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Improving Collaboration and Communication with ERP Business Management Software
In today’s fast-paced business environment, effective collaboration and communication are crucial for success. Companies of all sizes are increasingly turning to ERP (Enterprise Resource Planning) business management software to streamline their operations and enhance productivity. This powerful technology integrates various business functions into a single system, enabling seamless collaboration and communication across different departments. In this article, we will explore how ERP software can improve collaboration and communication within an organization.
Streamlining Processes for Better Collaboration
One of the primary benefits of using ERP business management software is its ability to streamline processes. By bringing together data from different departments such as sales, finance, inventory, and human resources, ERP software eliminates the need for manual data entry and reduces the chances of errors or discrepancies. This streamlining of processes enables employees to access accurate information in real-time, facilitating better collaboration among teams.
With ERP software, employees can collaborate on various projects more efficiently. For example, sales representatives can access up-to-date customer information from the CRM module within the ERP system. They can then communicate with the production team to ensure timely delivery of products or services. This seamless flow of information eliminates bottlenecks and improves overall collaboration between departments.
Enhancing Communication through Centralized Data
ERP business management software acts as a centralized hub for all critical business data. Instead of relying on multiple systems or spreadsheets that may lead to miscommunication or outdated information, employees can access real-time data from a single source within the ERP system. This centralized approach enhances communication by ensuring that everyone has access to accurate and consistent information.
For instance, when a customer places an order through an e-commerce platform integrated with the ERP system, relevant departments such as sales, inventory management, and shipping receive instant notifications about the order details. This eliminates the need for manual communication between departments and reduces the chances of errors or delays in fulfilling customer orders. Employees can also leave comments or notes within the ERP system, allowing for seamless communication and collaboration on specific tasks or projects.
Facilitating Remote Collaboration and Communication
With the increasing trend of remote work, organizations need tools that enable effective collaboration and communication regardless of employees’ physical locations. ERP business management software provides a solution to this challenge by offering cloud-based access to its functionalities. This means that employees can collaborate and communicate with each other from anywhere, at any time, using any device with an internet connection.
For example, project teams spread across different geographical locations can use the project management module within the ERP system to track progress, assign tasks, and share documents in real-time. Team members can collaborate on complex projects seamlessly without being physically present in the same office space. This remote accessibility reduces the barriers to effective collaboration and communication, fostering teamwork even in a distributed workforce.
Improving Decision-Making through Data Analytics
Effective collaboration and communication are not just about sharing information but also about making informed decisions based on accurate data. ERP business management software offers powerful data analytics capabilities that enable organizations to gain valuable insights into their operations. These insights help teams make data-driven decisions, leading to improved collaboration and better outcomes.
For instance, sales managers can analyze sales data within the ERP system to identify trends or patterns that can inform marketing strategies or inventory planning. They can share these insights with other departments such as marketing or production to align their efforts towards common goals. By having access to real-time data analytics within the ERP system, teams can make informed decisions together, enhancing overall collaboration and driving business growth.
In conclusion, ERP business management software plays a crucial role in improving collaboration and communication within organizations. By streamlining processes, centralizing data, facilitating remote collaboration, and enabling data-driven decision-making, ERP software empowers teams to work more efficiently together towards achieving common objectives. Investing in an ERP system can yield significant benefits in terms of enhanced productivity, reduced errors, and improved overall business performance.
This text was generated using a large language model, and select text has been reviewed and moderated for purposes such as readability.
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Starting a Compost Business
A composting business helps keep the community clean by composting leaves and recyclable organic materials. From this raw material, compost is created, which can then be sold to consumers or used on farms or in residential areas. Composting businesses typically operate out of a large facility where the composting takes place. They may pick up other people’s compost for a fee, or accept drop-offs for a fee.
Learn how to start your own Compost Business and whether it is the right fit for you.
Ready to form your LLC? Check out the Top LLC Formation Services .
Start a compost business by following these 10 steps:
- Plan your Compost Business
- Form your Compost Business into a Legal Entity
- Register your Compost Business for Taxes
- Open a Business Bank Account & Credit Card
- Set up Accounting for your Compost Business
- Get the Necessary Permits & Licenses for your Compost Business
- Get Compost Business Insurance
- Define your Compost Business Brand
- Create your Compost Business Website
- Set up your Business Phone System
We have put together this simple guide to starting your compost business. These steps will ensure that your new business is well planned out, registered properly and legally compliant.
Exploring your options? Check out other small business ideas .
STEP 1: Plan your business
A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:
What will you name your business?
- What are the startup and ongoing costs?
- Who is your target market?
How much can you charge customers?
Luckily we have done a lot of this research for you.
Choosing the right name is important and challenging. If you don’t already have a name in mind, visit our How to Name a Business guide or get help brainstorming a name with our Compost Business Name Generator
If you operate a sole proprietorship , you might want to operate under a business name other than your own name. Visit our DBA guide to learn more.
When registering a business name , we recommend researching your business name by checking:
- Your state's business records
- Federal and state trademark records
- Social media platforms
- Web domain availability .
It's very important to secure your domain name before someone else does.
Want some help naming your compost business?
Business name generator, what are the costs involved in opening a compost business.
