What is the "Business Model"?

The heart of the business model that we promote is quite simple:

It is a financially self-supporting, not-for-profit community business. All surpluses are invested back into the business.

It is a low-capital intensive, low-tech and labour intensive business reducing waste and saving resources by collecting waste timber from the commercial waste stream that would (probably) otherwise be land filled.

It finances itself in two ways; by charging for its collection services, winning business by being the cheapest form of waste disposal for those that would otherwise use skips or other low-volume disposal methods. It also generates significant income by selling any re-usable material collected back to the community.

It utilizes volunteer labour to reduce start-up and ongoing development costs. Many volunteers drawn to this type of project are often labeled as "marginalized" as they might have particular challenges that make it more difficult for them to find / return to employment.

It rewards the loyalty and commitment of its volunteers by ensuring that - as the project grows - all (appropriate) paid posts created go to those volunteers. For volunteers unable to secure employment with it, it will invest as much as possible in meeting their training needs so they can move on to paid work in other organisations.


Some more of the detail - its not rocket science!

• Understanding our niche
  

Our collection customers are any organisations that use skips or "man with a van" - type rubbish clearance services to dispose of their waste. But it is the building industry that is the most important market as it seems to generate an endless amount of waste wood and much of the collected material will be good enough to sell back to the community for re-use. Thankfully, on the majority of building sites, waste is still removed in 6yd / 8yd skips.

Those regularly generating larger volumes of wood waste (e.g. a furniture factory) would probably use large waste containers (40 - 80 yards3) with which we could not compete and it is unlikely that we would win their custom.

In terms of sales of the reusable material collected, high volume purchasers - like builders - will expect substantial discounts off your normal retail prices and will clear you out of your most popular stock, so the focus should be on attracting the general public.


Suitable premises

This type of wood recycling does not need high quality space. It can work in virtually any reasonably accessible, secure space that has power and water; even in an open yard. It is ideally suited to low grade redundant space - perhaps awaiting re-development.

Most Local Authorities have large property portfolios and often have the type of property mentioned above. Due to the social and environmental aims of this model of wood recycling, such property can often be rented on favourable terms. However, the business model should be robust enough to allow for suitable property to be obtained at a market rent.

• Collections - what and how
  

To make it as easy as possible for potential customers to use the collection service, we do not select the material we accept. We take anything - as long as it is wood or wood - based (such as furniture etc.). Experience shows that customers (especially in the building industry) would be less likely to take part if they had to discriminate between different types of wood; they might simply put it all in the rubbish skip! The principal wood waste streams from which collections can be made are:

• The Building Industry
  The majority of waste timber that the Project deals with is generated by construction/demolition firms; on virtually every building site - large or small - you will see wood in the rubbish skips.

  DEMOLITION – 1.9 MT PA.
  
  • mainstay of architectural salvage (re – use)
  
  • rolonofs because of high volumes
  
  • mixed waste so low quality
  
  • highly competitive so want to recycle
  
  • H&S dictates working practises

• Packaging waste and pallets
  There is also a significant quantity of wooden packaging waste and a massive quantity of pallets generated by all sorts of companies. Although many types are reusable, a huge number get damaged beyond repair or are simply discarded into the waste stream.

• Wood products manufacture
  Lots of waste wood comes from joinery workshops, furniture makers and other organisations that make things from wood. Again, much of this simply gets discarded.

  PALLETS & PACKAGING
  
  • 30 million pallets in UK
  
  • many single use from imports
  
  • new rules govern use (food use)
  
  • clean waste, so sought after
  

• Wood from local residents
  In addition there is a lot of wood in the domestic waste stream languishing in peoples' sheds and garages that ends up at the local dump. But residents are used to disposing of their waste for free - so it is less likely that they will pay to have waste wood collected. Never the less a useful source of grade 1 timber.

  WHAT HAPPENS TO WOOD WASTE?
  
  • only c. 14% recycled (1.2 mt pa.)
  
  • wide regional variations in recycling rates
  
  • predominantly pallets and packaging waste
  
  • limited uses for recycled wood
  
  • very high volume operations
  
  
  

• Sorting the collected wood for re-use / recycling

Depending on its reuse / recycling potential, the collected wood is sorted into different (flexible) grades:

Grade 1 (c. 10% of construction wood waste stream)

This is timber good enough to reuse - especially for DIY and should be sold in your premises. Grade 1 is wood that is around two metres or more in length, relatively sound, free from splits and relatively free from nails and other contaminants. Sheet materials in good condition more than 1.5 metres square are also classed as grade 1 along with doors in good condition, pieces of hardwood, shorter lengths of floorboards, skirting boards and architrave - and anything considered "interesting" and saleable.
Even though grade 1 only represents a small proportion of the waste stream, it generates a large proportion of a project's income.

Grade 2 (c.15% of construction wood waste stream)

This is also good wood but too short or small to be easily sold for DIY. It can, however, be used for manufacturing products for sale. Making and selling such items is a good way of generating cash and raising awareness of the potential of recycled material. Where there is insufficient demand for timber for this use, it can be classed as grade 3.

Grade 3 (c. 60% of construction wood waste stream)

Grade 3 represents the biggest challenge for wood recyclers. It consists of untreated wood - including off cuts, broken pallets etc. - and some sheet materials too small to be useful as grade 1 or 2. Much of this grade can be sacked up as firewood and kindling and sold during the winter, but it will mostly be sent off for recycling into chipboard or chipped as fuel or compost.
It is essential that an outlet for the grade 3 is arranged before commencing a collection service.

Residue (c. 15% of construction wood waste stream)

Some of what is collected has no use and must be returned to the waste stream. This includes wood contaminated by creosote, old paint or other preservatives, and anything else that not reusable or recyclable.

Making the numbers stack up

The collection fees and the income derived from retails sales of the reusable material should be sufficient to completely finance the project. To reduce the set-up and development costs arrangements should be made to attract volunteers.