How to Start Your Own Firewood Supply Business
Unpredictable fuel costs and the necessity of keeping warm in the winter have resulted in ?boom sales? for manufacturers of wood-burning stoves. There has also been a return to the use of the fireplace.
Supplementary heat, as well as a luxury, that promotes the ?cosy? atmosphere sought after by both the middle class and affluent families, use this. This renaissance in the popularity of wood heat and upward spiralling sales of associated equipment, has created a demand for firewood that?s almost impossible to fulfil!
This demand has caused the price of firewood to almost double over the past several years. Whatever the ?going price? for a cord of firewood in your area, you can expect it to increase by 20 to 30 percent each year for the next ten years or so.
Your potential market depends on the weather. You?ll find buyers among apartment dwellers as well as homeowners. The rich are buying firewood perhaps more than the poor, those concerned with the purity of the environment and the so-called ?voluntary-simplicity? folk seeking a return to the ?pioneering? life are all part of your market.
Secret of the Success
One of the secrets of success in this business is understanding why the people in your area burn firewood. Then it?s a matter of learning when and how often they need it and positioning yourself to fill those needs.
It doesn?t take special education or training to become a successful firewood supplier. Just for the record, the backgrounds of people operating businesses of this kind range from farmers to unemployed factory workers to doctors, lawyers, real estate salesmen and even university professors.
The Equipment Needed
The kind of equipment you?ll need varies according to the type of business you want to establish, and the kind of wood you will be supplying.
The first prerequisite to the establishment of your business is to decide what kind of business ? wholesale to retail outlets, or retail to the public you want to operate.
Type of Firewood
Next, you?ll have to decide on the type of firewood you will sell. There are three major categories:
- ?Mill ends or sawed up scrap lumber and kindling
- Whole logs for the buyer to cut according to his own specifications
- Fireplace and stove wood, cut and split according to the general requirements of your market area.
Your next step is to line up a source of supply. Actually, it?s best to ?lock in? a number of sources of supply. Later on, as your business develops and grows, you may want to offer several different kinds of firewood.
Then become a full-service dealer offering firewood to meet everyone?s needs and fancies for your area. We?ll discuss different categories of wood in demand so that you can explore sources of supply and costs.?
Your best source of supply for this type of wood is sawmills in your area. If you live in a metropolitan area, take a few weekend trips to the small towns in the wooded areas of your state. With a little bit of initiative on our part.? You will discover any number of small sawmill operations within a 200-mile radius of most metropolitan areas in this country.
What you?ll want to do is buy a truckload of mill ends, take them home and package them into sacks of firewood. Thus, a load of mill ends that you might buy for R 500 would be broken down into perhaps 200 bags that you sell for R 50 per sack. Multiply these 200 sacks of firewood times R 50 each, and you have a gross income of R 10 000 for a load of wood costing you only R 500.
You wouldn?t have to be very smart to realise?that?s pretty good, providing your sources of supply can keep up with the demand.
The beauty of mill ends, is that they are clean, burn easily and fast, put out a lot of heat, and when broken down into sackfuls, are ideal for apartment dwellers, as well as people in warmer climates needing firewood for just a few cold spells each winter.
Until you have a large full-service firewood supply operation, it?s suggested that you leave the sale of truckload supplies of mill ends to the larger, more established firewood suppliers.
Truckloads, yes or no!
My advice here is that you should stay within your capabilities of supplying the buying demands of your market, and further concentrate on selling what brings you the greatest profit. However, as your operation grows, the supply of truckloads of mill end firewood is definitely worth considering.
Clean Up Work-sites
Other sources of supply for mill end lumber will be your local lumber yards, woodworking or furniture manufacturing firms, and home building or remodelling contractors. In many instances, you can offer to stop by these places about once a week and clean up the work-site by hauling away the scrap lumber, and they?ll let you have it without cost.
It is possible to even get paid for doing this. The only drawback will be that you?ll have to sort this wood, and then saw it up into the size s you want for your bundles or sacks. This is no big deal because you can handle a pickup or trailer load with a power saw in just a couple of hours.
