Do you want to start a logging business? If YES, here is a complete guide to starting a logging business with NO money and no experience.
The logging industry is indeed a very big industry both in the united states of America and Canada. Logging companies are known to be major players in house construction and in the forestry industry. Majority of the houses in the US and Canada are built with logs, hence the sale of logs is tied to the real estate industry.
Starting a logging company can be considered to be capital intensive but it is indeed highly profitable. It is capital intensive because of the money required to purchase logging equipment and to obtain licenses and permits. No doubt the industry is highly regulated by both the Federal and the State Government, and any logging company that is found on the wrong side of the law are always dealt with.
Starting a logging company requires proper preparation and planning; you would need to acquire training and it could be obtaining a degree in Forestry or a College Diploma in Forestry Management.
The truth is that no matter the type of business you choose to start, you should ensure that you carry out your market research, economic and cost analysis and of course feasibility studies. If you get things right before launching your logging business, it will not take you long before you breakeven and start smiling to the bank.
If indeed you want to start your own logging business, all you need do is to read this article and you will be well informed and equipped.
Steps to Starting a Logging Business
1. Understand the Industry
Logging companies are involved in buying and leasing log-harvesting equipment and vehicles and use them to fell trees.
The trees are then transported as saw logs to cottage companies such as sawmills and pulp mills et al. It is important to state that the logging industry does not include businesses that are involved in breeding, planting or growing trees. Companies that provide these services are classified under the Timber Services industry.
Logging business is indeed a big business and should not be handled with levity; little wonder there is a university degree dedicated for forestry. So, it is important that you acquire relevant training and education before launching your own logging company.
Part of what you need to do is to enroll for a degree or diploma in forestry and upon graduation; you can apply and work with a logging company or the forestry ministry in your country. The truth is that when you are properly educated, it makes it easier for you to follow best practices when conducting your business.
As a matter of fact, there are laws regulating the logging industry and it is your responsibility to ensure that you abide by these laws.
If you are a close watcher of the Logging industry, you will agree that over the past five years, the industry has been in recovery mode since construction activity has been climbing upward from recessionary low point, driving industry revenue.
The demand in the industry is expected to continue improving going forward as recovery in the residential construction market is forecast to strengthen and home improvement spending rises. On the other hand, paper manufacturing is forecast to slow due to the continued trend toward electronic communication, and of course reducing demand from key industrial players.
The Logging industry is indeed a large industry and pretty much active in countries such as United States of America, United Kingdom, Germany, Brazil, Argentina, France, Italy, Holland, Romania, Australia and Canada et al.
Statistics has it that in the United States of America alone, there are about 49,828 registered and licensed logging companies scattered all across the United States responsible for employing about 93,353 and the industry rakes in a whooping sum of $16 billion annually.
The industry is projected to grow at 2.3 percent annual growth within 2011 and 2016. It is important to state that Weyerhaeuser has a lion market share of the available market in the industry.
A recent report published by IBISWORLD shows that the Logging industry has medium barrier to entry, and this is largely due to the various regulations and policies that logging companies must comply with as well as the high level of competition within the industry.
The report further stated that industry regulations primarily focus on environmental acts and they include: The Clean Air Act, the Clean Water Act, the Endangered Species Act and the Toxic Substances Control Act, which regulate the use of fire, chemicals and timber extraction in timber tracts.
The report also stated that despite the fact that there is a high level of regulation, the industry also benefits from government assistance provided by the US Forest Service, the Sustainable Forestry Implementation Committee and the National Resources Conservation Service, as well as some protectionist trade policies.
Even though the business is not a Green business, the truth is that the business will continue to remain relevant as long as logs and other products manufactured by loggers are still in use in our world.
Lastly, it is important to state that the Logging industry is highly regulated in the United States of America and anyone who aspires to start a logging company must apply and obtain a license before they can legally operate in the industry.
2. Conduct Market Research and Feasibility Studies
- Demographics and Psychographics
The demographic and psychographic composition of those who hire the services or purchase logs from logging companies cut across all players in the construction industry and furniture making industry, hence the demographic composition for a logging business is all encompassing.
The truth is that when it comes to logging business, there is indeed a wide range of available customers. In essence, your target market can’t be restricted to just construction companies within your location, but to all players that make use of logs around the city where you have your business presence.
So, if you are thinking of starting your own logging business then you should make your target demographics all encompassing.
