# I'm looking at starting an e-waste scrap business, have XRF



## seattledan11 (May 29, 2012)

I know that there are probably a ton of people here who never really get a business off the ground, and have a pie in the sky dream of easy money. Hopefully, that is not me. I have a realistic view of making an extra thousand or two a month if I can really get things started off. Here is my plan, I would prefer any helpful advice:

I have a day job, but can be somewhat flexible in my schedule as I am the manager and on salary.
In my day job I have full access to an XRF which I am trained to use, and can take home with me 90% of the time.
I have access to several trucks and trailers and an empty basement to process the goods
I have several metal scrap yards very close to my home
I have a lifelong friend who is willing to split costs, work, and profits
I plan to start a website, get a business license, and get business cards
My girlfriend is training as an accountant and can do books and taxes
My friends girlfriend can make cold calls and answer phones

Problem: Washington state has a certification program that requires lots of insurances and a facility inspection, this is not mandatory but an opt-in program. but, this does mean I can dispose of crt's for free at goodwill or several other drop-off locations.

Well, what do you guys think? I don't plan to refine, but just to part out and sell boards, processors etc.


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## NobleMetalWorks (May 29, 2012)

seattledan11 said:


> I know that there are probably a ton of people here who never really get a business off the ground, and have a pie in the sky dream of easy money. Hopefully, that is not me. I have a realistic view of making an extra thousand or two a month if I can really get things started off. Here is my plan, I would prefer any helpful advice:



I am going to play Devil's Advocate, please don't take offense...



> I have a day job, but can be somewhat flexible in my schedule as I am the manager and on salary.



Do not do anything to affect your day job, even if you are on salary your contract probably states you have to be there so many hours, during specific times. That is your bread and butter, don't blow it.



> In my day job I have full access to an XRF which I am trained to use, and can take home with me 90% of the time.



Is your XRF configured for precious metals? Or is it configured for scrap metal? It's nice to have access to an XRF, they are wonderful pieces of equipment, but you shouldn't only rely on it.



> I have access to several trucks and trailers and an empty basement to process the goods



Having access to trucks is totally different than owning a truck, or trailers. If you don't own it, you can't count on it. Dragging scrap in and out of a basement is going to get old, fast. But if that is the only place you can work, then I am sure you can make do.



> I have several metal scrap yards very close to my home



That might be good, having scrap yards so close, but they could also be competition.



> I have a lifelong friend who is willing to split costs, work, and profits



Friends come and go, the quickest way to break up a friendship is to go into business with the. I would start small, and take it slow, you have a job there is no hurry. Just keep turning profits into equipment.



> I plan to start a website, get a business license, and get business cards



I don't have a website up, and I have yet to make business cards, but I have more work than I know what to do with right now. That is because I put my money into equipment, and my time into meeting real life people. If you live in the United States, you can talk with the Small Business Administration, ask about their SCORE program. There are retired CEO's etc that donate their time free of charge to give advice to people just starting a business. While you are at it, ask about an SBA backed loan, instead of taking on a partner, take on a loan. And before you do that, get yourself incorporated, that way if you do go belly up, it's the corp that gets the bad credit rating, not you.



> My girlfriend is training as an accountant and can do books and taxes



My girlfriend is not involved in my business for a very good reason. She's my girlfriend. She's not my wife, not a family member, she's my girlfriend. And although I love her to death, still I make a point not to involve her in my business because if we ever did break things off, she would know everything. People get really strange when relationships break up.



> My friends girlfriend can make cold calls and answer phones



Don't count on friends, girlfriends, but specially do not count on your friends girlfriend.



> Problem: Washington state has a certification program that requires lots of insurances and a facility inspection, this is not mandatory but an opt-in program. but, this does mean I can dispose of crt's for free at goodwill or several other drop-off locations.



Take things slow, grow into things like this. You can collect CRT's until you have made enough to let the business pay for it. Or get an SBA backed loan like I stated above.



> Well, what do you guys think? I don't plan to refine, but just to part out and sell boards, processors etc.



I think you can make good money scraping, a lot of people do. If you proceed with a business plan, and stick to it, you can do very very well.

Scott


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## seattledan11 (May 29, 2012)

SBrown said:


> seattledan11 said:
> 
> 
> > I know that there are probably a ton of people here who never really get a business off the ground, and have a pie in the sky dream of easy money. Hopefully, that is not me. I have a realistic view of making an extra thousand or two a month if I can really get things started off. Here is my plan, I would prefer any helpful advice:
> ...



