Guide: Starting or buying a used cooking oil collection business for sale

Have you ever wondered where all that burned cooking oil goes after restaurants throw it out? Billions if not trillions of gallons of cooking oil that is used yearly, Into the ocean? A landfill? What if you are looking at staring at a business idea that can generate you a weekly income? Yes, you heard right! Starting or buying a used cooking oil collection business for sale can be a greasy but smart investment if you play your cards right. Not only will you make a business out of used waste oil but you will be playing a vital role by helping the environment. In this article, I will break down some questions with answers that will help you understand the business a little better, but before we do that make sure to register as a business buyer to get the latest alerts on routes for sale as well as some interesting business ideas! 

What is a used cooking oil collection business?

While cooking oil is commonly used in households, the focus here is on the significant amounts generated by restaurants. Unlike a typical household kitchen where a 1-gallon bottle of vegetable oil lasts for 2-3 weeks, restaurants often consume 50-100 gallons of oil per week. However, they cannot simply dispose of this oil anywhere. The primary reason behind the large volume of used cooking oil in commercial kitchens is to ensure that customers are served fresh-tasting food. The frequency of oil changes in restaurant fryers varies from daily to weekly, depending on the restaurant's level of activity. This demand for regular oil changes is what leads us to the next section below.

So that brings to the queston, What is a used cooking oil collection business?

A used cooking oil collection business involves the collection, recycling, and reselling of used cooking oil from restaurants, commercial kitchens, and other food establishments. These businesses provide a valuable service by efficiently and responsibly disposing of large quantities of used cooking oil, preventing environmental pollution and promoting sustainability.

Why is cooking oil so valuable?

Used cooking oil became very popular in the early 2000s when it was considered an alternative option to fossil fuels. But what is bio-diesel? Well, Biodiesel is a renewable, environmental-friendly alternative to your average petroleum diesel fuel. It is great because it can be used in diesel engines without the need for major modifications and also produces lower emissions than petrol which is great for our earth. 

In addition to its environmental benefits, biodiesel has several economic advantages. It is typically less expensive than petroleum diesel, and the price is generally more stable, which can help businesses that rely on diesel fuel to better manage their costs.

You as a used cooking oil collector will have one task and that is to remove the dirty oil and get transported into a refinery that accepts used cooking oil. Overall, the value of used cooking oil lies in its potential to be recycled and repurposed into a valuable resource, providing both economic and environmental benefits.

How does a used cooking collection business work? 

Here is fun the part, Running a used oil collection business is pretty simple but it can get messy! You are dealing with grease throughout the day so you will need to have work gloves and oil-resistant clothing alongside some heavy-duty boots. Your work will require you to remove waste oil from restaurants, commercial kitchens, and any other food establishments that use cooking oil.

Below is a step-by-step list that involves how a used cooking oil collection business works:

Contacting potential clients: The first step for your used cooking removal business is to find restaurants or large kitchens that might be interested in your service. You will need to get to know these customers to collect their used cooking oil frequently.

Dropping drums or containers:  Once you established an agreement with the customer you will need to provide customers with drums or containers and ensure they are properly labeled with the necessary information, such as your business name, the type of oil to be dumped inside, and any relevant safety information. This will help ensure that the used cooking oil is stored safely and securely until you come to remove it.

The size of drums and containers will depend on how busy the restaurant is, for example, If a kitchen will use 20 gallons of oil a week a 55-gallon drum should be enough, and if a business will use 50-100 gallons a week you will need to either provide them with a 200-300 gallon container to ensure they enough space to store the dirty oil.

Scheduling collections: Once a client is identified and agrees to use the collection service, You will need to schedule regular pickups of the used cooking oil. These collections are typically done on a weekly, bi-weekly, or monthly basis, depending on the volume of oil being produced by the client.

Collecting the used cooking oil: On the scheduled pickup day, You will arrive at the customer’s location with your pump truck and equipment and pump out the used cooking oil, You will pull up to the drum and container and then you use the hose attached to the truck and it will vacuum out the oil. You will repeat this process until your truck is full or your route ends.

