Recycling Business - 10 Year Financial Model

If you were looking to improve the environment and also make a living at the same time, you could end up running a recycling business. It will take some sort of initial investment and to plan out what the possible returns could look like, this financial model was built. It can go for less than 10 years as well, with a variable exit month.




Pricing
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I focused on making the executive summary and returns really clear and simple to understand here. With these industry-specific models, the revenue and cost logic is usually always different and the case is no different here.

What I had to do is allow for inputs regarding the number of units acquired each month. This would be like if you were to go and collect lard from a restaurant or cast-off from a vineyard or what have you. There may be little to no cost besides time and transport or you may have to pay some fee to get the materials that you are going to recycle into some usable product. Either way, you can account for that in this model.

The selling price per unit is then defined per material type (up to 15 different types of materials). So, you are building the margins right on the same page. You can also adjust the month that a given material is to begin being acquired/processed and sold.

The rest of the model, as far as assumptions, is much of the norm that you have seen in the past. You have a monthly running cost tab with variable start months, startup costs, and CapEx with monthly variables. There is then a monthly and annual P&L that auto-populates based on all these assumptions.

The 'control' tab on this financial model will allow for you to enter any financing variables as well as an exit month and an exit multiple + type of valuation method (EBITDA multiple or % of annual sales). It will use the monthly figure multiple by 12 for the basis of that valuation multiple.

The month of exit will tell the model to also account for the payback of any debt from the loan.

On the executive summary, you will see an IRR figure, ROI figures, and $ return figures as well as a discounted cash flow analysis based on an entered discount rate.

Finally, I have added charts/visuals to go along with everything. The coolest one is probably average EBITDA earned per unit sold.

Disclosure: This is not financial advice. Use at your own risk.