This business is labor intensive and may cost a lot to get set up. Between land costs and maintenance, costs for hauling and distribution of compost, and collection (if your business offers collection services), startup costs may exceed $1 million.
The bulk of the costs go into the land required for composting, the tools required for maintenance, compliance with local and state regulations, and trucks to haul compost to and from the site.
What are the ongoing expenses for a compost business?
Ongoing expenses for this type of business include gasoline for trucks, marketing, office utilities, and labor costs to maintain the compost fields. These costs may be as little as $10,000 for a very small compost field up to hundreds of thousands of dollars for a large-scale operation.
Who is the target market?
Your target market includes local governments, HOA neighborhoods, and farms and commercial enterprises that need a high-volume of soil.
How does a compost business make money?
Compost companies make money by selling fully composted material, which is essentially high-quality dirt or "top soil" used as fertilizer or ground cover. It is usually nutrient-rich and ideal for use on farms, gardens, and in residential neighborhoods.
This depends on the local market. Selling in bulk helps increase your total revenues, but may lower your profit margins. Companies typically charge between $5 and $10 per cubic foot. However, discount prices may drive those prices down to $1 to $3 per cubic foot. Local governments may also demand a lower price as well as farmers buying compost in bulk. You should plan on minimum charges of $1 per cubic foot, with an average sale price of $3 per cubic foot.
How much profit can a compost business make?
Profit depends largely on the local demand for compost. Compost is in high demand in some areas, allowing businesses to earn net profit margins in excess of 10%, while other markets command razor-thin margins. Average revenue in this industry (which is still young) ranges from $500,000 to over $1 million for a small to medium-sized compost business.
How can you make your business more profitable?
Making the business more profitable is not a simple matter. Lowering costs is the primary way to increase profits. But, this requires you to find cheaper sources for compost raw materials and lowering your transportation costs. Buying land in low-cost and low-tax areas will also help the bottom line.
Want a more guided approach? Access TRUiC's free Small Business Startup Guide - a step-by-step course for turning your business idea into reality. Get started today!
STEP 2: Form a legal entity
The most common business structure types are the sole proprietorship , partnership , limited liability company (LLC) , and corporation .
Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your compost business is sued.
Form Your LLC
Read our Guide to Form Your Own LLC
Have a Professional Service Form your LLC for You
Two such reliable services:
You can form an LLC yourself and pay only the minimal state LLC costs or hire one of the Best LLC Services for a small, additional fee.
Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services . You can choose to hire a registered agent or act as your own.
STEP 3: Register for taxes
You will need to register for a variety of state and federal taxes before you can open for business.
In order to register for taxes you will need to apply for an EIN. It's really easy and free!
You can acquire your EIN through the IRS website . If you would like to learn more about EINs, read our article, What is an EIN?
There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.
STEP 4: Open a business bank account & credit card
Using dedicated business banking and credit accounts is essential for personal asset protection.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil .
Open a business bank account
Besides being a requirement when applying for business loans, opening a business bank account:
- Separates your personal assets from your company's assets, which is necessary for personal asset protection.
- Makes accounting and tax filing easier.
Recommended: Read our Best Banks for Small Business review to find the best national bank or credit union.
Get a business credit card
Getting a business credit card helps you:
- Separate personal and business expenses by putting your business' expenses all in one place.
- Build your company's credit history , which can be useful to raise money later on.
Recommended: Apply for an easy approval business credit card from BILL and build your business credit quickly.
STEP 5: Set up business accounting
Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.
Make LLC accounting easy with our LLC Expenses Cheat Sheet.
STEP 6: Obtain necessary permits and licenses
Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.
State & Local Business Licensing Requirements
Certain state permits and licenses may be needed to operate a compost business. Learn more about licensing requirements in your state by visiting SBA’s reference to state licenses and permits .
Most businesses are required to collect sales tax on the goods or services they provide. To learn more about how sales tax will affect your business, read our article, Sales Tax for Small Businesses .
Certificate of Occupancy
A compost business is generally run out of a large indoor facility. Businesses operating out of a physical location typically require a Certificate of Occupancy (CO). A CO confirms that all building codes, zoning laws and government regulations have been met.
- If you plan to lease a location :
- It is generally the landlord’s responsibility to obtain a CO.
- Before leasing, confirm that your landlord has or can obtain a valid CO that is applicable to a compost business.
- After a major renovation, a new CO often needs to be issued. If your place of business will be renovated before opening, it is recommended to include language in your lease agreement stating that lease payments will not commence until a valid CO is issued.
- If you plan to purchase or build a location :
- You will be responsible for obtaining a valid CO from a local government authority.
- Review all building codes and zoning requirements for your business’ location to ensure your compost business will be in compliance and able to obtain a CO.
STEP 7: Get business insurance
Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.
There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance . This is the most common coverage that small businesses need, so it’s a great place to start for your business.
Another notable insurance policy that many businesses need is Workers’ Compensation Insurance . If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.
FInd out what types of insurance your Compost Business needs and how much it will cost you by reading our guide Business Insurance for Compost Business.
STEP 8: Define your brand
Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.
If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners , we'll give you helpful tips and advice for creating the best unique logo for your business.
Recommended : Get a logo using Truic's free logo Generator no email or sign up required, or use a Premium Logo Maker .
