It seems like a no-brainer. You have a lot of dead trees on a large property. Simply cut them up and sell them so that you have a sweet side hustle that you might turn into a full-time firewood business.
Wait! Before you swing that ax, ask yourself if you know what you are getting into. There's more to starting a firewood business than sawing wood and putting up a hand-drawn "Firewood for Sale" sign on your front lawn. Here are some of the things you need to know if you really want to do this.
If you're serious about trying to start a firewood business, the good news is that there might be a strong market for you. People like to burn wood in their home fireplaces, in backyard fire pits, and on camping trips and beach outings. Some even use many full cords of wood as backup. Basically, people use wood like it's growing on trees.
Questions to Ask Yourself About a Firewood Business
Before you start your firewood business, you should ask yourself some hard questions. First, are you physically ready for the hard labor of cutting down trees, hauling wood, sawing and splitting it into firewood, and getting it to your markets?
Speaking of markets, do you live close to one where there is a demand for firewood? For example, do you have a cold winter season where a lot of people would need firewood? Do you live close to campgrounds or beaches, and are there a lot of homes in your area with fireplaces and fire pits?
Could demand sustain a full-time business or would it just be a seasonal one? Do you have the practice and skills to cut, split, and stack wood, cure it so it's not green, and protect it from the elements until you can get it to market?
If your answer is yes to the above, read on.
What to Do Before Shouting, "Timber!"
Before you saw logs, you need to think ahead, doing business planning, researching your market, deciding what services you'll offer, and getting the right equipment.
Make a Plan for Your Firewood Business
If you are serious about selling firewood, you need to make a business plan so you know what you are aiming for. Also, a proper business plan will be required if you need to find financing for your company.
The U.S. Small Business Administration (SBA) has a traditional business plan template you can follow, with sections covering a description of your business and its market, its organization and management, market analysis and marketing plans, financial projections, and more.
Find Your Firewood Market
You should assess the need for firewood in the area you hope to serve. While the climate may seem to dictate the demand for a lot of wood, that's not necessarily always the case.
Your selling markets can include:
- Directly to individuals
- Parks and campgrounds
- Retailers
Keep in mind that while firewood is usually sold by the cord (128 cubic feet), you can earn more money by breaking the wood up into small bundles and selling it in small packages that consumers can pick up for a few days or hours needed for camping trips or for use in their home fire pits.
As you research your market, you should also check out what the competition is doing - their prices, services, and how they market themselves. You may see an opportunity that's not covered or decide that the market is saturated, so you can set your sights elsewhere.
Choose a Related Service
In deciding the kind of firewood service you want to start, you can also do a pivot and offer a related service. You could, for example, set yourself up as a sawmill or firewood processor, taking the unprocessed wood from others and cutting and packaging it for different needs in the market.
To do this effectively to scale, you will need to purchase a heavy-duty firewood processing machine that can cut and split the wood, with minimal need for manual handling.
How Will You Find Wood?
If you have a big property with a lot of trees, having a firewood inventory won't be a problem. If you don't, though, there are other options. If you have family or friends with a well-wooded property, they might be open to selling some of the wood to you or entering into a profit-sharing arrangement.
You can place an ad on an online classified list, such as Craigslist, offering to remove felled trees from people's properties. You can also look for ads posted by people who want tree removals or are offering unprocessed wood.
A lumberyard could be another choice for sourcing wood. You could get discounts on discarded lumber with defects but that would still burn fine. If you have money to invest, you can buy or rent a woodlot and then harvest it in a sustainable manner.
What Type of Wood Will You Cut?
You also need to decide what type of wood you are going to cut and sell. Will it be logs or split wood? Will it be hardwood or softwood? Customers with fireplaces or wood stoves might require longer burning, high-quality hardwood, which needs to be cut and sometimes split in sizes that will accommodate this use.
People who are camping might be looking for softwood logs that catch fire easily and then burn hot and bright. Some of the most in-demand woods include maple, oak, and birch.
Buy the Right Equipment
You will need the right equipment and gear to start a firewood business. This might include:
- Chainsaw
- Log splitter
- Kindling splitter
- Maul
- Firewood splitting ax
- Firewood cord strapping kit
- Set of sturdy gloves
- Protective eyewear
- Set of sturdy clothes and boots
You might also need a large truck and/or trailer to haul the firewood if you're not expecting customers to come to you. Beyond the equipment costs, you might have the expenses of running a home business or leasing office space if you are running a bigger tree service operation.
How Much Can You Make With Firewood?
