Compost is one of those things that a lot of people need on a repeat basis, and you might be wondering “is making compost profitable?” Many municipalities make compost from community food and garden waste collection, and if you’re questioning whether this is profitable, we’re going to cover that today.
Selling off old food waste may sound odd, but compost is a valuable commodity. However, for a business to make enough of it to turn a profit, they need a commercial facility, rather than the sort of space that the average backyard has. Composting can theoretically be a profitable business, but you need to think about a lot of aspects first!
Does Commercial Composting Require A Lot Of Space?
This really depends on how big the business gets, but composting can’t be done in a tiny yard and made profitable, no. A home compost heap needs to be around three feet by three feet to work properly, and if someone is trying to create compost for more than one or two households, they will need more space.
Some commercial composting facilities are enormous.
Compost can take anywhere between six months (for hot composting) and two years to reach a state where it is fully broken down and usable. Any waste that is added to the pile later will still need the full amount of time – so estimate that compost needs at least six months after the addition of the final ingredient before it’s ready.
To get an idea of how much space this involves, look at your own compost pile (if you have one) and consider how many more compost piles you would fill before the six-month period was up. You would need at least that much space to compost effectively.
Bear in mind that you also need to add space to store the compost once it has finished processing but has not been bought. This will take a significant amount of room as well.
Remember too that food waste loses a lot of volume as it decomposes, so the business’s salable goods will be considerably less than the waste that gets input to their facility. Again, this makes managing space a challenge.
Finally, you will need space to pack and sort both incoming waste and outgoing compost – so it really is a space-hungry business.
How Is Waste Sourced?
Many composting companies source their organic waste by offering a service to the local community, in which they collect waste from them – often for a small fee. In some places, waste will be picked up free of charge or possibly even paid for.
Obviously, how cheaply you can source the organic waste for your compost business affects how much profit you are likely to make. If you are having to pay for the waste, you’ll find this takes a huge chunk of your profits. If you can get people to pay you to take it away, you’re more likely to make good money.
You will have to think about this in relation to your own area and consider what is realistic before you can decide what to do – but make sure you take the cost of waste collection (even if this is just the physical cost of getting it to your facility) into account when building your business plan.
Does It Require Much Knowledge?
You might think that piling up some organic waste and stirring it from time to time, and then letting it turn back into soil doesn’t require much knowledge, but creating commercial compost is a little different.
Commercial compost needs to have a good balance of nutrients and a neutral (or close to neutral) pH (unless it is specifically ericaceous compost, in which case it must be acidic). The salable product must be of reasonably high quality if it is to attract and satisfy buyers.
While compost produced at home is certainly fine to use on your garden, you don’t really know what nutrients it contains and what it may be deficient in. You may also lack knowledge on how to ensure it is balanced and when it is ready to use.
Creating a composting business does, therefore, require a surprising amount of knowledge. That isn’t to say you should give up if you want to create one – but be realistic about where you are and what you still need to learn.
Often, before you can set up your own composting business, you will need to do some serious on-the-job training. Experience is often the best way to make sure that you are producing high-quality compost that will satisfy your customers.
Consider working for another firm to get this experience, as composting isn’t really something you can go and do a course in. Most of your knowledge will come from trial and error!
Is Setup Expensive?
It may not surprise you after the section on space, but yes, setting up a composting facility can be expensive. The business needs a lot of things, which all come with costs, and we’ll go into some of the standard expenses below.
Apart from the land, let’s look at what else someone setting up a composting business needs to consider:
Firstly, you need labor. Even if you plan to keep your composting business fairly small, you are likely to need more than one pair of hands to run it. If, for example, you accept dropped-off material, who will process this if you also offer compost delivery services? Who is packing and sealing the bags, who is turning the heaps, who is sieving and sorting, etc.?
You need a lot of hands for commercial composting, and labor is often one of the biggest expenses. Even if you find you can manage on relatively few staff because you are prepared to do a lot of the work yourself, you will still need to set a generous budget for wages.
This is particularly true if you aren’t in a position to be hauling around compost!
Secondly, you’ll need equipment. You might not think that composting takes a lot of equipment since it’s just a pile of rotting materials, but to compost commercially, you will need a carefully built and well-designed facility.
You will also need equipment to help you process the compost, such as a compost turner machine. You will find that a garden fork doesn’t quite cut it when it comes to large-scale composting! As well as that, you need to consider things like bins or sheds for storing the finished compost.
You may also need a truck (or trucks) for delivery and collection if you offer these services. If you don’t, you’ll need car parking space for your customers to collect your compost, and this could lead to increased insurance costs because you have customers on-site.
Equipment will also be required in many smaller ways, such as the spades/forks for handling compost, the buckets for transporting, etc. While less equipment-heavy than some businesses, composting definitely requires the right tools.
You may also find that you need things like screens, accelerators, bags, etc. Depending on the size of your composting business, you may find this gets expensive fast.
Thirdly, you need to think about the cost of pickup and delivery. If you are accepting food waste from the community, will you offer pickup services? How can you keep costs down? Will you charge for delivery, or offer it for free?
Remember that pickup and delivery will cost your business significant amounts of money, especially if you provide these services for free. You will need sufficient staff to run the trucks and the main site, and you’ll have to balance peak times against slow periods.
You might decide to only offer customer pickup and drop-off. This will reduce your expenditure, but will often cost you business, and you’re likely to find that many potential sources of waste for your compost simply don’t have the time or inclination to drop off waste at your facility. Likewise, some potential buyers will choose another company that does offer delivery.
What Else Do I Need To Consider?
There are many other things to consider in setting up a composting business, but one of the big ones is sanitation. You are collecting a waste product from households, and you need to think about how you can do this while minimizing the risk to your workers and your site.
You will need to put some strict procedures in place and while these may not directly affect your profitability, not doing so could – because you might open yourself up to lawsuits.
You will also have to think about quality control and how to ensure that your end product is good, and there is no contamination. Again, failure to do this could be expensive in the long term.
A composting business can be profitable, but it comes with high startup costs and needs to be carefully thought out. To make money selling compost, you need a large facility with sufficient staff and a reliable source of organic waste.
However, if you have the money to put into the startup and the access to organic waste, composting can certainly be a profitable venture.