Another overhead that should not be overlooked is waste disposal. Although
all recycling businesses aim to divert as much as possible of the material they
collect away from landfill, this can still be a considerable cost. Commercial
waste collection prices vary considerably depending on the local cost of
waste disposal, and even within local areas the range between different
contractors charges can be large. Collections systems vary depending on the
volumes of waste being collected at each visit, with costs of less than £1 to
£2.50 per refuse sack, £4 to £15 per wheeled bin collection (depending on
size) and £50 to £140 per builder's skip sized container the norm. It is well
worth shopping around for the best local deal.
Direct costs are those that are directly incurred in delivering a service
(wages, vehicle costs etc.) or selling a product (costs of stock, delivery
to customers etc.) The largest direct cost entailed in operating a recycling
business is likely to be wages, principally those paid to collectors of the
recyclable or compostable materials. The second largest is likely to be
vehicle running costs.
Direct labour rates for recycling businesses are generally comparable to
other industrial service sectors employing unskilled or semi-skilled labour.
Some kerbside collection schemes use vehicles of 7.5t and above, which
are classified as Heavy Goods Vehicles (HGVs), to drive which a special
additional driving test must be passed. Businesses employing HGV drivers
would expect to offer up to double the wage of standard collectors.
As recycling operations usually require workers to be committed and to work
hard in all weather conditions, pay is generally higher than the minimum
wage, with basic collectors' wages ranging between £5 and £7 per hour
and HGV drivers ranging between £10 and £12 per hour.
Several recycling operations in the UK run intermediate labour market (ILM)
schemes through initiatives such as the New Deal. ILM schemes are defined
as `stimulating temporary employment and sustainable new jobs for long-
term unemployed people in disadvantaged communities, which substantially
' Schemes offer paid work, subsidised by an ILM
funder, along with high-quality training, personal development and assistance
with job seeking. ILMs can offer a vehicle to meet social objectives and,
through their funding, an income source which offsets part or all of the cost
of employing workers. As recycling operations require crews of collectors to
work unsupervised in the community, many social enterprises opt for a mix
of ILM and permanent labour, often providing an avenue into permanent
employment through ILM placement within the organisation.
Vehicle costs include fuel, road tax, vehicle insurance, MOTs and repairs,
as well as leasing or hire costs. Diesel engines are more economical and
arguably more environmentally friendly than petrol. Electric vehicles are
increasingly used and can be very economical to operate, the smallest PCVs
costing as little as 30p per day to charge. Electric vehicles also benefit from
a reduced road tax.
18 ILM Network
19 Small Business Service
20 Association of Business Recovery Professionals