Firewood buisness question

[willsaw4beer]

OK, Let's scale it back for a small operation:
Fixed Costs at Startup the First Year:
Truck ---> $1,500
Chain Saws ---> $500
Sledge and Wedges ---> $100
Equipment Maintenance and Repairs ---> $300
Fuel and Oil ---> $500
Advertising and Insurance ---> $100
Miscellaneous ---> $200
-----------------------
Total Annual Fixed Overhead ---> $3,200

Cords/year required to break even = $3,200 / $100 = 32

Now, you can start paying yourself a wage to buy groceries and beer when the 33rd cord is delivered.

I agree that selling firewood is a rough way to make a living. The best way to do it is to have a regular job and do it on the weekends. And heat your house with wood. It helps if you already have a truck, saws and mauls. Then you can look at it as paying for itself the first year - after that it's extra money and free heat. You ought to be able to get more than $100 a cord split and delivered also...

 

[Moss Man]

I agree that selling firewood is a rough way to make a living. The best way to do it is to have a regular job and do it on the weekends. And heat your house with wood. It helps if you already have a truck, saws and mauls. Then you can look at it as paying for itself the first year - after that it's extra money and free heat. You ought to be able to get more than $100 a cord split and delivered also...

You make some very valid points. You need to already have some of the gear to really get started, if you were to start freash and buy everything mew the payback period may never come. I started out with saws I had bought years ago, then came the splitter that I share with my dad and a couple friends. I needed a truck for once and awhile use with a plow and that turned into a one ton 4x4 dually with a platform dump. We had a logging operation on our small woodlot and in the process of removing saw logs we had a 11 cord pile of tops and large limbs, that turned into our first firewood sales. As my factory job started to look like it was going south I decided to get a processor to hedge the lost income. I know full well the business won't replace the income loss, but combined with other small jobs it sure helps.

Would I walk out and buy all new gear to start up a firewood business?
Never.

 

[Wood Doctor]

I agree that selling firewood is a rough way to make a living. The best way to do it is to have a regular job and do it on the weekends. And heat your house with wood. It helps if you already have a truck, saws and mauls. Then you can look at it as paying for itself the first year - after that it's extra money and free heat. You ought to be able to get more than $100 a cord split and delivered also...

The biggest problem around here is the relatively low cost of alternative fuels, especially natural gas and electric heat pumps. The instant a firewood dealer raises his price to twice his variable cost, he exceeds the $/MBTU price of natural gas. Last spring the firewood price looked very good when NG reached $14/MCF, but now it's dropped back to less than half that.

The depressed economy created a gas bubble when industrial production dropped off, and that forced gas suppliers to drop price. Utilities and retail gas suppliers eventually passed that savings on to residential customers.

 

[blackdogon57]

I would say that around 50% of my customers buy wood for heating and that they may buy less when oil/gas go down. These are generally the people who buy 3 or 4 cord in the Spring or early summer because they need the wood to be dry by winter. I usually give regulars like this a good price if thet pay cash and take the wood well before fall.

The other 50% are folks that burn for pleasure and don't fuss to much about price. They want someone like me who shows up on time with dry firewood when they need it.

Prices around here:

Logs - 130-180 per cord

Cut and split - 325-400 per cord

16" face cords around 140 - 160


Even with those seemingly good margins I find it hard to make any serious money selling wood.

 

[thejdman04]

