HOW TO START AND OPERATE A 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 “cosy” atmosphere sought after by both middle class and affluent families. 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!
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 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 as varied as the weather; it is also somewhat dependent on the weather. You’ll find buyers among flat 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.
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, 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: 1) mill efds or sawed
up scrap lumber and kindling, 2) whole logs for the buyer to cut according to his own rpecifications, 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 in 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 city, take a few
weekend trips to the small towns in the countryside. With a little bit of initiative on your part, you chould be able to
discover any number of small sawmill operations within reasonable distance of your home.
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 a 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 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 flat occupants, as well as people who only need a minimal amount for 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. 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.
Other sources of supply for mill end lumber will be your local lumber yards, woodworking or furniture manufccturing 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 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 sizes you want for your bundles or sacks. This is no big deal, because you can handle a 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 increase your profits by hiring a couple of college students. Contact the counsellors at one of the local colleges, 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 students, one would hold open a sack while the other uses a 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 reasonable fast rate, 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 the bags to put the wood into, 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 site – about half to a whole acre – and preferably on the outskirts of your area. The first thing will be to put up a 6 foot fence around your ground, 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.
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. Sometimes, 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 – 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 home.
FIREWOOD AND STOVE WOOD: In running a programme of 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 wood lot where whole logs are delivered to your location. Part time workers saw these logs into 16 to 24 inch lengths for you, and stack the wood onto pallets.
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 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 have 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 spell. If you should also sell bags and pallets of wood to the general public, after setting up retail sales ou4lets, be sure that your prices at least “average” those being charged by the retail sellers. Never “undercut” 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, get the paper to help you with the layout and writing of this ad.
Plan the appearance of this advertisement for a Saturday morning paper. Make your opening a big event – much the same as a grand opening or special anniversary sale – with free drinks, snacks, and balloons for the kids. 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 draw forms. The prizes can be a free log of wood, dinner for two in a local restaurant, or even cinema 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
firewood 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 remodelling 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 tyre” 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 qercent of the market will wait until the first cold weather spell 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 programme utilising the services of commission telephone sales people, 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 book-keeping 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 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 weathering services, recycling, and perhaps even home remodelling. er.