If you already have a logo, you can also add it to a QR code with our Free QR Code Generator . Choose from 13 QR code types to create a code for your business cards and publications, or to help spread awareness for your new website.
How to promote & market a compost business
Promote your business locally through fliers and business cards. Use direct mail advertising to boost sales. Go to networking events and talk to local government officials. Talk to local farmers about their soil needs.
How to keep customers coming back
Provide a good quality product, and this business should almost run on autopilot.
STEP 9: Create your business website
After defining your brand and creating your logo the next step is to create a website for your business .
While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.
Here are the main reasons why you shouldn’t delay building your website:
- All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
- Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
- Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.
Recommended : Get started today using our recommended website builder or check out our review of the Best Website Builders .
Other popular website builders are: WordPress , WIX , Weebly , Squarespace , and Shopify .
STEP 10: Set up your business phone system
Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.
There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use. Check out our review of the Best Business Phone Systems 2023 to find the best phone service for your small business.
Recommended Business Phone Service: Phone.com
Phone.com is our top choice for small business phone numbers because of all the features it offers for small businesses and it's fair pricing.
TRUiC's Startup Podcast
Welcome to the Startup Savant podcast , where we interview real startup founders at every stage of the entrepreneurial journey, from launch to scale.
Is this Business Right For You?
This business is perfect for individuals who are passionate about the environment and want to do their part to recycle organic materials for future use. Business owners who get into this business should also have a passion for learning about how composting works.
Want to know if you are cut out to be an entrepreneur?
Take our Entrepreneurship Quiz to find out!
What happens during a typical day at a compost business?
A composting business collects recyclable garbage from the community. People either drop it off or the company goes and picks up garbage from local neighborhoods, similar to waste disposal services. The compost is then taken to the facility where it is dumped into various compost piles. These piles are managed and rotated to make sure that the composting process takes place and that there is an even distribution of compostable material.
What are some skills and experiences that will help you build a successful compost business?
Understanding the science and business of composting is a must. You must study composting cycles, what makes good compost, what to avoid and what to expect from your first few composting seasons. Not being afraid of dirt also helps. An ecological background isn't required, but helps.
What is the growth potential for a compost business?
Growth potential for this business depends a lot on local laws and regulations. Since composting deals with garbage, local ordinances may prohibit or limit the use of composts in your area. Or, they may require special licensing or permitting. Many governments are, however, becoming very liberal in allowing composting businesses to set up a composting field and run their business like any other normal business operation.
A composting business is usually limited in size based on the amount of land you can afford to purchase and maintain.
TRUiC's YouTube Channel
For fun informative videos about starting a business visit the TRUiC YouTube Channel or subscribe to view later.
Take the Next Step
Find a business mentor.
One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.
Having a support network in place to turn to during tough times is a major factor of success for new business owners.
Learn from other business owners
Want to learn more about starting a business from entrepreneurs themselves? Visit Startup Savant’s startup founder series to gain entrepreneurial insights, lessons, and advice from founders themselves.
Resources to Help Women in Business
There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:
If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.
What are some insider tips for jump starting a compost business?
This business is easy to get going, aside from the high initial cost. Most businesses are looking for a low-cost way to get rid of their garbage. Flower shops, bakeries, and any other business that produces significant organic waste is a potential source for your composted raw material. As for customers, you should focus on selling to HOA neighborhoods, business that need high-quality soil, and local governments.
How and when to build a team
Your business will need a lot of employees in the beginning. Plan on hiring at least 5 to 10 workers and adding to that as your composting business grows.
- US Composting Council
Real World Examples
- Garbage Man
- Compost Wheels
- Pros & Cons
- Steps to Starting a Compost Business
- Profile on a Startup
- A Few Things to Know When Starting Your Composting Business
Have a Question? Leave a Comment!
The Organics Recycling Authority Since 1960
May 27, 2020 | Community Composting , Composting
Lessons In Community Composting: Business Focus And Structure
Determining focus generally starts by seeing a need in the community and wanting to provide a solution. the structure supports your overall mission and enables it to scale over time. plus a covid-19 update. part ii, molly lindsay.
The second installment in this series, “Lessons in Community Composting,” covers business structure and focus. I spoke to five community composters from around the country to learn about their operations and find out how they got their start.
Photo courtesy Rising Sands Organics
Part I Lessons In Community Composting: A Series
Part III Collection and Processing — Growth And Insights
Part IV State Of Community Composting In The U.S.
Determining focus generally starts for most by seeing a need in the community and wanting to provide a solution, whether that be collecting food scraps from residents and businesses, starting a zero waste events service, or training people to produce compost. It’s also dependent on the landscape of your area. Is there a saturation of haulers or processors? Will you have access to a location to compost or can you lease land? What are the restrictions in your area for composting or permits for hauling food scraps? Kelly Adlington describes her enterprise, Rising Sands Organics, as “a farm first.” She started a food scrap collection service as a way to cut costs in the farming operation by producing compost. “Compost costs thousands of dollars for a farm of our size — a 35-acre property,” says Adlington. She and her coworkers began collecting residential and commercial organics in her community of Stevens Point, Wisconsin in 2017. The material is processed in partnership with another local farm and partially at Rising Sands, with the compost produced split between the two farms to grow food for themselves and the community.
