Requirements To Start A Scrap Trading Business

Scrap Trading is a business where you can make a good profit while helping save the environment at the same time. Recycling saves enormous amounts of energy and resources. You will also be cleaning the environment of junk to be transformed into useful items once again.

There are basically two ways you can approach this business. You can put up a buying station only and just carry the scrap directly to recyclers, or have your own warehouse to stock the scrap you buy.

Even people of moderate means can start a scrap trading business. The requirements, while not insignificant, are relatively simple. To assist you in planning, here are some tips to help you know what is needed in this venture:

Have sufficient capital. It is possible to start on a shoestring budget with only around P200,000 if the location needs little improvement and rental. This is assuming you have other sources of income for your personal expenses while your business is still starting. Most of the capital should be used for purchasing scrap. If you have more capital, a delivery vehicle is the most useful purchase.

Determine what kind of scrap you will be trading. There are so many things you can collect for recycling. While there are those that deal with a wide variety of scrap, there are many who have been successful by focusing on a single item. Some of the items you can focus on are scrap metal, scrap paper, glass and plastic.

Find a suitable location. A prime location is not essential. If you do not intend to stockpile the scrap, you may get by with around 30 square meters. However, if you plan to store scrap to get better prices, then have at least 100 square meters. Make certain first that there would be no impediments to starting a scrap trading operation in the community.

Register your business. Register your business name with the Department of Trade and Industry as a sole proprietor or at the Securities and Exchange Commission for a partnership or corporation. Then go to the barangay and municipal/ city hall for business permit. Finally, you need to register with the Bureau of Internal Revenue and have your receipts printed. Note that later on, you have to go to the SSS, PAG-IBIG, Philhealth, etc.

Have good buyers for your scrap. Get a list of potential scrap buyers and learn which of them gives the best offer. Develop a good working relationship with at least two buyers. Going with only one buyer leaves you with no option and you have better negotiating leverage if there is another party you can sell to.

Know the going, buying, and selling prices. You must always have the latest information on the going, buying, and selling rates of the scrap. Be careful to monitor the trends to avoid losing on your transactions.

Have the proper equipment. The largest expenditure here would be the purchase of delivery vehicle, if you can already afford it, and accurate weighing scales. Other large expenditures would be equipment to process your scrap.

Know how the business is operated. Ultimately, the most important thing is to know how to operate the business well. Learn the right way of running a scrap trading business from those who have actual experience; this will make your operations more efficient and will help to minimize your risks of being defrauded.

To know more about this business, BusinessCoach, Inc., a leading business seminar provider, conducts a seminar entitled, “Starting a Junk Shop and Scrap Trading Business.” Contact (02) 727-5628, (02) 727-8860, (0915) 205-0133 or visit www.businesscoachphil.com for details.

Click here to view details of the seminar: Starting a Junk Shop and Scrap Trading Business »

*Originally published by the Manila Bulletin. D-4, Sunday, May 26, 2013. Written by Ruben Anlacan, Jr. (President, BusinessCoach, Inc.) All rights reserved. May not be reproduced or copied without express written permission of the copyright holders.