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Author Topic: Firewood business...big enough market to run a business?  (Read 29354 times)

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Offline burnwood

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Firewood business...big enough market to run a business?
« on: January 09, 2008, 11:11:59 AM »
Our company consists of three people, myself and two others. We've continued to grow more than 100% every year but we're reaching big walls mostly dealing with space and time(we all work other fulltime jobs).  We're debating just going for it and buying all the equipment we need and leasing land to move production up but we're concerned the market is not there to support large quantities of firewood . Ideally we would like to wholesale instead of dealing with individuals who order 1-2 cords a season but it would take time to built up wholesale clients this way. We figured it would take around 250-300 cords for someone to work full time on the business which is not that many and we could handle that dealing with consumers only.  I just wanted to get some opinions on if you think this is a viable business to get into. We know it's a lot of work but that doesn't concern us, what concerns us is processing tons of wood just to have it sit and not get sold.

Thanks.

Offline johncinquo

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Re: Firewood business...big enough market to run a business?
« Reply #1 on: January 09, 2008, 02:18:07 PM »
Which one of you hates your job the most?  Have him do it full time, and 2 part timers.  If you get big enough and can stay busy enough after that, let the next guy start doing it. 

Some of the happiest people I know left their full time, with benefits, jobs to go live a dream job.  Also, some of the least successful.  Ya just never know.
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Offline mainiac

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Re: Firewood business...big enough market to run a business?
« Reply #2 on: January 09, 2008, 03:16:28 PM »
Burnwood,

What part of the country are you in? I know that here in Midcoast Maine, dry firewood is selling for $250-$300/ cord and there is not enough of it to go around. I know that you would have to add a step or two to the process to be able to sell it as dry, but it might be worth it to get ahead of your self in inventory.

People up this way that make a year round living at it process 1000 plus cord per year.
Or they do other things as well.

Mainiac
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Offline burnwood

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Re: Firewood business...big enough market to run a business?
« Reply #3 on: January 09, 2008, 03:22:22 PM »
Burnwood,

What part of the country are you in? I know that here in Midcoast Maine, dry firewood is selling for $250-$300/ cord and there is not enough of it to go around. I know that you would have to add a step or two to the process to be able to sell it as dry, but it might be worth it to get ahead of your self in inventory.

People up this way that make a year round living at it process 1000 plus cord per year.
Or they do other things as well.

Mainiac


We're located In Massachusetts, last season we sold seasoned cords for $240 and green for $180 and we were sold out of about 35 cords before October which is why this year we're producing even more.  I'm sure we can sell a few hundred but as you said to make a living it would take 1000's. Processing 1000 cords is not the issues, thinking about how to delivery 1000 cords in 1-2 cord truck loads is what makes my mind go nuts!  :-\ :o   Wholesale would be much easier but requires more investment because of trucks.

The other issue we have is space, we can't process more than 60 cords with the land we have so we either have to take the leap and buy some land or try and find a place to lease us land so we can grow. That and finding a steady supply of logs, last year we lost about a month of prime weather season because we couldn't find anyone to delivery logs to us, if this happens when we're a full-time business it would be a major dent in the business.

Offline mainiac

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Re: Firewood business...big enough market to run a business?
« Reply #4 on: January 09, 2008, 03:56:29 PM »
I really think the way to do it is go both ways. Wholesale and retail. I would look into trucking companies to fill the need for wholesale and having a truck that can deliver local. For the time of supply slow downs, you should plan ahead and stock pile enough to get you through plus use the slow times for maintenance.

Another way to increase profit is to palletize or even bundle your firewood. The local grocery store is selling .7 cu ft of firewood for $4.69. That is $857.60 per std cord. That is quite a return.

All it takes is money.

Mainiac
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Offline Ron Wenrich

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Re: Firewood business...big enough market to run a business?
« Reply #5 on: January 09, 2008, 05:33:40 PM »
There are cash flow issues with firewood, because it tends to be a cyclical business.  You'll starve during the summer months, but work your tail ragged in the fall and winter. 

