Document Shredding Business plan for starting your own business
Vandalism, theft, and industrial espionage are becoming an increasing concern for most industries in the market. With the increased use of office copiers and computers, staggering amounts of sensitive information are generated and carelessly discarded. For instance, if a firm follows an education consulting business plan, the information it holds on students and their academic careers is sensitive and at risk of falling into the wrong hands if not discarded properly. Similar is the case with a courier business plan.
Security Docs is a professional paper shredding company that provides the most secure, efficient, and simple plan for destroying a company’s confidential information. If you are confused about how to start a document shredding business, an SBA business planner can be a source of guidance. For a detailed guide, you can refer to this document shredding business plan used by Security Docs.
2.1 The Business
Security Docs is a professional paper shredding company that provides the most secure, efficient, and simple way for destroying a company’s confidential information. Security Docs provides complete on-site and off-site document destruction services as mentioned in the next sections of this document destruction business plan. The company will offer services in Wisconsin. The company has experience in product destruction and the shredding of microfilm, microfiche, credit cards, computer tapes, and other forms of media storage.
2.2 Management of Document Shredding Business
While looking into different mobile shredding business opportunities, it is important to ensure that you stick to those that are coherent with your main business idea.
You can read strategic and operational business plans for different services you have to offer. You can take help from an HR consultant business plan as well. It is essential to have a customized business plan that is in line with your resources and objectives for your startup.
2.3 Customers of Document Shredding Business
For Security Docs, paper shredding business income will be generated from the following target market:
- Banks & Insurance Companies
- Job Recruitment Agencies
- Educational Institutes
- Public Sector Agencies
2.4 Business Target
While looking into how to start a shredding company, you must establish realistic and achievable objectives for your business. Our vision is to establish a standard paper shredding company whose services and brand will be accepted in Wisconsin and throughout the United States of America.
3.1 Owner History
Daniel Wilson, the owner of Security Docs, has ten years of experience in the field of commercial paper shredding business. Before moving to the Wisconsin area last year, he worked for both Shredd-All and Capital Shredding in Madison City.
3.2 Why the Document Shredding Business is started
According to statistics, in the USA alone, the paper shredding industry rakes in a whopping sum of billion annually. There are about 1,670 registered and licensed document management service businesses scattered across the length and breadth of the United States, and they are responsible for employing approximately 55,875 people. Looking at the market potential, Daniel Wilson decided that he will have a shredding paper business of his own.
3.3 How the Document Shredding Business will be started
Starting a business of your own can be tricky, and it is quite natural if you are still confused about how to start a shredding business from scratch. Following are the steps that can give you a head start.
While setting up a business, it is imperative to plan everything. Having contingency plans for every scenario is key to a firm’s success. A comprehensive mobile paper shredding business plan can help you strategize accordingly and manage your resources efficiently. This business plan will help answer all of your questions regarding how to start a mobile paper shredding business.
Step2: Define the Company
The next step is to be recognized by defining your business’s services and values. Having the proper business structure is very important to us at Security Docs. For this reason, we sought and hired the best employees who are competent, have the right experience, and understand the business thoroughly.
For this reason, Security Docs uses a unique business plan for recruitment.
Step3: Establish Your Corporate Office
You need to strategically plan the location of your cooperate office, as this is where you would be supervising your operations from. As per this freelance business plan, Daniel Wilson will establish his corporate office in Wisconsin’s city center.
Step4: Establish a Web Presence
Living in an age of social media and digitalization, having a web presence is imperative for a company’s success. Security Docs’ website would consist of testimonials from different companies to gain the confidence of new clients. Furthermore, it would highlight various services the firm provides for informational purposes.
Step5: Promote and Market
The last step is developing and executing a marketing plan to promote services. To make a paper shredding business successful, you must employ marketing strategies to advertise your business objectives. You can use a business plan for staffing consultation firm for getting ideas for sales strategy. It is advisable to thoroughly consult with different sources to make a marketing plan that targets the relevant audience.