Student pocket money
When you have the wood ready to package into sacks, you?ll save time and increase your profits by hiring a couple of high school students. Contact the counsellors at one of the local high schools, explain that you need a couple of students for part-time work sacking firewood, and you?ll have all the help you need.
As for how much to pay them, establish a pay rate for 100 full sacks. Of two high school students, one would hold open a sack while the other uses a scoop shovel to pick up the wood and dump it into the sack.
Between them, they can gather the top of the sack and tie it with twine. The full sacks, of course, must be stacked on a pallet or in an area ready for selling. Check the time it takes two good students, working at a reasonably fast clip, to load 100 sacks.
Knowing the current minimum hourly wage rate, you can then determine the labour value of 100 loaded sacks.
For a supply of burlap bags for use in sacking your wood, check with a farmers? feed store. If you buy in quantity, you can get them at a very reasonable price. You can purchase twine for tying the sacks at the same place.
Many people have chainsaws and fancy themselves as ?do-it-yourselves,? but they don?t have the time to go out into the woods and bring back firewood. If you can supply these people with a location not too far from home, where they can saw and split their own firewood, you?ll have a steady stream of customers.
You?ll need a large vacant lot ? about a half-acre to a full and preferably on the outskirts of town. The first thing will be to put up a 6-foot cyclone fence around your lot, and then a small garden shed type building to serve as your office.
Contact a sawmill or logging operation not too far from where you want to open your business. Arrange with them to deliver whole logs (lumber rejects) to your woodlot. Your costs shouldn?t run much more than R100 per log, even for premium wood, but will depend upon the size and number delivered in each load.
If you have the vehicle and the energy, you can also contact the Forest Service or the Bureau of Land Management in your area for a permit to cut firewood in government preservation areas. Then you go out into the woods, saw up downed tree s into eight-foot lengths, load them into your vehicle and haul them to your woodlot.
Farmers in area
Another source of supply is the farmers in your area. Talk with them and offer to ?thin out? areas of standing timber, and the downed trees. Oftentimes, you can get this wood at no cost other than offering the landowner a share of the timber you take out. He may even consider your ?thinning? and hauling an even exchange for the logs.
Road building construction
Don?t forget about the road building construction companies and commercial and residential developers as sources of supply. Once you get into this business, you?ll find sources of supply virtually unlimited, and restricted only by your own initiative in making contact with the property owners.
Once you have a supply of logs within your woodlot, there are many things you can do to attract customers. Run an advertisement in your local paper inviting ?do-it-yourselves? to come out and Cut their own firewood.
You charge them twice as much per log as your cost, and they do the sawing, the splitting, and the loading and provide their own car or truck to take them home. You are there only to supervise and receive payment.
You could also rent chainsaws, axes, and the use of your power slitter. Allow the customer to select the log of his choice, and then have the hired help high school students, perhaps who would saw, split and load this wood into the buyer?s vehicle.
The ultimate, of course, would be to include delivery and stacking of this wood at the customer?s residence.
Once the customer has selected his log at twice your cost and pays you R 50 for sawing it into the lengths he wants, plus R 100 for splitting it for him and another R 100 for loading it onto his vehicle, you?re talking about,? R1 500 to R 2000 per cord of wood.
The secret here is to have your helpers working in teams, with the kind of efficiency that means R 1000 per hour for you.
Fireplace and stove wood
In running a program of the pre-cut and split fireplace and stove wood, you combine all the principles we?ve discussed so far, into either a wholesale or retail firewood supply sales outlet.
The easiest and most profitable operating procedure is to set up a woodlot where whole logs are delivered to your location. Part-time workers saw these logs into 16 to 24-inch lengths for you. A couple of people with chainsaws should be able to cut two cords of wood per hour.
?A couple of people working a power log slitter should be able to keep up with the people on the chainsaws. And a couple of other people stacking this wood onto pallets as it?s split, or for storage until sold, would be all the help you need.
