Setting-Up a Junk Shop Business Part 1

The Junk Shop Business is most relevant today considering that the government has promoted environmental awareness among its citizens, expressing the need for proper waste disposal and recycling of materials as a major factor in protecting the environment.

As such, business of this nature has developed into a small scale industry. At a glance, one can not immediately see the profitability of this business but in fact that junk shops continue to exist is proof enough. The proliferation of junk shops in many localities attests to the stability of this small scale industry.

The introduction of new materials such as plastics and aluminum containers replacing the old kind have expanded the items now considered in the business unlike before wherein old newspapers, glass bottles and metals are the main concern. From the simple and ordinary galvanized iron and brass steel products, copper, aluminum and plastic user more as an alternative, has taken the limelight.

And so we can say that this enterprise which is actually a simple buy and sell business is here to stay.

Registration and Permits

In whatever type of business one intends to venture into, legally is a must. The licenses coming from the concerned government agencies should be acquired prior to operation. Below is a list of the said agencies.

  • DTI – Business name registration
  • BIR – Taxation purposes
  • Barangay Certification
  • LGU (City/Municipality) – License to operate

Capital Investment

Fixed

  • Business licenses and registrations
  • Security (refundable) and advance rental deposit equivalent to 4 months
  • Equipments
  • Vehicle (optional-pick-up truck)
  • Renovation (in case of land lease)
  • Miscellaneous

Operating Expenses

  • Monthly rent
  • Utilities (electricity, water, telephone, gas)
  • Manpower (wages)

Revolving Fund

  • Purchasing cash

Contingency Fund (optional)

Location/Site of the Business

The project’s location should be within a commercial district and proximate to residential developments. It should be high accessible to private and public utility vehicles, trucks included. Prior to signing of the leas contract, the entrepreneur must check with the local barangay with regards to any restrictions concerning the junk shop operation.

There are two options that can be considered with regards to how big an area one should lease.

  • 1. Buying Station – Should one find hard to acquire a space for both purchasing and warehouse purposes due to inavailability or high rent, one can operate a buying station with an area of at least 30 sqm. However, a storage area proximate to the buying station is required. The storage area must be at least 100 sqm., portion of which is covered, the ratio to be determined based on the market assumptions. In this case, it is necessary to have at least a small pick-up vehicle for transporting the purchased goods from the buying station to the storage area.
  • 2. Warehouse Operation – A warehouse set-up with ample open area is advisable. The gross floor area should be at least 100 sqm., portion of which is covered, the ratio between the open and covered area to be determined based on the demand in relation to the volume of recyclable items/materials. In this case, the acquisition of a delivery vehicle is optional.

Manpower and Equipments

The Junk Shop Business is not manpower intensive but like any other businesses, one must have a trustworthy and hardworking staff to succeed. A personal touch is advisable as the foundation of the business’ operation is pretty much cash oriented. If the entrepreneur can act as the general manager and the cashier at the same time, the possibility of pilferage can be minimized if not eliminated.

The list below outlines the basic skeletal force for operation.

  • 1 General Manager/Cashier
  • 1 Officer-in-Charge (minimum wage)
  • 1 Driver/Helper (can act as Checker) (minimum wage)
  • 2 Helper (can act as Checker) (allowance+free board)

Basic office equipment and furniture consisting of 2 sets of tables and chairs, calculator, adding machine and other office supplies as required.

The list below outlines the necessary operating equipments to start up the business. It is not necessary that these are brand new as long as it is functional and accurate. All weighing scales should be inspected and calibrated by the DTI of the City/Municipality Government.

  • 1 Weighing Scale (Bascula)
  • 1 50kg countertop/hanging weighing scale
  • 2 Metal push-cart (cartilla)
  • 1 Acethyline Torch and Gas Tank
  • 1 Pulley
  • Tools (steel saw, pliers, vice grips, screw drivers, hammer, “baretta de cabra”, etc.)

Read Part 2

source: trc.dost.gov.ph

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