We don't do firewood full time.  We do sell wholesale, and have for quite some time.  We have sold some that was cut to length as well as cut and split.  At one time, we cut and split and piled it up.  We had about 1,000 cords on hand by the end of summer.  This took 1 guy working an Eager Beaver nearly every day throughout the spring, summer and fall.  To load, we used a Prentice loader and loaded self unloading trailers. 

The biggest problem with wholesaling is the payment.  You'll have guys who will order 5 or 10 trailerloads.  They'll pay for the first couple, just to get you interested.  Then, as you extend them credit, they'll pay you "on the next load".  That just keeps you coming back for more until you say you won't deliver any more. 

Is there room in the firewood business?  You bet.  But, you have to be able to figure out how you're going to make a go of it.  Sit down, and write up a business plan.  Your business should take in as many aspects as you can think of.   Discounts for summer deliveries, discounts for yard pickup, bundled wood, pole length wood, bags of smoker chips, etc. 

Equipment I would consider as a must are:  a processor, a log truck with a loader, and a self unloading trailer.  You can always get someone to drag a trailer.  You may even find someone that will put one underneath your conveyor.  The log truck will make it easier to pick up logs from the loggers.  It will open up some supply avenues.  Besides, the truck will be real handy putting logs through your processor.

In the meantime, here is an interesting read about a guy who did it in PA:

http://www.multitekinc.com/stories/PDFs-images/gish.pdf

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Offline burnwood

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Re: Firewood business...big enough market to run a business?
« Reply #6 on: January 09, 2008, 05:52:16 PM »
I really think the way to do it is go both ways. Wholesale and retail. I would look into trucking companies to fill the need for wholesale and having a truck that can deliver local. For the time of supply slow downs, you should plan ahead and stock pile enough to get you through plus use the slow times for maintenance.

Another way to increase profit is to palletize or even bundle your firewood. The local grocery store is selling .7 cu ft of firewood for $4.69. That is $857.60 per std cord. That is quite a return.

All it takes is money.

Mainiac

Yeah, some of the places we contacted to purchase already split firewood contracts their deliveries out. That would be the way to start if we went that route, all though one of our guys has a CDL it's still a large investment to get a truck.
When we talk about this business idea the idea of 'other firewood products' always comes up.  I think we've decided that to be efficient and do the best we can at firewood we have to stick to one thing. All though bundles have a nice return it's a lot more work not only packaging but also finding clients and delivering.

There are cash flow issues with firewood, because it tends to be a cyclical business.  You'll starve during the summer months, but work your tail ragged in the fall and winter. 

We don't do firewood full time.  We do sell wholesale, and have for quite some time.  We have sold some that was cut to length as well as cut and split.  At one time, we cut and split and piled it up.  We had about 1,000 cords on hand by the end of summer.  This took 1 guy working an Eager Beaver nearly every day throughout the spring, summer and fall.  To load, we used a Prentice loader and loaded self unloading trailers. 

The biggest problem with wholesaling is the payment.  You'll have guys who will order 5 or 10 trailerloads.  They'll pay for the first couple, just to get you interested.  Then, as you extend them credit, they'll pay you "on the next load".  That just keeps you coming back for more until you say you won't deliver any more. 

Is there room in the firewood business?  You bet.  But, you have to be able to figure out how you're going to make a go of it.  Sit down, and write up a business plan.  Your business should take in as many aspects as you can think of.   Discounts for summer deliveries, discounts for yard pickup, bundled wood, pole length wood, bags of smoker chips, etc. 

Equipment I would consider as a must are:  a processor, a log truck with a loader, and a self unloading trailer.  You can always get someone to drag a trailer.  You may even find someone that will put one underneath your conveyor.  The log truck will make it easier to pick up logs from the loggers.  It will open up some supply avenues.  Besides, the truck will be real handy putting logs through your processor.

