Profitable New Company Built Upon Making Waste Product Useful

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A new business is off to a good start when its inputs cost nothing. The founders of EcoScraps have just that situation because their product is made from stuff other people put in the trash.

Dan Blake stumbled upon an interest in composting while attending an all-you-can-eat buffet as a student at Brigham Young University. The idea for starting a company gradually developed as he began collecting food scraps for compost. Soil analysis by a university lab concluded the optimal combination of ingredients for the most beneficial compost material.

Blake and his fellow company co-founders dropped out of college and launched EcoScraps in 2010 as a full-time business endeavor. They reasoned that an enterprise should experience good profit margin when material costs are zero. According to the U.S. Environmental Protection Agency, 33 million tons of food was trashed in 2010. Food is also the heaviest waste and businesses are happy to give away the scraps instead of paying garbage-tipping fees that are based upon weight.

Coming from an entrepreneurial family, Blake must deploy some management skills of his own as company CEO. In addition, he credits much of the success to a simple business model for EcoScraps. Grocery stores and farms save money by bringing food waste to EcoScraps and paying a tipping fee that is a big discount from landfill charges. With such low input costs, EcoScraps can sell its product for less than other organic composts.

The EcoScraps founders report that their new business was profitable shortly after the first year in operation. The company sells compost for potting soil in Utah, Arizona, New Mexico, and Colorado. However, the company still struggles with transportation costs. Proving that operating a business is always challenging, Blake explains that controlling these costs demands a lot of time. Nevertheless, EcoScraps is succeeding based upon making a profit from garbage.