Transporting the oil:  Once your truck is full you can transport the used cooking oil to the refinery you are working with, These can be rendering plants, or other companies that use the oil as a feedstock or buyers such as biodiesel producers. Once you arrive They will offload your truck and pay you on what you agreed on.

Can you make money selling used cooking oil?

Yes, it is indeed possible to make money by selling used cooking oil. Many businesses operating in the used cooking oil collection industry generate revenue by selling the collected oil to companies involved in its recycling, such as biodiesel fuel producers or other plants in need of used cooking oil as a raw material.

However, it is important to note that the market value of used cooking oil can fluctuate, much like any other commodity such as gold or silver. The price of used cooking oil may experience ups and downs based on various factors. Additionally, businesses that collect larger volumes of used cooking oil often have an advantage in negotiating a better price for their product.

The quality of the oil also plays a significant role in determining its value. Not all used cooking oil is equal, as some restaurants may only pour oil into collection drums, while others may mix it with water and food particles like bread crumbs or even bones. The price paid for used cooking oil can vary depending on the buyer, the location of the collection business, and other relevant factors.

Overall, selling used cooking oil can be a profitable venture for those operating in the used cooking oil collection industry. It requires careful consideration of market conditions, maintaining high-quality standards, and building relationships with reliable buyers.

What do they do with used cooking oil?

As mentioned earlier, the primary use for used cooking oil is its conversion into biodiesel fuel. However, there are several other purposes for repurposing used cooking oil. Here are a few examples:

Animal feed production: Used cooking oil can serve as a valuable feedstock for the production of animal feed. It can be processed and incorporated into animal feed formulations, providing a nutrient-rich ingredient for livestock.

Industrial lubricant: Due to its lubricating properties, used cooking oil can be utilized as a lubricant in various industrial machinery and equipment. This can help reduce friction and enhance the performance and longevity of mechanical systems.

Heat and electricity generation: Some businesses employ used cooking oil as a source of heat or fuel to generate electricity. This can be achieved through specialized equipment that converts the oil into thermal energy, which is then used for heating purposes or to produce electricity.

Soap production: Used cooking oil can also be utilized as an ingredient in soap production. Its properties make it suitable for soap making, and it can be a cost-effective alternative to other oils or fats used in the process.

When starting or acquiring a used cooking oil collection business, it becomes evident that many businesses lack proper knowledge regarding the appropriate disposal of used cooking oil. Some may dispose of it in dumpsters or pour it down drains, which can be detrimental to drains and sewer lines. As a used cooking oil collector, part of your responsibility would be to educate businesses and introduce your service. Offering them a free 55-gallon drum where they can safely pour their used cooking oil can help prevent damage to infrastructure and promote responsible disposal practices.

Overall, the repurposing and recycling of used cooking oil offer numerous opportunities and benefits, making it a valuable resource within the waste management industry.

How big is the used cooking oil market?

Now that we have explored who generates the most used cooking oil, you might be intrigued to learn about the size of the market. However, before rushing to your local Chinese restaurant and requesting their used cooking oil, let's delve into the details of this industry. The used cooking oil market is a niche segment within the broader waste management industry, but it is steadily growing, which is encouraging.

According to reports from Spherical Insights, the used cooking oil market is currently valued at over 6 billion dollars, marking a significant jump. Furthermore, it is projected to continue expanding at an annual growth rate of 6.4%. This indicates that either more restaurants will open or there will be an increased demand for fryers in existing establishments. While there are already established players in the market, such as Darpro with a substantial market share and nationwide truck fleet, there are still opportunities for new businesses to enter the market and secure a portion of the customer base.

To succeed in this industry, it is essential to excel in customer service, offer additional services like grease trap cleaning, and prioritize scheduling to prevent overflowing drums and messy situations that customers dislike. Moreover, aspiring entrepreneurs can consider purchasing an existing used cooking oil collection business for sale, which would provide a head start by including assets like a pump truck and an established customer base. This approach saves time and effort compared to starting from scratch.