Photo courtesy Schmelly’s Dirt Farm
Similarly, Nicola Krebill, founder of Schmelly’s Dirt Farm in New Orleans, also started a business to produce compost to “address New Orleans’ inadequate supply of fertile garden soil and compost needed to grow food,” and “create meaningful jobs that provided a solution to food waste through composting.” The core of the Dirt Farm’s business is commercial collection, which started in 2014 by servicing mostly small businesses. Within the last year, the company has grown to collecting from larger clients like hotels and event venues. Schmelly’s has been donating and selling its finished compost in bulk, and is in the process of developing a bagged product. “We love the full cycle aspect of how we collect compostable organic material from businesses, transport it to our farm, and create a product that farmers and gardeners can use to grow healthy plants without pesticides and chemical fertilizers,” notes Krebill.
Community engagement and teaching people how to compost is a goal of both LA Compost in California, and Loop Closing in Washington D.C. “It’s always been about connecting people to the soil and building community around compost,” says Lynn Fang, Operations Support at LA Compost. The organization has established Compost Hubs throughout Los Angeles, where participants can drop off their food scraps and get hands-on experience composting. They also offer drop spots at farmers’ markets. The compost produced at the Hubs is freely accessible for use by volunteers involved in the program.
Photos courtesy LA Compost (left) and Loop Closing (right)
In Washington D.C., Jeffrey Neal, founder of Loop Closing, was inspired to create a business that processed material on-site to eliminate the need for hauling organics, while also producing compost to regenerate soils. Loop Closing provides a solution for organizations by designing composting operations, installing in-vessel machines, and offering ongoing consultation and workforce development. “I initially worked with donation-funded and volunteer-operated community composting sites that provide tremendous educational opportunities, but small overall diversion rates for a city or region,” explains Neal. “We are now focused on developing systems with commercial and government food waste generators that have trained, paid staff, which provides the potential for higher diversion rates. We’ve maintained our community focus but are evolving from volunteers to workforce development training… providing underrepresented community members the opportunity to join this burgeoning economy of future-leaning green jobs and participate in the environmental justice field.”
Another business with a diverse model is Common Ground Compost based in New York City (NYC), which provides composting and recycling consulting services such as program design and management, employee training, eco-friendly product procurement, signage design, and more — as well as zero waste event services. Their program, Reclaimed Organics, collects food waste and compostable materials by bicycle from businesses like corporate offices; for residents, it offers a bokashi composting service. Common Ground Compost also facilitates a food scrap drop off at its community garden in the Lower East Side through NYC’s organics collection program (currently on pause due to COVID-19). “The goal of our business has never been to just be profitable, but to increase awareness and access to organics,” says Common Ground Compost’s director, Meredith Danberg-Ficarelli.
Photos courtesy Common Ground Compost (top) and Reclaimed Organics (bottom)
How your business or organization is structured should support your overall mission and allow it to scale over time. For example, establishing a nonprofit can be beneficial if your primary focus is on education and community engagement. LA Compost is a nonprofit funded by local and global foundations. Most of its programs are offered at no cost; others operate on a donation basis to increase accessibility and encourage participation. Its partnerships throughout Los Angeles County have made it possible to expand the Composting Hubs, establishing them at locations like community gardens, schools, and churches. Schmelly’s is a social enterprise with a L3C or Low-Profit Limited Liability Corporation — a hybrid of a LLC and a nonprofit. It operates to benefit the general public without shareholders and without a profit motive. “At the time of our incorporation, this seemed like the business structure that best fit the mission and values-driven nature of the company,” explains Krebill. Rising Sands Organics is a worker-owned cooperative. While Adlington manages the composting operation, she says it’s a shared responsibility among the members. “The cooperative model has been essential for it to operate and for me to discover what I want to do for a career,” says Adlington. “It shows you how much worth you have, and I realized I have a lot more power. Working with your friends, having access to land, and learning how to be good stewards of the land have been the benefits of our model.” While aspiring to be worker-owned, Loop Closing is currently a for-profit organization and LLC, as that was “the path of least resistance to get started,” notes Neal. He plans to transition to an Employee-Owned B Corp. “Organizations already spend so much on food waste removal, I believed there was a market for a better solution,” he adds. “This would also allow me to include worker development programs and partnering with nonprofits.” Reacting and adapting to your community’s needs, your goals as a business or organization, and long-term feasibility are important pieces in establishing a community composting structure and focus. These should be heavily considered in formulating your plan and revisited regularly as you scale. In the next installment of this series, I will dig deeper into how these organizations execute their operations and insights they’ve learned along the way. Molly Lindsay is Director of Operations at the Community Compost Company, a food scrap collection service and compost production company headquartered in New Paltz, New York. She also serves as Editor of Livelihood magazine, a resource for good news on keeping money local, sharing abundance, and strengthening communities in the Hudson Valley.
