Maybe You Can Get This Business Model To Work - I Can't
For a long long time now I have been wanting to start my own salvage & reclamation business, however the dream seems unreachable .
The issue always comes back to "Not Enough Money" to get started .
Over the years I have written many different businesses plans, researched the business model, talked to knowledgeable folks and attended business / economics classes.
It just seems like starting a business is only for the wealthy any more ....
Let me explain exactly what I have been planning ...
Every year billions of dollars worth of usable equipment and building materials are destroyed in "low profit, fast money" recycling operations, and in the process creates far more pollution and waste than necessary ( transport, breaking down, transport again, re-refining, transport again, re-manufacturing, transport again, re-assembly, transport again, wholesaling, transport again, retail transport again, end user ) .
My business model would have been "minimally destructive recycling" of commercial & industrial equipment and buildings .
This business model is "high profit, slow money" - meaning it makes FAR more money than "destructive recycling", but takes longer and requires effort .
What this business would do:
Buy out the "salvage rights" to commercial & industrial buildings, and buy no longer wanted commercial & industrial equipment .
The buildings would be deconstructed for all their useful parts.
Equipment [*1] would be inspected to determine if it would be more practical to refurbished it or strip it down for parts.
All usable components, parts, and equipment would be repaired ( if practical ), cleaned up, tested and than repainted before being moved off to a warehouse to be sold .
[*1] "Equipment" is everything from machines used in manufacturing, to construction equipment, to abandoned hospital equipment .
What I would need to start he business:
It's pretty much a "money" issue - to be exact I conservatively estimated the minumum start up cost would be $1,200,000 USD - and here is why.
1: I would need to buy a plot of land 30 - 40 acres in size located somewhere "optimally" in the rust belt - Boardman Ohio is an excellent location, as it's centrally located near many decaying manufacturing hubs . Land goes for $2,000 - $5,000 an acre .
2: I would need an inclosed workshop and warehouse. A small one would run $450,000 .
3: Equipment and tools to do the "jobs" . I can get away with renting equipment until I can afford to buy it, however the minumum cost I estimated to get started would run $250,000 - $400,000 .
4: Legal - any money left over would have to be used for legal fees. I have found that most communities are extremely hostile toward "industrial entities" . It is also not easy to interpret all the local, state and federal laws I would have to follow.
Other notes:
Leasing land, buildings, and equipment is a huge waste of money.
The lowest lease prices for equipment I have found, per month, runs about 1/19th the cost of new.
The lowest lease prices for land I have found, per month, runs about 1/24th the actual land value.
The lowest lease prices for a building I have found, per month, runs about 1/26th the actual structure's value.
I have not calculated in "man power" to the cost. Including taxes, each individual will cost $16 total per hour - if they are paid $11 per hour in wages .
I have not calculated in taxes, which run around 44% for local & state & federal & "self employment tax" .
I have not included bonding and insurance into the calculation - which runs around $480 per month if my gross sales stays under $150,000 per year .
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