|Research and Development||$10,000|
|TOTAL START-UP EXPENSES||$232,700|
|Other Current Assets||$232,000|
|Start-up Expenses to Fund||$232,700|
|Start-up Assets to Fund||$889,400|
|TOTAL FUNDING REQUIRED||$1,122,100|
|Non-cash Assets from Start-up||$1,150,800|
|Cash Requirements from Start-up||$132,000|
|Additional Cash Raised||$50,000|
|Cash Balance on Starting Date||$35,000|
|Liabilities and Capital|
|Accounts Payable (Outstanding Bills)||$51,100|
|Other Current Liabilities (interest-free)||$0|
|Additional Investment Requirement||$0|
|TOTAL PLANNED INVESTMENT||$1,122,100|
|Loss at Start-up (Start-up Expenses)||$176,400|
|TOTAL CAPITAL AND LIABILITIES||$1,367,800|
Strategic/Operational Business Plan
Services of Document Shredding Business
Starting a document shredding business can be daunting and confusing. Suppose you are new to the paper shredding business and are unaware of the facilities to offer. In that case, you can refer to the services available at Security Docs mentioned below:
- On-site shredding services
Security Docs will provide security bins throughout the office area. These bins have a built-in lock to ensure documents cannot be removed without a key. Paper recycling can add an environment-friendly aspect to your document destruction business.
- Off-site shredding services
Security Docs also offers off-site document destruction. We will still supply the customers with security bins, but the materials will be brought back to our facility to be shredded. This service is expected to be one of the critical sources of our shredding business income.
- Residential Paper Shredding
With more people working from home these days, this service is a promising paper shredding business opportunity. You always have personal files like insurance information bills, tax documents, and health records. Residential Paper Shredding offered by Security Docs will ensure the secure disposal of all your confidential documentation.
- Shredding Events in your Community
Consumer fraud and identity theft are putting communities at risk. To raise awareness and promote privacy protection, Shred-it organizes free and fee-based community shred-it events, offering paper shredding for residents.
If you are new to the industry and are learning how to start a paper shredding company, the services mentioned above can clarify the direction you want to take your business.
Marketing Analysis of Document Shredding Business
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While formulating your business plan, conducting a market analysis is essential. It will clear most of your ambiguities regarding how to start a paper shredder business. To give you an overview of how a market analysis for different document shredding business opportunities is done, we are providing you with the information gathered for Security Docs.
5.1 Market Trends
Research carried out by IBISWorld shows that over the past five years, revenue for the document management services industry grew at an annualized rate of 3.8% to $6.5 billion. The industry includes companies that provide commercial and government clients with outsourced records storage, document destruction services, and digital conversion of paper-based records. Hence, starting a paper shredding business right now can be rewarding.
5.2 Marketing Segmentation
Before you start a shredding business, you need to identify the potential target market of your services to become a successful commercial shredding business.
5.2.1 Banks & Insurance companies
To comply with legislation, companies within the financial sector have to avoid legal and financial implications by preventing data breaches and losing confidential information into the wrong hands. Thus, they will need document shredders regularly.
5.2.2 Job recruitment agencies
Human Resource Department/ Agencies are responsible for identifying how records will be disposed of once retention requirements are met. Records containing confidential information should be shredded to protect employee privacy and comply with applicable laws. Thus, recruitment agencies will be recurring customers of a mobile document shredding business.
5.2.3 Educational Institutions
Document shredding is an excellent solution for schools that want to protect the identity of their students and staff. Besides keeping a school clutter-free, document shredding can also prevent thieves from stealing other people’s information and help a school maintain its reputation of being trustworthy.
5.2.4 Public Sector Agencies
Local authorities, parish councils, and even statutory agencies such as the police deal with confidential information daily. Public sector organizations of all varieties need to ensure a cost-effective document destruction solution in place that protects taxpayers against identity theft. With regulatory requirements getting tighter every year, a document shredding policy is essential to keep your office compliant with legislation.
|Potential Customers||Growth||Year 1||Year 2||Year 3||Year 4||Year 5||CAGR|
|Banks & Insurance Companies||38%||52,900||63,480||76,176||91,411||109,693||10.00%|
|Job Recruitment Agencies||32%||42,800||51,360||61,632||73,958||88,750||10.00%|
|Public Sector Agencies||13%||22,300||26,760||32,112||38,534||46,241||11.00%|
5.3 Business Target
- Expand the mobile shredding business in the neighborhood towns
- Have a customer satisfaction score of 97%
- Capture 35% market share within the first year of business
- Acquire five additional mobile shredding trucks after 1.5 years of operations
5.4 Product Pricing
At Security Docs, we will adopt all the pricing systems obtainable in the industry. Still, we will ensure that we keep the prices of our services a little below the average market rate by keeping our overhead low.
Marketing Strategy of Document Shredding Business
Regardless of whether you are starting a shredding company or working on a call center business plan sample, you need to have an effective marketing strategy to promote your services. It would help you stand out amidst competition and capture market share.