In These Times Of COVID-19 …
At the time I set out to write this “Lessons In Community Composting” series, it was pre-COVID-19 and the days of social distancing. Today the world is different and life as we know it has been disrupted. Composting falls under recycling and waste removal, which are essential services and can continue to operate under the stay-at-home mandates. One thing this pandemic has illuminated is how necessary community and small-scale composting are. Being able to process much of your own waste, like in backyard composting, or have it picked up by a service that’s processing it locally, is an excellent depiction of self and community-reliance. Victory Gardens, popularized during World War I and II, are having a resurgence with people seeing the benefits of being able to provide their own food source. A locally produced compost supports these initiatives within communities.
In the last two weeks, while interviewing community composters from around the country to learn about their operations, I was also able to hear how they are managing this difficult time. Some continue to operate, while others have shut down, either by choice, to help stop the spread, or by necessity, due to loss of clients. Schmelly’s Dirt Farm in New Orleans has been able to pivot its business to focus primarily on finished compost sales, as its commercial collection has been greatly reduced. Rising Sand Organics in Stevens Point, Wisconsin, opted to pause its collection service for two weeks at the onset of the outbreak, but has resumed, which worker-owner Kelly Adlington says her customers are grateful for. Common Ground Compost and Reclaimed Organics in NYC, which is among the hardest hit areas, have completely stopped hauling operations due to the closure of the majority of their commercial clients. Their team is using this time to focus on administrative projects. In California, LA Compost shared that many of its drop off locations and Community Hubs have temporarily closed to adhere to social distancing protocols.
Though there is a feeling of uncertainty in the air, this can also be a good time to pause and reflect on the inspiration for doing this work, and how to move forward as a resilient business or organization.
To learn more about how community composters and municipal programs are coping during the COVID-19 pandemic, download the recording of the April 14 webinar, Navigating COVID-19 for Small-Scale Food Scrap Collectors: Drop-off and Curbside , presented by the Institute for Local Self-Reliance and the US Composting Council.
Related posts, taking stock of 2023.
Hauling And Recycling Company Expands Into Food Waste Composting
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Back to All Business Ideas
How to Start a Composting Business
Written by: Carolyn Young
Carolyn Young is a business writer who focuses on entrepreneurial concepts and the business formation. She has over 25 years of experience in business roles, and has authored several entrepreneurship textbooks.
Edited by: David Lepeska
David has been writing and learning about business, finance and globalization for a quarter-century, starting with a small New York consulting firm in the 1990s.
Published on May 18, 2022 Updated on November 10, 2023
$109,550 - $209,100
$318,000 - $1.56 million p.a.
Time to build
$63,600 - $312,000 p.a.
Composting is the eco-friendly process of taking organic waste, such as banana peels and bread crusts, and recycling them to be used as fertilizer. It’s green and sustainable , which means it’s also growing: the industry is expected to expand more than a third by 2027.
You could start your own composting business and help the environment while carving out your share of a growing market. But before you start gathering greens, you’ll need to understand how to start and manage a business.
Luckily, this step-by-step guide has you covered with all the information you need to launch a successful composting business.
Looking to register your business? A limited liability company (LLC) is the best legal structure for new businesses because it is fast and simple.
Form your business immediately using ZenBusiness LLC formation service or hire one of the Best LLC Services .
Step 1: Decide if the Business Is Right for You
Pros and cons.
Starting a composting business has pros and cons to consider before deciding if it’s right for you.
- Save the Planet – Composting has many environmental benefits
- Good Money – More than one source of income
- Work Outside – Spend time in nature
- High Startup Costs – Land, equipment, and trucks necessary
- Permits Needed – Land needs to be permitted as a compost facility
Composting industry trends
Industry size and growth.
- Industry size and past growth – The global composting industry was worth $5.59 billion in 2017.(( https://www.globenewswire.com/news-release/2022/01/13/2366344/0/en/Compost-Market-2022-Revenue-USD-7516-5-mn-Growth-Prospects-Price-Trends-Share-Forecast-by-2027-Report-by-Absolute-Reports.htm ))
- Growth forecast – The global composting industry is projected to expand by 34% by 2027 to reach $7.52 billion.
Trends and challenges
Trends in the composting industry include:
- Mandated bans on organic materials in landfills is driving composting industry growth. Recycling materials for composting reduces carbon dioxide emissions from landfills significantly.
- New laws seek to promote better soil health, boosting demand, since compost fertilizer is great for the soil.
Challenges in the composting industry include:
- The increased use of food scraps in compost due to an emphasis on less food waste is creating contamination issues in the compost making process.
- Air quality standards for emissions from composting facilities are getting tougher, which means that composting businesses must better manage their emissions.
How much does it cost to start a composting business?
Startup costs for a composting business range from $110,000 to $210,000 or more. You’ll need a down payment on land and trucks, equipment, and a labor and operating budget.
You can learn composting processing by taking inexpensive courses on Udemy .
You’ll need a handful of items to successfully launch your composting business, including:
- Compost bins
- Compost tumblers
- Compost containers
- Compost turner
Materials to make compost that include things like:
- Food waste and other organic waste
- Yard waste and yard debris
- Grass clippings
- Coffee grounds
- Worms or manure to produce nitrogen
How much can you earn from a composting business?
To get organic materials, you could partner with municipalities or local waste management firms, or reach out directly to hotels and restaurants to pick up their organic waste. You could charge a monthly fee of about $25 for weekly pickups, then sell your finished compost to local nurseries and garden stores for $25 per yard. Your profit margin, after overhead, land payments, and labor, should be about 20%.
