Increasing Profitability By Controlling Cost of Operation
There are many solutions, but we have done some analyses that should help any composting business grow its profits.
First, the quickest route to profitability is to enhance the value of the output product so you can obtain higher prices. If you are selling compost for $35 per ton with a profit of $4 per ton, increase value to double your profits by getting $39 per ton. If you can double your price to $70 your profit goes up almost 1,000 PERCENT.
Another area for review is to reduce your costs. Look at the chart at below.
Our analysis shows a ”rule of thumb” model for composting costs that look like the following, on a PER TON basis:
Proper site selection and careful planning for layout and preparation can reduce that number, but it starts out small so that is a really small area for improvement. Fuel pricesare at the mercy of the market, but we have designed our systems to require less fuel per dollar of output compost. This is still, however, a small opportunity. Inoculant is important to the overall process and can reduce cost by speeding up the processing, as well as increasing the value of output. Marketing can be made more effective through research, customer relationships, and good planning. A solid operating plan, reliable equipment, and speedy processing can all keep labor costs to a minimum.
The “Aeromaster Equipment” figure shown is a total cost of ownership for an Aeromaster compost turner and water tank, well maintained. Enhance profitability by choosing equipment that lasts. We believe Aeromaster compost turning equipment offers the lowest total cost of ownership on the market.
Choosing a reliable, inexpensive tractor is something you are probably familiar with. Reduce costs by utilizing one that has been preowned or is used for multiple purposes.
Creative planning and selection of feedstocks can make a huge difference in cost. Dependent on local situation, many of the following might be free or better in your area:
- Tree trimmings
- Various animal manure
- Animal bedding from your local FFA chapter
- Sub-quality silage
- Discarded/unusable hay and straw
- Wood chips
Our recipe program can help you develop a cost-effective combination of feedstocks.
If you think we can help you enhance your value or improve your cost structure, we’d be happy to help you put together a plan to do so. Just contact us to get started.