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HOW TO OPEN A SKIP HIRE BUSINESS

how-to-open-a-skip-hire-business

HOW TO OPEN A SKIP HIRE BUSINESS

I figured I would write this blog to try and guide anyone looking into starting to work in the skip hire business. I made a million mistakes and trying to figure this game out and the path was not an easy one. There does not seem to be a ‘how-to’ guide on this. I am not claiming that this is one, but, if it offers any guidance to anyone, I will be happy. 

Thankfully along the way I met some great people who guided me and pointed me in the right direction. I know how lucky I was by these chance encounters and feel a duty to pass it onto anyone else wanting to get on this journey.

First things first, be prepared for long hours and lots of cash. The cash sounds great but just remember this does not relate into net profit automatically. Looking back, having a sturdy business plan and a realistic profit and loss sheet (that gets addressed monthly) is so important, you’ll find free profit and loss templates here on the Office Website. Being in control of your business is so important and knowing how much money you are making per skip depending on roughly the type of waste is a real power that will give you an edge on most of your competitors. 

Your costs are going to be an issue to start with. It would be wise to have some money saved up or if needs be a loan, you can find funding such as business loans with various organisations, one example is North East Finance.

1 skip loader approximately 8 year old will cost around £15,000 and 50 8yd skips (second hand, if you can find any) are going cost you about £300 per skip, it all adds up. You do not have to start massive, but to make money the bigger the turnover, the more profit. Thankfully, there will always be waste to collect! There is a fantastic Facebook page called Skip Driver UK where you may find plant, vehicles and sometimes skips for sale. Facebook Market place can also be a fantastic online resource for finding second hand plant & equipment.

You will be in an industry that utilises reverse logistics. Simply put:

the process of moving goods from their typical final destination for the purpose of capturing value, or proper disposal”

Click on the above link for the more detailed Wikipedia article. Due to its nature, it is important that your skip loaders are always taking or bringing a skip back. This will increase profit and help ensure that fuel costs are kept as low as possible.

There are multiple things that are needed to make a skip company work. Are you planning to process the waste? This is the only way really to make money in my opinion. You could just deliver skips and take them to a waste transfer station but be aware if a station shuts down or some of equipment breaks down and for whatever reason you cannot tip, then you are going to be stuck with some waste that you can’t get rid of till who knows when. Then you’ll have the added problem of 20 or 30 skips being stuck on customers driveways with them screaming for them to be removed. Either with a transfer station or without, you are going to require a yard either for storage of empty skips or to operate your waste transfer station. I will go through tips and advice on yards and permits later, but it is important to know this as leaving skips on the floor with waste in them classes your site as an illegal waste transfer station and you could be fined or prosecuted. 

With your own waste transfer station, you can take waste from other companies too. Whether man in a van types, one man band skip drivers to bigger companies, providing they have a waste transfer note and an in date waste carriers license. Having a waste transfer station basically allows you to take waste in and process it, separate it and then turn it into another type of waste or sellable product that is no longer classed as waste.  The Environment Agency us EWC Codes to categorise waste, also known as the European Waste Catalogue. For example, if you take in mixed builders waste at 17.09.04, run it through a Trommel and picking you should produce waste streams such as 19.12.12 and 17.01.02. These 2 codes are cheaper to dispose of at landfills rather than 20.03.01 (mixed municipal waste), sometimes by as much as £100 per tonne cheaper. If you’ve your picking station and Trommel finely tweaked you could be expecting a free tip on clean hardcore also known as rubble, clean brick or 17.01.02. Maximising waste separation is key to maximising profits. Don’t also forget a magnetic band pulling off small pieces of waste metal can produce heavy dense scrap metal, once again bringing in a good rebate and offsetting the high operating costs.

Be aware that although profits can be small, 85k turnover will come around quick and so will being VAT registered. This is fine and needs to be taken into consideration with your P and L sheet, but it is better to go bigger as that 20% tax will eat into your profit unless you get well above the cliff limit. Sage Business cloud Accounting I found is a good piece of software to use at it has an online service to take payments that is easier, I found at least, as opposed to a PDQ machine and having to post out receipts. Invoices can just be sent via email and you can also have a log of all your clients who have used before. Also allows a bookkeeper, who is an absolute must, to keep track of any money owed and tax obligations that could land you in hot water if you are not keeping track of it. Make sure all your cash is logged. Having lots of cash can be the so deceptive as it can create an illusion that you are making more money than you have! A good accountant is important too and a necessity. Using them as your company address is a good idea too as it means bills and any important information is sent to them and opened and read. 

