Starting Up a New Scrap Yard

Ive been a street level scrapper for several years, Picking up metal as my Painting career permitted. I am a USMC Veteran and Happened to Make a connection in the Industry who was just starting up a small level scrap yard.
We are starting small with an existing property with a warehouse and about .75 acre of open storage in the yard. My Partner does sitework in construction so we have the equipment to clear another 2 or so acres for storage of metal. We have one loading dock and a small scale for now to start off. We are Hoping to expand into another facility down the road with 10,000 sq ft and about 6 loading docks.Ive successfully ran my own small company for several years but figured Id take my shot at getting in at the ground level and building the business.

Ive got the Determination and Heart, We are Located in Kannapolis NC off N.Main st.

Any ideas/suggestions are helpful as neither of us has a lot of experience in the business side of scrap metal recycling.

Semper Fi

Just be prepared to have plenty of cash available to pay for the material you will be purchasing. Nothing will slow your progress down more than running out of cash to pay for the loads we bring in. Other than that, good luck in moving to this level.

Check this out; http://www.scrapmetalforum.com/gener...crap-yard.html

Then check this, and welcome; http://www.scrapmetalforum.com/off-t...roll-call.html

And don't forget about buying and selling cores,
Or you might want a side division doing cardboard.

Awesome guys thanks for the help so far. I have not discussed cash flow in depth but I did make it clear to him that the BIGGEST concern is Cash FLOW.. He is a veteran of sitework development for 33 years. My Partner said He has over $1,000,000 in liquid assets, As I said before I have never Ran a Scrap Yard so I am trying to learn the business the best I can because I am starting on a small salary for the first few months then I will become a 49% Partner handling the day to day operations and mainly keeping the yard open during business hours ALL the time is the Key.
I do know theres nothing more frustrating then driving to a yard to see the fence closed 30 mins early.
We will also be open ALL day Saturday and we are tooling with the Idea of 24/7 buying if the Legalities of that work out. It is exciting to be in on a ground floor opportunity and will def. keep everyone here posted as far as progress, challenges etc. in the Hopes it will help other scrappers like myself in their dreams of entrepeneurship.

Should we just focus on ferrous and non ferrous metals? I have been doing quite a bit of E-scrap and have made a decent profit of close to $3,000 off several pickup truck loads of towers I got from an old IT guy so I know there is money to be made in Escrap but I also know the certifications, and Insurance etc are a lot higher because of the hazardous waste materials dealing with that type of scrap.

Again I am open to any and all suggestions as I push ahead with My scrap business. I will try to get pics up soon of the yard and the beginnings of hopefully a successful yard.

Semper Fi

Well, first off, grats on making the decision to go for it.

Secondly, you have a bunch to learn and you seem like you are willing. If the cash flow problem is sound, your next step in my opinion is check all of your state laws. I know around here to be a secondary metal recycler, besides all of the licenses and permits, the proper tracking software is required. I think 10k or so to get it. Also around here requires so much documentation above and beyond that it is insane, but all doable of course.

On the other hand in this state, I can e-recycle with much less hassle as it is not a secondary metal. If you are not breaking up the boards and moving them on to a refiner you should be OK with the EPA, however, again you will need to check with your state laws. Here once I get set up eventually, I could buy heat sinks for a certain amount per pound, but I could not buy them as aluminum, or copper aluminum, etc.

One other note. Scratch that idea of 24/7. You will be inviting crack heads, tweekers and armed robbers. Operate your hours when the legitimate scrappers are selling their wares.

And hope to hear of your success soon.

Thanks that's what I told him about the 24/7 idea. I was in the Marines and Carry a .45 caliber 1911 with me, but Im not trying to use it..I think daily hours are more then plenty and I want business to be legit not sketchy. Im sure the local police would def. be checking us out regularly for being 24 7. I don't think it makes much business sense and hopefully with alittle persuasion he will also.
Cashflow seems to not be an issue, I am already doing the research for the permits needed. I know we need one giving us permission from the local sheriff to buy metal as I saw those displayed at local yards. I also know you have to take pictures and track purchases.
I will def have to learn a lot and Im sure we will hit a few bumps in the road..If anyone can tell me what type of software or where you could get it from that would help majorly as I want to line up all my ducks and present the ideas to him as hes funding the entire operation from his pocket. He has been open for a few weeks off and on but I need to keep the Gate open and the LIGHT on so to speak as I Expand marketing and try to build a customer base.
I atleast have the experience of running my own painting company for several years wearing all the hats(estimator,salesman,installer,book keeper etc.)
I look forward to all the replies, Any help is greatly appreciated.

