Originally Posted by
Tcgs
It appears that a lot of people want to get in the
scrap metal business. Part of me says, "Great! Entrepreneurs" However, what I see is a bunch of Wantrepreneurs. People who think that going into business is easy, and that all they need is to make a couple hundred bucks a week is good enough. What we have is a flood of bad scrappers.
First, it takes a desire, or want, to be an entrepreneur before you can actually become one. I don't care what business you are in, and I have owned a few, it's never easy, it's always hard. It's this very reason that so many business fail or never get off the ground. This isn't something specific or special to the scrapping industry alone.
Lets say that if you think going into any business is easy, you are in for a surprise, but there are government agencies and other groups out there willing to help.
I think that we can say there are people doing it right, and people doing it wrong, but that there are also people who are scrapping as a hobby, or supplemental income and it's nor really fair to say just because they are happy with a few hundred a month that they are somehow doing it wrong. You see this with refiners as well, there is nothing wrong with hobbyists or people doing any of this for extra pocket change, or something to fall back on if they loose a job. And just because they are doing so, does not automatically mean they are not doing it right.
Originally Posted by
Tcgs
Consider which scrapper you want to be
Level 1 Scrapper = I get my scrap from the streets, its almost always free. I make about $50-500 a week.
I agree, a person should consider at what degree or level they wish to scrap at, but just because someone chooses not to invest all their time into scrapping, does not mean they are a low level, and it also doesn't mean they are scrapping off the street. When I first became interested in refining, I was asking my friends and family for anything they might have that they didn't want. I didn't need to hit the streets to get good material, material I was able to learn how to process.
And although I have other means of income, I didn't invest any of those funds into my fledgling hobby, nor even when it turned into a business, I made the decision that I was going to bootstrap everything, meaning I was going to make a profit but re-invest that profit into better equipment so I could expand what I was able to do. There is a lot to be said for taking things nice and slow, bootstrapping and learning at the same time. People that just jump into a business and spend lots of money doing so are far more likely to fail according to SBA statistics. This is why banks often want to see three years of business before they will even consider loaning money, even the SBA prefers this method.
Originally Posted by
Tcgs
Level 2 Scrapper = I rely on some actual business techniques to acquire my scrap but I am still dependent upon the streets for my scrap. I can bring in some decent income from $500-1000 a week.
Or maybe this is just a hobbyist who just has a little more time on their hands. Or perhaps someone doing as I suggested in another thread, bootstrapping and slowly growing into their business as they learn.
Originally Posted by
Tcgs
Level 3 Scrapper = I rely completely on business techniques to acquire scrap. However I am still far from my goals. I have some help scrapping but if I am not involved in the process, my business declines. We make a decent amount of money, but overhead is a B*tch I only pay myself $5000 a month or less.
I get the feeling you believe "business techniques" implies that you are not getting your hands dirty, or collecting scrap wherever you are able. The most successful people in the scrap industry I know work hard, and that's why they are a success. Perhaps instead of concerning yourself with being involved in the process, you instead hired someone to manage your business and kept a hands on approach, you would do better. It costs more to insure an employee being subjected to scrapping, than it does to hire someone to manage the business from their home for example. As well, you wouldn't have to pay that person as much, and here is a novel idea, you can hire someone to manage your business who understands those dynamics far better than you do. This is what I have done, I hired a business manager, I don't have to answer phones, I don't deal with bills, taxes or licensing, and he brings in new clients, talks with them, etc etc. He does an excellent job and knows far more about these things than I do, because this is what his focus has been his entire working career. Sometimes it takes hiring people in the areas you are not good in, in order to be a success. A good manager, or business owner, does not fool himself into believing that he can do it all, but instead realizes he cannot and hires talent in the areas he is lacking in.
Originally Posted by
Tcgs
Level 4 Scrapper = I own a small scrap yard. Were constantly buying and selling. Its hard to keep up with the pace of business, and the market dictates our fortune. Things are good but could go either direction. I make a six figure income and don't have to beat myself up everyday at work.
The market never dictates your fortune in the scrap business, it's your labor percentage and managing it as well as how you conduct yourself in the business world. I hear it all the time, people complaining about the price fluctuations, but it does not matter how much the prices fluctuate if you are conducting business in the correct way. Hedging for example negates dependency on the marketplace. So long as you are always making the same profit margin, and doing all possible things to cut out as many middle men as possible, you don't have to worry about the marketplace. Being dynamic, having someone who understands the trends and how to manipulate them to your advantage, hiring the correct people for the right jobs, hiring the right number of people, and keeping your labor percentage at a reasonable amount.
Originally Posted by
Tcgs
Lets be real, nobody wants to be just a level 1 scrapper, you can say that you have to start somewhere. Unfortunately level 1 scrappers almost never make it to a level 3 or more.
I don't feel comfortable how you describe what you call level 1 scrappers, I don't agree with you at all. I think it's that very mentality, as if we are somehow above certain types of work that have created many of the problems in this country to begin with. I have a lot of respect for what you call level one scrappers. I know many that make a good living and do this as a hobby, matter of fact I prefer buying from these types of people before going to a large scrap yard, they have far less overheard, and I can help 20 people make extra money to support their family, rather than paying some large scrap yard, plus I get get the material I am looking for, for much less, not to mention building business, and friendships along the way. If everyone works at this level, then everyone makes money and you create a system where there is built in support, a community, like this forum for example.
