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January 17, 2021


How to Start a Cooking Oil Recycling or Waste Oil Collection Business

Follow these simple steps to launch your own cooking oil recycling business.

Cooking oil recycling and waste oil collection are ongoing needs you can build a business around, providing a very useful and valuable service for restaurants, automotive mechanics, and other businesses. If you have access to a small amount of startup funds, understand the regulations of your area, and can make connections with local businesses, you may just have everything it takes to start your very own waste oil business. 

One way or another, businesses that use oil consistently have to properly dispose of it later on. By dependably doing this as a service, you can reduce the costs other companies incur and take care of something they may consider an annoying problem. 

Whether you want to handle all types of waste oil or have specific waste products you plan to collect, you’ll need to know how to keep your business compliant with all applicable regulations, how to organize your new company, and how to find customers. 

What is the waste oil industry? 

Businesses that collect waste oil for future recycling allow restaurants, manufacturing plants, automotive facilities, and other operations that regularly use oil to properly dispose of it, giving the oil a renewed life elsewhere. Since companies repeatedly use oil for their processes, they have a constant need for someone to collect it. 

What can you do with used oil? That depends on the type of oil: 

  • Cooking oil: Vegetable and animal oils are used to cook food in restaurants, cafeterias, and other institutions. Although they can’t be reused directly to cook food again, these oils can be converted to biodiesel to fuel vehicles. Biodiesel is a clean, nontoxic, reduced-pollution alternative fuel. Specialized vehicles can use it instead of traditional fuel types. 
  • Automotive oil:  Vehicles use oil, and a lot of it. Mechanics and dealerships represent ideal customers for a business collecting automotive oil. 

The Environmental Protection Agency (EPA) considers waste oil a contaminated, used oil containing other substances. These oils can be recycled through a specific process. Oil recycling minimizes dumping, making it good for the environment. A single gallon of used motor oil produces just as much refined, high-quality oil as 42 gallons of crude oil. The efficiency of oil recycling saves energy and reduces the overall price of oil. 

Getting Started in the Waste Oil Industry

Processing waste oil as a business requires the right plan. To get started, you’ll need to research local requirements, obtain the right equipment, and do other feasibility research. From there, carefully craft your business plan and determine how you’ll find clients. If you need more guidance, follow these steps: 

  1. Gain experience: Get the right experience and knowledge by taking classes, working in someone else’s business for a while, or learning about local requirements. Find out more about the industry if you’re new to it. If you already have the experience, you can start sooner. 
  2. Research your market: Look at the competition and determine the accessibility of current waste oil options to potential customers. Make sure your area can support another waste collector. If you’re the first in your sector, that’s even better! 
  3. Create your business: When you’re confident in your business plan, start registering and opening your business. Choose a legal structure, a name, and a marketing identity. Decide how you’ll spread the word about your new company. Find out what licenses you’ll need and regulations you’ll have to follow. 
  4. Purchasing and renting equipment: The type of oil collection you do may dictate what equipment you need, but generally you’ll want to have barrels or other containers for the oil, a commercial transportation truck to haul barrels away from customer businesses, and a location for storing oil. Your barrels and equipment will probably cost at least a few thousand dollars. Once you add in the costs of a decent truck, the total price tag will likely hit ~$20k. Be sure to factor in how much money you’ll need to obtain the right equipment. 
  5. Advertising and getting your first customers: Begin by letting others know about your new business. You could send an ad in the mail to all local companies that use oil, for instance. You can also start a website and rely on SEO and word of mouth advertising to let everyone know about it. 
  6. Refine your plan: Once your business starts getting its first customers, revise your plan to make sure your back office processes keep up with your needs. You should make more accurate revenue projections with the added information you have from your first contracts and making your first deals. 

Your Cooking Oil Recycling or Waste Oil Collection Startup

Continuously market your services and work on refining your plans, and you will find yourself in a better position to take advantage of market opportunities.