In the meantime, here is an interesting read about a guy who did it in PA:

http://www.multitekinc.com/stories/PDFs-images/gish.pdf

Thanks, that story was great...this is ideally what we would like to become.  It just takes the guts to take that leap and since we all have jobs and families to support it's a tough leap to make. :)  When you say loader what to you mean, bobcat type machine or a conveyor belt?

Offline Ron Wenrich

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Re: Firewood business...big enough market to run a business?
« Reply #7 on: January 09, 2008, 06:19:18 PM »
No, I mean a knuckleboom loader.  The truck I'm talking about is a log truck.  Typically, the knuckleboom sits between the cab and the bed.  It really adds a dimension to your business that most guys overlook.

With a log truck, you'll be able to transport logs in great amounts.  You'll be able to go to the woods and pick up loads from loggers.  That will open the doors to some loggers that won't deliver to you because of length of haul or they don't want to be bothered.  Show up at their door, and they'll be more open to do business. 

Not to mention all the wood that gets burnt when they put in a development.  Back up to the pile and load it up.

You'll also be able to load your log decks right from the truck to the log deck.  You'll also be able to deck logs in the yard much higher than you ever could with a bobcat or other loader. 

Used trucks and loaders can be found at a reasonable price.
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Offline Tom

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Re: Firewood business...big enough market to run a business?
« Reply #8 on: January 09, 2008, 06:29:23 PM »
The biggest problem with having a truck to support your business is the CDL and the DOT.  It has imposed a whole new layer of doing business on business.  There is red tape, intimidation, permits, fines and money to be spent on drug tests and medical tests that were not in the mix before.  It has turned a trucker into a specialized commodity.  An operator, many of whom, can't be bothered with small business. 

Small businesses can't be everything to everyone.  I found early out that I needed to hone my business on the few things I was able to do well.  That cut me out of retailing lumber, buying logs, etc.  Each of those is a business in itself.
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Offline Furby

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Re: Firewood business...big enough market to run a business?
« Reply #9 on: January 09, 2008, 06:42:56 PM »
As it is, you are required to have a DOT # and annual inspection on the truck you are using right now.
Because of the DOT#, you need a commercial plate and that will make your insurance carrier either drop you or change your policy to a commercial policy.
And I'm talking about as you are doing things right now.

Offline Corley5

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Re: Firewood business...big enough market to run a business?
« Reply #10 on: January 09, 2008, 07:13:50 PM »
  I'd been thinking about a firewood processor for several years.  There's always a market for firewood but it's labor intensive.  A good friend of mine used to do 400 standard cord a year with a chainsaw and low functioning labor when needed.  He was busy year around so I knew the market was there.  What launched me into it was the cutbacks in the Mi DNR which basically put me out of a job.  I got the processor and did firewood full time for the next 4 months and most of the time I worked daylight til dark at least 5 days a week and many weeks it was seven.  My biggest issue was finding enough seasoned wood in log length to feed the machine.  I had to resort at times to mixing seasoned with green which many people are fine with if they know what they're getting.  When it's all there is they'll buy it anyway  ;) ;D  Since then I've went into logging to produce firewood from tops and otherwise cull hardwood.  The firewood business is now more of a part time self supporting venture powered by returning and word of mouth clients.  It makes enough that I've been able to upgrade the equipment to where I'm quite comfortable with doing little labor to make firewood ;) 8) 8)  My next investment is a building with a gutter cleaner to set the machine over for waste removal and maybe a Bio Mizer fueled by the waste to heat the building  ;) ;D.
  I'd recommend making friends with a couple loggers for a steady supply of hardwood pulp that's uniform  to feed a processor.  Tree service wood is quite often pretty ugly :)  For deliveries I've got a dump trailer that'll haul 4 face cords (a cord and a 1/3 if you prefer ;) ) and a just acquired 1 ton dump that'll haul 2 face cord.  Both measures are for loose wood.  I don't stack anything it's wasted energy and add a little more to the load just to make sure the customers are happy.  No ones ever complained.  My trucks also don't require CDLs and I've got Farm and Log plates on the 1 ton which makes the plate about 150 bucks less per year in this state 8) 8)
  If you sell a good product, are prompt and arrive on time you'll do great.  There's always gonna be the beer money guys with an old truck and a chainsaw who are selling for less but they get swamped with orders, find out how much work it really is, the snow'll get too deep for them etc and they'll disappear.
  Michigan state parks issue contracts for their firewood supply.  That might be a market to explore in your state.  You're only limited by how many $$$, hours, and labor you want to invest 
Burnt Gunpowder is the Smell Of Freedom

