The Community Wood Recycling business model – in a nutshell

We want to establish lots more wood recycling social enterprises all over the country and we are looking to help organisations and people from all walks of life to become social entrepreneurs and set one up. The community wood recycling business model is quite simple but needs to be properly understood by anyone considering getting in to it. So what is it all about?

Well, it is a financially self-supporting, not-for-profit community business.

Aims and Objectives

Its overall objective is to make a contribution to a more sustainable society and its aims are both environmental and social. Specifically, community wood recycling enterprises are set up to:

• Reduce waste and save resources

• Create jobs, training and volunteering opportunities for disadvantaged people

So if you are looking for business opportunity that has a high (or even moderate) financial return or you want to develop an enterprise that you can one day sell for a personal profit (and there is nothing wrong in that), this is most likely not the one for you!

But if you share our goals of contributing to that more sustainable, socially-just society (and you still want the exhilaration of working for yourself and running a small business) and don’t need to earn a small fortune, then this could well be what you are looking for.... so read on.

The advantages of our Business Model

There are many great things about the community wood recycling business model. Especially that it is:

• Low capital intensive - it doesn’t need a lot of money to set up, in fact you’d be hard pushed to find a business that is cheaper to get going.

• Low tech/mech – it doesn’t need highly skilled people or lots of expensive, specialist equipment.

• Highly labour–intensive – so it has the ability to create lots of lower-skilled but highly worthwhile work, especially for those who might be disadvantaged.

and that:

• The NCWRP offers a comprehensive level of support - from understanding the concept right through to ongoing support and mentoring as your enterprise grows, we provide help every step of the way. And there are no “franchise fees” or formal charges to pay.

So what does the business do?

The idea is simple. The business is to collect wood waste from (mostly but not exclusively) the building industry and reuse or recycle it in the most environmentally useful way.

Doing this is very labour–intensive so it creates lots of jobs, training and volunteering opportunities for local people – many of whom might be described as “disadvantaged”.

How is the income generated?

There are two main income streams.

Firstly, the charges to collect the waste timber. Community wood recyclers charge less than it costs to put the same amount of timber into a skip, so the customer has the financial incentive to use the service.

The Brighton & Hove Wood Recycling Project carrying out a collection of pallets from a building site. If the vehicle is loaded correctly, it will take many more pallets than could be put in a skip, offering better value to the customer.

On most building sites waste is simply put into 6 or 8 cubic yard skips – so that’s what enterprises are competing with. If builders are using much larger skips, they would be paying proportionately less for them and so it would be more difficult to compete on price.

Then there is the income generated from the sale of wood for DIY, wood products and firewood. Because you will have been paid to take it away, any reusable wood can be sold back to the community at relatively low cost.

These two income streams should provide sufficient revenue to operate the enterprise without the need for ongoing grants.

Of course, there are other ways wood recycling enterprises can generate money; like offering “added value” services such as cutting to size, sanding/planing and finishing. Most make and sell a range of products from recycled wood and some get fees for giving work experience to particular “client groups” – like people with learning difficulties.

How much does it cost to set up a community wood recycling enterprise?

The answer to this question is.... it depends on how you do it.

At the top end, if you follow our business model, you will need working capital of around £30,000 to cover the cost of buying a vehicle, buying some tools, paying the wages, rent/rates, insurance and all the other overheads until your turnover grows large enough to cover them all (go to budget to see a three year sample profit and loss budget).

Because this is a social enterprise, not a private, profit-making business, it is possible to apply for grants to cover some or all of the costs of setting up. But applying for larger grants is a relatively arduous and time-consuming process and can take a year or more before any money is received.

But many of our enterprises have been set up for far less! Much of that £30,000 working capital is used to pay the entrepreneur a £20,000+pa wage and £15,000 is budgeted for rent/rates.

So some entrepreneurs have started on a much lower salary, begged and borrowed tools and equipment and managed to sweet talk their local Council into providing premises at a very low rent.... and by doing this they have managed to get their wood recycling enterprises going within months.

It is not about cutting corners or starting up in a less-than-professional-way. It’s just that the simplicity of the model, the speed at which you can start generating income and the fact that the NCWRP provides such a high level of support means community wood recycling enterprises can happen very quickly.

Some More Detail

Premises

Community 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.

The Brighton & Hove Wood Recycling Project managed to obtain these premises owned by the City Council at “peppercorn” rent. The building is the old fish market and is earmarked for redevelopment.

Rather than leave it empty and a potential security risk, the Council had the foresight to let the Project use it – thereby creating a valuable local resource that creates jobs, training and volunteering opportunities for local people and makes a significant contribution to the City’s sustainability strategy.

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 reasonable market rent; the sample budget allocates £15,000 a year for both rent and rates – hopefully not unrealistic in most parts of the country.  

The Wiltshire Wood Recycling Project has been set up in some redundant farm buildings. The premises is privately owned but affordable and there’s plenty of space for a retail area, office, staff room, workshop and a storage and sorting area. This is a picture taken during their set-up phase.

A suitable premises would be around 200 to 300 m2 (2000 to 3000ft2), have a yard or outside space for unloading, parking and storing pallets etc. Ideally, because retail sales are such an important income stream, it should be as accessible as possible, in a busy location, on a busy road, on a bus route, and in an area of high footfall. Of course the better the premises, the more it will cost. So compromises must be made. But sometimes it might be worth choosing a more expensive site that has the edge for retail.

 

The Bristol Wood Recycling Project’s premises is part of an old Royal Mail sorting office. Most of their space is outsider, so they have constructed a range of bike-shed style wood stores.
This is a picture taken during their set-up phase.

