HOW TO START AND OPERATE
YOUR OWN FIREWOOD SUPPLY
BUSINESS

Unpredictable fuel costs and the continued necessity of keeping warm in the winter have resulted in booming sales for manufacturers of woodburning 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 many families. This renaissance in the popularity of wood fires has created a demand for firewood that's almost impossible to fulfill. Most folks using firewood live within the city and have no opportunity to cut their own wood. Besides, most wouldn't even know how to begin. You can get a piece of this lucrative market by starting your own firewood supply business.

The great demand for firewood has caused the price to almost double over the past several years . Whatever the going price for a cord of firewood in your area (a 4x4x8 foot stack), you can expect it to increase by 5 to 20 percent each winter for the next several years. As more and more new homes are being built with fireplaces, and as more people feel the pinch of increased electricity and heating oil costs, the need for a steady supply of firewood will continue to push the market.

While the market for firewood is large enough to keep several suppliers busy in most areas, brisk sales will to a large extent be dependent upon the weather. When the weather turns chilly, sales will climb. During extended periods of cold weather, sales will skyrocket. You'll find buyers among apartment dwellers as well as home owners. Although upper class individuals buy the most firewood, by and large your market will cut across the entire spectrum of citydwellers. Everyone with a fireplace or wood burning stove is a part of your market. Don't think for a minute that firewood sales are limited to the colder northern states. People living in the sunny West and along the Gulf of Mexico buy and burn firewood for the same reasons as people living in Minnesota or Montana. Individuals concerned with the purity of the environment and those seeking a return to a simpler life see wood burning stoves as an alternative to consuming limited fossil fuels.

It doesn't take special education or training to become a successful firewood supplier. The backgrounds of people operating businesses of this kind range from farmers to unemployed factory workers, from doctors to real estate salesmen. The equipment you'll need varies according to the type of business you want to establish and the kind of wood you will be supplying. One of the secrets of success in this business is understanding why the people in your area burn firewood. Then it's merely a matter of learning when and how often they need it, and positioning yourself to meet those needs.

The first prerequisite to the establishment of your business is to decide what kind of business wholesale or retail you want to operate. Next, you'll have to chose the type of firewood you will sell. There are three major categories from which to choose: (1) mill ends, or sawed up scrap lumber and kindling; (2) whole logs, for the buyer to cut per his specifications; and (3) fireplace and stove wood, cut or split according to the general requirements of your customers.

Now, line up a source of wood supply for your business. It's best to lockin a number of suppliers to prevent any possible shortages. Later, as your business develops and grows, you may want to offer several different kinds of firewood by becoming a wholesale dealer of firewood in your area in order to meet everyone's needs and fancies. Let's examine the 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 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 your part you should be able to discover any number of small sawmill operations within a 200mile radius of your city. You'll want to buy a truckload of mill ends, take them home, and package them into small stacks of firewood enough for one evening's fire. From a load of mill ends that you might buy for $100 would be packaged 200 small stacks of wood that could sell for $5 per stack. Multiply these 200 stacks of firewood times $5 each, and you have a gross income of $1,000 for a load of wood costing you only $100. You don'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 smaller stacks, are ideal for apartment dwellers or others in warmer climates needing firewood for just a few cold spells each winter. Until you have a large fullservice firewood supply operation, it's suggested that you leave the wholesaling of truckloads of mill ends to the larger, more established firewood suppliers. Our advice is that you should stay within your capabilities of supplying the buying demands of your market. Concentrate on selling what brings you the greatest profit. However, as your operation grows, the buying of truckloads of mill end to sell to smaller dealers is definitely worth considering.

Other sources of mill ends are local lumber yards, woodworking 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 work site by hauling away the scrap lumber. Often they'll let you have it without cost. It is even possible to get paid for doing this type of cleaning. The only drawback will be that you'll have to sort this wood and saw it up into the sizes you want for your bundles or stacks. This is not a major problem, however, as you can fill a truck or trailer in just a couple of hours working with a portable power saw.

