also across your state and country.
Securing a land facility, fleet of haulage trucks, building a recycling plant and purchase of equipment are part of what will consume a large chunk of your startup capital, but if you choose to start the business on a small scale with just one haulage truck, you may not have the need to go source for fund to finance the business.
No doubt when it comes to financing a business, one of the first things you should consider is to write a good business plan. If you have a good and workable business plan document in place, you may not have to labor yourself before convincing your bank, investors and your friends to invest in your business.
Here are some of the options you can explore when sourcing for startup capital for your tire and rubber waste recycling business;
- Raising money from personal savings and sale of personal stocks and properties
- Raising money from investors and business partners
- Sell of shares to interested investors
- Applying for Loan from your Bank
- Pitching your business idea and applying for business grants and seed funding from government, donor organizations and angel investors
- Source for soft loans from your family members and your friends
14. Choose a Suitable Location for your Business
Starting a tire and rubber waste recycling company comes with its own challenges; it is a business that cannot be started in any location of your choice. As a matter of fact, you will not be allowed to start a tire and rubber waste recycling company in a residential estate in the United States of America. The only location you can be allowed to start a tire and rubber waste recycling company is a land designated for such business and it usually in the outskirts of town.
The location you chose to start your tire and rubber waste recycling company is key to the success of the business, hence entrepreneurs are willing to rent or lease a facility in a visible location; a location where the demography consists of business with the required purchasing power, and a location that has minimal hurdles to cross especially as it relates to the construction of a tire and rubber waste recycling plant.
It is important to note that a business facility in good location does not come cheap hence you should be able to allocate enough fund for leasing/renting in your budget. If you are new to the dynamics of choosing a location for a business such as tire and rubber waste recycling business, then you should feel free to talk to a business consultant or a realtor who has a full grasp of the city and perhaps country you intend starting your tire and rubber waste recycling business.
15. Hire Employees for your Technical and Manpower Needs
After the construction of your tire and rubber waste recycling plant, the next thing to do is to install all the necessary equipment and machinery required to run your company. Here are some of the equipment and machinery needed in your tire and rubber waste recycling plant; Tire and Rubber Waste Baling and Sorting machines, tire and rubber waste material processing machine, Shredders, Cable Granulators, Catalytic Converter Recycling Machine, tire and rubber waste melting furnace, Processing Wire Looms and Harnesses, Alligator Shears, tire and rubber waste ingot Casting machine, Conveyor Belt System, and Power Plant amongst others. It is important to state that this equipment can be purchased as fairly used if you are operating on a low budget.
When it comes to choosing between renting and leasing a facility for your tire and rubber waste recycling company, the size of the tire and rubber waste recycling company you want to own, and your entire budget for the business should influence your choice. If you have enough capital to run a pretty large and well – equipped tire and rubber waste recycling company with a standard tire and rubber waste recycling plant, then you should consider the option of long lease or out rightly purchasing a land.
As regards the number of employees that you are expected employ to kick start the business with, you would need to consider your finance before making the decision. Averagely, when it comes to starting a standard tire and rubber waste recycling business on a large scale, you would need the services of the following professionals; Chief Operating Officer (you can occupy this position), Head, Technical Services, Admin and HR Manager, Transport and Logistics Manager, Marketing and Sales Executive (Business Developer), Accountant, Recycle Plant Engineers/Technicians, and Operators, Tire and Rubber waste Collection Truck Drivers and Customer Services Executive/Front Desk Officer.
Over and above, you would need a minimum of 10 to 15 key staff members to effectively run a medium scale but standard tire and rubber waste recycling company. Please note that there will be times when you are expected to go out of your way to hire experts to help you handle some job functions. If you are just starting out, you may not have the financial capacity or required business structure to retain all the professionals that are expected to work with you, which is why you should make plans to partner with specialists in the industry.