THANKS FOR ALL OF THE GREAT INFO. I TEND TO RESEARCH THINGS HEAVILY BEFORE COMMITTING, ANY ADDITIONAL ADVICE WOULD BE GREATLY APPRECIATED.


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## NobleMetalWorks (May 29, 2012)

1. Talk with your local SBA, they have tons of information on all kinds of things, not just loans, that may help you.

2. Make a business plan, very first thing after your SBA visit. You will be shocked when you realize all the things you haven't thought about yet.

3. If you are doing this as a business, and not a hobby, you need to think about what type of corp you want to set up, for legal reasons you should choose carefully between S-Corp, C-Corp, LLC, etc.

4. I used to set up corps and give them a credit history by connecting them to a shell corp, for customers when I was doing business development and planning. This allowed them to take on the good credit of the shell corp within about 6 months time. You can no longer do this sort of thing, and Duns-Bradstreet has since changed the way they report credit. But there are still a few tricks you can use. If you know anyone who has a business that is doing well, and has credit, you can ask them to put you, as a signitore on an unsecured credit line, if that have one. This will elevate your non existent credit, not like it once may have, but still it's better than not. If they have a Duns and Bradstreet, see if they will allow you to ride their coat tails. It will never reflect negatively on their Duns and Bradstreet profile, but it will elevate your own. Duns and Bradstreet is regularly referred to as D&B.

http://www.dnb.com/

5. TALK TALK TALK, get a feel for what's going on in your area. The reason why I have so many good contacts right now is that I went around, in person and in some cases made appointments with the clear intent of getting advice, and information. People will go out of their way if they believe you are really trying, and really want their advice. I went to a couple gold buyers, a few scrap yards, etc. Some only had discouraging words, others were not only very helpful, but gave me contacts to talk with other people. Having a business card at this point would have been beneficial, but when I was first starting, I didn't have a business name, or even a clear intent on what exactly I was going to do. Talking with all these people clarified my intent, I ended up added a lot to my business plan. There is nothing in this world like getting good solid advice from people who know.

6. The way I talked about business cards before did not do them fair justice, nor the website. They are both powerful tools. After I get my new set up going, that's exactly what I will be doing. You not only need a business name, but a slogan. Mine is "when the best isn't good enough". You can use that if you would like, but I would encourage you to think of your own, that way it reflects your own intent, and how you want your business to be perceived.

7. Choose an accounting program, or an accountant, and record everything, collect receipts. Even if you do your own accounting, it would be a good idea to sit in on a free consultation with an actual accountant. In the 15-30 min your appointment will take, you can absorb 2-3 years worth of information just on tax pointers.

8. You are going to want to do some market research, find suppliers, buyers, etc. You are also going to want to size up your competition, check your local county hall of records to find other businesses doing what you are, potential suppliers and customers. Now is when you want to put your website together, it's a great way to advertise. Look into SEO (Search Engine Optimization) so that you score and rank higher on GOOGLE searches, etc. Be careful though, there are a lot of companies out there that will promise you the world, but will not get you ranked higher on GOOGLE. GOOGLE changes the way web pages are ranked so often, that you need a company that has been doing SEO for awhile, has customers you can call as reference, etc. If you find a good entity to handle your SEO, then it could mean a great deal to you, business wise. Marketing does not have to be expensive, so make sure you do it on the cheap. Most business burn through their available cash because someone told them, and rightfully so, that they need to advertise. But they end up spending way too much money on it. Remember this also, people in marketing are so because they can SELL. When you talk with them, they are selling you on their company and ideas. See my point? They sound great because that's how they sell. It would be good experience talking with a few, you could learn a lot.

9. You need to calculate your estimated profit margin, gross margin, labor percentages if you have payed employees. Also you need to find out about workman's comp if you have employees, that might end up being your most cumbersome expense. I used to be in the grocery business, as an investor. I didn't have a lot to do with the day to day operations after a couple years time. I got out because of workman's comp. We had 28 employees, and our workman's comp when from about $8,000 a year, to almost $100,000 a year. Two factors ended up being the reason for this. First, workman's comp jumped up in cost by about 5 times the amount it was, this was because the laws were changed. Second factor was that we had an employee claim a back injury, and before we purchased the business there was already an accident on the books. In future businesses, I made sure my employees had health insurance. And if they were injured on the job, I immediately sent them to the hospital and took care of them. I don't want any injuries on my conscience, but I also don't want to pay hefty workman's comp payments either.