In your first year or two, you might sign 60 customers for waste pick-up and sell 1000 yards of compost a month, bringing in $318,000 in annual revenue. This would mean $63,600 in profit, assuming that 20% margin. As you get referrals and repeat business, you might do pickups for 200 people and sell 5000 yards of compost a month. With annual revenue of $1,560,000, you’d make an outstanding profit of $312,000.
What barriers to entry are there?
There are a few barriers to entry for a composting business. Your biggest challenges will be:
- The high startup costs of land and trucks
- Learning how to run an efficient composting facility
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Step 2: hone your idea.
Now that you know what’s involved in starting a composting business, it’s a good idea to hone your concept in preparation to enter a competitive market.
Market research will give you the upper hand, even if you’re already positive that you have a perfect product or service. Conducting market research is important, because it can help you understand your customers better, who your competitors are, and your business landscape.
Why? Identify an opportunity
Research composting businesses in your area to examine their products and services, price points, and customer reviews. You’re looking for a market gap to fill. For instance, maybe the local market is missing a service that picks up yard trimmings and grass clippings or also cleans gutters and clears yard debris.
You might consider targeting a niche market by specializing in a certain aspect of your industry, such as food scrap compost or leaves and yard trimmings.
This could jumpstart your word-of-mouth marketing and attract clients right away.
What? Determine your products or services
Your services will include the pickup of composting materials from residential and commercial customers, and the sale of composted materials for fertilizer.
How much should you charge for composting?
Typical prices for pickup of composting materials are about $25 per month. Prices for selling compost are about $25 per yard. After all your costs, you should aim for a profit margin of about 20%.
Once you know your costs, you can use this Step By Step profit margin calculator to determine your mark-up and final price points. Remember, the prices you use at launch should be subject to change if warranted by the market.
Who? Identify your target market
Your target market will be both individuals and businesses, such as farms, so you should spread out your marketing to include sites like TikTok, Instagram, Facebook, and LinkedIn.
Where? Choose your business premises
You’ll need land with a structure on it for your facility. You’ll probably have to purchase land, but you may be able to find a suitable property for rent. You can find commercial space to rent in your area on sites such as Craigslist , Crexi , and Instant Offices .
When choosing a commercial space, you may want to follow these rules of thumb:
- Flexible lease that can be extended as your business grows
- Ready-to-use space with no major renovations or repairs needed
Step 3: Brainstorm a Composting Business Name
Your business name is your business identity, so choose one that encapsulates your objectives, services, and mission in just a few words. You probably want a name that’s short and easy to remember, since much of your business, and your initial business in particular, will come from word-of-mouth referrals.
Here are some ideas for brainstorming your business name:
- Short, unique, and catchy names tend to stand out
- Names that are easy to say and spell tend to do better
- Name should be relevant to your product or service offerings
- Ask around — family, friends, colleagues, social media — for suggestions
- Including keywords, such as “composting” or “compost fertilizer”, boosts SEO
- Name should allow for expansion, for ex: “Advanced Composting Solutions” over “Commercial Composting Services”
- Avoid location-based names that might hinder future expansion
- Use online tools like the Step by Step Business Name Generator . Just type in a few keywords and hit “generate” and you’ll have dozens of suggestions at your fingertips.
Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these.
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Finally, make your choice among the names that pass this screening and go ahead with domain registration and social media account creation. Your business name is one of the key differentiators that sets your business apart. Once you pick your company name, and start with the branding, it is hard to change the business name. Therefore, it’s important to carefully consider your choice before you start a business entity.
Step 4: Create a Composting Business Plan
Every business needs a plan. This will function as a guidebook to take your startup through the launch process and maintain focus on your key goals. A business plan also enables potential partners and investors to better understand your company and its vision:
- Executive Summary: Brief summary outlining the key elements of the composting business plan, including its objectives, unique selling points, and financial projections.
- Business Overview: Concise description of the composting business, its mission, vision, and the problem it aims to solve in the market.
- Product and Services: Clear outline of the composting services offered, detailing the types of organic waste accepted, processing methods, and any additional value-added products.
- Market Analysis: Thorough examination of the composting market, identifying target demographics, market trends, and potential growth opportunities.
- Competitive Analysis: Evaluation of competitors in the composting industry, highlighting strengths, weaknesses, and strategies to differentiate the business.
- Sales and Marketing: Strategic plan for promoting the composting services, encompassing sales tactics, pricing strategies, and marketing channels to reach the target audience.
- Management Team: Introduction to the key individuals responsible for running the composting business, emphasizing their skills, experience, and roles within the company.
- Operations Plan: Detailed overview of the day-to-day operations of the composting facility, covering logistics, equipment, staffing, and quality control measures.
- Financial Plan: Comprehensive financial projections, including startup costs, revenue forecasts, and break-even analysis, providing a clear picture of the business’s financial viability.
- Appendix: Supplementary materials such as relevant permits, licenses, market research data, and any additional documents supporting the information presented in the composting business plan.
If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist to create a top-notch business plan for you.
Step 5: Register Your Business
Registering your business is an absolutely crucial step — it’s the prerequisite to paying taxes, raising capital, opening a bank account, and other guideposts on the road to getting a business up and running.
Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business!
Choose where to register your company
Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you’re planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to composting business.
If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state.
Choose your business structure
Business entities come in several varieties, each with its pros and cons. The legal structure you choos e for your composting business will shape your taxes, personal liability, and business registration requirements, so choose wisely.
Here are the main options:
- Sole Proprietorship – The most common structure for small businesses makes no legal distinction between company and owner. All income goes to the owner, who’s also liable for any debts, losses, or liabilities incurred by the business. The owner pays taxes on business income on his or her personal tax return.
- General Partnership – Similar to a sole proprietorship, but for two or more people. Again, owners keep the profits and are liable for losses. The partners pay taxes on their share of business income on their personal tax returns.
- Limited Liability Company (LLC) – Combines the characteristics of corporations with those of sole proprietorships or partnerships. Again, the owners are not personally liable for debts.
- C Corp – Under this structure, the business is a distinct legal entity and the owner or owners are not personally liable for its debts. Owners take profits through shareholder dividends, rather than directly. The corporation pays taxes, and owners pay taxes on their dividends, which is sometimes referred to as double taxation.
- S Corp – An S-Corporation refers to the tax classification of the business but is not a business entity. An S-Corp can be either a corporation or an LLC , which just need to elect to be an S-Corp for tax status. In an S-Corp, income is passed through directly to shareholders, who pay taxes on their share of business income on their personal tax returns.
We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using an online LLC formation service. They will check that your business name is available before filing, submit your articles of organization , and answer any questions you might have.
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Step 6: Register for Taxes
The final step before you’re able to pay taxes is getting an Employer Identification Number , or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN.
Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.
The IRS website also offers a tax-payers checklist , and taxes can be filed online.
It is important to consult an accountant or other professional to help you with your taxes to ensure you’re completing them correctly.
Step 7: Fund your Business
Securing financing is your next step and there are plenty of ways to raise capital:
- Bank loans: This is the most common method but getting approved requires a rock-solid business plan and strong credit history.
- SBA-guaranteed loans: The Small Business Administration can act as guarantor, helping gain that elusive bank approval via an SBA-guaranteed loan .
- Government grants: A handful of financial assistance programs help fund entrepreneurs. Visit Grants.gov to learn which might work for you.
- Friends and Family: Reach out to friends and family to provide a business loan or investment in your concept. It’s a good idea to have legal advice when doing so because SEC regulations apply.
- Crowdfunding: Websites like Kickstarter and Indiegogo offer an increasingly popular low-risk option, in which donors fund your vision. Entrepreneurial crowdfunding sites like Fundable and WeFunder enable multiple investors to fund your business.
- Personal: Self-fund your business via your savings or the sale of property or other assets.
Bank and SBA loans are probably the best option, other than friends and family, for funding a composting business. You could also try crowdfunding since you’re doing something good for the environment, so you might find broad support.
Step 8: Apply for Composting Business Licenses and Permits
Starting a composting business requires obtaining a number of licenses and permits from local, state, and federal governments.
Specific licenses and permits required for a composting business vary at the state and local levels, so check with your local governments for requirements. You’ll also need to comply with Environmental Protection Agency regulations regarding emissions.
Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), health licenses and permits from the Occupational Safety and Health Administration ( OSHA ), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits.
You may also need state-level and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more.
You could also check this SBA guide for your state’s requirements, but we recommend using MyCorporation’s Business License Compliance Package . They will research the exact forms you need for your business and state and provide them to ensure you’re fully compliant.
This is not a step to be taken lightly, as failing to comply with legal requirements can result in hefty penalties.
If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.
Step 9: Open a Business Bank Account
Before you start making money, you’ll need a place to keep it, and that requires opening a bank account .
Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your composting business as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.
Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account.
Step 10: Get Business Insurance
Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.
Here are some types of insurance to consider:
- General liability: The most comprehensive type of insurance, acting as a catch-all for many business elements that require coverage. If you get just one kind of insurance, this is it. It even protects against bodily injury and property damage.
- Business Property: Provides coverage for your equipment and supplies.
- Equipment Breakdown Insurance: Covers the cost of replacing or repairing equipment that has broken due to mechanical issues.
- Worker’s compensation: Provides compensation to employees injured on the job.
- Property: Covers your physical space, whether it is a cart, storefront, or office.
- Commercial auto: Protection for your company-owned vehicle.
- Professional liability: Protects against claims from a client who says they suffered a loss due to an error or omission in your work.
- Business owner’s policy (BOP): This is an insurance plan that acts as an all-in-one insurance policy, a combination of the above insurance types.
Step 11: Prepare to Launch
As opening day nears, prepare for launch by reviewing and improving some key elements of your business.
Essential software and tools
Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks.
You may want to use industry-specific software, such as ASCHL , to manage your record keeping, inventory, costs, and compliance. For your compost pickups, you can use software like Trash Flow or Trux to manage your schedules and routes.
- Popular web-based accounting programs for smaller businesses include Quickbooks , Freshbooks , and Xero .
- If you’re unfamiliar with basic accounting, you may want to hire a professional, especially as you begin. The consequences for filing incorrect tax documents can be harsh, so accuracy is crucial.
Develop your website
Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism.