When you have your wood ready to package into bundles, you'll save time and increase your profits by hiring a couple of high school or college students. Contact the counselors at one of the local high schools and explain that you need a couple of students for part time work stacking firewood. You'll soon have all the help you need. A twoman work crew can compile a number of suitable size stacks and then work together with a stout twine, polyethylene wrap, or plastic shipping bands to encircle each stack into a bundle. We recommend using plastic shipping bands. The banding tool is inexpensive, it makes a tight, neat stack, and the band can be easily cut with a pair of household scissors. Don't use metal bans since most people do not have the tools to cut the bands open. Twine is inexpensive and easy to use, but you run the risk of having it come untied or stretch loose. It is, however, a less wasteful method since twine can easily be burned in the fire instead of having to be thrown away. Customers can simply lay an entire stack of your wood in their fireplace without untying it and light a fire. The final decision of how to bind your wood bundles will ultimately depend upon the cost and practicality in your particular location.

Working together, your two helpers can prepare a number of bundles in a short period of time, stacking the entire load onto a pallet or in an area for selling. Establish a pay rate for 100 complete bundles. Check the time it takes two students working at a reasonably fast clip to bind 100 bundles. Knowing the current minimum hourly wage rate, you can then determine the labor value of each bundle and pay them proportionately.

WHOLE LOGS

Many people have chain saws and fancy themselves as "doityourselfers," 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 suitable 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 onehalf acre to a full acre and preferably on the outskirts of town. First, put up a six foot high cyclone fence around your lot, setting a small garden shed or building to one side of the entrance gate to serve as your office.

Contact a sawmill or logging operation near 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 $3 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 trees into eightfoot 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 or downed trees. Often, 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. Once you get into this business, you'll find sources of supply 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 "doityourselfers" to come out and cut their own firewood. Charge twice as much per log as your cost. Let them do the sawing, splitting, loading and hauling of all the wood. You are there only to supervise the operation and receive payment. You may need to have your helpers available to move some of the logs about, pulling them behind a truck by a length of chain. Consider renting chain saws, axes, and the use of your power splitter. Allow the customer to select the log of his choice, and then have your hired help 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.

If you plan to offer fullservice to your customers, they will select the log they wish cut (at two times your costs) and pay you $10 for sawing it into the desired lengths, $10 for splitting it, and another $10 for loading it onto their vehicle. This comes to $150 to $200 per cord of wood. Have your helpers working in teams efficient enough to net you $100 per hour.

FIREPLACE AND STOVE WOOD In running a program of precut 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 operation to begin will be a retail outlet, moving into wholesale distribution after you've become relatively wellestablished.

The most profitable operating procedure is to set up a woodlot where whole logs are delivered to your location. Parttime workers saw these logs into 16 to 24 inch lengths. A couple of people with chain saws should be able to cut two cords of wood per hour. Two more helpers 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 using several young men to do the physical labor, you'll realize greater profits and not have to do too much strenuous work. Remember, as the business owner and operator your time should be devoted to selling the final product. Utilize your skills to procure, advertise, and sell the wood, and let your assistants do the cutting, stacking, and preparation. If you try to be a part of every aspect of the operation, all your time will be spent in completing small chores and you will not have an opportunity to market the product to the endusers. Successful advertising can only be done by you any number of young people can cut and stack firewood.

If you decide to become a wholesale supplier, you will need to hire commission sales people to call on the retail outlets in your area. You'll definitely need help in covering all the possible opportunities for retail sales of your firewood by other dealers. The more you can divide a basic cord of firewood into bundles or pallet loads, the greater profit you're going to make from each cord of wood you sell. Thus, selling a large number of small stacks or bundles will increase your profit over the selling of a single truckload of uncut wood to one dealer. Concentrate on the wholesale marketing of prebundled wood. Many grocery and convenience stores like to purchase prebundled wood to offer to their customers during the Fall and Winter months. Have your salesmen call on all the possible retailers: grocery and convenience stores, fireplace shops, apartment or condominium managers, christmas tree lots, and other retail firewood suppliers.

You'll find that most people buy cords or truckload quantities of firewood before cold weather sets in. After that, people will buy in quantities only large enough to get through a few weeks or to last out a sudden cold snap. If you plan to sell bundles and pallets of wood to the general public through your wholesale outlet, be sure that your prices at least average those being charged by the retail sellers. Never undercut the price other retail people are charging.