Security Docs will use a robust set of marketing and sales strategies mentioned in this document shredding business plan. Hence it would be helpful to read it thoroughly if you want to start a paper shredding business of your own.
6.1 Competitive Analysis
- The team at Security Docs is highly responsive. Our shredding business franchise will respond within 24 hours after a request for shredding services is sent by a company.
- Our disposal trucks will shred documents twice as fast as our competitors and have a greater load capacity.
- Danial Wison’s leadership is a tremendous competitive edge to the company. His strength and his ability to use assessment as a sales tool to promote the company’s services.
6.2 Sales Strategy
- Ensure that the Security Docs is enlisted on offline and online directories.
- Leverage social media platforms such as Facebook and Twitter.
- Look out for a document shredding business for sale, and acquire that for expansion.
- Engage in direct marketing.
6.3 Sales Monthly
6.4 Sales Yearly
6.5 Sales Forecast
|Unit Sales||Year 1||Year 2||Year 3|
|TOTAL UNIT SALES||8,760||9,286||9,843|
|Unit Prices||Year 1||Year 2||Year 3|
|Direct Unit Costs||Year 1||Year 2||Year 3|
|Direct Cost of Sales|
|Subtotal Direct Cost of Sales||$511,250.00||$596,117.50||$663,478.78|
Personnel plan of Document Shredding Business
The costs of setting up mobile paper shredding franchises is like that of a call center business plan sample. It is important to account for different kinds of costs to forecast financial returns accordingly. These costs include the salaries of employees at Security Docs as well. To give you an idea of average salaries, we are providing the personnel plan of Security Docs below.
7.1 Company Staff
This document shredding business plan for Security Docs will hire for the following positions:
- 1 Admin & HR Manager
- 1 Sales & Marketing Manager
- 4 Paper Shredding Machine Operators
- 2 Drivers
- 1 Accountant
7.2 Average Salary of Employees
|Year 1||Year 2||Year 3|
|Admin & HR Manager||$35,000||$38,500||$42,350|
Financial Plan of Document Shredding Business
A sole focus on increasing sales is not a key to making a paper shredding business profitable. It is imperative that you thoroughly analyze the average cost of setting up a shredding business and estimate the operations’ capacity for your startup accordingly.
Conducting a financial analysis is crucial for your Document Shredding Business plan.
In your financial plan, you must identify when and how to cover your investment amount with the earned profits. Moreover, it would help you analyze your yearly expenses to determine the possibilities of reaching an economy of scale. The better way of doing that is calculating how much a pet hotel costs.
Here we’re providing a business plan used by Security Docs for you to use as a reference.
8.1 Important Assumptions
|Year 1||Year 2||Year 3|
|Current Interest Rate||8.12%||8.20%||8.26%|
|Long-term Interest Rate||8.40%||8.44%||8.47%|
8.2 Break-even Analysis
|Monthly Units Break-even||5340|
|Monthly Revenue Break-even||$132,500|
|Average Per-Unit Revenue||$231.00|
|Average Per-Unit Variable Cost||$0.62|
|Estimated Monthly Fixed Cost||$163,800|
8.3 Projected Profit and Loss
|Pro Forma Profit And Loss|
|Year 1||Year 2||Year 3|
|Direct Cost of Sales||$511,250||$596,118||$663,479|
|TOTAL COST OF SALES||$511,250||$596,118||$663,479|
|Gross Margin %||66.50%||68.24%||71.25%|
|Sales and Marketing and Other Expenses||$145,000||$148,000||$156,000|
|Total Operating Expenses||$375,200||$399,050||$431,060|
|Profit Before Interest and Taxes||$639,800||$881,510||$1,213,023|
8.3.1 Profit Monthly
8.3.2 Profit Yearly
8.3.3 Gross Margin Monthly
8.3.4 Gross Margin Yearly
8.4 Projected Cash Flow
|Pro Forma Cash Flow|
|Cash Received||Year 1||Year 2||Year 3|
|Cash from Operations|
|Cash from Receivables||$22,000||$23,760||$25,661|
|SUBTOTAL CASH FROM OPERATIONS||$73,000||$79,570||$85,936|
|Additional Cash Received|
|Sales Tax, VAT, HST/GST Received||$0||$0||$0|
|New Current Borrowing||$0||$0||$0|
|New Other Liabilities (interest-free)||$0||$0||$0|