You can create your own website using website builders . This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech-savvy, you can hire a web designer or developer to create a custom website for your business.
They are unlikely to find your website, however, unless you follow Search Engine Optimization ( SEO ) practices. These are steps that help pages rank higher in the results of top search engines like Google.
For your composting business, the marketing strategy should focus on highlighting the environmental benefits of composting, the quality and utility of your compost products, and your role in promoting sustainable practices. Emphasize how your services contribute to waste reduction, soil health, and overall environmental wellness. The goal is to establish your business as a key player in local sustainability efforts, appealing to environmentally conscious consumers, gardeners, farmers, and businesses.
- Professional Branding : Your branding should reflect environmental responsibility, sustainability, and the natural benefits of composting, from your logo to your promotional materials.
- Direct Outreach : Network with local nurseries, garden centers, farmers’ markets, and community gardens to introduce your products. Also, connect with local businesses and organizations to offer compost collection services.
Digital Presence and Online Marketing
- Professional Website and SEO : Develop a website that details your composting services, product offerings, and the benefits of composting. Implement SEO best practices to optimize your site for search terms related to composting, organic gardening, and eco-friendly practices.
- Social Media Engagement : Use platforms like Instagram, Facebook, and Twitter to share information about composting, showcase your processes, and highlight customer testimonials.
Content Marketing and Engagement
- Eco-Friendly Blog : Share posts about the benefits of composting, tips for composting at home, and stories about how your compost has been used in various projects.
- Customer Success Stories : Feature stories from satisfied customers, particularly those who have seen significant benefits from using your compost in their gardening or farming activities.
- Educational Videos and Infographics : Create content that explains the composting process, showcases the impact of composting on soil health, and provides tips for effective compost use.
Experiential and In-Person Engagements
- Workshops and Seminars : Host workshops on composting techniques, benefits of organic waste recycling, and how to use compost effectively in gardening or agriculture.
- Participation in Eco-Friendly and Community Events : Engage in local environmental events, fairs, and farmers’ markets to promote your products and educate the public about composting.
Collaborations and Community
- Partnerships with Environmental Groups and Businesses : Collaborate with environmental organizations, community gardens, and eco-friendly businesses to promote composting and joint sustainability initiatives.
- Community Projects : Get involved in community projects that focus on sustainability, such as creating community gardens or green spaces, using your compost.
Customer Relationship and Loyalty Programs
- Loyalty Rewards for Regular Clients : Offer discounts or special deals to regular customers, such as local farmers or gardeners who frequently purchase your compost.
- Referral Incentives : Encourage word-of-mouth advertising by providing incentives for customers who refer new clients to your business.
Promotions and Advertising
- Targeted Advertising : Use digital advertising on gardening, farming, and eco-conscious lifestyle platforms, as well as local online communities, to reach potential customers.
- Email Marketing : Keep your audience engaged with newsletters about composting tips, new product offerings, and updates on your sustainability efforts.
Focus on USPs
Unique selling propositions, or USPs, are the characteristics of a product or service that set it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your composting business meets their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire.
Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your composting business could be:
- Help save the planet; give us your organic waste and we’ll make it green!
- Top quality compost to enrich your family garden
- Bulk compost to boost crop growth
You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running a composting business, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in composting for years and can offer invaluable insight and industry connections.
The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in compost. You’ll probably generate new customers or find companies with which you could establish a partnership.
Step 12: Build Your Team
If you’re starting out small from a home office, you may not need any employees. But as your business grows, you will likely need workers to fill various roles. Potential positions for a composting business include:
- Facility Workers – assist with handling and processing compost materials
- Drivers – pick up and deliver compost materials and compost fertilizer
- General Manager – scheduling, accounting
- Marketing Lead – SEO strategies, social media
At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need.
Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed , Glassdoor , or ZipRecruiter . Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent.
Step 13: Run a Composting Business – Start Making Money!
Composting has many environmental benefits, including food recycling, reduced landfill emissions, and curbing the use of chemical fertilizers. The industry is seeing rapid growth as more people recognize those benefits. Starting a composting business takes an investment and some hard work, but with real commitment and an eco-friendly mindset, you could build a thriving green operation!
Your business homework is complete now, so it’s time to roll up your sleeves and launch your successful composting business.
- Composting Business FAQs
Yes, a composting business can be very profitable. You’ll have two income streams – one from picking up compostable waste from residential and commercial customers, and another from selling your processed compost as fertilizer.
The growth of a composting business is somewhat limited by geography. However, if you capture your local market, you’ll have a good-sized business.
You should use a good quality composting bin. You also need to drain your compost frequently to keep it from being too moist.
You could start a blog, posting frequent articles about the benefits. You can also make it a part of your value proposition and include it in your marketing.
You can do yard cleanups for people and save the yard waste to make compost. That would be an additional revenue stream for your business.
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- Decide if the Business Is Right for You
- Hone Your Idea
- Brainstorm a Composting Business Name
- Create a Composting Business Plan
- Register Your Business
- Register for Taxes
- Fund your Business
- Apply for Composting Business Licenses and Permits
- Open a Business Bank Account
- Get Business Insurance
- Prepare to Launch
- Build Your Team
- Run a Composting Business - Start Making Money!
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