The Service Delivery Process of the Business
Basically, the business operation process as it involves tire and rubber waste recycling companies involves the collection/haulage trucks driving through designated locations to collect tire and rubber waste materials that are packed in a waste bin and then transported to the tire and rubber waste recycling plant.
Once the tire and rubber waste materials are offloaded from the truck, sorting of the waste materials is the next activity that will follow. After sorting the materials, they are then placed inside the tire and rubber waste recycling plant; it usually goes through different processes such as melting, molding and packaging. The use of conveyor belt is needed to transport the materials from one location to another within the recycling plant.
After the recycling process is complete, the recycled tire and rubber waste materials are packaged and then shipped or transported to manufacturing companies that make use of recycled tire and rubber waste materials as raw materials for producing products, and this is done based on demand.
16. Write a Marketing Plan Packed with ideas & Strategies
- Marketing ideas and strategies
The fact that the entry barrier for starting a small scale tire and rubber waste recycling business is not on the high side means that there is bound to be more players in the industry no matter the location you choose to start yours. In essence, you must be innovative if you must carve out a market for yourself within the available market in your community, city, state or country.
So, when you are drafting your marketing plans and strategies for your tire and rubber waste recycling company, make sure that you create a compelling personal and company profile. Aside from your qualifications and experience, it is important to clearly state in practical terms what you have been able to achieve in time past as it relates to tire and rubber waste recycling. This will help boost your chances in the market place when marketing your services.
Here are some of the platforms you can utilize to market your tire and rubber waste recycling company;
- Introduce your business by sending introductory letters alongside your brochure to manufacturing companies such as tire production companies, automobile manufacturing companies, electronics manufacturing companies, ship manufacturing companies, manufacturers, distributors, entrepreneurs and start – ups who would need recycled tire and rubber waste raw materials within the location where your plant is located.
- Open your tire and rubber waste recycling company with a party so as to capture the attention of residents who are your first targets
- Advertise your business in community based newspapers, local TV and radio stations
- List your business and products on yellow pages ads (local directories)
- Engage in roadshows from time to time in targeted neighborhoods
- Leverage on the internet to promote your tire and rubber waste recycling company
- Engage in direct marketing and sales
- Encourage the use of Word of mouth marketing (referrals)
- Leverage on the internet to promote your business
- Join local chambers of commerce around you with the main aim of networking and marketing your product; you are likely going to get referrals from such networks
- Engage the services of marketing executives and business developers to carry out direct marketing for you
17. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity
If your intention of starting a tire and rubber waste recycling company is to grow the business beyond the city where you are going to be operating from to become a national and international brand by selling your recycled tire and rubber waste materials all across the United States, then you must be ready to spend money on the promotion and advertisement of your brand.
No matter the industry you belong to, the truth is that the market is dynamic and it requires consistent brand awareness and brand boosting cum promotion to continue to appeal to your target market. Here are the platforms you can leverage on to boost your brand awareness and create a corporate identity for your tire and rubber waste recycling company;
- Place adverts on both print (newspapers and magazines) and electronic media platforms
- Sponsor relevant community based events
- Leverage on the internet and social media platforms like Instagram, Facebook, Twitter, YouTube, Google + et al to promote your business
- Install your billboards in strategic locations all around your city or state
- Engage in roadshows from time to time in targeted neighborhoods (as it applies to getting tire and rubber waste materials from residents)
- Distribute your fliers and handbills in target areas
- Contact tire production companies, automobile manufacturing companies, electronics manufacturing companies, ship manufacturing companies, manufacturers, distributors, entrepreneurs and startups who would need recycled tire and rubber waste raw materials in your target areas by calling them up and informing them of your tire and rubber waste recycling company and the products you sell
- List your tire and rubber waste recycling company in local directories
- Advertise your tire and rubber waste recycling company in your official website and employ strategies that will help you pull traffic to the site
- Ensure that all your staff members wear your branded shirts and all your vehicles and tire and rubber waste collection trucks are branded with your company logo et al.