 

 

Reseiclo’s home is a privately owned unit on an industrial estate in Newport Gwent. This is a picture taken during their set-up phase.

Although considered “lower – grade” space and potentially unsuitable for much modern light industry, Reseiclo’s space is ideal for community wood recycling and is a real “Aladdin’s cave” (note the office beautifully made from collected wood). This is a picture taken during their set-up phase.

TRiM (Timber Recycling in Manchester) rent an open yard of about 2000ft2. They have built an office, workshop staff room and storage bays from the wood they have collected from their customers. The wood is kept dry in the racks and the whole thing works perfectly well (although it is a bit chilly in the winter!). This is a picture taken during their set-up phase.

What happens to the collected wood?

The collected wood is taken back to the premises and sorted out. The idea is to find the most environmentally beneficial way of dealing with it and firstly it is categorised into one of the following grades.

Grade 1 (c.10% - 15% of the construction wood waste stream)

This is timber good enough to reuse for DIY, building, the garden etc. and is sold back to the community. Grade 1 is loosely defined as wood that is around 1.5 metres or more in length, relatively sound, free from splits and free from contaminants that can’t be removed. 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 pallets that can be reused - 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 an enterprise’s income.

Grade 1 is all the stuff that is reusable - for DIY, building work or the garden. It’s good quality wood – because it is old and might have been harvested from superior trees half a century ago, it is often of a far higher quality than wood bought in the timber merchant today. Modern timber for general building and DIY use is usually fast-grown, lower-quality wood.
	This is hardwood decking that was collected from the Palace Pier in Brighton. It is made of jarrah, a dense hardwood found only in Australasia. Because of its strength it is often used for sea defences and other “engineering” work, such as railway sleepers or bridges. Although it has been in situ for several decades to wood is of such a high quality that once a few millimetres or planed off, it looks like new again. The point is that the waste stream is full of extraordinary, high quality wood... not just broken pallets!
The Brighton & Hove Wood Recycling Projecthas a huge range of doors; internal, external, back, front, hardwood, softwood, shed and cupboard doors of every size and style.
All sorts of lengths – every dimension all sorted and ready for sale.
All sorts of sheet materials can be sold; plywood, chipboard, OSB, hardboard and MDF.

Grade 2 (c.15-25% 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 making wood products.

	Grade 2 is clean, sound timber that is too short or small to be particularly useful for DIY.. but it is perfect for making into products. 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.
A beautiful side table made from relatively short offcuts of hardwood decking. Simple products can be made that do not need a high level of carpentry skill – along with items such as this table which demonstrate a high level of wood working skill.	Some sea defences that have been dried out, sanded and waxed to turn them into “sculptures” that will look great inside the home or in the garden.
A good quality, useful compost bin can be made by virtually anyone – regardless of their carpentry experience. The chicken house might be a bit more tricky, but can be made to a template.

Grade 3 (c.60-70% of construction wood waste stream)

Grade 3 consists of everything else; the off cuts, small pieces, broken pallets, anything too contaminated etc. Much of this grade can be cut and sacked up as firewood and kindling (generating a very useful income stream during winter).

All the offcuts, broken pallets, stuff with wood worm or rot, or contaminated wood is considered grade 3. Grade 3that can’t be used by the enterprise is passed on to a chipping firm and ends up being made into chipboard or used as “biomas” fuel (see wood waste). Because such a relatively high proportion will need to be passed on, it is essential that an outlet for the grade 3 is located before commencing a collection service.

In the winter much of the grade 3 can be cut up for firewood and sold at a healthy profit. By using wood in their hearths, people are displacing coal – a fossil fuel that releases more CO2 and is more polluting. Because it absorbs CO2 whilst growing, wood is considered “carbon neutral” and waste wood - that might otherwise end up in landfill - is even better. Most enterprises pay around £10 to £30 per tonne to deliver in loads of grade 3 to the chippers and in the budget 5% of the collection income is set aside to meet the charges. Because enterprises are not-for-profit organisations, good deals - and even free tips can be negotiated.

Equipment

The main piece of equipment is a 3.5 tonne pick-up truck, fitted with a cage of about 12 cubic yards. This is the Transit-sized vehicle that can be driven on a normal car license. They are easy to obtain and relatively cheap – enterprises have paid as little as around £1000 for an acceptable, working vehicle. As it is going to work hard and generate lots of income, the more that can be spent, the better.

We use this kind of vehicle because it is cheap to buy and operate and can still take a good load; think of a skip lorry with a 6 litre engine and weighing around 20 tonnes, but still only taking an 8yd3 skip. With a cage of 12yd3, that’s 1.5 x more than the much more expensive vehicle can take - with its much greater negative environmental impact too.

The perfect community wood recycling collection vehicle: A long wheelbase Transit pick-up with a 2.5 litre diesel engine, twin rear wheels and a cage of 12.5 cubic yards.

The community wood recycling fleet also includesMercs, Renaults, DAFs, and Citroens.

Tools

Although some community wood recycling enterprises have well-equipped wood working workshops, it is not necessary to buy a lot of machinery. The basic tools that will be the most useful for collections will cost little. For making products, simple hand-power tools are sufficient for most items.

Most Community wood recycling activities can be carried out with tools shown.

 
The most important power tool is the chopsaw, but with this small range of tools, most added-value work can be accomplished.

In terms of the basics, this is it. But we have a lot more to tell you about community wood recycling, so please don’t hesitate to contact us for any further information.

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