Scrap Metal Dealer Business
Plan
Executive Summary
In this discussion, we're going
to discuss the development of a scrap metal dealer business plan that is seeking
a SBA loan. Scrap metal dealers tend to operate with a strong degree of economic
stability as once they acquire their inventories they are able to quickly divest
them to third parties that can use them in conjunction with other types of
manufacturing processes. As such, the large amount of tangible aspects as well
is and the large amounts of inventory held by these businesses allow these
companies to be easily financed via a SBA loan.
As with all business plans, we
first start with the scrap metal dealer executive summary. Here, you should
discuss how you intend to acquire your inventories of scrap metal, how you will
sell these inventories to third parties, the amount of money that you have to
speak to receive from the sale of scrap metal, and the general operations of the
business. Here, you keep this section relatively short as it would be much
further discussed in the third section of the business plan.
In the next section of your
executive summary, you're going to want to focus substantially on the amount of
money is seeking through an SBA loan, the anticipated monthly repayment rate,
the anticipated annual interest rate, and the anticipated armadillo.
Additionally, you're going to want to focus heavily on how you intend to use
your SBA loan funds as it relates the launch of your scrap metal dealer
business.
Next, you're going to focus on
your experience as a scrap metal dealer, your experience within the industry,
their experience as an entrepreneur, your educational background, as well as
your ability to bring the business to profitability within the first five years
of operation. You may also want to include additional information that
strengthens your case as an individual that is applying for a SBA loan.
Next, within your scrap metal
dealer executive summary, you may want to focus on the anticipated profit and
loss statements that you will provide to your bank or for the first five years
of operation. Here, you're going to want to discuss top line revenues, operating
expenses, and the net profits before taxes that can be used to repay the
interest and principal that are associated with your SBA loan. This was much
further discussed in the scrap metal dealer financial plan which is the last
section of the business that.
Finally, within the executive
summary, you're going to want to focus on how you intend to expand the business
during its first five years of operation. Foremost, you may want to discuss how
you intend to expand the facility, expand your marketing infrastructure, and
expand your ability to buy scrap metal inventories that are sold to third
parties.
SBA Loans for Scrap Metal Dealers
In the second section of the
business plan, you're going to want to focus substantially on how you intend to
use your SBA loan for the development of your scrap metal dealer. Here, you're
going to want to break down the usage of funds as it relates to the facility
development, working capital needs, marketing costs, initial purchasing scrap
metal inventories, as well as other costs are commonly associated with this
business.
Additionally, and which is very
common with in this section, is to have a discussion pertaining to invest in
equity, management equity, and the applicable exit strategies are related to
scrap metal dealers.
Scrap Metal Dealer Products and Services
In the third section of the
business plan, you're going to want to focus substantially on your operations as
it relates to acting as a scrap metal dealer. This section of the business plan
should run two pages to five pages in length and should discuss how you intend
to acquire scrap metal inventories; you intend to package these inventories to
third parties, the anticipated amount of money that you receive each time that
you sell these inventories. Also, you may want to have an overview of the number
of employees that you have working for your scrap metal dealer firm, and how
these employees we paid as it relates to the overall operations of your
business.
Scrap Metal Dealer Industry Analysis
Next, we move on to the scrap
dealer industry analysis. Here, you should discuss the economy and how it
relates to sales of medals that you intend to acquire and sell to third parties
also showcasing any specific issue that may arise from acting in his capacity.
As scrap metal is a commodity, you should have very little issues with divesting
these inventories to third parties on an ongoing basis. As such, scrap metal
dealers are able to maintain a strong degree of economic stability as it relates
to their ongoing operations.
Next, you're going to want to
focus on issues pertaining to the scrap metal dealer industry including the
number of scrap metal dealers operating in the United States, annual revenues
generated by scrap metal dealers, the number of people employed by the industry,
annual payrolls paid by scrap metal dealers, market trends, and any pending
legislation that could impact the way that your company does business. At the
time of this writing, there are no anticipated changes in legislation that
impacts the way that scrap metal dealers operate. Additionally, scrap metal
dealers are an established industry and the anticipated growth rate is expected
to remain within that of the general economy.
Next, you're going to want to
focus on be demographic analysis of companies that you'll sell your scrap metal
inventories. This includes discussing working with businesses that have an
ongoing need for use metals at and how much money they make on a yearly basis,
the profits they generate on a yearly basis, and the overall target market that
you'll be operating with it.
Finally, you're going to want
to discuss the competition he'll face as it relates to operating as a scrap
metal dealer. However, as this is a commoditized industry is important for you
to note how you intend to maintain a very lean operation so that you can provide
your scrap metal inventories at prices that are slightly less than the market
value of what you're selling. If you are able to do this effectively be able to
effectively compete with other scrap metal dealers within your market, a
regional basis, and other national basis.
Scrap Metal Dealer Marketing Plan
In the next section of the
business plan, you're going to focus on the scrap metal dealer marketing plan.
Here, you don't want to discuss how you intend to develop ongoing relationships
with manufacturers, home builders, and other businesses that have an ongoing
need for scrap metal. Here, and again, you may want to reiterate how you intend
to place your scrap metal inventories so that you're able to effectively compete
with other dealers within your market. It is of foremost importance, as well, do
you develop a very intricate methodology of how you intend to maintain the
ongoing purchase order relationships with the target demographics that were
discussed in the previous section of the scrap dealer that metal dealer business
plan.
Scrap Metal Dealer Financial Plan
Finally, we come to the scrap
metal dealer financial plan. As we discussed many times before, you're going to
want to have a very well-developed profit and loss statement, cash flow
analysis, balance sheet, cash flow analysis, business ratios page, and the
general assumptions are used when you develop his business but. As it relates to
scrap metal dealers, you're going to want to heavily emphasize that your
inventories and equipment can be used as collateral for your SBA loan.
Additionally, you're going to want to provide a amortization schedule as it
relates to the ongoing monthly payments of principal and interest for your SBA
loan.