How to Start a Profitable Recycling Business in Nigeria: A Step-by-Step Guide

Nigeria’s recycling industry is fast-growing and driven by rapid urbanization and population growth. The demand for recycling businesses is increasing among companies and individual families as Nigeria generates 32 million tonnes of solid waste annually. (To put it in context, this is enough to fill out the National Stadium 122 times over.) 

Starting a recycling business in Nigeria has enormous profit potential, and the industry is not yet oversaturated because most people don’t know about its profitability. Some still associate recycling with myths like “all your compound will be filled with rubbish and smell.” Others consider it lower than their status, while those who know about the potential don’t know how to start.

In this guide, we’ll show you, step by step, how to start a profitable recycling business in Nigeria.  


Types of Recycling Businesses in Nigeria

Within the recycling business in Nigeria, there are a couple of niches based on the materials collected. Knowing the materials you can collect before you start, each material has its peculiarities, pros, and cons. The primary recycling niches in Nigeria are;

  • Plastic Recycling Business: The demand for plastic recycling is increasing as the use of plastic for packaging increases. Globally, about 40% of plastics are used as packaging. Plastics are more readily available and lightweight, and there are multiple options of plastics to collect: PET, HDPE, LDPE, PP, and ABS.
  • Aluminium Recycling Business
  • Composite Materials Recycling Business
  • Paper & Cardboard Recycling Business
  • Metals Recycling Business 
  • Batteries Recycling Business 

How to Start a Recycling Business in Nigeria

Each stage of the process is crucial to not just starting but running a profitable recycling business in Nigeria; starting a recycling business goes through these eight steps; 

Step 1: Conduct Market Research and Choose a Niche

According to Havard Business School, Market research gathers information about customers and the market to determine a product or service’s viability. A comprehensive market research for a recycling business in Nigeria will include the following;

Local Market Analysis: 

Your marketing research should answer these questions;

  • How many recyclables are available in your locality?
  • How are the recyclable materials currently recycled? 
  • Are there gaps in the current method of recycling that you can fill?
  • What would be the collection routes? 
  • Are there cultural or community peculiarities with collecting the materials? 
  • What’s the overall disposition of the community to recycling?

Competitor Analysis

Your marketing research should answer these questions;

  • Who are the other businesses in your area collecting the same materials
  • Where do they get them from?
  • Who do they sell to?
  • What is their pricing model?
  • What are their unique selling propositions?
  • What are their strengths or weaknesses?
  • Are there any service delivery gaps you can fill?

Market Feasibility:

After getting your local market analysis and competitor analysis, you’ll use insights from them to determine if;

  • Is the niche profitable?
  • Is the location ideal?
  • Should you focus on only one recycling niche or combine multiple niches?

The market feasibility helps you determine how to structure your pricing and which pricing model to use. 

Notice conducting marketing research comes before choosing a niche. Choosing a niche and conducting marketing research on that niche would limit your scope and not let you see the complete picture. Select 3 -5 niches and conduct market research in your location, then proceed to select your niche from the results of your research.

Whichever option you choose, ensure you choose a niche that is not overly saturated, the supply of the material is readily available, and the demand already exists. 

Step 2: Write a Business Plan

A business plan is a document that details a company’s goals and how it intends to achieve them. It makes a case for the soundness of your business. After completing your market analysis, you should write a business plan for your recycling business.

A detailed and comprehensive business plan helps you think through the business. It also helps you raise funding – if you need to – most investors would require a business plan that convinces them your recycling business is worth investing in.

A typical business plan for a recycling business in Nigeria should contain the following sections:

  • Company Goals & Objectives: In this section, you will clearly state what the business aims to achieve. It’s best to make the goals SMART and divide them into long and short-term goals.
  • Market Research & Feasibility Studies: A summarized version of your market research and feasibility studies from step one will be placed here. When writing this section, keep it as brief as possible and state the key points. Use Data from authoritative sources in this section.
  • SWOT Analysis: In this section, you will summarize your business strengths, Weaknesses, Opportunities available or opening up, and threats facing the business. It’s always better to compare your business with your local competitors—this helps contextualize your points.
  • Financial Projection: In this section, you’ll use different data visualization charts to show the expected financial performance of your recycling business. When writing this section- ensure you’re as realistic as possible and have appropriate charts – make the charts interactive if possible. It’s essential to pay close attention to this section – especially if you intend to raise money from investors.
  • Marketing Strategy: This section will explain how you intend to obtain and sell the recyclables. You should include the marketing cost and expected returns from marketing efforts. 

