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Useful steps involved in creating a recycling company

Gaurav Gupta 11 Stories

Friday June 16, 2017 , 4 min Read

A booming sector, recycling still holds a lot of potential due to changes in consumption patterns and environmental awareness. Governments encourage initiatives in this sector. Many start-ups are being created.

Recycling consists of recovering and / or recovering used objects, materials or waste:

(Green waste, metals, furniture, clothing, mattresses, old items, electronic equipment, used cell phones, cans and bottles, etc.),

Or from enterprises or other public or private bodies.

The purpose of a recycling company may be:

To recover and to sort in order to constitute a raw material intended to be transferred to other companies in the sector,

To give a second life to the object, for the same use or for a different use,

To transform the object or matter in order to create a new object (remanufacturing),

Or simply to offer a removal or cleaning service.

It should be noted that the recycling sector sees the creation of entities that differ in purpose:

Private for-profit enterprises,

Enterprises in the cooperative form,

But also many non-profit entities (association’s law 1901).

Recovery and recycling activities are in some cases part of the social and solidarity economy. Many companies or associations are launching "recycling" or recycling projects with the aim of creating employment, fostering the social integration of disadvantaged or disabled people, protecting the environment, or Develop artistic creation projects

Create a recycling business: the market and trends.

Recycling is marked by favorable trends:

Recycling is at the heart of the circular economy (transformation of waste into raw materials), which is considered a sector of the future,

Public authorities and environmental protection agencies ( ADEME ) are launching many innovative calls for projects to support the sector,

New trends emerge, offering new market opportunities: eco-design, re-use, repair, re-use, industrial ecology ...

The recycling market also presents a number of threats, including:

Strong competition and concentration within the sector,

The trend towards waste reduction at source,

The recognition of recycling by the manufacturers themselves,

Changes in the price of materials: since 2007, prices have been tending to decline, which is not conducive to recycling.

Finally, there is considerable potential for recycling and upgrading in developing countries, particularly in Africa.

Create a recycling business: economic model, positioning and key success factors.

Recycling activities are based on a simple economic model:

A very low or even zero or negative raw material cost,

The maximum recovery of the recovered materials, for example by efficient recovery, sorting or recovery processes.

However, there are some economic risks to recycling activities:

Recycling processes may require significant investments,

In the absence of investment, recycling processes can be very labor intensive,

The image of recycled products is sometimes worse than that of new products.

One of the key success factors is access to an attractive deposit of waste or materials, it being understood that high value materials are often picked up by well-established recycling companies. In this type of activity, upstream (sourcing) is therefore as important as the downstream (marketing of products).

What legal regime to choose to create a recycling business?

When creating your business, you will have the choice between several activities:

Purchase and resale of recyclable materials (commercial activity) : the collection or recovery of recyclable materials for resale.

Collection, storage of recyclable materials (artisanal activity) : this is to offer a service of removal of recyclable materials, similar to a removal service. It is therefore a craft activity that requires an inscription in the Chamber of Crafts and Crafts.

Refilling and recycling of ink cartridges (commercial activity).

Processing of recyclable metal materials (artisanal activity) : this involves recovering recovered metals by treatment or recasting processes.

Processing of recyclable non-metallic materials (artisanal activity) : the aim is to recover recovered materials, other than metals.

Here are the different possible legal statuses to create its recycling business:

The micro-enterprise (ex auto-entrepreneur regime): it is a very simplified status and suitable for a start-up,

The sole proprietorship (EI): this is a status that we do not advise because it can reserve some surprises in terms of payment of social charges; Since the latter are calculated on the profits, they are liable to vary greatly from one year to the next,

The EIRL : same remark as for the EI. However, the EIRL makes it possible to protect its personal assets better than in EI,

The EURL (SARL with one partner): it is a suitable status. The manager of the company determines his remuneration, which is used as a basis for the calculation of the social charges,

The SASU : this legal regime is suitable but a little more expensive than the last.

Finally alternative statuses can also be considered:

The association law 1901 ,

The Scop .

The steps of creating a recycling business.

Here are the main steps to create a recycling business:

Validate your project by market research ,

Conduct an economic study: build a business plan and a financial plan , list your needs,

Identify a local ,

Choose your legal status and register ,

Take insurance,

Purchase material for your business,