Thread: Is He Crazy?????

My cousin was discussing with me a few ideas to make money right now. He owns a construction company and as most of you know, the economy sucks. People aren't spending money on remodeling homes like they were a few years ago. His business is struggling pretty badly right now. 2011 is probably his worst year in the last 15 years.

I see the same problem with my painting business. I can't get the same prices I use to even though all my expenses have gone up. It seems as though everyone is looking for price over quality. It's probably because of fear of our economic future.

So we were both throwing around ideas on how he can make money. He came up with an idea that sounds crazy but I'll let you be the judge.

There's a problem in his county right now with recycling. They cut recycling pick-up to once every 2 weeks. He's been noticing large amounts of recycling when he drives through the neighborhood. He's been listening to friends and neighbors complain for the past few months.

So he comes up with an idea to offer recycling pickup for friends and family for a fee of $20 a month. He would go around with his truck and pretty much just pick up people's garbage. Then he would take that recycled garbage and separate the metal, glass and plastic then go and sell it to a scrap yard.

I told him he was nuts but then we started to think about it. If he got 100 customers at $20 a month, that would be $2000. If he got 1000 customers then he would bring in $20,000 a month. Keep in mind that this figure does not include any money he would make from the scrap yard. And you all know the prices of metal these days.

Another interesting fact is that his county is the largest in New Jersey. They have well over 200,000 households. he's the type of person that knows everyone. Wherever I go with him, it seems like he's the mayor. lol.

So now if he can get just a small % of 20,000 households and hire 2 workers to work for him full time, It gets me thinking that maybe he's not crazy. Read the story about 1-800-You got junk! They basically do the same thing.

What are your thoughts on this? Is it possible this can work? Could this be fastlane????

Be sure to check on local garbage franchise laws. Someone opened a 1-800 Got Junk franchise in my area and within about six months the local garbage companies had him shut down because he was in violation of the franchise agreements they had with the city.

Hey Likwid -

Makes sense to me, the only question I would have is about your price point.

How much time will it take to gather the recycling, sort it and dispose of it?

What amount of money will you make per load?

What will your payroll costs be?

Are you going to provide company trucks or subcontract?

Also, you are competing against a free service, which might be a tough sale.

I'm wondering what would happen if you turn this idea on its head?

In other words, lets work off the assumption that if you gather up the loads, sort them, and sell to a scrap yard, that you will get more for the loads than the time and effort it takes to do that work.

Try that with a few trial runs and find out if it is true.

If it is, then you have the potential for a dynamite business as follows:

"Mr. Jones, instead of letting your recycling pile up for the county to take, why not let me handle it for you? In exchange I will pay you x% of what we make at the scrap yard and you will end up with an extra $y to $z in your pocket every month."

Good luck!

JWH

Try going to large apartment complexes and offer door service for recycle and regular garbage. Have the complex bill the tenant an extra 5-10 bucks a month for the service, give the complex a buck or two commission. Hire someone to go door to door to pick up the trash/recycle and use the apartment dumpsters. No fuss, no muss with dumping permits. I did it in atlanta during college and it worked out well. Many complexes are several hundred units, do the math.

benefits, no messy car hoods/trunks, safer for females that dont have to drop their trash at night in a dark area by dumpster etc...nobody leaving trash on their deck/porch etc...

you could work your recycling ideas in there as well.

I think this business idea lacks most of rules MJ described in his book.

Need - there might be some kind of need for this, but you have to realize that recycling doesnt take that long and there is already free service for garbage. And 20 dollars per month for this seems way too much

Entry - there is almost no entry at all. Everyone can do it any time.

Scale - there is no scale. You are saying that in your city, there is xxx households, but to get to all of them, do you know how time consuming it would be? You would have to drive the whole day, maybe more to get to recycle garbage at least for few hundreds households.

Control - well, you can move your prices, adjust your service etc. as you will, so you have control

Time - Even if they pay 20 bucks per month, there is no space for hiring someone to do it for you in my opinion. To recycle one household, you would need at least 5 minutes (drive there, recycle, drive to other household)
and I suppose you are going to pick up their garbage more that once per month...

But I might be wrong and it is great business idea. Just wondering how did it end up Likwid24? Did you try it? I am interested in this one

What does the county charge for recycling? Seems like the competition is going to limit your options.

I actually have a friend in a small town that does this. He was the first to start picking up glass in the area. Last time I talked to him he had around 200+ clients at $5 a piece plus he get the money for the recycled goods. He has also been in talks with the apartments for larger contracts. So far it is not fastlane money but it pays the bills.

Things to look out for is the corruption of the sanitation industry. If your county is crooked as many are you must price in the bribes; I mean profit sharing, special fees, you must hire this guy as he is the only one who can get you permit approved, and the list goes on. necessary to get the permits.

Originally Posted by Likwid24

There's a problem in his county right now with recycling. They cut recycling pick-up to once every 2 weeks. He's been noticing large amounts of recycling when he drives through the neighborhood. He's been listening to friends and neighbors complain for the past few months.

So he comes up with an idea to offer recycling pickup for friends and family for a fee of $20 a month. He would go around with his truck and pretty much just pick up people's garbage. Then he would take that recycled garbage and separate the metal, glass and plastic then go and sell it to a scrap yard.

Although this thread is a little old, I thought I'd weigh in since I have some experience with it.

Likwid, the quote above describes the thought I had several years ago exactly. I had a hauling business at the time and the county had closed the landfill and transfer stations on Sundays, which was one of the busiest days.

There are several obstacles to overcome.

1. Depending on the state and county you may need to get a permit to collect waste and recycling as it is regulated in most areas. (Due to Mafia corruption, Waste Management was and may still be owned by the mafia though they have become more legal in their operations)

2. You will need to get a large amount of people to sign up within an area. In order to be profitable you need to be able to travel a set route and spend no more then 2-3 min at a pick up stop. (Most garbage/recycling companies lose money the first 2-3 years as they build up a decent route)

3. With garbage and recycling, you are dealing with a very profitable business. As such the competition is fierce and cut throat. I had several pieces of equipment vandalized and destroyed by my competition. (No hard evidence, but I know it was them) Garbage haulers are a whole other breed, most don't think twice about running you into the ground, both figuratively and actually.

4. Although there is a market for metal, plastics, glass, paper; you will need to collect very large quantities to make any money on it. Most companies won't pay you for small quantities (less then tractor trailer load). Though scrap yards will gladly pay you for the metal.

All in all, as long as you are prepared and go by the book in regards to regulations, this could be a profitable venture.

I got out of the business, due to the constant destruction by my competitors and the fact that people in my area are cheap. They always knew a guy who they could "give him a couple of beers and he'd load it up in their truck and haul it away"

Since it has been a couple of months since this was originally posted, I love to hear how it went if you did try this out.

ps: Regulations are a big thing... In NY at least, the fines per day for operating without the proper permits start at $10k... found that out the hard way...