10. Set up an office, even if it's just a desk in your bedroom, and dedicate it only for your business. If you do not, important papers will end up in the trash, blowing in the wind, being used for scrap paper, you name it, it will happen. If you have a dedicated area that everyone knows not to touch, it will serve you well.

There is a lot more. Again talk with your SBA. They probably have a brochure sitting in the waiting room with more information on it than I have given you here. Some of the things I have talked about you might not even need to concern yourself with, but it's all good information for later use.

And again I don't want to understate the value of business cards or a web page, they are both very important if you want to be a success. However, there are many other things you might want to consider before doing either of these.

Scott


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## seattledan11 (May 29, 2012)

Scott, 


I know that you have spent a lot of time writing these responses to my posts, and I truly appreciate your insight. I think that I will get an appointment with the local SBA representative and see what advice they can offer.I currently manage a business that deals with hazardous building materials, so I have a decent knowledge of regulatory agencies and commercial facility operations. I think that I will start with a website, and get a ton of legwork going on potential customers and buyers. I am thinking that one of the easiest ways to start would be to get the business going and begin offering the pickup services of x-ray film from dentists, chiropractors, and vet clinics. That may provide me with a simple way to begin scrap collection without getting burned on buying electronic parts that are not as valuable as I had thought. I have also put up a craigslist ad and will begin to contact friends that may be able to get me in touch with the right people at some of the big tech companies here in town. 
Do you feel that there is still opportunity to get in on the ground level with a lot of hard work and patience, or do you think I will end up being a little to late for some of the bigger clients?


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## NobleMetalWorks (May 29, 2012)

Dan,

I apologize, it wasn't my intention to go over material you already know. I wrote what I did for your benefit, and also for the benefit of anyone else that might read the thread. I try to be thorough with my posts so that they might be of use to other members. What you did was open the door for me to post the information I did. For that, thank you. I have learned a lot about recovering and refining just by reading other peoples questions myself.

I think the business you propose to start has about a 80% market growth considering that only about 17% of all e-waste is recycled and the rest goes to landfill. I was at my local county auction a few weeks back, the county collects equipment they no longer need and has an auction once a month. There were over 300 computers this last auction. That might be a good place to find material. Here are two other good places.

http://www.govdeals.com/index.cfm?type=k&fa=Main.KeywordSearch&f_Item=computer

http://www.govliquidation.com/aucti...&Ns=P_Lot_Number|0&words=computer&cmd=keyword

Both of those sites are part of http://www.liquidation.com/

I have been using them for the past 10 years or so to sell, and buy equipment I needed. When I first started recovering, I purchased 24 pallets of computers from Travis Air Force Base, close to me on the govliquidation site. About a month ago I could have kicked myself in the you know what, they sold 47,000 lbs of spent brass, it went for $250.00. I could have literally hired a driver to pick it up, two truckloads, and deliver it to a recycle center not far away and made a good deal of money. Or if you sit on it and sell it to a company that sells spent brass for reloading, you can make a lot more.

Anyway, point being is that there are so many different ways you can get your material, and dirt cheap, even free sometimes. The market is wide open for people like you, and right now is the perfect time to start. You can grow your business while there is growth potential. All these things you might want to mention in your business plan, if you plan on submitting it to a bank for a loan. If you can bid and get a government contract for scrap, you might even be able to get a revolving letter of credit to pay out every month without putting any money up front. That means the bank levies the letter of credit against the value of the scrap, when you sell the scrap you pay the bank against your revolving letter of credit. Having the revolving letter of credit also puts you at the top of the list, for bids, because the government is guaranteed to get that money every month. It's a great way of doing business without putting any funds up front to purchase material.

Ask your SBA SCORE rep about financial instruments for purchasing scrap contracts from the government. Also, you might want to make an appointment with your banks, trade bank, or if your bank doesn't have a trade bank, open a business account with a bank that has a trade bank. Doing so will give you access to financial instruments you otherwise would not have access to.

Anyway, I apologize again if I am going over material you already know about. If there is anything I can clarify or answer, let me know, more than happy to attempt an answer.

Scott


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## silversaddle1 (May 29, 2012)

Well I recycle E-scrap full time for a living. I own the business. I can tell you right now it's not a hobby or part time job. Yeah, you can piddle around with it, but you won't make enough money for it to be worth your time. Not saying you can't do it, but it is harder than you think.


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