Everything You Need To Start A Scrap Metal Business In Kenya

Scrap Metal Business In Kenya

One of the businesses that present a rewarding opportunity for you is the scrap metal business. The scrap metal business has to do with the handling, sorting, and recycling of scrap metals.

With Kenya’s policies and regulations about waste reduction, the scrap metal business plays an important role in it.

Also, people who have an interest in venturing into this business will contribute to resource conservation and environmental sanitation by removing metal waste and promoting the reproduction of scrap metals into valuable materials.

What about the high demand for metals in the construction sector? This creates an avenue for profitability in the business. Additionally, it creates opportunities for people to make money.

So after you have considered all these reasons, you will get to know that the scrap metal business is a good business to invest in. However, this article will give you information on everything you need to start a scrap metal business in Kenya.

What Are The Business Opportunities In The Scrap Metal Business In Kenya?

The scrap metal business presents different opportunities for an entrepreneur to make money in Kenya and the opportunities are:

1. Scrap Metal Recycling Business: This is the business that involves recycling scrap metal into new products.

2. Scrap Metal Collection: A scrap metal collection is another way of running a scrap metal business in Kenya. It involves the collection and gathering of scrap for recycling purposes.

3. Repair And Maintenance: This is almost similar to recycling, but in this niche, you repair scraps that are damaged and then resell them. Meanwhile, this business requires technical knowledge and even electrical knowledge.

4. Rendering Transport Services: You can also start a scrap metal business by offering a delivery service for scrap metal companies. Or conveying scrap metals for scrap metal businesses.

How Profitable Is Scrap Metal Business In Kenya?

The scrap metal business will continue to remain a profitable venture for those who are into the business in Kenya. This is because the global knowledge about scrap metals has led to the growing demand for metals.

With this awareness, the construction, technology, and manufacturing sectors have presented a lot of opportunities for Kenyans to make money. Even more opportunities for those involved in the business of processing scraps into a recycled and reused form.

So with all these factors, the scrap metal business in Kenya will remain significant.

All the same, strive to understand the market to increase your chances of success.

What Are The Challenges Of Scrap Metal Business In Kenya?

Some challenges you are likely to face are:

1. The high startup capital
2. Bad road for transporting of collected scrap metal
3. Theft of scrap metals
4. Accident and injury during collection, reviewing, and packaging of scrap metals
5. You may find it difficult to identify quality scrap metals
6. Exposure to toxins bad for health
7. Constant disagreement between scrap yard owners and collectors.

How Much Does It Cost To Start A Scrap Metal Business In Kenya?

As we said, the scrap metal business is capital-intensive. To start a successful scrap metal business in Kenya you will need a capital of Ksh 1 million to Ksh 2 million, this should cover all expenses including licenses and permits.

How Do I Start A Scrap Metal Business In Kenya?

Here are simple steps on how to start a scrap metal business in Kenya:

1. Choose A Niche: The first step to starting a scrap metal business in Kenya is to choose a niche. There are niches like recycling, collection, etc. More so, when choosing a niche, it is important to consider your location, as most niches don’t do well in certain locations.

And also consider the competition level when choosing a niche.

2. Conduct Market Research: You have to equip yourself with the basic knowledge about your chosen niche. So how can you achieve this? It is through market research. Of course, it is very important to conduct your market research before starting this business.

You need to identify your target market, competition, pricing, marketing strategies, and the rest. All these are achievable through market research.

3. Develop A Business Plan: Business plans are vital for all businesses and the scrap metal business is not exempted. You need a good business plan that will guide you through how you can start your scrap metal business and possible ways of achieving success.

Meanwhile, your business plan should include goals and objectives, market research, financial projections, marketing strategy, competitive advantage, SWOT analysis, etc.

4. Choose A Good Location: You need a good space for your scrap yard. When looking for a space, ensure that it is accessible and visible and should comply with the law.

5. Obtain The Needed Licenses And Permits: Scrap metal business is a business of environment, so it needs to be licensed before operation. Therefore, you have to acquire a scrap metal dealer license in Kenya.

To achieve this, you have to make an inquiry fulfill the requirements, and get your license.

6. Purchase The Needed Equipment/Tools/Machines: Acquiring equipment depends on your budget and the scale you are starting your business.

Meanwhile, you will need tools and equipment like pickup trucks, axes, hammers, scales, crowbars, metal shears, balers, sorting and grouping equipment, granulators, washing gears, shredders, etc. It all depends on your budget.

7. Hire Workers: You need to hire workers for different tasks, for example, those who will be collecting scrap metals, drivers, those who will be handling the machines, packagers, etc. So you have to hire the major help you need to run your business effectively.

8. Promote Your Business: The major way of promoting your business is by networking with other buyers. You have to identify other metal scrap dealers both locally and internationally, and then collaborate with them.

Conclusion

Although the scrap metal business is a capital-intensive business, it is still worth it, because its profit potential is very high.

Do proper market research including offline investigation before venturing into this business.

Ambassador Victor Chidera
Ambassador Victor ChideraAmbassador Victor Chidera is a business consultant, writer and a blogger. He provides lots of professional and expert advice to small businesses, entrepreneurs and organizations. He has many years of experience in business, teaching field, and research work. And his aim is to provide business articles that matters to you both nationally and internationally.
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