sample business plan for sawmill

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Table of contents, the essential sawmill business plan.

• 14 May, 2024

Understanding Sawmill Business

Before diving into the details of starting a sawmill business, it’s essential to understand the basics of the industry and the importance of sawmills.

Overview of Sawmill Business

A sawmill business involves the process of converting logs into lumber, which is then used in various construction and woodworking projects. Sawmills play a crucial role in the timber industry by processing raw logs into marketable products. They are responsible for transforming timber into usable materials that can be used for construction, furniture making, and other applications.

Starting a sawmill business requires careful planning, knowledge of the industry, and investment in the necessary equipment and resources. By effectively managing the entire production process, sawmill owners can ensure the efficient conversion of logs into high-quality lumber.

Importance of Sawmills

Sawmills play a vital role in the timber industry and the overall economy. Here are a few reasons why sawmills are important:

Supplying Wood Products : Sawmills are the primary source of lumber and other wood products used in construction, furniture making, and various industries. They provide the necessary materials for building homes, offices, and infrastructure projects.

Job Creation : Sawmills contribute to job creation in both rural and urban areas. They require skilled workers for log processing, equipment operation, maintenance, and other tasks. Additionally, the demand for wood products supports employment in related industries such as carpentry and woodworking.

Sustainable Forest Management : Sawmills play a crucial role in sustainable forest management. By utilizing harvested timber and turning it into valuable products, they help promote responsible forestry practices. This includes reforestation efforts and adherence to environmental regulations.

Regional Economic Development : Sawmills contribute to regional economic development by supporting local suppliers, businesses, and communities. They provide opportunities for log suppliers, transportation services, and other industries connected to the timber value chain. Additionally, the sale of lumber generates revenue that can stimulate local economies.

By understanding the overview of the sawmill business and recognizing its importance, aspiring entrepreneurs can make informed decisions when starting their own sawmill operations. It’s important to conduct thorough market research, develop a comprehensive business plan, and explore the available sawmill business opportunities . Additionally, considering factors such as sawmill business insurance and evaluating the potential sawmill business profitability are crucial for long-term success.

Planning Your Sawmill Business

Before embarking on the journey of starting a sawmill business, it’s crucial to have a well-developed plan in place. This section will outline the key steps involved in planning your sawmill business, including developing a comprehensive business plan and conducting thorough market research.

Developing a Business Plan

A business plan serves as a roadmap for your sawmill business, outlining your goals, strategies, and financial projections. It provides a clear vision of how your business will operate and helps you make informed decisions as you move forward.

When developing your business plan, consider including the following components:

Executive Summary: This section provides an overview of your sawmill business, highlighting its mission, vision, and key objectives.

Company Description: Describe your sawmill business in detail, including its legal structure, location, and ownership.

Market Analysis: Conduct a thorough analysis of the market, identifying your target customers, competitors, and market trends.

Products and Services: Outline the products and services your sawmill business will offer, including the different types of lumber you will produce.

Marketing and Sales Strategy: Explain how you will promote your sawmill business and attract customers. Consider the various marketing channels and strategies you will utilize.

Operations and Management: Detail the day-to-day operations of your sawmill business, including the personnel involved, equipment needed, and production processes.

Financial Projections: Create realistic financial projections for your sawmill business, including startup costs, revenue forecasts, and profit margins.

Risk Assessment: Identify potential risks and challenges that may impact your sawmill business and outline strategies to mitigate them. It’s also essential to consider obtaining sawmill business insurance to protect your assets.

By developing a comprehensive business plan, you lay the foundation for a successful sawmill business, enabling you to make strategic decisions and secure financing if needed.

Market Research

Conducting thorough market research is an essential step in starting a sawmill business. It helps you understand the demand for lumber in your target market and identify potential customers and competitors. By gathering relevant data, you can make informed decisions about your business operations and marketing strategies.

Consider the following aspects when conducting market research for your sawmill business:

Demand and Trends: Determine the demand for lumber in your target market and analyze the current market trends. This information will guide your production and sales strategies.

Target Customers: Identify the types of customers who are likely to purchase lumber from your sawmill. This could include construction companies, carpentry businesses, and homeowners.

Competitor Analysis: Research existing sawmill businesses in your area and analyze their offerings, pricing, and market share. This analysis will help you differentiate your business and identify opportunities for growth.