|New Long-term Liabilities||$0||$0||$0|
|Sales of Other Current Assets||$0||$0||$0|
|Sales of Long-term Assets||$0||$0||$0|
|New Investment Received||$0||$0||$0|
|SUBTOTAL CASH RECEIVED||$74,000||$79,000||$85,000|
|Expenditures||Year 1||Year 2||Year 3|
|Expenditures from Operations|
|SUBTOTAL SPENT ON OPERATIONS||$69,000||$70,000||$76,000|
|Additional Cash Spent|
|Sales Tax, VAT, HST/GST Paid Out||$0||$0||$0|
|Principal Repayment of Current Borrowing||$0||$0||$0|
|Other Liabilities Principal Repayment||$0||$0||$0|
|Long-term Liabilities Principal Repayment||$0||$0||$0|
|Purchase Other Current Assets||$0||$0||$0|
|Purchase Long-term Assets||$0||$0||$0|
|SUBTOTAL CASH SPENT||$69,000||$74,520||$80,482|
|Net Cash Flow||$21,000||$23,000||$25,000|
8.5 Projected Balance Sheet
|Pro Forma Balance Sheet|
|Assets||Year 1||Year 2||Year 3|
|Other Current Assets||$1,000||$1,000||$1,000|
|TOTAL CURRENT ASSETS||$282,000||$315,840||$355,004|
|TOTAL LONG-TERM ASSETS||$24,400||$27,328||$30,744|
|Liabilities and Capital||Year 4||Year 5||Year 6|
|Other Current Liabilities||$0||$0||$0|
|SUBTOTAL CURRENT LIABILITIES||$19,000||$21,280||$23,919|
|TOTAL LIABILITIES AND CAPITAL||$300,000||$329,280||$370,440|
8.6 Business Ratios
|Year 1||Year 2||Year 3||INDUSTRY PROFILE|
|Percent of Total Assets|
|Other Current Assets||2.11%||2.34%||2.59%||2.40%|
|Total Current Assets||149.80%||151.00%||152.00%||158.00%|
|Percent of Sales|
|Selling, General & Administrative Expenses||93.56%||96.09%||98.78%||97.80%|
|Profit Before Interest and Taxes||41.50%||42.62%||43.81%||33.90%|
|Total Debt to Total Assets||0.18%||0.18%||0.17%||0.40%|
|Pre-tax Return on Net Worth||74.08%||74.89%||75.00%||75.00%|
|Pre-tax Return on Assets||96.30%||101.12%||106.17%||111.30%|
|Additional Ratios||Year 1||Year 2||Year 3|
|Net Profit Margin||33.56%||34.60%||35.67%||N.A.|
|Return on Equity||55.80%||57.53%||59.31%||N.A.|
|Accounts Receivable Turnover||7.7||7.8||7.8||N.A.|
|Accounts Payable Turnover||15.6||16||16.3||N.A.|
|Total Asset Turnover||2.5||2.5||2.6||N.A.|
|Debt to Net Worth||-0.04||-0.03||-0.04||N.A.|
|Current Liab. to Liab.||1||1||1||N.A.|
|Net Working Capital||$244,000||$257,664||$272,093||N.A.|
|Assets to Sales||0.85||0.87||0.89||N.A.|
|Current Debt/Total Assets||1%||0%||0%||N.A.|
1.How do I start a small shredding business?
With increasing regulations to reduce the risk of identity theft, document shredding offers an excellent business opportunity. Following are the basic four steps that you need to follow:
- Create a business plan
- Understand investment requirements
- Comply with regulatory requirements
- Start your business and focus on marketing
The details of each of these can be studied from this commercial paper shredder service.
- How much should I charge for shredding papers?
While contemplating how to start a paper shredding business, you should also investigate costs and prices. There are no fixed criteria and your charges will depend on the market price and scale of your operations. To get an idea of average rates in this market, you can visit the unit sales part of this business plan.
- How do you prepare documents for shredding?
Mostpaper shredding companies for sale fail to educate their customers about preparing documents for shredding. Security Docs makes sure that it follows up with its customers before going through the process. The first step in preparing your documents for shredding is to know what documents are past their retention schedule. The best way to do this is to have a retention date stamped on every paper.
- What is the process of shredding?
Our Document Shredding Business follows a straightforward procedure that can be divided into the following steps:
- Call Time Shred Services
- Choose a Service
- Get a Free Quote
- Schedule Your Appointment
- We Come to You
- Your Destroyed Papers are Recycled
OGSCapital’s team has assisted thousands of entrepreneurs with top-rate business plan development, consultancy and analysis. They’ve helped thousands of SME owners secure more than $1.5 billion in funding, and they can do the same for you.