Offline burnwood

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Re: Firewood business...big enough market to run a business?
« Reply #11 on: January 09, 2008, 07:41:27 PM »
As it is, you are required to have a DOT # and annual inspection on the truck you are using right now.
Because of the DOT#, you need a commercial plate and that will make your insurance carrier either drop you or change your policy to a commercial policy.
And I'm talking about as you are doing things right now.


Why do you say that, we get the truck(normal pickup) inspected every year but it's a passenger vehicle.

Offline ely

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Re: Firewood business...big enough market to run a business?
« Reply #12 on: January 09, 2008, 07:57:05 PM »
i think he was referring to the way you use the truck is what makes it DOT . i think most states are under the same rules it is just that most do not enforce those rules to the enth degree.

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Re: Firewood business...big enough market to run a business?
« Reply #13 on: January 09, 2008, 07:58:39 PM »
Yes, but if it's used for a business it's considered commercial.
Is it a one ton or 3/4 ton?
It's a federal rule.

Offline stonebroke

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Re: Firewood business...big enough market to run a business?
« Reply #14 on: January 09, 2008, 08:05:15 PM »
We have a bunch of guys local that make a living at cutting firewood. Most can't keep up with the demand. One of my friends works at the local sale barn andf does it in his spare time. He produced about 200 cords but he only does it in the good weather. He has a small tractor and cleans up tops after other loggers.

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Offline Corley5

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Re: Firewood business...big enough market to run a business?
« Reply #15 on: January 09, 2008, 08:16:45 PM »
Whose to say it's commercial ???  The officer that stops you  ???  I don't have commercial insurance and I told my insurer that I deliver firewood and hay with the 1 ton.  They didn't try to sell me commercial insurance.  If I get stopped and questioned about a load I'm just going to town for parts or fuel or whatever not that I'm on a delivery.  Never admit anything to a cop  ;) ;D  
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Re: Firewood business...big enough market to run a business?
« Reply #16 on: January 09, 2008, 08:23:37 PM »
I agree Greg, but the fines are high if they decide to push things and they are checking more and more.
Your insurance company may know that you deliver wood, and not try to push commercial insurance on you, but most policies have it in the fine print that commercial use voids the policy or some such thing.
I've heard of lots of cases where the company took the $ and then refused coverage after an accident due to an improper use of the vehicle.
Fighting in court is the way it ends up.

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Offline SwampDonkey

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Re: Firewood business...big enough market to run a business?
« Reply #17 on: January 09, 2008, 08:31:04 PM »
Getting a little distracted here. But, we had to get the tater trucks inspected every 6 months here, if I recall. And they were not used year round. There was at least 4 months that they were parked while crops grew.
Move'n on.

Offline Corley5

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Re: Firewood business...big enough market to run a business?
« Reply #18 on: January 09, 2008, 08:33:49 PM »
There's no law against taking a load of wood for ride  ;) ;D
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Offline The Woodcooker

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Re: Firewood business...big enough market to run a business?
« Reply #19 on: January 09, 2008, 08:38:49 PM »
In central NY (very rural) we pay $50 per face crd.  If you have a firewood processor and a conveyor the independent haulers will be there.  The price of oil will raise all alternative energy sources, just look how natural gas prices have risen and we don't get it from Iraq! Wood will follow!  


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