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How Much Does It Cost to Start a Logging Business?

Logging Business

You may have to spend at least $150,000 If you are planning to start a logging business because the equipment for logging is very expensive.

For example, you will need to spend a minimum of $ 39,000 to purchase a 1990 Mack 6×6 Log Truck Equipped with a Hood Log Loader and Rotobec Grapple. Apart from the amount it will cost you to acquire a truck for transporting your logs, there are other costs involved.

If you want to start a standard logging business that will be involved in the harvesting, transportation, and sale of timber or wood products obtained from forests, then you should create a budget that exceeds $500,000.

Factors That Determine the Cost of Opening a Logging Business

  1. The Location of the Business

When we talk about the location, we are talking about factors like regional demand, local regulations, and proximity to disposal facilities.

For example, starting a logging business in areas with higher demand for timber products, such as construction-heavy regions or areas with thriving wood processing industries, can lead to increased profitability and business growth opportunities but may require more expensive equipment, skilled labor, and compliance with strict environmental regulations, thus increasing startup costs.

We cannot also rule out the fact that local market conditions, competition, and access to resources in a location can also play important roles when it comes to determining the overall costs for establishing a successful logging business.

  1. The Size of Your Sawmill or Storage Facility

You are not supposed to pile your logs on open spaces or even park or store your equipment and trucks indiscriminately on the street. Before you can get approval to start a logging business, you should be able to at least secure a sawmill or storage facility.

The cost of leasing a secured sawmill or storage facility that is large enough is going to be a significant portion of your budget.

For example, it will cost you between $2,000 to $10,000 per acre per year to lease a secured sawmill or storage facility in a suburban area, and between $10,000 to $100,000 or more per acre per year to lease in an urban or prime commercial area.

  1. The Cost of Registering the Business, and Obtaining the Necessary Licenses, and Permits

As expected, before you can start a logging business, you should have the following licenses and permits; business license, Timber Harvesting Permit, Timber Sale License, Timber Transportation Permit,

Environmental Permits (e.g., for wetland protection), Forest Management Plan Approval, Occupational Safety and Health Administration (OSHA) Logging Standards Compliance,

State Timber Harvesting License, Federal Timber Sales Contract (if operating on federal land), and Commercial Driver’s License (CDL) for logging truck drivers et al.

  1. The Required Insurance Policy Coverage

If you are planning to start a logging business, you should at least have the following insurance policy coverage in place; commercial auto insurance, workers’ compensation insurance, general liability insurance, property insurance (for your vehicles and premises),

Umbrella insurance (excess liability insurance), garage keepers’ insurance, business interruption insurance, and business owner’s policy (BOP).

  1. The Cost of Hiring and Training Your Employees

The fact that you cannot operate a logging business alone means that you should make provisions in your budget for hiring and training your employees.

You should make plans for competent people to occupy the role of logging crew supervisor, chainsaw operator, skidder operator, truck driver, mechanic, safety coordinator, and administrative assistant.

  1. The Equipment, and Tools Needed to Operate Your Logging Business

You will need chainsaws, logging trucks, skidders, forwarders, feller bunchers, harvesters, logging winches, grapples, logging trailers, safety gear (helmets, gloves, boots), chainsaw sharpeners, axes and wedges, fuel and lubricants, GPS and mapping equipment, maintenance tools and equipment.

  1. Your Operational Cost, and Contingency

Under your operational cost and contingency, you should be able to budget for fuel and lubricants for your logging trucks and other machinery, servicing and maintenance, toll fees, parking fees, towing fees, emergency vehicle repairs, unforeseen maintenance costs, accidents and collision repairs, and medical expenses (if injuries occur) et al.