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Unpredictable fuel costs and the necessity of keeping warm
in the winter have resulted in "boom sales" for
manufactures 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 as 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 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
and 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
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 salesman 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 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 and 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 your part, you should be able to discover any number of
small sawmill operations within a 200-mile radius 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 down
into sackfuls are 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 firewood suppliers. My advice here
is that you should stay within the 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 will be your local
lumbar 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 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 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 increase your profits by hiring a couple
of high school students, explain that you need a couple of people
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 a 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 wood, check
with a farmer's 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-yourself" types, 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
area. Then you go out into the woods, saw up downed trees
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" area
of standing timber, and the downed trees. Oftentimes, you can
get this wood at no cost other than offering the land owners
a share of the timber you take out. He may even consider your
"thinning" and hauling an even exchange for logs.
Don't forget about the road building construction companies,
and commercial and residential developers as sources of
supply. Actually, once you get into the business you'll find
sources of supply virtually unlimited, and restricted only by
your 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
only there 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 be include
delivery and stacking of this wood at the customer's
residence.
Once the customer has selected his log--at twice your
costs--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 $100 per hour for you.
FIREPLACE AND STOVE WOOD: In running a program 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. 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 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 truckload 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. When selling to the public,
after setting up retail sales outlets, 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, at least contact the advertising instruction
class at your local community college for help in 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 freelance help to assist in
the makeup of your advertising.
Plan the appearances of this ad for a Saturday morning paper.
Make your opening a big event--much as 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 that 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 remodeling
contractors and lumber yards in you 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, 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 the people who turned out
to your big opening event. Simply set up a telephone selling
program utilizing 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 their
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 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 customers a "little extra" for his money will
result in greater and longer lasting success than quick
profit schemes.
Once you've got your basis 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
remodeling.
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