If you decide to do all the selling yourself as a retail outlet, you'll need to advertise widely and consistently. Start with a large threecolumn wide by fourinch deep display ad in your local paper. The sports section is often a good location to utilize. Unless you've had advertising experience, 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 call the advertising agencies or freelance copywriters in your area to assist in the makeup of your advertising.

Plan the appearance of your first ad for a Saturday morning paper to coincide with your Grand Opening. Make your opening a big event, the same as any store's grand opening or special sale. Serve free coffee and doughnuts, and have balloons for the children. Ideally, this opening should be staged on a weekend in late September or early October, and be 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. Give away free prizes requiring the visitors 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 theater passes. These names, addresses, and telephone numbers will be used later for advertising your services and soliciting orders via direct mail or telemarketing.

The whole purpose of your grand opening is to let people know that you're available to serve their needs, to help them to discover your location, and to plant in their minds the idea that you can supply them with the best means to keep warm when the weather turns cold. Many will find your services to be more convenient, timesaving, and less bother than whatever methods they're currently using to get firewood. As you talk with your customers, listen to their complaints about firewood procurement, and then alleviate those problems with the services you provide.

After your grand opening, buy a small 2 by 4 inches display ad in the yellow pages of your telephone directory. Post advertising circulars on all the area bulletin boards and leave a supply of business cards with woodstove and fireplace suppliers, insulation and remodeling contractors, and lumber yards in your area. This is all the advertising you'll need to do. However, it would be wise to follow the lead of the snow tire stores. Whenever the weather forecast shows a cold front or winter storm moving into your area, invest some money in radio and newspaper advertising. If you can advise people of your availability in the moment of their need, they are more likely to buy from you upon impulse than to shop around and inquire of your services in the months they don't generally buy wood.

Statistics show that only twenty percent of your potential market will prepare for cold weather by purchasing before the cold weather hits. Another thirty percent of the market will wait until the first cold snap comes, then buy from the first supplier that they come across. Finally, the remaining fifty percent of your potential customers will have to be "sold" via ads mentioning the benefits of your business. This is the period when you begin profiting from the names, addresses, and telephone numbers of people who turned out for your big opening event. Set up a telephone selling program utilizing the services of commission telephone sales people, and follow up on those who had registered. Call and inform each customer that you're offering a special price on firewood. Are they prepared for the coming cold months ahead? May you offer them a special deal? How much would they like you to deliver? You can generate a large amount of business just by reminding folks that they need to be well prepared with wood to beat the high cost of heating fuels and to maintain a comfortable, cozy home this coming winter. Also consider mailing a postcard or letter offering a special discount if the recipient will come to your location within the next ten days and make a purchase.

You can conceivably operate this business from your home or backyard on a parttime 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. Find a suitable location in your city. Make contact with the large wood suppliers. Hire some young men to work with you, put your advertising in place and you're ready to do business!

You will only need the simplest of bookkeeping systems. Make sure you keep a receipt pad for taking orders, and a daily diary or small ledger for recording expenses and income. A calculator and a telephone should suffice for your basic office equipment. Until you're making a suitable profit you can keep your sales receipts in a shoebox or staple them together daily and file them in chronological order.

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 best and most people will be willing to pay premium prices for it. Giving the customer a little extra for his money, perhaps more wood, a sack of kindling, or seasoned wood for no extra charge, will result in greater and longer lasting success than a quick profit scheme. People remember the extra service and kindnesses they're shown, and will reward that service with buyer loyalty.

Once you've got your basic firewood supply business on a profitable footing and running smoothly, you'll find your facilities and business expertise ideally expanding your operation to include the sale of firewood accessories, woodstoves, builtin fireplaces, home insulation or weatherizing services, recycling, or perhaps even home remodeling. The limit of your business success is dictated only by the boundaries of your imagination. You can be successful. Make the decision to get started today!

HOW TO START AND OPERATE YOUR OWN FIREWOOD SUPPLY BUSINESS

HOW TO START AND OPERATE
YOUR OWN FIREWOOD SUPPLY
BUSINESS