How to Start a Firewood Business

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Quick Reference

Do you have experience cutting trees or split your own firewood?  If you have access to a lot of wood on your own property, or even if you don’t, you can start a firewood business as either a part-time or full-time home business.  You can get started quickly and easily, make some extra money, and be your own boss.

Business Overview

A firewood business cuts trees into firewood and sells it in packages to customers for use in a home fireplace, a firepit, or campfires.  Some work with wood from trees on their own land or wood they obtain as a tree removal service.  Wood can also be purchased from logging companies and made into firewood.

Industry Summary

According to MarketResearch.com, the firewood dealers industry has a market size of $200 million and has grown 4.9% annually for the last three years.  There are 213 companies in that industry in the United States.  These numbers do not include small, local firewood sellers.

Related Industries

Bait Shop
Campground

Industry Trends

Firewood is still in demand in spite of the trend toward gas fireplaces.  Firepits are very popular, and campgrounds are full of people who need firewood.  It is an industry that can be somewhat affected by economic fluctuations because it is not a necessary expense for most unless it is for a home heated by a wood-burning stove.

Target Market

Your target market will be people who have fireplaces, wood-burning stoves, fire pits, or those who camp.

Additionally, campgrounds and local retailers like gas stations and bait shops may be interested in selling small bundles of firewood to their customers.

Skills, Experience, and Education Useful in Running a Firewood Business

There are several specific skills that you will need to open a firewood business.

  • Experience.  Experience turning logs into firewood safely is helpful, although you can learn.
  • Business knowledge and experience.  You will need to have some basic knowledge of marketing, finance/accounting, and human resources.
  • People skills. You’ll need to build rapport with your customers so that you retain them as customers and keep them coming back.

Costs to Start a Firewood Business

Here are the typical costs you will face when you open a firewood business.

  • Setting up a business name and corporation costs approximately $200.
  • Business cards, brochures, postcards for marketing $200 – $300
  • Tools including a chainsaw, axe, and a log splitter $1,000 +
  • Pickup truck or van $5,000 +
  • Utility trailer for hauling $500 +
  • Liability insurance, worker’s comp, property-casualty insurance $600 – $1,000

Steps to Starting a Firewood Business

Step 1: Write your Business Plan

After coming up with the idea, the next step in starting your firewood business should be to write a business plan.  The business plan will make you focus on some important aspects of the business, such as who your customers are, how you plan to reach them, projecting sales and expenses, your value proposition to use for marketing, and more. You’ll also need to do some research to calculate exactly what your startup expenses will be and what your ongoing expenses will be.

Not only will a bank require you to have a business plan if you need financing, but multiple studies have shown that having a good business plan increases the odds of starting a successful business. Writing the plan helps you think through all the aspects of the business and then serves as a guide as you begin.

Related:
How to write a business plan
Free sample business plans

Step 2: Name the Business

Finding the perfect firewood business name can be challenging. Not only does the name have to reflect what you do and be appealing to customers, but it also has to be available to use. You can check your state’s website to see if the name is available and register your name.  Your name should make you stand out, reflect your brand, and tell potential customers exactly what you do.

Step 3: Form a Business Entity

A business entity refers to how a business is legally organized to operate. There are four primary business entities to choose from, which include a sole proprietorship, partnership, corporation, and Limited Liability Company (LLC).  Each type of entity has its own pros and cons, such as liability exposure, costs, and administrative requirements.

RelatedComparison of Business Entities

Step 4: Select your Location

The location of your firewood business will probably be your home.  If you do not have land with a lot of trees, you will need to find a logging company to partner with, so look for one near you so that you can get the wood conveniently.  You can sell your wood online, through partner stores such as hardware stores, from a roadside stand, or you can even set up booths at flea markets.

Related: Choosing a business location

Step 5: Apply for Business Licenses and Permits

In most areas, a firewood permit is going to be required to legally sell firewood from the USDA Forest Service.

In addition, some other common local, state, and federal registrations a firewood business may need include a sales tax permit and an Employer Identification Number.  

Related: Common business licenses, permits, and registrations by state

Step 6: Find Financing

Fortunately, the cost to start a firewood business is small, and most people purchase equipment with personal funds.  If a loan is needed, the borrower(s) will need to have good credit and invest 15-25% of their money towards the total start-up costs.

Related: Finding the money to start a business

Step 7: Open a Business Bank Account

Keeping your business and personal finances in separate business bank and credit card accounts makes it easier to track the income and expenses of the business.

Step 8: Get your Marketing Plan in Place

Common marketing techniques for a firewood business include social media marketing and online advertising on places like Craigslist, as well as flyers and postcard mailers.  Developing a website can be a significant expense, but it can also give your firewood business greater visibility online.  You can market to campgrounds and partner stores where you can sell your firewood.

Related: Low-cost ideas to market a new business

Step 9: Get Insurance

A firewood business needs several types of insurance for full coverage:

General liability insurance can help protect you from third-party claims of bodily injury and property damage.

Worker’s compensation insurance covers expenses like medical bills and legal fees that a business might face if an employee were ever hurt while working.

Insurance policies will vary. To get the most accurate idea of what to budget for insurance, request quotes from multiple providers. When comparing the quotes, consider not only the premiums but also how the plan exclusions, coverage limitations, and deductibles compare.

Related: Common types of insurance a business may need

Step 10: Hiring Employees

You may need to hire employees to help you run your firewood business if you grow a large customer base.

In addition to salary costs, your budget will also need to include other employee-related expenses. Workman’s comp insurance, unemployment insurance, and paid time off are common expenses that a business will need to cover when hiring staff.

Related: Hiring your first employee

Step 11: Set up an Accounting System

Setting up an accounting system for your firewood business is critical to the long-term success of your business.

Staying on top of taxes not only keeps the business out of trouble with the government but the numbers can be used to track and monitor trends and cash flow in the business and maximize profits.

Related: Setting up accounting for your business

How Much Can You Potentially Make Owning a Firewood Business?

The price for a cord of wood is about $175-200 (and sometimes higher for quality hardwood), but you could make more per cord if you sell the cords in smaller bundles. A cord is a stack of wood measuring four feet high, four feet wide, and eight feet long and will fill 128 cubic feet.

If you sell 5 cords per week in bundles for an average revenue of $250 per cord, you would make $65,000 per year before expenses.

Things to Consider Before Starting a Firewood Business

Running a firewood business or any business will have its challenges.  You need to be prepared and make sure that you know what you’re getting into.

Marketing and acquiring customers will be your biggest challenge and an ongoing expense.  You will need to find partner stores to sell your firewood.

You will need to find a logging company or a tree cutting service to buy excess wood from if you don’t have access to wood on your property.  They will need to sell you the inventory at a price that allows you to profit from the firewood.

Be sure to account for your time in unloading and stacking firewood at the customer’s location. If you can’t park close, there will be a lot of time walking back and forth.

Selling firewood is typically a seasonal business, but in some areas, there may be a market year-round.  Campfires and firepits will need firewood in the warmer months, while indoor fireplace customers will buy in the colder months.

Larger operations with access to sufficient woodlots could be a firewood processor and sell in bulk to smaller firewood suppliers.  Though the margins are smaller, the volume and efficiencies may be worthwhile in your market.

Talk to other business owners for tips on starting a business and do your homework to determine costs.  Research other firewood businesses to see what they offer and what prices they charge.

 

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