Originally Posted by
Tcgs
Maybe you have a good idea, thought it was original, then came to the forum and realized everyone is doing it. You may still try, but getting past level 2 is hard. Only a true entrepreneur will make it to level 3 or beyond.
I think you are wrong, there are still more small businesses in the United States than there are large.
Back when I owned a grocery store, I was told a story by someone I respected the hell out of. We are talking about the Mom & Pop small grocery store that is 25k sq ft and under. It went sort of like this.
He explained how he allowed his son after he graduated with his business degree from college, try to modernize their grocery store. He changed the signs, he painted the building, put in shelves that were hirer and could stock more items, he changed the uniforms, and really made it look beautiful, like just a modern supermarket. But the profit shrunk, they had to lay people off that worked for them for over 20 years, then finally his father said that was enough and took back control to set things back on the right track.
He told me that he had known for years and years that his little grocery store was the Jackass of grocery stores, and compared it to the supermarkets calling them camels. He then went on to say that at least when he was a jackass, he was the best ****ed jackass out there and made a good living, but the minute he tried to become a camel, he was the worst camel and made no profit but instead lost money.
For some people it's better to stay small and dynamic, for others it's better to grow into a larger version of themselves, but none are wrong so long as you can make a living, and you're happy. To insinuate you are only a success if you grow into what your idea of success is, is really just creating a class system for scrappers. I totally disagree with you on this. I know for a fact some of the what you would call level 1 scrappers are in fact making a very good profit, I know this because I am buying a lot of material from them.
Originally Posted by
Tcgs
The only way I see it possible is to start at level 3 and progress to 4 and beyond. This means a substantial investment into the business. Maybe not all at once or in the beginning, but building a scrap yard from the ground up isn't the easiest way to pay the bills at home now or any time soon.
Building a scrap yard from the ground up is the most intelligent way to do this, not only are you afforded the time to learn as you go, but you are also afforded the opportunity to backtrack if you cannot handle the market fluctuations. I'll give you another example. In Las Vegas there were a few huge casinos that were being built, with all the bells and whistles, right before our great big economic downturn in this country. They went ahead with their plans because they had investors who already invested, and they really couldn't back out at that point, some were bought out, some didn't complete, and still others did build and are operating but loosing money.
The small casinos that exist on the old strip are still there, they have been in business longer than anyone else, and have been making a nice steady profit forever. In their case, staying small and dynamic, being able to change with the times has served them better than giant investments and jumping right into massive casinos.
Leasing equipment instead of buying also allows you the change as needed, or to reduce your investment if things change.
Originally Posted by
Tcgs
If you value your hands, feet, and other appendages, you will soon realize that level 1 and 2 scrappers are in constant pain from scrapping injuries.
If you are taking the correct safety precautions, and wearing safety gear, you should be able to work without too many injuries. Let me give you a good example. I work with deadly chemicals and acids on a daily basis. I also religiously dress down in the correct safety gear each time before I work with any of these solutions. I have had some accidents, but because I took the correct safety precautions I have never been personally injured as of yet. That is not to say that just because I practice safety, that something might not happen in the future, but I have effectively minimized the possibility. I have also worked for a pharmaceutical company where I was manufacturing the nicoderm patch. One drop of pure nicotine on your bar skin will kill you dead, yet in all the years that particular patch has been made, I have only heard of one accident, and it was caused because the person didn't take the correct safety precautions. So frankly, your argument doesn't hold water. I have done a fair bit of scrapping myself, and only have been cut or injured when I wasn't doing what I was suppose to be doing in order to protect myself. If you want to manage a business, then hire the correct people as you can and manage your business, but to make the excuse that level 1 scrappers are someone doing something they don't want to be doing, because they are being injured while doing it is ludicrous, sorry but it's a argument that doesn't make any logical sense.
Originally Posted by
Tcgs
If you value your public image, just ask a life long level 1 scrapper how he feels when people watch him digging in the trash. Even as a level 3, you will come home dirty and smelling bad.
Personally I have far more respect for a man that puts his nose to the grind and works his butt off to get to where he needs to be, rather than someone overly concerned about getting dirty, or dirt under their nails. I have met far more dirty people, filthy and stinking from hard labor, that are far more honest than those wearing a suit and tie. I just don't buy it. I like to be nice and clean, specially for my significant other. But I don't mind getting dirty. I clean the toilets just like everyone else, I would never ask anyone to do something I wasn't willing to do myself. If you are so concerned about your public image, I would suggest getting into another line of work. If what other people think about you means so much to you, perhaps you should be a politician rather than a scrapper.
And so far as I am concerned, regardless of how much or little I make, if I see something on the side of the road, or something in a dumpster that looks like I can either recycle, process, or save from the dumps I'm going to pull over in my BMW, and throw it in the backseat, and ****ed if I really could care what someone thinks about me doing so. After all it's my life I am living for myself, not for any of them.
Originally Posted by
Tcgs
Is this business for you? Only you can decide. Just consider what kind of business you want and the best way to get it.
Of all the things you have stated in this thread, I do agree with this one, it's the only one I can agree with. I think in trying to express how people should think things through before they attempt to start a business, you didn't think things through before you posted. I am not saying this to be abrasive, but I think it's very important to clarify what you have said, because it seems to me you have said things that good people would take great offense to. I'm sorry, but that's my personal opinion.
Scott
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