It should include construction companies, furniture manufacturing companies, boat makers, paper production companies, sawmills, timber merchants, pulp mills and every player in the cottage industries that make use of logs/woods within and outside the location where your logging company is operating from.
3. Decide Which Niche to Concentrate On
It is safe to say that there is no niche area in the logging line of business, every player in the industry primarily engage in buying and leasing of log-harvesting equipment and vehicles and use them to fell trees. The trees are then transported as saw logs to cottage companies such as sawmills and pulp mills et al. On the other hand, a logging company may decide to major on any of the under listed alongside their core services;
- Softwood logs and bolts
- Hardwood logs and bolts
- Pulpwood manufacturing
- Cutting timber
- Transporting timber
- Producing wood chips in the field
The Level of Competition in the Industry
The competition that exists in this line of business goes beyond competitions amongst logging companies in your location; you are expected to compete with other businesses in the timber and wood related businesses within and outside your business location. So, it will be right to say the competition in the logging line of business is tough.
The truth is that no matter the level of competition in an industry, if you have done your due diligence and you brand and promote your services or business properly, you will always make headway in the industry. Just ensure your workforce can carry out thorough logging services, you deal in logs that are in high demand, you can deliver excellent customer care services and you know how to attract and reach out to your target market.
But over and above, there are several logging companies and other players in the logging and timber industry that also supply logs scattered all around the United States. So, if you choose to start your own logging business in the United States of America, you will definitely meet stiff competitions amongst logging companies and other players in the logging and timber industry that also supply logs.
Besides, there are larger logging companies that determine the trends in the industry and you should be ready to compete with them for customers.
4. Know Your Major Competitors in the Industry
In every industry, there are always brands that perform better or are better regarded by customers and the general public than others.
Some of these brands are those that have been in the industry for a long time, while others are best known for how they conduct their businesses and the results they have achieved over the years. These are some of the leading logging companies in the United States of America and in the globe;
- Mixon Logging Company
- Tri-State Timber LLC
- American Forest Lands Washington Logging Company LLC
- Gerald Pelletier Inc.
- Darlage Logging & Lumber
- Ritchie Logging & Sawmill Inc.
- J M Browning Trucking
- Wasatch Timber Products
- Springhill Land & Timber Co
- W H Moore Cash Lumber LLC
- Beaty Logging Co Inc.
- Southern Logging & Timber Co
- Squires Timber Co
- Morris Timber Co Inc.
- Gator Timber & Land LLC
- Carolina Land & Timber Company
- Williston Timber Co Inc.
- Canal Wood LLC
- Flannery & Flannery Logging
- Findley Timber, Inc.
If you are planning towards successfully launching a business and maximizing profits, then you need to ensure that you get your economic and cost analysis right and try as much as possible to adopt best practices in the industry you choose to build a business in.
Logging business is not a green business; as a matter of fact, you will come across several home logging companies and other players in the logging and timber industry when you drive through the outskirts of town, search through directories and browse through the internet.
So, if you are mapping out your economic and cost analysis, you should carry out thorough market survey and costing of the amount needed to acquire the needed trucks, jigsaw, power arc saw and other tree falling equipment and tools, renting a space where you are expected to open your logging business, obtaining permits and licenses, working capital and also the running and maintenance cost of the business.
Over and above, if you are considering starting a logging company, then your concern should not be limited to the cost of acquiring the needed equipment and tools, but also on branding and on how to build a robust clientele base. The truth is that if you are able to build a robust clientele base, you are sure going to 5. Decide Whether to Buy a Franchise or Start from Scratch
If you are looking towards starting a logging company, you would have to start from the scratch because you can hardly get a franchise of a logging company to buy.
Besides starting a logging company from the scratch is less stressful when compared to other small scale businesses which usually require detailed groundwork before launching the business. With a logging company, you should just try as much as possible to get the right employees, build business relationship with key stakeholders and then leverage on every marketing tool within your disposal especially the internet to market your logs and other related products.
Please note that most of the big and successful logging companies around started from the scratch and they were able to build a solid business brand. It takes dedication, hard work and determination to achieve business success.
6. Know the Possible Threats and Challenges You Will Face
If you decide to start your own logging business today, one of the major challenges you are likely going to face aside from the stiff regulatory control of the industry is the presence of well – established logging companies and other players in the logging and timber industry. The only way to avoid this challenge is to create your own market.
