HOW TO START & OPERATE YOUR OWN
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 "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 a 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 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.

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 or 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 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, real
estate salesmen 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: l) 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 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 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 our part, you
should be able to discover any number of small sawmill operations
within a 200-mile radius of 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 sackbuts 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 easily
and 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 fire wood
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 truck
loads of mill end firewood is definitely worth considering.

Other sources of supply for mill end lumber will be your local
lumber yards, wood working 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 size s 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 in crease your profits by hiring a couple of high
school students. Contact the counselors at one of the local high
schools, 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 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 an 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 your wood,
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 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 areas.
Then you go out into the woods, saw up downed tree s 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" areas of standing timber,
and the downed trees. Oftentimes, 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 - high school 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 residence.

Once the customer has selected his log - at twice your cost
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 $l00 per hour for you.

FIREPLACE AND STOVE WOOD: In running a program of pre-cut and
split fire place and stove wood, you combine all the principles
we've discussed so far, into either a whole sale 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 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 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 re member 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 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 snap. If you should also sell bags and pallets of
wood to the general public, after setting up retail sales outlets,
be sure that your prices at least "average" those being charged by
the retail sellers. Never "under-cut" 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 the 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
free-lance help to assist in the makeup of your advertising.

Plan the appearance of this ad for a Saturday morning paper.
Make your opening a big event - much 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 than whatever methods
they're currently using. As you talk with your customers, listen
to their "complaints" about their present methods of fire wood
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 your 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, 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 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 people who turned out for your
big opening event. Simply set up a telephone selling program
utilizing the services of commission telephone salespeople, 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 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 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-lasting 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 weatherizing
services, recycling and perhaps even home remodeling.


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