Filing and keeping track of letters for bills and any others is so important too as things can creep up on you when you are busy in your own business with the daily stress. A way of keeping this stress to a minimum is to make sure you pre-emptively deal with it or sort it before it comes a problem. Difficult issues that are left are the ones that fester and do not let you enjoy life. Most times the most ‘difficult’ ones are the ones that can be sorted easiest, at least in my experience. Just remember there are going to be problems and that is just the way life and business is. It would be silly to think there would not be any problems.

I will be updating this every other couple of month as of February 2023, with specific sections of the business such as:

  • Waste Handling Equipment
    – Site Location, facilities
    – Transport and the DVSA
    – Environment Agency and permitting
    – How to build a customer database
    – Trommel fines, landfills,
    – Marketing
    – Recruitment and a host of other related subjects.

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Waste Transfer License

Waste Transfer License

Attaining environmental permits (commonly known as a ‘waste transfer license) from the environment agency to operate a waste transfer station is more time consumer and costly than ever. Not toi mention the vast amount of time spent waiting for the permit to become live, that is if, it is granted.

When I opened my transfer station I completed the forms and undertook the whole process myself. I would strongly advise against this now, that is unless you have sufficient confidence and experience in the working g the process. 

Back when I applied for my permit, I had already begun building g a relationship with some of the teams from the environment Agency. I’d sent them a couple of perspective sites and attained a little bit of an ‘off the record’ opinion as to whether I would attain a permit.

Once I had found a site that I thought would be suitable a member of the team came out to inspect the site with me before I committed to the rent and fees associated with making the application. I doubt this would be possible in today’s World but it is definitely an approach I recommend at least trying. Plus, it puts you on their radar in a positive manner rather than which is exactly the way I’d suggest trying g to keep it.

If that doesn’t work the best route to go down would be employing the services of an environmental consultant. As to pricing I really couldn’t hazard a guess at t=what the price would be today. Having a knowledgeable consultant on your side is pretty much paramount in todays world so this is a good starting point for building a good working relationship with one.

My first permit took about 12 weeks to arrive, the next one I did for a second site (using a consultant) took over a year. Other site owners I have spoken to recently have experienced the same long delays. 

Planning permission

If the land you’re operating on doesn’t have the correct use, it is important to attain a change of use from the local authority. My factors impact decisions on both the permit and change of use, from sites of important historical use to the position of houses close to the site. Being away from houses is important, waste transfer stations are noisy, dusty, dirty, and messy. The more the site you are planning to operate from is further away from the houses and neighbours in the general the better. Again using a planning consultant is a important as with the environmental consultant the high expense at the start of the process could save you a lot of time and money in the long run.

Conclusion

If and when the permit is in place, make sure to adhere to your permit, read over it. Unannounced inspections are guaranteed, nobody wants them so have your site in order as best as possible, adhering to what is stated in the permit. Frpom experience, the better managed your site is the less frequent the inspections are. Build your management systems with the permit in mind. All good staff like rules and roder, have places set out for individual waste streams, floors regularly swept, signs up, first aid boxes in place etc. What is asked in the permit is quite simple and the eartlier you implement the rules the better your system will work.

You can find a vast amount of concise and information on the .gov website here, waste transfer permits.

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Trommel Fines – Understanding Trommel Fines & Their Disposal – Regulations & Taxation

Operating a waste transfer station requires a good understanding of trommel fines. It is important to understand the various types of waste that enter and leave site, the sorting processes, including trommel fines. Trommel fines are the small particles of waste that are left over after larger materials have been sorted through a trommel screen. In this article, we will explore the process of producing trommel fines, the regulations around their disposal, and the taxation of trommel fines landfill in the UK.

Trommel fines are produced during the screening process of waste, which separates the larger materials from the smaller ones. These materials are usually composed of soil, rocks, and other small particles (C&D waste) that cannot be easily sorted. Trommel fines are considered to be a residual waste and are therefore subject to specific disposal regulations.

In the UK, trommel fines disposal is governed by the Environmental Permitting Regulations (EPR) 2016. These regulations state that trommel fines must be disposed of at a licensed waste facility that is authorised to receive them. Additionally, waste management companies must follow specific procedures for the storage, handling, and transportation of trommel fines to prevent environmental contamination.