Some other challenges and threats that you are likely going to face are downstream ownership links, must hold quota, appropriate physical growing conditions, economic downturn and unfavorable government policies. There is nothing you can do as regards these threats and challenges other than to stay positive that things will work well for you.
7. Choose the Most Suitable Legal Entity (LLC, C Corp, S Corp)
Generally, you have the option of either choosing a general partnership, Limited Liability Company which is commonly called an LLC, or even a sole proprietorship for a business such as logging business. Ordinarily, sole proprietorship should have been the ideal business structure for a small – scale logging business especially if you are just starting out with moderate startup capital in a small neighborhood or city.
But if your intention is to grow the business and obtain national licensing and permits, and operate all around key forests in the United States of America, then choosing sole proprietorship is not an option for you. Limited Liability Company, LLC or even general partnership will cut it for you.
Setting up an LLC protects you from personal liability. If anything goes wrong in the business, it is only the money that you invested into the limited liability company that will be at risk. It is not so for sole proprietorships and general partnerships. Limited liability companies are simpler and more flexible to operate and you don’t need a board of directors, shareholders meetings and other managerial formalities.
These are some of the factors you should consider before choosing a legal entity for your logging business; limitation of personal liability, ease of transferability, admission of new owners, investors’ expectation and of course taxes.
If you take your time to critically study the various legal entities to use for your logging business with the ability to obtain national licensing and permits and operating all around key forests in the United States of America, you will agree that limited liability company; an LLC is most suitable. You can start this type of business as limited liability company (LLC) and in future convert it to a ‘C’ corporation or an ‘S’ corporation especially when you have the plans of going public.
8. Choose a Catchy Business Name
When it comes to choosing a name for your business, you should be creative because whatever name you choose for your business will go a long way to create a perception of what the business represents. Usually it is the norm for people to follow the trend in the industry they intend operating from when naming their business.
If you are considering starting your own logging business, here are some catchy names that you can choose from;
- Shadrach McLaurin® Timber & Logging Company
- Perfect Jigsaw® Timber & Logging Company, LLC
- Ply Trade© Timber & Logging Company, Inc.
- Kings Forest Way® Logging Company, Inc.
- Outer Space™ Logging & Timber Company, Inc.
- Ten Twenty Trees™ Logging Company, Inc.
- Deck Nation© Real Estate Company, Inc.
- Heritage Trees® Logging and Timber Company, LLC
- Bark Tumble© Logging & Timber Company, Inc.
- Columbus Kennedy & Sons© Logging Company, Inc.
9. Discuss with an Agent to Know the Best Insurance Policies for You
In the United States and in most countries of the world, you can’t operate a business without having some of the basic insurance policy covers that are required by the industry you want to operate from. So, it is important to create a budget for insurance and perhaps consult an insurance broker to guide you in choosing the best and most appropriate insurance policies for your logging company.
Here are some of the basic insurance covers that you should consider purchasing if you want to start your own logging business in the United States of America;
- General insurance
- Health/Medical insurance
- Liability insurance
- Workers Compensation
- Property/Building Insurance (if you choose to also operate a sawmill or pulp mill)
- Overhead expense disability insurance
- Business owner’s policy group insurance
- Payment protection insurance
10. Protect your Intellectual Property With Trademark, Copyrights, Patents
If you are considering starting your own logging business, usually you may not have any need to file for intellectual property protection/trademark. This is so because the nature of the business makes it possible for you to successfully run it without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties.
But if you just want to protect your company’s logo and other documents or software that are unique to you or even jingles and media production concepts, then you can go ahead to file for intellectual property protection. If you want to register your trademark, you are expected to begin the process by filing an application with the USPTO. The final approval of your trademark is subjected to the review of attorneys as required by USPTO.
11. Get the Necessary Professional Certification
Apart from the results you produce as it relates to professionally carrying out your logging activities, professional certification is one of the main reasons why some loggers stand out. If you want to make impact in the logging and timber industry, you should work towards acquiring all the needed certifications in your area of specialization. Certification validates your competency and shows that you are highly skilled, committed to your career and up-to-date in this competitive market.
These are some of the certifications you can work towards achieving if you want to run your own logging company;
- Master Logger Certification | Certified Loggers
- Certified Logging Professional – CLP
- LEAP Certified Loggers
- Wisconsin Master Logger Certification: WIMLC
- Trained Logger Certification (TLC)
Please note that you can successfully run a logging company in the United States and in most countries of the world without necessarily acquiring professional certifications as long as you have the required operational license and permits and you have adequate experience cum background in the logging and timber industry.