I have been reading several threads here tonight and have seen to try to stay small and specialize in particular items of scrap. we can also buy steel but that makes it tricky without a drive on scale we will be unloading all loads by hand.

But as everything you must walk before you run and I am excited to take this next step

Without a drive on scale, forget about steel. Period.

Most places are either ferrous or non-ferrous. Without that drive on scale you will get no sellers. The labor costs involved in steel loads would be horrible.

You can make that a plan down the road, but for now get the non-ferrous side up and running regular in my opinion. I know they exist, but I have never been to a yard that handles both.

Keep asking questions, even though we may not have a bunch of actual yard owners here, (I know there are some), but most of us here have been to yards enough to hopefully give some incite.

Looking forward to your continued tale on this endeavor.

Several yards here don't have drive-on scales, but a decent sized parking area. They put a dump bin up to your tailgate with a forklift, and weigh those minus the tare. Then they just dump it in a roll-off.

Same here in Oregon. And the yard I go to does both ferrous and non-ferrous. They just give you different bins to fill.

My yards near me, my main one, an the sketchy one you all have herd me ***** about, they all accept both, ferrous an non. Tho they do have drive on scales for the shred. Everything else is unloaded to the inside scale. They even help ya out with that part!

I love my main yard. Just wish the buggers were closer.

To stilt..on your software question for tracking an such..I did a quick Google search an bunches came up. Might try that an see if any work for you, I just used.."Scrapyard software" an a bunch popped up. I also like your idea of not going 24/7..while it would be nice, as others have pointed out, you'd be inviting ever tweeker, crack head, an thief to use your yard. An yea.. I don't think the law would be to happy. I know here on the sandbar they've been riding the sketchy yard hard. They deserve it tho, the thieving bastards. haha!

Again good luck, an let us know how it goes for you. I'm sure others on here have thought to do the same an for whatever reason haven't.

Sirscrapalot - kooky loos! - Tater

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You can make that a plan down the road, but for now get the non-ferrous side up and running regular in my opinion. I know they exist, but I have never been to a yard that handles both.

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As you come into the yard at my local scrapyard you split, to the left you drive to the inside door where thy help you unload the nonferrous. Go towards the right and cross the big semi scale to weigh your ferrous, then go out back to unload. They have a semi roll-off service also businesses/farmers come in with semi loads of misc. ferrous metals. A lot of their cubed ferrous goes to the big Omni yard in Ft Wayne. The smaller cut up stuff they take to the local steel foundry.

Welcome to the forum from another escapee of the Green Machine(retired GySgt) still living in Jacksonville.

The only suggestion I have is be very careful in your growth. You can find yourself with a lot of inventory and if prices drop you can get stuck holding the bag.

When I was commercial fishing I was advised the if i caught all the fish in the ocean and didn't have a market for them all I would have is a lot of dead fish. You need to keep you eye on who you sell to and try not to get caught with too much inventory. Best of luck, Mike.

To generate more profit, you may want to stay open a couple hours later that the other yards. That would be safer than the 24/7

Try to have Saturday hours and maybe extended hours one day a week, for the honest people that do it as a second job or the contractors that don't want to do it during their work day

I gotta agree with Matt an Scrapping4ever, extended hours sounds awesome. I always get annoyed when my yard closes at 5. Drives me nuts, an I'm sure it does others also. If they'd stay open to 7, or heck once a week till 9, that would make me happy.

Sirscrapalot - He was a wise man who invented beer. - Plato

I would say later hours at least 1 or 2 or early one day or late another be like others said not 24.

In Nebraska some things MUST be paid by check (catalytic converters and over $100 in copper there might be others).

You might want to have a policy about over $XXX is by check. The big yard around here (Alter) does debit cards.

You might look into portable scales like the DOT uses they are probably cheaper then the drive on ones.

