Sunday, January 11, 2015

Hey Grinderguy, how do I start a Mulch Business?

This call could have come from anyone, but it came from a Tree Service more or less.
Many Tree Service businesses get into a situation where their disposal costs are so high, that they have to find another avenue to make their waste disappear. While buying a half million dollar grinder does not sound like saving money, it may be. This customer was spending about $50,000 a year in disposal costs. While this is a significant amount, I wouldn’t necessarily say enough to warrant purchasing a grinder just yet. But how would you start is the question. What to do?  Rent, purchase, start or not.
First, you need a permitted space. You may be able to start a site with your own materials a lot easier than to try and start a dump site for others. Check out your area and see if there is a loophole or other way of starting with limited volumes.
Secondly, determine your products. Do your homework in your area. What is mulch selling for? Is it natural or colored? Your biggest return will be on the colored mulches. What is the competition? These are all easy questions to answer but you need to take the time to do the research.
Third, determine what equipment you need and what equipment you can rent or subcontract.
The simple answer is this:
·         You need a way of loading and moving materials. This is a must and is very easy to rent a wheel loader
·         Keep your material clean. No inert debris just chips and logs. While chips can be sold or colored as is, it is not very attractive.
·         Subcontract a grinding Service to reduce your materials. Decide if you want a finished product or if you are going to screen the material to size after. While you will have a lot of fines because of grinding the chips, as long as there is limited dirt in the material, you should be fine.
·         Rent a color machine, trommel screen or use the subcontract grinder to color your materials. A trommel screen is very easy to rent, especially in the off season. A Mulch Colorant Company can assist you in setting up any machine to color mulch.
This simple way of starting will help you determine:
·         If you will be profitable?
·         How much material you need to stockpile before subcontracting the grinding?
·         What materials sell quickly and which do not?
·         What other products you can add to your inventory?
What if you were to accept additional yard waste or if you do not own a tree business and were thinking of starting a Mulch site? Most everything would be the same, except a little more permitting to accept materials. I would start the same way and determine what your incoming materials look like before doing anything. A lot of dirt, sand and fine debris come into these types of sites, so screening becomes a must before coloring. But when you do screen, you will have other products to sell like topsoil, fill or compost. Compost returns about one third the dollars as colored mulch, so keeping the woody materials for mulch is your best bet.
This makes a screen more valuable to the operation than a grinder. After screening out the dirt, the screen can be used to screen the mulch product to size and then to color the materials. So the first purchase in this scenario may be a screener rather than a grinder.
After determining your volumes, contract grinding expenses and income, then you can make an educated decision to purchase a grinder. But remember, a grinder payment is about one third of the cost of monthly operations of a grinder. Fuel and wear parts are expensive.
This way allows you to dip your foot into the market without any significant capital expense and decide if this is the correct option for you.
On another note, I was asked if I would do some consulting for a customer. I am absolutely available on a consultation basis and the more volume a customer has, the more money I can save them. Guaranteed. Sometimes you just need to look at things a little differently or have someone else look at them for you to see the obvious. If you are a big Corporate Company in Waste, Composting or Landscape Materials, I can save you millions. If you are a little guy getting started, I can eliminate your growing pains because I have made all those mistakes before and worked twice as hard doing it the wrong way.

Questions? Dave Whitelaw-Grinderguy,

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