I want to expand, approaching a bank for a loan.

No, but I can expand on the space I do have.

From what it sounds like you are dream for people with granulating operations already but perhaps farther away from your not so profitable local yards. I'm not sure what your shipping and storage space is like but I think you would benefit from getting a larger work space and become a "feeder" yard first. You will see a faster ROI on a small yard with a baler, low overhead/payroll versus an expensive granulator setup. The machines are only good as the user and require a few years experience to master.Plus the salesman is always going to tell you how easy it is to use because they want to make the sale. Because you have such uniform material you can fetch a much higher price shipping it out. Then recoup your invest and look into the granulator if you truly outgrow from there. Small recycling operations seem to be the route to go, a lot of the big boys had to cutback the scale of their operations because of lack of supply and high overhead. You're assuming less risk by not relying on recovery.

Army,

1st time I've read this post. Have you considered dealing with a broker instead of a scrap yard. Not sure if you have room to accumulate 40,000 pounds. There was an interesting article about Johnson Zeng and Sunrise Metal Recycling Ltd.. I'm including the link to the article and there website.

To a Chinese Scrap-Metal Hunter, America's Trash Is Treasure - Businessweek
Our Team

My .02/lb,

I'm all for your guanulator operation if it's profitable, but your last post throws up a bit of a red flag. If you are having trouble finding time to package and ship you will have even less time to chop, package, and ship.

You're right, it is a red flag, the same one the bank wondered. They asked me if I could afford to hire a full timer. They want to see me with an employee FIRST before expanding in equipment. Their reasoning, and something I agree on is that I am one person and can only operate one thing at a time. Additional equipment would be underutilized and thus...a waste of money for me and a waste of investment for them. This year I plan to change that. I still get steady wire streams in excess of 4,000 lbs a month...this won't change. My regular pickups constantly throw out a variety of wire and I produce even more on stripping down power supplies.

Instead of all this, I think the best course of action is to store my shred on the property until value comes up high enough in two years (three if I have to wait that long) to use it on a major equipment purchase. In the meantime I can focus on my wholesale and refurbishing efforts. Should a granulator come up used I just cant pass up, I will buy it. I've done my research and will be using the wet shaker table process versus cyclone fans. Much less power consumption and better than 99.5% recovery on stranded telecom wire, which those who have granulators tell me is material not worth running because of how hard it is to recover not the actual percentage.

Honestly man, I hate to be a Negative Nancy here but I don't see your margin from chopping increasing by any more than .25/lb over what you could sell the wire for loose and unprocessed. @ 4k lbs per month that's an extra $1000. The payment on the machine will be $400. I think it will be a problem hiring someone for a manufacturing type position for only 600/mo. They would have to strip all of your wire plus do lots of other stuff. That's why you see all these wire processors fighting for volume. It takes a lot of stripping to pay a salary.

An update for you guys.

I took some space with a fellow forum member and we are going to wade into the waters together and develop a partnership as we go. The ideas are simple, work out the issues and cashflow avenues before we put pen to paper on any actual partnership. This also means I will be split between the workspace and my storage. It's going to be lots of hard work and lots of time on the road too as this warehouse is 80 miles from my home.

My wire income has gone down some. I only had one raceway deconstruct this month and got 1100 lbs of cat5, POE and ground cables from it. I have a few thousand pounds of power supplies that have not been touched since xmas and even more wire from scrap intake. Combine this with my future partner and we meet the requirements for a granulator. So that is still on the table.

Since my first post I've begun focusing on refurbishing more in anticipation I could stay away from the scrap side for longer periods of time. I've also had part time help. Likewise since the first post I've had dumpster access for my shred, a real time saver.

I did take a loan, a small one, a few thousand dollars and spent it on new tools. There was a growing list of things I needed for work and convenience reasons, BGA rework machine was on that list. I also spent a large amount of money on incoming more than scrap value parts from members. This last many of you already know I've spent better than ten grand in the last few months, most of which I've been using on refurb projects. Call it filling inventory requirements.

So, the aspects have changed. When I saw the downturn of the metals market with no real definition for how long it might last I made a snap change to the business and went the route of refurbs and parts wholesaling.

I think with a new partnership we can encompass all sides of the industry under one roof. Able to handle e waste, provide working parts to keep IT departments going and at the same time, providing working low cost replacements for small businesses and indivuals, even able to build large lots of new computers if that's whats required.

I have to thank a few people. Ken first of all for being as crazy as I am with this. The wives/girlfriends for putting up with living rooms, bed rooms, closets, garages and basements full of scrap long enough to give us a chance. All the people I've met right here on SMF, to those who had faith and sold to me early on. I have to thank my mother who is a special case...she specializes in iso certifications for the electronics industry and at her place of work now, reduces reworks on their boards. Plain and simple, she knows all about the components and processes to bring a board back to life. Absolutely invaluable. She has provided me with the tools and knowledge to do what I do.

So, back to the bank. First...I want to pay back what I borrowed. It wasn't much but it helped get me over a hump. Second, get setup in such a way to make incoming material processing as fast as possible.

And with that, things like balers, forklifts, granulators...all of it comes into play at some point. And...more importantly I am acutely aware my truck is being overtaxed constantly which so far has been just fine by it. Still, I've socked away just enough to cover one major assembly rebuild if it happens. And while we are on the subject. Even though I am taking in pretty decent wire quantity it's not profiting like it would if I was able to buy at scrap yard prices (or a little better) and advertise as such. So sure 4,000lbs of wire sounds great but after my time spent, gas spent, band aids... sawzall blades, nipper cutter heads (they are like huge dykes, don't know the proper name) I don't make as much as you think. If I was able to offer a competitive price the end result would really mean less actual expense and overhead and less chasing down weight.

A baler is going to have to happen sooner than either of us think. At first glance, it seems like sure gaylords and etc will do. It won't last.

Anyways, once we've got most things in place and discuss strategy I will show everyone what I'm doing and the new areas I get to work out of.

Best of Luck!!!!!

Good Luck to both of you guys. Been dealing with Ken for 6 months or so and am looking forward to working with you also. You guys will definitely suceed as I have read and seen the drive that both of you have.

This is going to be a blast!

Good luck you guys! Wish you all the best.

Best of luck! I hope that it goes well!

Thanks everybody. I just walked in the door, put the second coat of polyurethane on my new workbenches and got out of there. I had to the last couple days I might have forgot to sleep. Anyways. BIG changes coming.

When you're drawn to your office, you're on the right track definitely.

Best of luck! We're all pulling for you!

I spent 45-50 hours of the last 5 days at the shop. WE made huge progress. We brought in pallets, gaylords, benches...material to work on. The cable is hooked up all the utilities are on, the heat is awesome etc. Already the two of us have been busy utilizing my truck to pickup a load, his van for another and it doesn't look like it's ever going to slow down (I hope not). When things look like we've got a groove going I'll see about getting a facebook page going for us and update my website for the first time since I bought the domain.