One of the key considerations when disposing of trommel fines is the taxation of trommel fines landfill in the UK. The trommel fines landfill tax was introduced in 2018 as a measure to encourage the diversion of waste away from landfills and towards more sustainable methods of waste management. The tax is currently set at £3.15 per tonne and applies to any trommel fines that are disposed of at a landfill site. Once deposited at a landfill a sample will be taken by the landfill operator and sent off for analysis. They are heated and tested for ‘loss of ignition’ The leftover residual waste is weighed and if a certain percentage is removed due to heat it is classed as organic waste and charged as waste at £98.60 per tonne. It is important that fines are ‘clean’ as they are extremely dense and heavy. Poor results in loss of ignition could easily send you into the red.

To avoid the trommel fines landfill tax, waste management companies may choose to process the trommel fines further or dispose of them in alternative ways. For example, some companies may use trommel fines for construction purposes, such as road building or land reclamation, which can reduce the amount of waste that needs to be sent to landfill.

Our site operates a an aggregate business which assists in converting disposal costs of some materials into profit by selling graded soils and fines.

In addition to the regulations and taxation around trommel fines, it is also important to consider the environmental impact of their disposal. Trommel fines can contain hazardous substances, such as heavy metals, that can pose a risk to human health and the environment if not handled correctly. Therefore, waste management companies must ensure that they are following all necessary procedures for the safe and responsible disposal of trommel fines.

In conclusion, trommel fines are a residual waste product that must be disposed of in accordance with specific regulations in the UK. Waste management companies must also consider the trommel fines landfill tax when disposing of these materials. By understanding the process of producing trommel fines, the regulations around their disposal, and the taxation of trommel fines landfill, professionals in the waste management industry can make informed decisions about their waste management strategies and ensure that they are meeting their environmental obligations.

Heavy waste streams such as soils, bricks and fines can either be a heavy financial burden or a profitable operation.

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Waste Handling Equipment

Plant & Equipment

Mainly due to lack of funds when starting off the business I began without any ‘waste handling equipment’ also known generally as ‘plant equipment’, it isn’t fun and the time lost makes business operations extremely inefficient and expensive. Imagine tipping a skip on the floor with 8 tonne of soil in? We literally had to use shovels to move the material. However over the years I built up savings along with knowledge and began building and improving the business. I learnt what was required to make a small site processing approximately 20 skips a day to operate as efficiently as possible. 

Loading Shovel

I’d say the piece of kit to priorotise first is some sort of loading shovel that will take care of the heaviest of the work namely the handling of the handle the heaviest of material, namely waste soil, clay and bricks. Our site started off small so a sensible investment seemed to be a Case 1845 C Skid Steer Loader. I was very lucky, the machine had one owner from new and was as they say in the industry ‘bullet proof’. However, as the business grew the machine struggled to keep up with the heavy work that was demanded of it. Later on in the growth of the company I invested in a brand new Manitou 365 from Lloyds in Newcastle. If setup is like mine was and your transfer station is quite small, then the Manitou 625 is nimble, quick and agile. 

These are huge decisions to make at the early stages of the business. At the time a Manitou 625, brand new, cost approximately £39,000 plus VAT so I had to get the right machine, correct size etc first time round. The companies that sell these machines do usually offer to bring them to your site so you can test them out – I’d highly recommend doing this but, you don’t get a proper feel for the machine, whether it is up to to the task, until you’ve operated it properly on site for a while in various scenarios. In order to make a half decent educated guess, I’d recommend paying attention to the operations of other transfer stations when you’re in their sites tipping off or their meeting owners. 

Just as important as finding the correct machine for the job is finding a good, reliable operator. A decent operator will respect the machine and maintain it to a high level. From my experience the best operators took their time and took care to complete their tasks in a professional and sensible manner. Often a poor machine operator would rush the job to get it complete as quick as possible. It cannot be overstated how much care and attention is required to operate a site like this in a safe manner. No point in building up a business to lose it all if an employ is in an accident and takes you to court. Have rigid procedures written up and signed by the operator. My method for creating these documents was to work with operators and run through all the different procedures of their jobs. From here I’d hand over the information to a qualified health and safety consultant to write up the information on a professional document.

Speaking of accidents, as a side note, insurance for this sort of work is difficult at the best of times to find and is always expensive due to the ‘high risks’ involved in the work being carried out. I’d highly recommend Avon Associates – Waste Management Insurance. They were always professional, efficient and affordable for getting the job done.

360 Selector Grab

I believe next on the list and in order of importance is a reliable 360 with a selector (rotator) grab. My fist machine was a Case CK50, 5 tonne. Once again, I was lucky and purchased a solid old workhorse from down South which done the trick for the first year or two.

Due to the increasing amount of waste passing though the transfer station on a daily basis it was necessary to upgrade the machine as breakdowns began costing a lot in terms of repairs and lost time.

