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Sale of used oil for Biofuel – Competence and Organization

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Start with the sale of used oil for biofuel

Setting up a company to collect and sell used oil represents a successful business venture. This used oil collection and sales company offers equal attention to the collection and sale of part of your business. You need a constant flow of customers for collection and a strong recycling program for higher revenues and profits. If you want to focus on restaurant waste oil or car oil, you need a strong understanding of the rules for collecting, transporting and disposing of waste oil. This business can be started with about $20,000 in start-up funds and can be run by a single person. Therefore, by providing efficient and convenient service for the collection and sale of used oil, you will have a solid foundation for a long-term business.

Environmental businesses, meet them all here

Keywords: used oil, biofuel

The world’s energy consumption is increasing. This has caused fuel to deplete resources such as oil. An alternative to oil is biodiesel. It has the same properties as fossil diesel, but is biodegradable and has lower emissions. Biodiesel is a product of a chemical reaction with vegetable oil or animal fat, alcohol, and a catalyst. Here are some ideas you can follow to open your business selling used oil for biofuel.

Find out about waste oil regulations in your area

Determine what type of oil you can collect, regulations and costs for disposal of non-recyclable oils, transportation, legal requirements and necessary containers.

Determine the types of waste oil you want to collect

Your options include car oil, restaurant oil and used oil in manufacturing processes. Each type of used oil may have different regulations and recycling options in your area. You need to do research on existing market and current service providers to find a niche that is not over-saturated with other waste oil collectors. Then, look at the value of the oil for recycling and the distance to the nearest recycling plant. Based on your research, choose the type of oil that will provide you with a large number of customers and a high recycling value.

Start with the sale of used oil for biofuel

Get customers interested in biofuel

Visit companies using the types of oil you want to collect and send.  Consider advertising in a local newspaper for restaurants or for the automotive industry. You can usually place a small ad for about $100. Describe their services and get agreements to pick up the oil.

Make it convenient for business owners to work with your service. Doing so will help you get other customers through word-of-mouth advertising. Consider offering additional services, such as deep cleaning, to increase your revenue per customer.

Costs of establishing your oil sales business 

Consider establishing a corporation to help limit legal and personal financial exposure in the event of accidents. Establish accounting and organizational systems that track your expenses and profits. A basic system of a desktop computer and accounting software could cost about $800.

Obtain all necessary licenses, including commercial driver’s licenses or CDLs, to drive large trucks with hazardous materials, and approval if appropriate. So, if you use a smaller truck, a CDL is not necessary. Training and licensing can be found for about $1,000. Purchase business insurance to cover all equipment loss and liability in case of accidents.

Safety costs vary depending on the type of vehicle you are driving and your location. For a small vehicle in an urban area, the budget is about $400 a month for commercial insurance.

-Buy the equipment and everything needed to store, distribute and recycle the type of oil you want to collect

You may need to purchase special containers for your customers to use between PICK-UPS, a commercial transport vehicle, storage tanks, test equipment and any equipment specified by the state or local governments.

You need to purchase a small flatbed truck with a 12-foot bed and an elevator that used can cost around $14,000. Start with about 40 55-gallon drums for storage of the oil provided by the customers, with service to about 35 customers. As well, purchase additional storage drums as your business grows. You can find used certified drums for about $50 each. The cost

Total of these could be approximately $2,500. Similarly, the total cost of a vehicle and equipment should average $16,500.

Requirements to start selling used oil for biofuel

There should be ample and open space to work, and any business that recycles industrial elements or that may represent a considerable level of contamination will most likely have to acquire its space in industrial zones destined for such use, due to the urban planning regime that may exist in the country’s jurisdiction.

Another requirement is to have the appropriate permits to work with industrial elements if necessary, always having your records, permits and appropriate business documents up to date, so that the country’s regulatory body does not harm or fine you for carrying out activities outside their control.

Advantages of selling used oil for biofuel

Biofuel is in the process of being accepted by the consumer, and it tends to be cheaper than that imported from foreign refineries.

Therefore, progressively increase the movement of this product, representing greater demand for used oil for business by the plants that manufacture this biofuel, however, the acceptance of the product, is progressive, for its economic advantage.

The raw material is simply used oil so it can be received and earned without the need to buy it because, there will be several users who will donate oil or sell it very cheaply since it is disposable, which always represents a good profit margin at the time of resale.

Requirements to start selling used oil for biofuel

Tips to start selling used oil for biofuel

It is advisable to notify users who dispose of used oil from their vehicles that there is a body willing to accept it without any commitment, thus managing to acquire this product free of charge.

A small amount of money can also be offered for the purchase of used oil so that, when reselling it to biofuel plants, good profit margins can be perceived by recovering the investment and tripling it.

Also, establish contact with all the biofuel plants available according to the acquisition of your used oil, the more quantity you acquire the more refineries you can sell this oil to.

Problems that may arise

This type of business does not yet have the necessary consumer credibility, many users believe that biofuel can damage their vehicles so this may indirectly affect their business.

Working with environmental pollutants can bring problems with the regulators in charge of preserving the environment, so if a mistake is made in the bureaucratic processes involved in obtaining the necessary permits to operate industrial elements, this can lead to fines or penalties for the business.

Success stories 

Deter-oil, is considered a successful company in the used oil business, because they collect the oil drums and exchange it for other services such as treatment, disinfection and pest control, air disinfection in cold rooms, checking fire extinguishers, cleaning and maintenance of the smoke extraction system.

Another successful company is SIGAUS, which guarantees all automotive workshops a free used oil collection service due to the contracts and agreements signed with a wide network of 160 authorised managers throughout Spain.