Starting a Shredding Business?

Welcome to the New Frontier

If you are currently starting your business, you have a front-row seat to an exciting expansion and transformation that is now taking place in the shredding industry. With it, vast new sales and profit growth opportunities.

Historically, the shredding industry traces it origins to “protecting the privacy of individuals” a concept that was incorporated into the federal Privacy Act of 1974. By the 1980’s, the Paper Shredding Industry was well underway. Today most people have dropped the term “paper” and refer to the industry as The Shredding Industry, but because information is also stored on computers and cell phones, it’s more accurate to describe today’s industry as the Information Destruction Industry.

Although there’s much publicity about the term “paperless,” the usage of paper is only declining a few percentage points annually. Propelled by the influence of COVID-19, most information is stored on computers and cell phones in addition to paper. The destruction of information stored on these devices represents a huge untapped market to the traditional shredding industry. While you will need to learn new skills – such as disassembling computers to retrieve their hard drive, acquiring these new skills is not difficult as YouTube will demonstrate.  

The Information Destruction Industry is rapidly growing. World-wide in 2020, 218 million PCs, 79 million laptops, and 1.4 billion cell phones were sold. Even taking into account that the U.S. is approximately 25% of this global market, that leaves approximately 425 million units of stored data that need to be destroyed annually.

You can already see elements of our industry change to account for this:

  • Most shredders currently do some level of hard drive destruction
  • The Electronic Recycling Industry is a $19 billion industry, compared to the $2 billion vended shredding industry. Even though the shredding industry has been slow to the draw, it is starting to compete effectively with electronics recycling based on its expertise in providing security. 
  • Early adapters and large corporations have been engaged in information destruction for many years, but awareness of the risks associated with obsolete electronics is just beginning. When the public recognizes the danger of 2 terabytes of information stored on a hard drive, opportunities in information destruction will explode. The public is just beginning to realize that “wiping” a hard drive does NOT provide adequate protection. 
  • Technology is continuously evolving to provide safer and more efficient methods for destroying information and to keep pace with changes in how memory is stored.  

Industry Support

Check out i-Sigma, an industry trade organization created through a merger of NAID, the National Association for Information Destruction and PRISM, the association for records information management companies. The members of this organization are a mixture of established and new records destruction and information management companies. This paramount industry organization serves the shredding and records information management industry. It fosters professionalism, third party certification for individuals and companies, and organizes an annual convention that is open to members and non-members.

Understand the Industry

Buy the book “Information Disposition” by Robert Johnson. This book is by far the most authoritative book available about shredding.

Shredding Sales Techniques

Shred School is a formal training program for salespeople and managers. Shred School is the education arm of the National Association for Information Destruction (NAID). It is designed to provide affordable training to all secure destruction industry professionals and NAID active members in an effort to improve their businesses.

Market Research

A direct market research approach involves creating a list of potential customers and seeking information directly from them. Your list should include organizations that are required by law to shred. Among them are those engaged in financial, health, education, and government activities.

It is important to learn:

  1. Does the organization currently shred records?
  2. What type of services do they need?
  3. Are they open to doing business with a new company?
  4. Do they have contracts with a service provider and if so, when do the agreements expire?

Getting answers is not easy. People are busy and when making phone calls, voicemail is mostly what you’ll get. You’ll learn more by making personal visits, which is time consuming. Personal visits will give you exposure to non-verbal signals and you can see your competitors shredding containers.

An indirect market research technique is to ask friends and people you know. By asking for “advice”, they may give you introductions to their network of associates and this may lead you to others.

You will learn about your competition from potential customers. You may call them directly to learn how they answer incoming calls. Explore their website. When you encounter their drivers at a location, ask if their company is a good one to work for and ask if their specific truck is reliable.

Create a Business Plan

Make it realistic and achievable. Build in some contingencies for the unknown. Make sure you know how much capital you’ll need. If you go through more cash than you’re allotted in the starting period, it may be too late to get more.


Experienced entrepreneurs know it’s very difficult to start with all the cash you’ll need. Your plan reveals how much cash you’ll need. Once your business is launched, in the “real” world, you probably will exceed your plan some of the time and under perform some of the time. Both conditions eat up more cash than the plan called for.

Hire Professionals

Business is complex beyond what it first appears. You’ll need legal, accounting, and insurance help. By selecting professionals with experience and good reputations, you’ll avoid common pitfalls. If you are lucky, they will keep you from getting into serious trouble.

Tools of the Trade

Shop for the right equipment: Visit these industry suggested suppliers

Learn about them on the internet, talk to their salespeople, visit the factory and request a demonstration. Research what size to buy and how to maintain the equipment. Research local support options and get quotes. Research operating costs, new equipment versus used, study financing terms and shop to get the best financing deal. Then decide, what’s right for you and your business.

Revisit Your Business Plan

Update your business plan using your newly acquired knowledge and understanding about equipment and facility economics. Compute your need for start-up capital Add in a contingency. Polish your business plan because you’ll be relying on it to raise capital. In many cases, it’s all possible investors have to base their judgement. Raise more capital, get going, and keep going.