Step 3: Secure Funding

After writing a comprehensive, in-depth, and convincing business plan, the next step is to secure funding from the following channels:

  • Personal Savings: Starting your business with savings is the fastest and easiest method. With your funds, you maintain complete ownership and control of the company, and there are no repayments or interest rates. However, you also bear 100% risk for the business. Except in a few cases, your starting capital will be little, and you risk running out of money before the business starts making a profit.  
  • Friends and family: Getting startup capital from friends and family is fast and sometimes easy. You have a more flexible payment plan, but it also strains your relationships, especially if you cannot pay back at the stipulated time or at all. 
  • Bank Loans: Start-up funding from bank loans can take a while to secure because you need to meet the eligibility requirements. The interest rates are usually higher, the payments are structured, and there’s the risk of asset seizure on refusal to pay. However, you have access to more considerable sums of money and prompt repayment, and you can build your credit with the bank, so you can borrow much more when you want to expand.
  • Co-operative societies or thrifts: Securing funding from cooperative societies and thrifts is quick and more accessible than getting a loan from a bank. They have lower interest rates and sometimes offer a supportive community to leverage for marketing and amplifying your business reach. However, they also have lower loan amounts, and you might need to attend functions and meetings and pay regular dues. 

Step 4: Acquire Equipment and Machinery

The next step after securing a location is getting the necessary equipment, such as a weighing scale, jumbo bags, binding ropes, wheelbarrows, etc. In cases where startup funds are limited, you can buy the essentials, start and buy the non-essentials as profit starts coming in, or rent/lease the essentials until you can buy yours.

Step 5: Secure a Location

After securing funding, the next step is to get a secure location for your business; when choosing a location, you should consider the following factors;

  • Proximity to customers: Choose a location close to the waste producers. This will make it easier for them to drop off and reduce the transportation cost and stress if you have to collect it from them. 
  • Accessibility: Choose a location with good roads. This is important, especially during the rainy season. A waterlogged road can be a disadvantage.  
  • Security: Choosing a secure location is paramount because, in most cases, you will need to store the materials you collect for days or weeks. 
  • Competition: If possible, choosing a location closer and more easily accessible to the waste producers than your competitors is Ideal; this will give you an edge over them.
  • Cost: The location’s cost will impact the business’s profitability. Choose an area within your price point so the cost of the location doesn’t obliterate your profit.

Step 6: Hire Employees (Optional)

You’re ready to start operations after choosing a location and setting it up. Depending on your outfit’s scale and availability, you can consider employing staff to implement some activities like security, accounting (payments, record keeping, etc.), Operations (waste collection, sorting, bagging, packaging, etc.), and management. Sometimes, the same person can function in multiple roles. 

Keep employee numbers as minimal as possible until your business becomes profitable enough to pay salaries comfortably. You can also explore other forms of remuneration, such as daily wages and commission-based payments.

Step 7: Promote Your Business

At this stage, your business is already operational. You need to promote your recycling business so people know your services and can patronize you. Closely implement the marketing strategies you stated in your business plan, ensure your Segmentation, Targeting, and positioning are correct, and fill the gaps you identified in your competitors’ marketing. Adapt what works and discard what doesn’t.

Keep in mind that marketing thrives on testing. You must keep testing to find what works for you; after finding what works, you still need to test ways to improve it. For this circle of testing and optimization to work, you need to implement accurate measurement strategies. Remember, what you don’t measure, you cannot optimize. 


In this guide, we’ve covered everything you need to start a recycling business in Nigeria. We’ve mentioned the different niches available to you, provided guides to help you select the right niche, and outlined the steps you need to take to start a recycling business. 

While this guide provides a comprehensive overview, seeking personalized guidance on starting your own recycling business in Nigeria is essential.

Sign up for our newsletter!

Related Articles

More Articles Like This