Pricing and Profitability: Determine the ideal pricing structure for your lumber products, considering factors such as production costs, market demand, and competitor pricing. Assess the profitability of your business based on projected sales volumes and profit margins.

Market Entry Barriers: Identify any barriers to entry in the sawmill industry, such as regulatory requirements, access to raw materials, or competition. Understanding these barriers will help you develop strategies to overcome them.

By conducting comprehensive market research, you gain valuable insights into the industry, enabling you to make informed decisions and position your sawmill business for success.

As you plan your sawmill business, keep in mind that there are various sawmill business opportunities for growth and diversification. Having a solid business plan and conducting thorough market research will set you on the path to turning timber into triumph.

Setting Up Your Sawmill

When venturing into the world of sawmill business, proper planning and preparation are key to ensuring a successful start. In this section, we will discuss two crucial aspects of setting up a sawmill: location considerations and the equipment needed.

Location Considerations

Choosing the right location for your sawmill is a critical decision that can significantly impact the success of your business. Here are some factors to consider when evaluating potential locations:

Proximity to Timber Sources : Select a location that is close to a consistent and sustainable supply of timber. This will minimize transportation costs and ensure a steady flow of raw materials for your sawmill.

Accessibility : Ensure that your chosen location provides easy access for the transportation of logs, as well as for the distribution of finished lumber to customers. Good road connectivity and proximity to major highways or waterways can streamline logistics and reduce transportation costs.

Zoning and Permits : Research local zoning regulations and obtain the necessary permits and licenses required to operate a sawmill in your chosen location. Compliance with environmental regulations and noise restrictions is crucial to avoid potential legal issues.

Market Accessibility : Consider the proximity to potential customers, such as construction companies or furniture manufacturers. Being located close to your target market can offer competitive advantages in terms of reduced shipping costs and faster delivery times.

Infrastructure : Evaluate the availability of essential infrastructure, including electricity, water supply, and waste management facilities. These factors are crucial for the smooth operation of your sawmill.

Equipment Needed

To run a successful sawmill business, you will need to invest in the right equipment. Here are some essential pieces of equipment typically required for sawmill operations:

It’s important to consider the quality and reliability of the equipment you choose. Investing in durable machinery and maintaining it properly can prolong its lifespan and save you from costly repairs or replacements.

Before finalizing your equipment purchases, conduct thorough research, compare prices, and seek recommendations from industry experts. This will ensure that you invest in the most suitable equipment for your specific sawmill business needs.

By carefully selecting the location and acquiring the necessary equipment, you will be well on your way to setting up a successful sawmill business. Remember to regularly review your business plan, explore sawmill business opportunities , and consider sawmill business insurance to protect your investment. With proper planning and execution, your sawmill can become a thriving enterprise with the potential for long-term profitability.

Operating a Sawmill Business

Once your sawmill business is set up, it’s time to focus on the operations. This section will cover two crucial aspects of running a sawmill business: wood sourcing and the production process.

Wood Sourcing

A successful sawmill business relies on a steady and reliable supply of quality timber. Establishing strong relationships with wood suppliers is essential for the continued operation of your business. When sourcing wood, consider the following factors:

Local Timber Sources : Look for local timber sources to minimize transportation costs and support the local economy. Identify nearby forests, logging companies, or private landowners who can supply you with logs.

Timber Quality : Ensure that the timber you source meets your quality standards. Consider factors such as species, size, and moisture content. Different species have different market values and applications, so it’s important to understand the demand for various types of wood in your target market.

Sustainable Practices : Emphasize sustainability in your wood sourcing. Consider partnering with suppliers who practice responsible forestry and ensure the long-term health of forests. This can be an important selling point for customers who prioritize sustainability.

Contracts and Agreements : Establish clear agreements with your wood suppliers regarding pricing, delivery schedules, and quality standards. Having formal contracts in place can help ensure a consistent supply of timber and minimize disputes.

By carefully selecting and managing your wood sourcing process, you can maintain a reliable supply of timber and meet the demands of your customers. It’s also essential to stay updated on industry trends, such as emerging wood sourcing technologies and sustainable practices, to stay ahead of the competition.

Production Process

Efficient and effective production processes are key to the success of a sawmill business. The production process involves converting raw logs into finished lumber or other wood products. Consider the following factors to optimize your production process:

Log Sorting and Preparation : Develop a system for sorting and preparing logs based on size, species, and quality. This allows for better utilization of the raw material and reduces waste. Implementing advanced technology, such as log scanners and optimizers, can help streamline this process.

