Firewood business ? Could we make it profitable in the first 2 years

[Gav73]

Read this thread with interest. My cottage is heated by two wood burning stoves and I’ve been processing all my own firewood for about 5-6 years and I’ve been selling some firewood for the last three years, nothing big, Just nets to local people.

 

I’ve built up a nice little customer base through word of mouth and the income has paid the running costs with a bit left over. I’m now in a position where the money I made last year paid for a new MS391 and rock machinery venom splitter.  Both of these should help me get everything done quicker than the old MS181 and axe! 

what started off as a bit of a “hobby” and a desire to have free heating has just continued to grow! All my logs come from the waste of tree surgery work and I have a steady stream of new timber all year round.  

 

I’ve no intention of making this a big business as I just don’t think it would be viable, but I think there’s definitely some money in it if it’s kept small and manageable 

[Lucan]

On 21/08/2020 at 23:38, Nickb123 said:

Hi guys I’m nick pleased to meet you all 

 

me and my friend have been thinking of starting a firewood business we have as follows 

 

large 30m x 20m barn (rent free) 

losds and loads of outdoor space 

£20k-£25k start up budget 

5t bobcat 

tipper truck 3.5 tonne

large tipping trailers 

 

here are my questions 

 

where would we source the trees to process? 
 

how much would a half decent processing plant cost ? 

 

we would be able to go 3/6 months without any wages from the company until we had reinvested all the money we earnt

 

we aren’t expecting to become rich out the job but we are both hard working honest lads who want to try and get on in life 

 

any info/advice links to equipment would be most welcomed 

 

please give both good and bad sides of the story 

 

thanks nick 

In short very unlikely.

 

The impression is that you are looking to create a full-time business paying two people a modest wage (say £25k each). Margins in firewood are low, so to be able to take out the equivalnt of £50k a year in wages you need to be selling huge quanitites. Given that the average punter only buy 1-2m3 a year, you would be talking about 1000s of customers in your area. Those customers aren't just going to appear out of nowhere, you would have to tempt them away from their existing firewood suppliers. While you might hope that you can undercut the opposition in price due to the free barn and existing machinery, you might be dissapointed. I would imagine that 9 out of 10 firewood suppliers have some sort of competitive advantage (either other agri types in a similar position as yourself, or arb or forestry guys with access to free or cheap timber). As a result your competitive advantage isn't really an advantage, it just puts you on the same playing field as the others.

 

The danger is a lot of people just focus on the production side and expect the firewood to sell itself. I would suggest spending more time on the market research side before any investing, so how many other suppliers in your area? what type of product (e.g. kiln)? what price? how delivered (loose, bagged, crates)? etc. Then see if there is actually a space for you and how you can compete and differentiate yourself.

 

In the UK it seems that firewood is viable either as a part-time business that runs alongside another enterprise, or go big as a national supplier. Fitting somewhere in the middle is rare.

[topchippyles]

You could look at the other option and acquire a reasonable sized bandsaw mill and run that alongside doing firewood.You would need to sell slabs/timber and provide a cutting service to make that pay though.A few on here do it very successful but the area you live will be a big factor.

Edited August 28, 2020 by topchippyles

[trigger_andy]

48 minutes ago, topchippyles said:

You could look at the other option and acquire a reasonable sized bandsaw mill and run that alongside doing firewood.You would need to sell slabs/timber and provide a cutting service to make that pay though.A few on here do it very successful but the area you live will be a big factor.

What Les says makes sense. I milled a few Oaks and ended up with a lot of nice Slabs that would have otherwise have ended up as firewood. Been selling the Slabs for £120-£150 each (green) and they are not huge. 24" wide, 2.7m long and 2-3" thick. 

[eggsarascal]

23 minutes ago, trigger_andy said:

What Les says makes sense. 

There's a first for everything.

[trigger_andy]

Just now, eggsarascal said:

There's a first for everything.

I know. Thankfully he's got be on block so he'll never find out.  

[topchippyles]

31 minutes ago, eggsarascal said:

There's a first for everything.

Friday afternoon so you must be in the pub ??

[Stubby]

5 hours ago, Gav73 said:

Read this thread with interest. My cottage is heated by two wood burning stoves and I’ve been processing all my own firewood for about 5-6 years and I’ve been selling some firewood for the last three years, nothing big, Just nets to local people.

 

I’ve built up a nice little customer base through word of mouth and the income has paid the running costs with a bit left over. I’m now in a position where the money I made last year paid for a new MS391 and rock machinery venom splitter.  Both of these should help me get everything done quicker than the old MS181 and axe! 

what started off as a bit of a “hobby” and a desire to have free heating has just continued to grow! All my logs come from the waste of tree surgery work and I have a steady stream of new timber all year round.  

 

I’ve no intention of making this a big business as I just don’t think it would be viable, but I think there’s definitely some money in it if it’s kept small and manageable 

Free wood is the thing be it arb waste or whatever . Having to pay for your timber kills it I recon . Keep doing what you are doing and stay small .

Edited August 28, 2020 by Stubby

[Khriss]

Mr @Stubby , buying in wood for processing with a good machine can be easier that sorting thru a lot of old crap . Plus you get wot you want . If yr going over a 100 ton a year , I think it would give a good return . Mostly a good yard manager would have the lads sort the arb logs out n log them up befr knock off time - IF he can flush them out of their hiding spots in the  laybyes .....  K 

[eggsarascal]

9 minutes ago, topchippyles said:

Friday afternoon so you must be in the pub ??

Not yet Les, I'm trying to workout how to drive this new poxy phone. It'll end up back in it's box until I can find a teenager that knows how the bleeding thing works.