12. Get the Necessary Legal Documents You Need to Operate
These are some of the basic legal documents that you are expected to have in place if you want to legally run your own logging business in the United States of America;
- Certificate of Incorporation
- Timber and Loggers Business License and Permits
- Tax Payer’s ID/Tax Identification Number
- Business Plan
- Contract Document
- Non – disclosure Agreement
- Employee Handbook
- Employment Agreement (offer letters)
- Operating Agreement for LLCs
- Insurance Policy
- Company Bylaws
- Memorandum of Understanding (MoU)
- Building License (if you choose to also operate a sawmill or pulp mill)
- Franchise or Trademark License (optional)
13. Raise the Needed Startup Capital
Starting a logging business is capital intensive even if you choose to start on a small scale. Securing a functional truck, and purchasing logging tools and equipment et al are part of what will consume a large chunk of your startup capital. If you choose to start the business on a large scale, you would need to source for fund to finance the business because it is expensive to start a standard large scale logging business with a standard sawmill or pulp mill.
When it comes to financing a business, one of the major factors that you should consider is to write a good business plan. If you have a good and workable business plan document in place, you may not have to labor yourself before convincing your bank, investors and your friends to invest in your business.
Here are some of the options you can explore when sourcing for startup capital for your logging business;
- Raising money from personal savings and sale of personal stocks and properties
- Raising money from investors and business partners
- Sell of shares to interested investors
- Applying for Loan from your Bank
- Pitching your business idea and applying for business grants and seed funding from donor organizations and angel investors
- Source for soft loans from your family members and your friends
14. Choose a Suitable Location for your Business
Starting a business such as logging company comes with its own fair share of challenges; it is a business that cannot be started in any location. As a matter of fact, you will need approval and permit from local council and other regulating authorities in the city you intend opening your lumberyard.
Most importantly, before choosing a location for your lumberyard/logging business, ensure that you first conduct a thorough feasibility studies and market survey. The possibility of you coming across similar business that just closed shop in the location you want to open yours can’t be ruled out.
These are some of the key factors that you should consider before choosing a location for your logging/lumberyard facility business;
- The demography of the location
- The demand for logs and woods in the location
- The purchasing power of cottage companies that need logs in the location
- Accessibility of the location and closeness to approved forests, furniture manufacturing companies, companies that rely on supply of woods, sawmills and pulp mills et al
- The number of forests, logging and timber companies in the location
- The local laws and regulations in the community
15. Hire Employees for your Technical and Manpower Needs
On the average, there are no special technology or equipment needed to run a logging company but you will definitely need major equipment and tools such as lumberjack, Feller Bunchers, Skidders, forklift and skeleton trucks for transporting logs. You would also need safety gadgets like protective helmets, safety booths, protective goggles, suitable hand gloves et al. In some cases, you would also need a bulldozer amongst others and all these can be gotten as fairly used.
As regard leasing or outright purchase of a lumberyard facility, the choice is dependent on your financial standing. But the truth is that to be on the safe side, it is advisable to start off with a short term rent/lease while test running the business in the location. If things work out as planned, then you go on a long – term lease or outright purchase of the property but if not, then move on and source for other ideal location/facility for such business.
When it comes to hiring employees for a standard logging company with plans to have clients all across major cities in the United States of America, you should make plans to hire a competent Chief Executive Officer (you can occupy this role), Admin and Human Resources Manager, Project Manager, Lumberjack Operators (Harvesters), Business Developer/Sales and Marketing, Accountant, Truck Drivers and Customer Service Executive/Front Desk Officer. These are some of the key employees that you can work with. On the average, you will need a minimum of 5 to 10 key staff members to run a small scale but standard logging company.
The Service Delivery Process of the Business
The way logging companies work vary from one company to another, but ideally, a logging company is expected to first and foremost obtain the required license and permits to fell trees in any forest within the area they intend operating from.
The service process involved in the logging and timber industry depends on the approaches to be taken and the type of trees to be cut. For example, cut-to-length logging is the process of felling, delimbing, bucking, and sorting at the stump area, leaving limbs and tops in the forest. Harvesters (Lumberjack operators) fell the tree, delimb, and buck it, and place the resulting logs in bunks to be brought to the landing by a skidder or forwarder.