The physical side of the business
If you can set your business up along these lines, you?ll realise the greatest profits and not have to get involved in the physical part of the business. The big thing to remember is that as the business owner and operator your time should be devoted to selling the end product.
If you decide to be a wholesale supplier and sell to retailers, advertise for and hire commission salespeople to call on the retail outlets in your area. You?ll need help in covering all the possible opportunities for retail sales of your firewood.
You should be selling sacks and pallet loads of firewood. Remember: The more you can divide a basic cord of firewood into sacks or pallet loads, the greater profit you?re going to make from each cord of wood you sell.
Selling to whom, why, where and when
You?ll find most people buying cords or truck-load quantities of firewood before cold weather sets in, and after that, people will buy in quantities only large enough to get by or to last out a sudden cold snap.
If you should also sell bags and pallets of wood to the general public, after setting up retail sales outlets, be sure that your prices at least ?average? those being charged by the retail sellers. Never ?under-cut? the price your retail people are charging.
Selling yourself and advertising
If you decide to do all the selling yourself, in other words, act as your own retail outlet you?ll need to advertise.
Start out with a large three-column wide, by four-inch deep display ad in your local paper. Unless you?ve had advertising experience, at least contact the advertising instruction class at your local community college for help in the layout and writing of this ad.
If you?re not far from a large metropolitan area, you can often contact the advertising agencies in that area, and get free-lance help to assist in the makeup of your advertising.
Plan the appearance of this ad for a Saturday morning paper. Make you?re opening a big event much the same as a grand opening or special anniversary sale with free coffee, donuts, and balloons for the children.
Get the name, address and phone number of everyone who shows up. This can be handled very unobtrusively by giving away free prizes requiring the attendees to your event to fill out simple prize drawing forms.
The prizes can be a free cord of wood, dinner for two at a local restaurant, or even movie passes.
The grand opening
The whole purpose of your grand opening show is to let people know that you?re opening to serve their needs, to get them to discover your location, and to implant in their minds the memory that you can supply them with the means to keep warm when the weather turns cold.
After your grand opening, a small 2 by 4 inches display ad in the yellow pages of your telephone directory plus the posting of advertising circulars and business cards left with wood-stove and fireplace suppliers, insulation and remodelling contractors and lumber yards in your area is about all the advertising you?ll need to do.
Listen to your customer
Quite naturally, many will find your services to be more convenient, time-saving and less bother than whatever methods they?re currently using. As you talk with your customers, listen to their ?complaints? about their present methods of firewood procurement, and then alleviate those problems with the services you provide.
When customers buy
Statistics prove that 20 percent of your potential market will prepare for cold weather by purchasing before the cold weather sets in. Another 30 percent of the market will wait until the first cold snap hits, then buy from the first supplier that comes to mind.
Finally, the remaining people will have to be ?sold? via suggestion of the benefits your business provides.
This is the period when you begin profiting from those names, addresses and telephone numbers of people who turned out for your big opening event. Simply set up a telephone selling program utilising the services of commission telephone salespeople, and follow up on those who had registered.
You can conceivably operate this business from your home or backyard, and definitely on a part-time basis, but the prospects of immediate success, with outstanding profits, are so great that it would be wise to plan on a big operation from the start.
A receipt pad for taking orders, a ?daily diary? or ledger type of bookkeeping system, a calculator and a telephone should suffice for office supplies and equipment. Until you?re over the hump on the profit side, you can keep your sales receipts in a shoe box or daily staple together and store in chronological order.
A couple of other points to remember:
- Hardwood burns the longest and gives off the most heat, firewood that has been cut in the spring and seasoned through the summer is the kind most people will be willing to pay premium prices for, and giving the customer a ?little extra? for his money, will result in greater and longer-lasting success than quick profit schemes.
- Once you?ve got your basic firewood supply business on a profitable basis and running smoothly, you?ll find your facilities and business expertise ideally suited.? This will add extra profit producing lines such as the sale of firewood accessories, wood stoves, built-in fireplaces, home insulation or weatherising?services, recycling and perhaps even home remodelling.