Scrap Yard Ideas

Hello again,

I have posted on here before about starting a scrap yard in a small farm town that we have hauled out of and have strong last name recognition. Me and my brother are currently trying to put ourselves through college through scrap removal. I have two idea's one is a ferrous yard in the small rural town, the other is a small yard in the cities. Here is what I have figured out before-

1. Start a yard in a rural farm town. We would purchase ferrous and non-ferrous metals and prepare them. The equipment we would purchase is a log grapple trailer (unloading scrap), a skid steer, a truck scale, and an office building. We will also get a PO software. The reason there is a need for a yard is because the closest yard is 100 miles away and they only pay $60-$70/ton. We have been collecting scrap from farms, but many farmers have expressed interest in hauling their own scrap if it made more financial sense. We would open the scrap yard just out of town (we have free land we can use) and pay the same as the yard that is 100 miles away. We would then haul the scrap 250 miles and get $300 a ton from the steel mill (We know the buyers, we just need a semi load). This leaves us with plenty of room for fuel and profit.

2. The second idea is to open a scrap yard that is only open at nights (say 5-9) and doesn't have 100 pound minimum like the other yards. We would pay significantly less then the other yards because of not having a limit. Our market would be business owners and home owners that are wanting to get a little extra cash. We would also pay market price for non-ferrous, this would appeal to contractors because we are open late so they do not need to take time from working to bring there scrap in. We would need a warehouse, fork lift, pallet scale, postal scale, and a few other things.

Thoughts or comments?

Thanks!

Alright you are going to or thinking about opening a yard, first let me say best of luck to you. I think rather I know you have left off many things that you would need to open a yard, and they are just to many things to list, but putting that aside. The main question I have is, I am confused who has under a 100 lbs of steel, or are you talking about tin / or shred so what are they buying for 60-70 a ton shred or unprepared steel. That is a big question that needs to be answered. Let me just say that steel mills are full of s....it, I have sold mills before, there is a big difference to #1 prepared and Mill quality ready for the furnace. Get ready for the deductions.

As 1956 said, I think your missing a lot of things. The general liability insurance that you will need to carry will be significant. I just got some for an upcoming removal job. If the nearest yard is 100 miles away, it makes you wonder if the area can support a yard. You should really sit down and develop a business plan. This is something that you will need when you go to the bank for a loan.

I say cut your high end expenses buy the scale go under the radar and do this. Its rural america and this is what young entrepreneurship is made of. Now when you become a large yard from all your success buy the more expensive equipment and all the insurance and licensing.
Have fun and make money

I have looked into insurance some, but will need to do so more. I also believe it can support a yard, we have talked to many farmers saying that if there was a closer yard they would just haul it in themselves. The reason there isn't a yard owned by a large company is because it would need to be owner operated to make any bit of a profit, it is also a seasonal market, being that the farms can't remove the metal when there is 6 feet of snow on it. I have also have a written business plan. Do you see any problem with using a log grapple instead of a excavator grapple? By using a log grapple mounted on a truck or trailer we can cut our start up costs by half.

Ok so are you going to prepare the steel or just load trailers?

If you can get 56's blessing on this your good to go. I'd answer his questions as if you were in front of a loan rep asking the same things. He does know what he's talking about having been a former yard owner.

Think of it as a test before the people who control the cash ask you.

Good luck on it either way,

Sirscrapalot - Has seen what a badly run yard can look like.

Originally Posted by Sirscrapalot

If you can get 56's blessing on this your good to go. I'd answer his questions as if you were in front of a loan rep asking the same things. He does know what he's talking about having been a former yard owner.

Think of it as a test before the people who control the cash ask you.

Good luck on it either way,



Sirscrapalot - Has seen what a badly run yard can look like.

Thank you for your kind words Sirscrapalot, like you said I am trying to get him to answer a couple of questions so I can give him some good advise.

Good help - is hard to find.
Free help - is rare.
Take any Good/Free help - as often as you can.
Just Sayin!

Originally Posted by 1956

Alright you are going to or thinking about opening a yard, first let me say best of luck to you. I think rather I know you have left off many things that you would need to open a yard, and they are just to many things to list, but putting that aside. The main question I have is, I am confused who has under a 100 lbs of steel, or are you talking about tin / or shred so what are they buying for 60-70 a ton shred or unprepared steel. That is a big question that needs to be answered. Let me just say that steel mills are full of s....it, I have sold mills before, there is a big difference to #1 prepared and Mill quality ready for the furnace. Get ready for the deductions.

The 100 pound idea would be to buy from homeowners, so people that would rather get $5 for something rather than give it away for free to the city recycling center. I have decided to scratch this idea and stay with the rural yard.

The $60-$70 is unprepared, but it is only like $20 a ton more for prepared. I have also looked into permits and the office told me what I need and they are pretty simple. Yes we are going to prepare it, this will yield the highest profit. We will also be getting large items such as balers and tractors which would need to be prepared to be shipped economically. What else are we missing 1956?

Thanks

Originally Posted by MattyNoNeck

****, those prices in the midwest are rough. You may want to look into trucking steel to the east coast. Yards around here pay $220-240 a GT for tin/shred, $310 for short steel. If you're buying short at $100 a ton, you could see some serious profit if you send it all our way.

Hell...a commercial account might even get you more per ton. I suggest giving the big boys in this area a buzz. PM incoming.

The $60-$100 is what they pay in the rural areas (5 hours from a big city). The yard I sell my steel to now in the city pays $210 for sheet and $220 for prepared.

Originally Posted by BatteryBob

I have looked into insurance some, but will need to do so more. I also believe it can support a yard, we have talked to many farmers saying that if there was a closer yard they would just haul it in themselves. The reason there isn't a yard owned by a large company is because it would need to be owner operated to make any bit of a profit, it is also a seasonal market, being that the farms can't remove the metal when there is 6 feet of snow on it. I have also have a written business plan. Do you see any problem with using a log grapple instead of a excavator grapple? By using a log grapple mounted on a truck or trailer we can cut our start up costs by half.

Well to start up you can start with the grapple but I would if at all possible get the excavator for the simple reason that you could attach a shear to the excavator and then you would be able to prepare your steel a lot faster and cheaper, also the grapples are basically made to handle yard waste and not steel. I can see manny repair bills and down time using a grapple for steel, the biggest problem besides good help in a yard is equipment brake downs. From what you are saying 75% or more of your business will be tin and steel! I think that you would need to spend the money on a excavator and a couple of attachments to make the yard function the right way. Also when you can you should get a log bailer for your tin/ shred, bailing the tin will enable you to load flat bed trailers with 22 tons making it feasible to ship to the nearest shredder. Also you will get $5.00 a ton for bailing your tin. Opening a yard to today is very costly please make sure you have the capital needed, I am not saying that you do not have the capital or resources what I am saying is this if you figure the start up cost would be say $400,000.00 figure you will need $600,000.00
One thing that you must put in place from the start is to have every one on the books and to have workmans comp in place, it's just the nature of the business, accidents will unfortunately happen and you have to protect yourself and your business.

Ha, Battery Bob I would also get some information on installing a A.T.M. Cuts down on a lot of the security issues..