If you’re looking to start a business that has a greater social and environmental impact, then starting a recycling business is an excellent idea. This is also one of the best rural and township business ideas as it’s relatively simple and cost-efficient to start up, and the industry presents some big opportunities.
You may not have considered a recycling business to be a great entrepreneurial venture. However, South Africa is a world leader in the recycling sector. There is also an endless supply of waste, which means there is always room for a recycling business to operate.
Whether you want to start a small-scale business or a large company, this guide will outline all the basics that you need to know to start a recycling business.
Recycling Industry Overview
Recycling is a major activity in South Africa. In terms of recycling output, South Africa currently recycles 46% of all plastic (higher than most countries), 70% of paper, 72% of metal, and 70% of glass. This means the country has one of the most effective recycling industries worldwide.
South Africa has around 300 recycling companies, generating formal employment for nearly 8000 citizens, and providing income opportunities for over 58000 South Africans.
Despite the size and success of the South African recycling industry, the job market in this sector remains highly informal.
South Africa has enforced strict new rules and regulations around recycling, based on increasing recycling efforts. For an entrepreneur looking to start a recycling business, this could be great news.
Starting a Recycling Business in South Africa
If you’re looking for small business ideas for rural areas, then starting a recycling business can be an excellent option. Not only does it have a positive environmental impact, but it can be a good way to earn an income without requiring much capital or experience.
Start by identifying an area where you will focus your recycling business. Try to look for a place where there is a large number of waste materials that are not being disposed of properly. There should also be minimal competition here.
Determine what budget and equipment you will need to start the recycling business. This is to cover things like a vehicle, collection tools, and wages if you plan to hire extra hands. Once you have this idea figured out, you can draw up a detailed business plan, outlining your business requirements and how you plan to operate.
Your business plan can help you secure funding if you require it. Luckily, there are various government funding and small business development incentives that can help new recycling businesses.
When starting a recycling business, you will also need to establish where your base of operations will be, how you will get clients, and (importantly) how you will monetize the business. You could make money by charging individuals or businesses to collect their recycling, selling scrap metals, or even repurposing waste into new products yourself.
The great thing about starting a recycling business is that it’s easy to get going and scale up. You could simply start with a single person, some recycling bags, and a trolley or bakkie. As demand for your business increases, you can expand your operations, hire extra workers, and potentially invest in a fleet of vehicles.
There are various challenges involved in starting a recycling business.
First, proper waste management can be difficult. Non-recycling materials could be placed in recycling bags, contaminating the recyclable waste. Depending on the area where you operate, you might also have difficulties accessing reliable waste disposal and recycling plants.
Small recycling businesses also have to compete with large recycling companies. This can make it difficult to attract clients.
The profitability of a recycling business is also dependent on the volume that you recycle. Profits can be slim with each load, so if you are not able to handle a large quantity, it can be challenging to meet your targets.
Starting a recycling business has many advantages. It’s relatively easy to set up, it has a positive environmental impact, and it will be part of a highly successful sector. Recycling in South Africa is mainly informal, which means it is a big job opportunity for the township and rural areas.
As long as you target the right area, and create a strong plan for managing waste, then just about anyone could start a profitable recycling business in South Africa.