Theres not much money in firewood lets face it. Heres my situation. All times and figures are for 1 face cord. My estimates may be a bit exagerated, sometimes it may go faster, sometimes slower, depending on how life goes.
Cutting the tree down Bucking a tree and putting the rounds in my backhoe to take up to the splitter
1 hour.
Splitting a face cord with a spee co splitter 1 hour.
Ok now you got the wood seasoned, time to deliver it.
AT least 1/2 hour drive time to and from customers house. 1/2 hour to load the wood in your truck and unload it at the customers house.
With every face cord of wood you have at least 3 hours labor, sometimes more sometimes less (at customers house you have to carry the wood, the customer is chatty etc).
You should be making at least 10 bucks an hour breaking your back so you have at least 30 dollars labor in each face cord of wood.
Now say you put 10 dollars worth of gas for your truck. 5 bucks worth of gas for your chainsaw, and bar oil.
Now you have 45 dollars invested per face cord of wood. Oh yeah if you have a 700 dollar saw and it lasts 1500 hours that s .50 cents an hour to run the saw. Now your up to 45.50. Oh yeah put some fuel in the backhoe and pay to maintain that probably runs 2 bucks per face cord. Now you have 47.50 per face cord. You need something to pay for maintenance tires oil changes depreciation etc for your pickup too, say 2 bucks a face cord. now you are at 49.50 a face cord. Need a chain for your saw, you just ruined the old one in a nail that was stuck in the tree. 15 dollars there. Do you get the picture? Your input costs now are up to 65 bucks a face cord. Thats assuming you dont have to go very far to go get the wood, or you need more gas for your truck more driving time. Or if you have the wood dropped at your place, that costs 1000 dollars for 7 cords or 47 bucks a face cord for the wood. Couple bucks for gas for the splitter. Around here seasoned delivered and stacked wood only brings 80 bucks a face cord. If you arent a tree service, where you get paid to cut the wood down(you got paid to get the wood), its kind of hard to make a buck. Even tree services, by the time you pay for labor, chipper, trucks liability insurance, property taxes on your property etc its super hard to make a buck. Then theres those times you spend 15 min sharpening chains, or plowing the driveway for your wood lot etc where theres no production, so theres no profitable work being done that you ahve to figure in. Your cell phone bill, which goes up when customers are calling price shopping 2 minutes x10 calls a day adds up. Your time sitting at the wood yard waiting for someone to show up who never does. People think "OH MY GOD 80 bucks a face cord." Yeah thats cheap, but its the going rate around here. The above figures are only making 10 bucks an hour too, for back breaking work. I know many people working retail (ie stocking shelves at the grocery store) making 8.35 an hour, with a highschool diploma and benefits pension, profit sharing 401k (ie read making 8.75 dollars an hour or so.). Is it worth it???????? I personally used to do firewood as a hobby, a side business. The economy and lack of work the past few years has forced me into doing it more seriously, for something to do and to pay the bills (hopefully). Also included above isnt taking into account that stray log you toss in your truck that shatters the 200 dollar back window, the tree that falls on your saw or just the general shtuffff that happens. its enjoyable work, especially as a hobby. when it becomes your bread and butter its not worth it, and really cant be done.

 

[sawinredneck]

Interesting thread.
A lot of information and different ways of doing things.
My operation:
I load up and head out no later than 7am. I drive 90 miles after I fill everything with fuel.
I drive my mini skid steer into the woods, chainsaw on a scaboard, find a tree, drop it and slice it into 80"ish lenghts and haul it to the trailer.
In three hours I have five or six face on the trailer.
I drive 90 miles home.
Unload it in an hour.
If I bust it, I can do two face an hour by hand, with a splitter, a full cord and hour. Cut to lenght and split. This is straight grained Oak, hence the ease of splitting it.
There is NO Oak in this area, and it is hugely popular. I can sell it for $125 a face easy, $150 and match my competitors.
So figure $70 for fuel and oil.
I eat the three-ish hour drive time.
Three hours cutting and splitting.
Figure in what you want for maintenance.
My saws have paid for themselves with tree work.
The mini was picked up for a song and it's intended purpose was summer work, the firewood was just an extra bonus.
Wood sells for $625, if they pick it up, anoter $20 for delivery.
Two solid days getting it ready, then however much time dealing with people.
YES, there are much better ways to make a buck, but I don't have to jack with anyone while I am working!
The way I have it setup now I can EASILY make three trips a week. AND, if I don't want to jack with people at all I have a place that will buy everything I bring in for $85 a face.
I am looking for a higher volume splitter, or a small proccessor, but don't like the price of the later at all!
There are ways to make money at it, but you wont get rich!

 

[Wood Doctor]

My conclusion: there is only one way to get rich at firewood delivery--get big and use mass production.

Some money can be made, but only if you do tree trimming and removal first, get paid for that, and then sell the "free" firewood that remains. That still isn't free because you must still process it.

As an alternative, several tree trimming and removal companies are now shredding branches into mulch and selling that rather than selling firewood. Crumbling the big rounds, however, is still a problem without a barrel shredder, and those puppies cost an arm and a leg to run.

 

[thejdman04]

My conclusion: there is only one way to get rich at firewood delivery--get big and use mass production.

Some money can be made, but only if you do tree trimming and removal first, get paid for that, and then sell the "free" firewood that remains. That still isn't free because you must still process it.

As an alternative, several tree trimming and removal companies are now shredding branches into mulch and selling that rather than selling firewood. Crumbling the big rounds, however, is still a problem without a barrel shredder, and those puppies cost an arm and a leg to run.

The only problem with getting big, is then you have to figure out how to sell it all, and most importantly how many trucks and people are you going to have to employ to move "big" amounts of wood. Then your profit gets eaten up right there.

 

[sawinredneck]

The only problem with getting big, is then you have to figure out how to sell it all, and most importantly how many trucks and people are you going to have to employ to move "big" amounts of wood. Then your profit gets eaten up right there.

And don't forget about the weather!!!! A couple of mild winters and you are done!

 

[Moss Man]

Bottom line is, as long as there are people burning wood, there will be people selling wood.

 

[LAH]

All my logs are free with many delivered to my lot. The others are cut on the bosses lot and hauled on my trailer to my lot for splitting, appox. 10 miles. I sell my wood by the pick up load. 40.00 for a short bed, 50 for a long bed. This is tossed, bed level. I don't deliver or load unless it is a widow or disabled vet. If it weren't for free logs, I wouldn't be doing this.