The logging industry is still alive and well. Despite changes to logging laws that limit the amount of logging done, it’s still a thriving industry.
In fact, the market has grown an average of 2.1% over the last five years. That makes it a good time to start a logging company.
Keep reading to learn how you can start a successful logging company.
1. Choose Your Market
The problem when you’re first starting out is choosing the best and most profitable opportunity for you. There are low-impact logging companies that operate with sustainability in mind.
That’s different from the traditional clear and cut companies, which are falling out of favor as people become more aware of the impacts on climate change.
You’ll also need to decide if you’re going to clear land on private lands or on government-owned properties. You may find that it’s easier to work private lands than getting government contracts.
On the other hand, government contracts can be very lucrative if you can meet the strict requirements.
2. You Need an Education
There is a lot to learn about trees, tree growth, and forest management. There are formal degree programs in forestry.
If you are the owner/operator of the business, this will be critical. Most agricultural schools offer a forestry program or something similar that will give you the education you need for your business.
Keep in mind that there are some states like Washington that don’t require a degree to start a logging company, just a regular business license. You should learn everything you can about forest management to ensure that you are working the land in a way that can sustain your business.
3. Get Experience
You’re going to make a huge commitment to start a logging company. You want to make sure that this is work that you can stick with. When you get to experience with a logging business first, you’ll see that it’s not easy work.
It’s not to scare you away from starting a logging company, but you have to make sure that this is the type of work you want to do for years to come. You may come to realize that logging in 30-degree weather isn’t your type of thing. You may come to love every second of it.
The experience will also give you a good idea as to what it really takes to be a successful logging company. Learn the ropes and ask a ton of questions.
4. Understand Logging Laws and Regulations
You certainly don’t want to get caught off guard when you start your business and find out that you’ve been logging illegally. That could shut down your business before it begins.
There are federal laws, such as the ones enforced by the U.S. Department of Forestry, and state laws. These laws exist not to make your life difficult, but to curb illegal logging and to preserve woodlands and water.
5. Create a Business Plan
You must write a business plan for your logging company. Businesses that write formal business plans are 60% more likely to be successful than businesses that don’t. A business plan is required when you ask for business loans as well.
What should you have in your business plan? The general structure of the business plan goes like this:
You have the executive summary, which sums up the entire business plan. This should be the last thing that you write.
That’s followed by an introduction to the company, the legal structure of the company, and how it is positioned in the industry. You’ll write a complete analysis of the market and your competition.
You’ll include a sales and marketing plan, which explains how you plan to market your business, price your services, and sell them. The most important part is your financial plan, which shows your startup expenses, your projections for the first year, and the first three years.
An operations plan gives lenders an idea as to how the day to day operations of the business will be run. This is to detail the equipment, employees, and processes in providing logging services.
6. Get Financing
You may be surprised by the startup costs of your logging business. At a minimum, you could spend as much as $10,000 on equipment for a small logging company that works on private land. For this type of setup, startup costs could creep up to $50,000.
If you’re going beyond a solopreneur business, you’ll need a lot more just to be able to compete with the larger companies. Your startup costs in equipment and employees could be $500,000 or more.
There are many ways to get financing for your logging business. You can start by visiting your local bank to see what type of business loans they have available.
Ask your bank if they offer SBA loans, which are small business loans that are backed by the Small Business Administration. These loans offer reasonable rates since they’re backed by the federal government.
They will ask for your business plan and run a personal credit check to make sure you can pay the loan back. There is a lengthy application and review process.
7. Purchase Equipment and Insurance
Once you get your financing, you’ll be able to put the pieces in place for your logging company. That starts by getting the equipment. You already know the equipment you need, you just need to locate vendors to work with.
Once you get your equipment, you don’t want to waste time to insure it. You can get sawmill insurance or any type of logging insurance to meet your business needs.
Starting a Logging Company
Entering the logging industry has its challenges. There is a lot to learn about forestry management and working the land. It’s not an easy endeavor to start a business logging company. Now it’s time for you to cut down some cash. Timber!
With the tips that show you how to start a logging company, you are set up for success. Be sure to check out this site again for more inspiring articles for entrepreneurs, whether you are starting a logging company or launching a software startup. Visit the Business section of the Everything Entrepreneur Blog right now!