In summary, while the used cooking oil market operates within a specific niche of waste management, it is a sector with growth potential. As the industry continues to expand, there are opportunities for newcomers to establish their presence, cater to customers' needs, and contribute to the sustainable management of used cooking oil.

What kind of trucks are used to remove cooking oil? 

When it comes to the removal and transportation of used cooking oil, the selection of the appropriate truck depends on various factors, including the volume of oil to be collected and the specific requirements of the collection business. Here are some examples of trucks commonly used in the industry:

Vans or small trucks with tanks and pumps: These are suitable for smaller-scale collections where the volume of used cooking oil is relatively low. They are equipped with tanks and pumps to facilitate efficient extraction and transportation of the oil.

Trailers or carts: These are used for transporting smaller volumes of used cooking oil. They can be attached to vehicles or operated independently for short-distance transfers.

Tanker trucks with specialized pumps and hoses: Larger collections necessitate the use of tanker trucks. These trucks are equipped with specialized pumps and hoses designed to handle substantial volumes of used cooking oil. They are commonly used for commercial kitchens or restaurants that generate significant quantities of oil.

Regardless of the type of truck selected, it is crucial to prioritize proper maintenance and ensure that the vehicle is equipped with the necessary safety features. This includes mechanisms to prevent spills or leaks during transportation, such as secure tank compartments, robust seals, and reliable pumping systems. Safety measures are essential to protect the environment, prevent accidents, and maintain compliance with regulations related to waste management and transportation.

In summary, the choice of truck for used cooking oil removal and transportation depends on the specific needs and volume requirements of the collection business. The trucks used should be properly maintained and equipped with safety features to ensure the efficient and secure transportation of the oil.

What additional services can I add to my used cooking oil business?

There are several additional services that you can offer to your clients as part of your used cooking oil collection business. Here are a few examples:

Grease trap cleaning: A great way to get customers is by offering grease trap cleaning. A grease trap is usually set up under sinks or basement where it keeps the grease from entering into the drains, this is great for you and the business. One the business will love the idea of you cleaning their traps and you will get the used cooking oil in exchange. 

Hood cleaning: In addition to grease trap cleaning, you can also offer hood cleaning services to your clients. After a while Commercial kitchen hoods accumulate grease and other debris, By offering hood cleaning services, you can help your clients maintain a safe and clean kitchen. 

Power washing:  Restaurants with parking lots can use a service like power washing, By offering power washing, you can help your customers maintain a clean property. Keep in mind many businesses also can use your service to clean their sidewalks as well.

Sewer jetting: One option for keeping drains and sewage lines clear is sewer jetting. By providing this service, you can save your customers money that would otherwise be spent on repairing or clearing obstructions.

Cesspool pumping: If your company works in a region where cesspools are frequent, you can add cesspool pumping as an extra service. This involves pumping out the waste materials of the cesspool and properly disposing of them.

Each service offers a unique but helpful solution for restaurants, but also each business will require its own set of skills and licensing.

In conclusion, starting or buying a used cooking oil collection business can be a smart investment for entrepreneurs looking to enter the waste management industry. Used cooking oil has a variety of valuable uses, from producing biodiesel to making animal feed, and demand for this commodity is expected to grow in the coming years. There are many opportunities available for those willing to put in the work, and with the right strategy and approach, a used cooking oil collection business for sale can be a great investment in your future.

Disclaimer: The information provided in this article is for general informational purposes only and should not be considered legal advice. The laws and regulations regarding business licenses may vary from state to state and are subject to change. It is important to contact your local state office to determine which licenses are required for any specific businesses. Additionally, please note that this article contains affiliate links and we may earn a commission from our affiliate partners or Amazon links. If you are considering starting a business, it is recommended that you seek the advice of a qualified lawyer, business broker, or professional in your area. The information provided in this article is not a substitute for professional advice and should not be relied upon as such.