Can I sell my backyard compost?
From time to time, a backyard composting enthusiast poses the question: Can I sell my backyard compost? Unfortunately, the answer is complicated. Switching from the backyard to the commercial world is like shifting the preparation of a plate of spaghetti from a home kitchen to a 120-seat Italian restaurant – even if you only want to sell one or two plates.
Rising interest in food waste diversion causes entrepreneurial spirits to think about starting a composting facility. That’s great news and deserves encouragement. There is plenty of room at the table for composting operations of every size, including the backyard variety.
Some pulling up a chair will come with little to no experience running a business, composting at scale, or managing wastes of any description. On one hand, that is a good thing for the composting industry as a whole. Fresh ideas and a non-jaded outlook (mixed with a dollop of desperation, naïveté, and plain dumb luck) drive progress.
But the budding entrepreneur must accept the fact that when money changes hands, the small-scale/backyard composter crosses over into the commercial composting world, one that is tightly regulated.
Fortunately, many states have exemptions or lighter “regs” for low-volume projects. But that’s not the same as no regulation. To find out more about regulations in your state, here is a list, compiled by the U.S. Composting Council.
If you are thinking about a for-profit or non-profit composting-related business, or even a public project, taking the time to do a little research before the planning process begins is the smartest and most economical first step any new business endeavor can take.
Can I sell my backyard compost?
There are many factors to consider before answering that all-important question. Some are related to rules and regulations. Others have to do with running a business.
Knowing the answers to questions like these can make the difference between success or failure:
- If considering a door-to-door food waste collection and composting service, what are similar companies charging in cities like yours? What is the average size of their customer base? What percent of the households that meet the identified customer profile (age, income, etc.) use the service? How does your community compare and will you have the possibility of gaining enough customers to make your business profitable? How are they marketing the service to potential customers? Talk to the local recycling coordinator. Is s/he aware of any similar companies operating or considering start-up in your locale?
- If you plan to intake waste from other household or businesses, most privately-owned composting facilities rely on tipping fees to support compost production, not compost sales. Do you know the average tipping fee in your region? Who are your biggest competitors for composting feedstocks? What other competing companies or technologies are thinking about moving into your market? A chat with your city or county business development specialist could be insightful.
- What are the high, low, and average wholesale and retail prices for a cubic yard of compost in your targeted service area? What about bagged products? Will customers expect auxiliary services like delivery or spreading?
- Have you read all of the regulations, zoning ordinances, and building codes that will impact your operation? Check in with the local planning department and correlating state agencies to determine if there are any changes in the works.
- Do you know where the high growth areas are in your region? There is nothing worse for a composter than to open a remote facility only to find the land around it being gobbled up by housing developments a few years later.
- Your annual reports to the state, including names of customers and volumes processed, as well as copies of your permit and any related violations, will probably be made available to the general public online or on request. As a result, potential anchor accounts — large corporations, municipalities and commercial entities — may wait a few years before doing business with you. They want to know the way you operate, the dependability of your service, and your efforts to protect the environment and local community are above reproach and will not negatively damage their own reputations by association. Obviously, this can have a major impact during the initial years of operation.
- First-time business owners may underestimate expenses and overestimate revenues. Talk to people who actually operate composting facilities before developing financial projections. Look for tradeshows, conferences, and other networking opportunities that will allow you to meet and learn from folks who have spent time in the trenches.
- If you do plan to open a facility of any significant size, there are only a handful of engineering firms and technology providers with extensive experience in designing successful composting facilities. Choose a designer with a resume that includes multiple, long-term composting operations with no technology/design-related problems.
As with any business start-up, be prepared for long days and short nights. The owner of a successful composting operation must not only know how to make good compost, but also keep the books, hire and manage employees, promote the business, and keep customers, regulators, and neighbors happy.
Until the business grows to the point where it can support others in managerial positions, the full weight of those jobs is carried on the shoulders of the owner.
More time will be spent on matters unrelated to compost production than on making compost. Knowing how to make good compost will not be enough. Before taking the plunge, be sure you have the drive, stamina, and desire to devote such a large portion of your day to shepherding a new business.