If you have a recycling business, you know the importance of calculating its value. You must have enough knowledge on the subject of evaluating your business. If you are unfamiliar with this territory, this article will help you in approaching this aspect carefully.
What are Recycling Performance Indicators
The recycling performance indicators must reflect the industrial ecology of the energy loops and closing material. They should be based on the environmental and economic impact in the whole life-cycle of the recycle chain and reflect global environmental business value.
Various definitions, data and methods for measurement are established and accepted globally as scientifically valid. Let us look at some of them.
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Recycling performance indicators
These cover several aspects such as economic, political and social conditions. Behavioural change is also studied, which looks into things such as the attitude of people towards recycling programs, participation on a household level, etc. The efficiency of the existing recycling programs and the public understanding’s effect on recycling performance is evaluated carefully.
Environmental performance factors
These include net energy consumption which is a crucial parameter in understanding how much energy is consumed is recycling and manufacturing processes, and material consumption which refers to the usage of raw materials for producing goods.
Water consumption and ozone depleting substances (ODS), pollution generation and Greenhouse gas (GHG) emission are other factors.
Economical performance factors
Various economical performance factors include net sales of the recyclables and recycled products, the quantity of product/service sold, net sales and net cost in the system. The cost criterion, i.e. the capital and operational/maintenance expenses should be taken into account.
Consider the social criteria of your business — the number of jobs you create, the company’s accessibility and public acceptance. Include the government support as well.
How to Value Your Recycling Business
Step 1 : Calculate Expenses
You must examine all the assets of the existing recycling business. Keep a check on the prices of all the similar recycling businesses and keep analysing the cash flow of your business.
Let a business appraiser check your assets, which include recycling equipment, your real estate, various machinery, etc.
The total sum of these assets without the cost of liabilities is the value of your business. Understand how similar businesses are evaluated and weigh their value to the existing recycling business to understand where your business stands.
Step 2 : Hire Professional Help To Evaluate Your Business
You won’t be able to examine and assess your business in a comprehensive manner on your own.
Hiring a business expert would greatly benefit you as they would help in evaluating your business carefully in different ways.
Before hiring one, make sure that you check their credentials and range of experiences. Ensure that they also know how to handle all things related to business evaluation.
Step 3 : Evaluate the Value of an Existing Business
Don’t just analyse the existing recycling business. Evaluating requires an extensive examination of the business’s performance since the past few years. You must also understand how your business stands against your competitors and what the prospective position of the business is in the market.
At the same time, consider what the future of the recycling industry is and examine its relation with economic predictions.
As an existing or aspiring recycling business owner, you must know how to calculate its exact value and how much it worth is. When you are clear on how to evaluate the business, you can be assured of getting great deals from any seller and you will also gain the ability to predict the future of your recycling business.