Can you make money with a firewood processor? This question is asked by many. The short answer is yes, it is possible. As a matter of fact, firewood processors have helped push to success some firewood businesses. While the idea may be basic, you may be wondering how making a living from firewood processor is possible. In this guide, let us take a look at certain factors that might help you make a decision before exploring this business endeavor.
What are the Business Requirements?
Now that you have considered the idea of starting a business with firewood processor, the next step to consider is writing a business plan. This will allow you to focus your attention on specific aspects of the business, such as knowing your potential customers, your methods of reaching them out, projecting the potential sales and expenses, and your value proposition, among others. It may also be helpful to do research to assess what the startup expenses is looking at, and what the ongoing expenses will look like.
Next, choose a name for your business. Aside from reflecting the purpose of your business, it should be available for use and attractive at the same time. The name should stand out and send a message to your customers as to what you do.
Then, you can form a business entity, referring to how your business is organized legally to operate. It may come in the form of sole proprietorship, partnership, corporation, and LLC (Limited Liability Company). You can then choose a location for your business.
There are also a number of regulations that you need to follow when making money with a firewood processor. Depending on your location, you may be required to present tree harvesting and firewood selling requirements. Also, you may be required to get a sales tax permit, along with an Employer Identification Number.
Potential of the Business Making Money
When it comes to potential, the following are the segments that will benefit from this kind of business:
Residential – Primary Heating
Even though this market may have the lowest margin of profits, it is a consistent one. To make it work, you can always have your feedstock source. The advantage to this market is that potential customers usually buy in bulk, with customers just nearby, thus shorter delivery distances. The quantity for orders is also predictable, which is why it is easy to get long-term customers.
Residential – Secondary Home Heating
The potential market here tends to purchase firewood for firing up stoves and fireplaces. The customers typically do not require more than one face cord at a single time, even preferring a quarter-cord most of the time, as it is the more affordable option.
This is particularly true among restaurants with wood-fired grills. As such, these requires looking for a high-quality wood supplier. They need to be on top of the game all the time, as their business will immediately suffer when wood runs out. These establishments, however, usually do not have enough space for storage, which means that they may need to have weekly deliveries, and on a very regular schedule.
Hotels and Resorts
Hotels and resorts may purchase wood for fireplaces in their lobby, or other places for their guests. Every establishment will have specific requirements and buying profile. Still, dependability is very important here. A reliable firewood business should have the capacity to provide a high level of service to their potential customers.
Campgrounds and Parks
These establishments can help your business a lot because they also purchase during the summer. They typically purchase in bundles, though some honor-system cribs, along with retail schemes can also be used. As such, dependability is very important in getting and securing customers.
Is it Seasonal or Not?
While it is true that firewood is more popular during winter, there are some establishments that still purchase the much-needed firewood even during summer. As such, we cannot really say that this is seasonal, though you can expect bulk purchases and a higher sale during winter. As mentioned earlier, establishments that also purchase during summer include campgrounds and parks.
This means the need to be resourceful, doing your research in checking which establishments can also purchase firewood even during the non-cold times of the year. You may need to do extra advertising and marketing during these months, but by doing your best, you can still have a steady list of customers all year round.
Can You Make Money Selling Firewood Bundles?
Selling firewood bundles is a good option for this business. This is true because you may need to compete with other businesses and suppliers. This means the need to make sure that you have constant supply. Thus, create a list of suppliers, contact private land owners or lumber mills.
You can also shop some camping supply and home improvement stores to see what the current prices for firewood bundles are. Record the sizes, weights and prices and know the prices from your competitors. This will help making sure that your bundles stay marketable.
Purchase and prepare your firewood bundles from your selected vendors. Wrap them in plastic wrap, burlap sleeves or mesh. Prepare uniform bundles so that your customers can expect same wood amount. Then, count the inventory, assessing the wholesale cost, comparing the value with the area’s average retail price. This can be used for setting the price for firewood bundles.
Can you make money with a firewood processor? Yes, you can. One of the most important factors that need to be taken into consideration here is to recognize that good service means success in this business.
A professional and dependable image, along with friendly and reliable service plays a huge role, as with any other business. As such, it is important to focus your attention in making sure that the services that you offer are reliable, despite being challenging.
Starting any type of business can pose some challenges, though a firewood business is known with the possibility of starting with less difficulty. You simply have to make sure that you have the best suppliers, the financial means, and a heart to serve your customers.