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How To Start & Operate 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 as a form of supplementary heat
and as a luxury that promotes the "cozy" atmosphere sought after by both middle
class and affluent families. This renaissance in the popularity of wood heat, and upward
spiraling sales of associated equipment, has created a demand for firewood that's almost
impossible to fulfill!
A very important element: 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 is a varied as the weather; it is also somewhat
dependent on the weather. You'll find buyers among apartment dwellers as well as home
owners. 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.
And don't think for a minute that firewood sales are limited to the
colder northern states. People living in Sunny Southern California and along the Gulf of
Mexico buy and burn firewood for the same reasons as people living in Minnesota or
Montana.
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 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 general
public - you want to operate.
Next, you'll have to decide on the type of firewood you will sell.
There are three major categories: l) mill ends or sawed up scrap lumber and kindling, 2)
whole logs for the buyer to cut according to his own specifications, 3) 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, that is, 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.
MILL ENDS: Your best source of supply for this type of wood is the
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 should be able to 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 $50 would be broken down into perhaps 200 sackfuls that you sell for $5 per
sack. Multiply these 200 sacks of firewood times $5 each, and you have a gross
income of $1,000 for a load of wood costing you only $50. You wouldn't have to be very
smart to realize 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
fire wood suppliers. 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 truck loads of mill end firewood
is definitely worth considering.
Other sources of supply for mill end lumber will be your local lumber
yards, wood working or furniture manufacturing firms, and home building or remodeling
contractors. In many instances, you can offer to stop by these places about once a week
and clean up the worksite 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.
When you have the wood ready to package into sacks, you'll save time
and in crease your profits by hiring a couple of high school students. Contact the
counselors 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 labor 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.
WHOLE LOGS: Many people have chain saws and fancy themselves as
"do-it-yourselfers," 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 acre - 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
wood lot. Your costs shouldn't run much more than $10 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.
Still 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 land owner a share of
the timber you take out. He may even consider your "thinning" and hauling an
even exchange for the logs.
Don't forget about the road building construction companies, and
commercial and residential developers as sources of supply. Actually, 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 wood lot, there are many
things you can do to attract customers. Run an advertisement in your local paper inviting
"do-it-yourselfers" 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, 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 chain saws, axes, and the use of your power
splitter. 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 $5 for sawing it into the lengths he wants, plus $10 for splitting it for him and
another $10 for loading it onto his vehicle, you're talking about $150 to $200 per cord of
wood. The secret here is to have your helpers working in teams, with the kind of
efficiency that means $l00 per hour for you.
FIREPLACE AND STOVE WOOD: In running a program of pre-cut and split
fire place and stove wood, you combine all the principles we've discussed so far, into
either a whole sale or retail firewood supply sales outlet.
The easiest and most profitable operating procedure is to set up a wood
lot 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 chain saws should be able to cut
two cords of wood per hour. A couple of people working a power log splitter should be able
to keep up with the people on the chain saws. 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.
If you can set your business up along these lines, you'll realize 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 sales people 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.
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.
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 your
opening a big event - much the same as a grand opening or special anniversary sale - with
free coffee, donuts and balloons for the children. Ideally, the opening of this kind of
business should be staged on a weekend in late September or early October, and designed to
acquaint the people in your area with your firewood business.
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 whole purpose of your grand opening show is to let people know that
you're open 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.
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
fire wood procurement, and then alleviate those problems with the services you provide.
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 woodstove and fireplace suppliers, insulation and remodeling
contractors and lumber yards in your area is about all the advertising you'll need to do.
However, it would be wise to follow the lead of the "snow tire" people, and
whenever the weather forecast shows a cold front or winter storm moving in, again invest
some money in radio and newspaper advertising.
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 utilizing 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 shoebox 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 to adding extra profit producing lines such as the sale of firewood accessories,
woodstoves, built-in fireplaces, home insulation or weatherizing services, recycling and
perhaps even home remodeling.
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