Thanks Guys for all the Insight and Help so far. I also agree its hard with just the small scale but for now we are getting a small lift for inside the warehouse to be able to use bins as they have said here. I am in touch with several bigger yards in the region who are interested in putting their roll offs in our yard if we agree to sell to them of course. we have been toying with the idea and will just have to see how volume goes but my Partner has access to big trucks so we may see how much more we'd net if we drive the scrap to South Carolina Instead of going through Gordon's or Davis scrap in Salisbury nc.
Tomorrow is the first full day I will keep everyone posted, I am having my partner go get our Purchasing permit from the Sheriff tomorrow, I want to make sure everythings 100 percent legal.
I also have researched a bit and believe the law is anything over $100 and any copper sales had to be paid via check.

Theres a lot of learning to come, But Im sure with your guys help and guidance I may be able to benefit other guys who happen to have the same dreams of running their own yards also.

I will talk with my Partner Tomorrow about the extended hours as Im a Painting contractor myself I know how it is to be racing home from a job to cash in a load of scrap only to see the gates close 15 mins early!..
I am also looking at different options for the scales, maybe a lease option is available. I know the drive on ones DOT approved would be cheaper I just want to make sure our scales are 100 percent because I used to hate being cheated and Im a Marine and do business with a Handshake and my word as a Marine I WILL do it right!

Keep the Ideas coming guys!

My yard uses a computer system and they took my drivers license and scanned it into the computer along with the pictures of my load if it's ferrous. The computer automatically puts my name on my receipt and they retain the pic for their records. Don't really know if it keeps people honest or not tho,,,

First Full day went well, I called this morning and Got our Ferrous Dumpsters Lined up and also got the guys info in charlotte to pickup our Cardboard containers for the various Nonferrous.
I also had time to make a few connections with a few local hvac guys.
I had two guys come in today, one of which was about 750 lbs of shred, and did a few hundred lbs. of electric motors.. I managed to get the shop pretty clean and organized so far.
Its nice to be given the keys and free reign over how I want the yard set up as Ill be the one running it.
I also tore apart all the items in the shred pile today that could be broken down,I guess better to make ourselves alittle more money:)..

Just wanted to Update everyone how it went so far...

Keep those updates coming Stilt. I know I'm all kinds of interested & would like to read about the process as you go through it.

Who knows maybe someday I'll open the "Traveling cooler Scrapyard. You drink it, we scrap it!" lol

Good luck!

Sirscrapalot - The trouble ain't that there is too many fools, but that the lightning ain't distributed right. ~ Mark Twain

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Originally Posted by StlitRockRecycling

I have not discussed cash flow in depth but I did make it clear to him that the BIGGEST concern is Cash FLOW.. He is a veteran of sitework development for 33 years. My Partner said He has over $1,000,000 in liquid assets, As I said before I have never Ran a Scrap Yard so I am trying to learn the business the best I can because I am starting on a small salary for the first few months then I will become a 49% Partner
We will also be open ALL day Saturday
Semper Fi

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"I have not discussed cash flow in depth but I did make it clear to him that the BIGGEST concern is Cash FLOW"
What about your own??

"I am starting on a small salary for the first few months then I will become a 49% Partner "
Really??

Yall have discussed just about everything, including all the documented evidence of proper permits, licenses, contracts etc, what about your own. "Making it clear" to someone doesn't always mean they agreed, it only means they made you believe they agreed

"My Partner said He has over $1,000,000 in liquid assets"
And I'd think he intends to hold on to every bit of it, so what does this really matter ?

With all this certified documentation, how much do you have for yourself? A low starting salary until you get it all up and running?
I think the importance of cash flow seems to have escaped, and I can tell you for sure what I've found to be the cold hard reality of it all is if things don't start out on the right foot, with a partner/employer or anything else, it will never get there

just a few words of caution man, good luck

If you're up to it, I'm sure everyone would like a tour of your facility via photographs.

Welcome aboard.. I agree with the suggestions on extended hours. 24/ 7 I believe would be a nightmare for the simple reason of attraction of undesirable clients. All day Saturday would be great for the working man. A board with daily pricing would be great. Good luck with your new venture.

Just Got the New Flyer Designed, and We got great news my Partner just got the go ahead on a $5,000,000 Site Work Job in VA! So I have the Greenlight and it feels awesome!

MY Advice: Never Be Afraid to Pursue Your Dreams No Matter how much Sense it makes to Other People! We ALL control Our Own Destiny.SHOOT FOR THE STARS, IF YOU FAIL YOU'LL STILL LAND ON THE MOON!

Back to Work Now, I will Update tonight or tomorrow..We should be getting Our Roll offs today:) Semper Fi.