According to HomeAdvisor, the average price for a cord of wood is $300, with most people paying between $120 and $580. (The cost of a face cord, which is about one-third of a cord of wood, costs between $120 and $200.) However, pricing could be a lot of money, going as high as $900. As a rule of thumb, firewood prices can double in winter when demand among homeowners with fireplaces and woodstoves spikes.
The biggest factors in the cost of firewood are the type of tree it comes from and where it is purchased from. For example, in California, a seasoned cord of wood sells for between $350 and $550, while in Delaware, it is $150 to $180.
The average prices per cord for types of wood are:
- Oak: $180 to $600
- Maple: $300 to $450
- Mesquite: $300 to $660
- Ash: $360 to $420
- Hardwood: $300 to $500
Turn Firewood Into a Real Business
The last things you need to do before the sawdust starts flying are set up a legal business entity for your firewood business, take care of tax requirements, open a business bank account, get the right permits and insurance, figure out a marketing strategy, and run your day-to-day business.
Your Business Type, Name, and Tax IDs
When you choose a name for your business, it should reflect who you are and what you do, be easy to pronounce and remember, and conform to your state's regulations governing names. For example, many states require that a new business name not copy or be very similar to an existing business name.
To form a legal business entity, you have a choice of limited liability company (LLC), sole proprietorship, partnership, or corporation. A corporation is an unlikely choice unless you're going really big.
A sole proprietorship or partnership is relatively easy and inexpensive to set up, but they are informal business structures that may leave you open to debt and liability issues because your personal and business assets aren't separated.
An LLC offers the kind of liability protection that a corporation has, with the separation of personal and business assets, but also provides the flexibility of a sole proprietorship or partnership.
For federal tax purposes, you'll have to procure an employer identification number (EIN) from the Internal Revenue Service (IRS). You may also have to apply for a separate state tax ID.
At the same time, it's wise to set up a business bank account and business credit card. Not only is a business bank account needed in some states to register a company, but both it and the business credit card can serve to keep separation between your personal and business assets. They can also help you build up a positive credit rating for your firewood business, a must if you want to apply for financing or extend a line of credit.
Licenses, Permits, and Insurance
Each state has its own process, but they will likely require you to fill out an application that will allow you to sell firewood. There's probably a separate application required for each county you harvest wood in and for each separate type of firewood.
You can also get permits to cut firewood in some national forests. Permits are required whether you're cutting the wood for business use or personal use. The number of permits issued may be limited and the amount of wood you're allowed to cut can vary.
Your firewood venture will also need business insurance, which might include:
- General liability
- Business owner's policy (including property coverage)
- Vehicle insurance
- Workers' compensation (if you have employees)
Market Your Firewood Business
Of course, it doesn't make sense to cut up trees if you don't have customers. You should have a marketing plan in place to get new business and keep it.
You can start simple. If your firewood business is on your property, you could put up a sign and tent and sell directly to people driving by. You could also see if local markets will let you open a booth to sell your products. You could, as well, have business cards and branded merchandise to give to customers (such as a calendar with dates reminding customers to stock up on firewood before winter comes), encouraging word-of-mouth business.
For a logo and branding, you can find reasonably priced designers and branding professionals on independent talent job-matching sites, such as Upwork.
You can also post on community boards at shopping centers, community centers, and other public places, as well as get permission from local hardware stores. If your budget permits it, you could also try advertising in local newspapers, on radio stations, and via community websites.
These days, it's essential to have a website for your business, telling about your services, communicating with customers, and taking orders. You can hire a web designer to build one for you or you can do it yourself with a site-building platform, such as Squarespace, Wix, or Weebly.
You should also have a social media marketing strategy, posting about your business and even selling your firewood through Facebook Marketplace and responding to customer queries and feedback.
Things to Do Besides Swing an Ax
Even though cutting firewood is an occupation demanding hard work, you can't ignore the administrative and financial work to keep the business running each day. If you have employees, you'll need a payroll system to keep track of worked hours, calculate wages, and withhold taxes and other deductions.
You may require Skynova's easy-to-use accounting system to keep track of your expenses and income with an automatic double-entry system that reduces the possibility of errors. It can also generate branded invoices that are sent with a few keystrokes to customers, who can pay online, keeping a steady stream of revenue into the business.
Get Help Firing Up Your Business
Sometimes, with a firewood business, you can't see the big picture because you are so focused on the job at hand. It is good to have a small business resource to be the dependable ox to your Paul Bunyan.
At Skynova, we have software products to help get you paid faster and keep on top of your finances. Whether you want to send an estimate, receipt, or purchase order, include a deposit request or packing slip, or keep on top of your accounting, we can help your business grow tall and strong.