Once again the heavy amounts of waste passing through the transfer station each day became too much for the old workhorse and the machine was upgraded to a brand new, JCB, 86C-2, 360. At 8.6 tonne operating weight this could pull through heaps of bulky waste at a super quick rate while also feeding the trommel drum. An efficiently operated, well maintained machine like this can do the work of 3 good men on the ground, picking out heavy objects and loading the feeder that drops into the trommel.

Trommel Drum

Before I started out on this adventure I had no idea what a trommel drum was. In simple terms, a trommel is like a giant tumble dryer, where waste is fed into it via a feeder belt and the waste passes through and trommel, where fines (dust) from the waste fall out of the drum and into a bay. I have wrote a full section on trommels fines and their tax rates that can be found here. When the larger corporate companies wanted smaller operators out of the game, it seems like the implementation of taxation on dust was one of the most effective ways of achieving this. As you can read in the trommel fines section (I’ll be writing in the coming weeks), separation of the dust doesn’t stop there, cleaning of fines is a whole other stage of the process. This taxtaion and a whole host of other pieces of legislation has led to the EU and UK Parliament gradually handing more and more of the work to lager corporate companies. This material from a waste processing operation could bankrupt a company in a matter of months or even a few weeks so it is important to have a something in place. For example when I set out, I mostly took work from house clearances as the dust was minimal. Once the trommel was in place we incoprtated more and more construction firms into our portfolio of customers. The amount of C&D waste(construction & demolition) increased, as did the fines, however our trommel and picking sations were in place to cope with the work.

What the trommel does is, it separates the dust out of the waste. What comes out the other end of the drum is waste above 20mm which can be picked off by operatives standing on the belt. If you have correct set up clean rubble will fall off the belt that can be later crushed and sold. It also makes separation of the other materials much simpler. Picking small pieces of waste off the floor by hand, especially small pieces mixed with dust is time consuming, back breaking and demoralising. Try find operatives who’ll do this at a fast pace all day – I never could. There are a whole host of various types of trommels for sale. I bought a Baughan Barrel – perfect for starting up first time. Simple to operate, not too big, easy to maintain and well manufactured.

Maintenance And Procedures

One of the most important pieces of advice I could give for anyone starting up is to regularly maintain their plant equipment. Processing waste is one of the dirtiest and heaviest of operations a piece of machinery could have to carry out. If your machine is offline for 3 hours every 12 weeks because its getting serviced then you’ve probably just saved yourself thousands of pounds in downtime and repair fees further down the line. Daily checks by staff are fundamental and should be included in your companies operational procedures. These things may seem like pieces of unnecessary red tape but actually save time and money keep good staff happier. For example, if an operator reports the machine has ran low on hydraulic oil in the middle of the day and they have signed their daily check book to say it was at a sufficient level in the morning – it is easy to find out who responsible for the issue.

Other Pieces Of Kit

Cardboard baler
Whether you’re processing construction and demolition waste or house clearance material, receiving lots of cardboard on site seems to be a guaranteed constant. A good baler can help keep tipping costs down, bring in a small revenue stream from rebates and free up quite a substantial amount of space due to the bulkiness of the material. Stacking the material in bales further reduces fire risk, creates more space and allows the site to operate in a more efficient and safe manner. My make of choice of baler would be an Orwak Baler however my experience of baling and storing waste cardboard is limited.

Concrete Lego Blocks
I’ve bought cheap and pid top dollar. Like most things in life you get what you pay for. Lego blocks are a fundamental part of the infrastructure in most waste transfer stations both big and small. I bought my concrete lego blocks from Titan Concrete. They’re a friendly, family run business that will deliver a high quality product on time. The blocks lock up in a very neat way and pull together tightly. Highly recommended.

Plant Hire
A piece of machinery goes down on what seems like the busiest day of the year and at the most inconvenient time possible, who can replace it while the fitter makes his way to site? I hired multiple 360 excavators from North East Plant Hire – another efficient, professional and easy to deal with firm.

For the hire of some sort of loading shovel or telehandler i’d recommend Northumbria Plant Hire. They’ve always got plenty of stock and can also repair plant equipment.

Skip Repairs
Every other week skips needed repaired, lugs coming off, holes appearing in the bottom, floors falling out or was more often the case – rotting out. I couldn’t recommend highly enough the professionalism of T-Service based on the Team Valley, Gateshead. The team there are perfectionists who are proud of the work they do. they charge a fair price and can make an old battered skip look like new.