Sample Salvage Company Business Plan

Here is how to develop a salvage company business plan.

Are you interested in starting a recycling business? This is a vast area of interest that covers several specializations. A salvage company is one area you might find suitable and interesting.

There are lots of opportunities for entrepreneurs in this area.

Need to write a plan for your venture? Download a FREE Business Plan PDF Sample to develop a template for your own startup.


Is this is your first time hearing about this business concept?

If your answer is yes, we hope the explanation we provide will help you better understand what the business is about. A salvage business involves the buying of totaled or damaged cars.

Such car wreckages are bought from insurance companies for either recycling purposes or to remove valuable parts to be sold to auto mechanics. For cars that can be salvaged, these are refurbished and put on sale.

Startup Costs

You’ll need sufficient startup costs to establish and run a salvage company. This is an important aspect of your business that must be properly worked out in detail.

For this business to be fully operational without financial hitches, you’ll identify what your costs are.

There are multiple factors involved when it comes to establishing this business. The most basic include land, a holding facility, fencing, equipment, security as well as administrative equipment.

Let’s briefly discuss each of these as follows;

  • Land

Land typically takes up a major part of your expenses.

However, this wouldn’t be the case if you own one as such can easily be converted for this purpose. You’ll need to check with local authorities if your land falls within the commercially zoned area.

If it doesn’t, an alternative is needed. Getting land within a commercially zoned area is necessary to avoid running afoul of existing regulations.

  • A Holding Facility

A salvage company requires a holding facility large enough to keep or store inventory.

More importantly, the size of your holding facility must allow for a sorting area. Additionally, an office space must be made available within your holding facility.

Several administrative functions are performed within the office space such as keeping inventory as well as sales records among other things.

  • Fencing

The need for fencing around your facility is essential as it helps secure your investments. With a well-fenced facility comes the need for openings or gates which are placed at strategic points.

  • Equipment

Equipment is very essential to the smooth running of a salvage business. There are various types of equipment needed that include hauling trucks, car crusher(s), and a forklift(s). The number of equipment needed will depend on your scale of operation.

  • Security

To safeguard your investments, you’ll need to have an additional layer of security apart from a fence. This comes in the form of security systems. There are several of these a few of which include motion detectors, security alarms, and cameras.

  • Administrative Equipment

To increase the efficiency of your business operations, consider investing in business software. This tool is designed to simplify the process of doing business.

You benefit from efficient management of inventory, clients as well as finances.

Target Market

Every good business has a clear target market it provides its services to. The same applies to a salvage company. Your business plan should identify those your services are designed for.

Your target market will consist of persons in need of affordable options to replace or fix an item.

It isn’t enough to simply assume who your target market is or what their needs are. Thorough market research will go a long way to identify details of what salvage yard services are the most in-demand.

With such knowledge, you’re able to select a preferred niche area to follow. That way, you’re able to send the right message to targeted clients.

Choosing the Right Niche Idea

The right niche idea for a salvage company depends on where your interests lie.

There are several niche areas available. These range from appliance salvage, scrap metal salvage, automotive salvage, insurance salvage, and recyclable salvage.

It’s entirely up to you to determine what area you’re most competent in.

By narrowing your pick, you’re indirectly increasing your chances of success. As the business progresses, expansion into other areas can be gradually implemented.

Income Streams

One of the crucial aspects of doing business you must not overlook is how money comes into the business.

Whether your operations are centered on metal processing, cleanup, or selling vehicle parts, it’s necessary to know all the possible income streams available to you.

What more? You should also find out how other salvage companies make their money. With such knowledge, you’re able to innovate on even better strategies for making more income.

Cash Flow

A salvage company is created for a variety of reasons.

Some of the most basic include providing solutions to problems and making money. The latter is very essential and must be carefully tracked. In other words, records must be kept of the money that comes in and out of your salvage company.

With such knowledge, you’re able to identify if your business is growing or not. A detailed record of your cash flow helps maintain a financially sound operation.

It also convinces investors about the viability of your business idea when seeking loans.

Marketing Strategies

When starting in this area of business, you shouldn’t be investing significant sums of money on marketing strategies that are unproven or untested.

We recommend going with tested and proven marketing professionals to help with designing your strategies.

Some of the cost-effective ways to market your salvage company include the printing and distribution of flyers and business cards, using or labeling your truck to serve as a moving billboard, word of mouth marketing, and the creation of social media accounts for your business.

Additional marketing strategies include listing your business on Craigslist or Angieslist as well as newspaper ads.

This way, you tend to get a wider reach by connecting and showcasing your business to potential clients.


In writing a plan for your salvage company business, it’s important to consider your competition. This involves taking note of their strengths and weaknesses and finding innovative ways to thrive amid such competition.

This salvage company business plan guide helps you follow a trusted path in setting up your business operations.

However important the plan is, it’s never fully beneficial without proper implementation.

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