This technique is routinely available for trees up to 900 mm (35 in) in diameter. Harvesters are employed effectively in moderately steep terrain. They ensure that harvesters are highly computerized to enhance cutting length, control harvesting area with the aid of GPS, and utilize price lists for each specific log to archive economical results during harvesting. The felled logs are then generally transported to a sawmill or lumberyard to be cut into lumber, to a paper mill for paper pulp, or for other uses.
It is important to state that a logging company may decide to improvise or adopt any business process and structure that will guarantee them efficiency and flexibility; the above logging business process is not cast on stone.
16. Write a Marketing Plan Packed with ideas & Strategies
Running a business requires that you should be proactive when it comes to marketing your goods or services. If you choose to launch a logging business, then you must go all out to employ strategies that will help you attract customers or else you will likely struggle with the business because there are well – known brands that determine the market direction for the logging and timber industry.
Your marketing strategy should center on attention to quality, swiftness, safety, pricing, thoroughness, and above all excellent customer service. You should ensure that whenever your customers place orders for logs from you, will get quality logs and excellent service. The truth is that if you are able to put the above stated in place, you won’t struggle to retain your old customers and at the same time win over new customers.
Businesses these days are aware of the power of the internet and which is why they will do all they can to maximize the internet to market their services. In other words, a larger percentage of your marketing effort should be directed at internet users; your website will become your number one marketing tool.
These are some of the marketing ideas and strategies that you can adopt for your logging business;
- Introduce your logging company by sending introductory letters alongside your brochure to construction companies, furniture manufacturing companies, boat makers, paper production companies, sawmills, timber merchants, pulp mills and every player in the cottage industries that make use of logs/woods and other key players within and outside the location where your logging company is operating from
- Advertise on the internet on blogs and forums, and also on social media like Twitter, Facebook, LinkedIn to get your message across
- Create a basic website for your business so as to give your business an online presence
- Directly market your logs and business
- Engage in road shows in targeted business communities from time to time to promote your logging business
- Join local logging business associations for industry trends and tips
- Join local chambers of commerce and industry with the aim of marketing your business
- Advertise your business in community based newspapers, local TV and radio stations
- List your business on yellow pages ads (local directories)
- Encourage the use of Word of mouth marketing (referrals)
17. Work Out a Reasonable Pricing for your Services & Products
One key factor that will help you sell your logs at the right price is to ensure that you cut operational cost to the barest minimum, and channel your efforts towards marketing and promoting your brand name. Aside from the fact that this strategy will help you save cost, it will also help you get the right pricing for your logs.
So also, if you are able to secure business partnership with construction companies, furniture manufacturing companies, boat makers, paper production companies, sawmills, timber merchants, pulp mills and every player in the cottage industries that make use of logs within and outside the location where your logging company is operating from as it relates to getting regular supply of logs, then you will be able to get the right pricing and of course maximize profits from your logging company business.
18. Develop Strategies to Boost Brand Awareness and Create a Corporate Identity
If your intention of starting a logging company is to grow the business beyond the city where you are going to be operating from to become a national and international brand by supplying logs all across key cities in the United States, then you must be ready to spend money on promotion and advertisement of your brand.
No matter the industry you belong to, the truth is that the market is dynamic and it requires consistent brand awareness and brand boosting cum promotion to continue to appeal to your target market. Here are the platforms you can leverage on to boost your brand awareness and create corporate identity for your logging business;
- Sponsor relevant community based events
- Leverage on the internet and social media platforms like Instagram, Facebook, Twitter, YouTube, Google + et al to promote your logging business
- Install your Bill Boards on strategic locations all around your city or state
- Engage in roadshows from time to time in targeted industrial estates to create awareness of your logging business
- Distribute your fliers and handbills in target areas
- Contact construction companies, furniture manufacturing companies, boat makers, paper production companies, sawmills, timber merchants, pulp mills and every player in the cottage industry that makes use of logs and other key players within and outside the location where your logging company is operating from informing them about your logging company and the products you offer
- List your logging company in local directories
- Advertise your logging company in your official website and employ strategies that will help you pull traffic to the site
- Position your Flexi Banners at strategic positions in the location where your logging company is located
- Ensure that all your staff members wear your branded shirts and all your carts, vehicles, trucks and vans are well branded with your company logo et al.