Sawing Techniques : Choose the appropriate sawing techniques based on the desired end products and customer requirements. Different sawing methods, such as plain sawing, quarter sawing, and rift sawing, yield different grain patterns and qualities of lumber. Understanding the properties of different wood species and their optimal sawing techniques is crucial for maximizing product value.

Drying and Treatment : Properly drying and treating the lumber is essential to enhance its stability and durability. Implement a drying schedule that considers the moisture content of the wood and the environmental conditions. Additionally, comply with any regulations regarding wood treatment, such as using preservatives for outdoor applications or heat treating for export.

Quality Control : Implement a robust quality control system to ensure that the final products meet industry standards and customer expectations. Regularly inspect the lumber for defects, such as knots, cracks, or warping, and remove any substandard pieces. Consistently delivering high-quality products will help build a strong reputation for your sawmill business.

By optimizing your production process, you can maximize efficiency, minimize waste, and deliver high-quality wood products to your customers. Regularly review and refine your processes to identify areas for improvement and stay competitive in the market.

Operating a sawmill business requires careful attention to wood sourcing and the production process. By establishing reliable wood supply chains and optimizing your production techniques, you can ensure the smooth operation of your sawmill and meet the demands of your customers. For more insights on starting and running a sawmill business, check out our article on starting a sawmill business .

Marketing Your Sawmill Business

Once you have set up your sawmill business and established its operations, it’s essential to focus on marketing to ensure its growth and success. Effective marketing strategies can help you build a strong brand presence and attract customers. In this section, we will explore two key aspects of marketing your sawmill business: branding and positioning, and finding customers.

Branding and Positioning

Branding plays a crucial role in differentiating your sawmill business from competitors and creating a strong reputation in the market. It involves developing a unique identity, which encompasses your business name, logo, colors, and overall visual representation. A well-crafted brand can instill trust and confidence in potential customers.

To create a compelling brand for your sawmill business, consider the following:

Brand Identity : Develop a clear and cohesive brand identity that reflects the values, mission, and quality of your sawmill business. This will help you establish a recognizable presence in the market.

Logo and Visuals : Create a professional logo and visual elements that represent your business. These visuals should be consistent across all marketing materials, including your website, social media profiles, and print materials.

Messaging : Craft a compelling brand message that effectively communicates the unique selling points of your sawmill business. Highlight the quality of your products, your commitment to customer satisfaction, and any other factors that set you apart from competitors.

Online Presence : Establish a strong online presence through a professional website and active social media profiles. Regularly update these platforms with engaging content, including photos and videos, to showcase your sawmill business and its capabilities.

Finding Customers

Finding customers is a critical aspect of marketing your sawmill business. Here are some strategies to help you reach potential customers and generate leads:

Targeted Advertising : Identify your target market, such as construction companies, furniture manufacturers, or local contractors. Utilize targeted online advertising platforms, such as Google Ads or social media advertising, to reach these specific audiences.

Networking : Attend industry trade shows, conferences, and events to connect with potential customers and build relationships. Networking allows you to showcase your sawmill business directly to individuals or companies who may require your products or services.

Online Directories : List your sawmill business in relevant online directories, such as industry-specific directories or local business listings. This can help potential customers find your business when searching for sawmill services in their area.

Referrals : Encourage satisfied customers to refer your sawmill business to others. Word-of-mouth recommendations can be powerful in attracting new customers. Consider implementing a referral program or offering incentives for referrals to incentivize existing customers to spread the word about your business.

Content Marketing : Create informative and engaging content related to the sawmill industry. This can include blog posts, articles, or videos that provide valuable insights or tips. By positioning yourself as an expert in the industry, you can attract potential customers who are seeking information and solutions.

By focusing on branding, positioning, and implementing effective customer acquisition strategies, you can increase the visibility and reach of your sawmill business. Remember to regularly assess and adjust your marketing efforts based on customer feedback and market trends to ensure ongoing success.

Growing Your Sawmill Business

Once your sawmill business is up and running, it’s essential to focus on growth and expansion strategies to ensure long-term success. This section will explore two key aspects of growing your sawmill business: expansion strategies and diversification opportunities.

Expansion Strategies

Expanding your sawmill business can lead to increased production capacity, wider market reach, and improved profitability. Here are a few strategies to consider:

Adding New Machinery : As your business grows, it may be necessary to invest in additional machinery to increase production efficiency. Upgrading your equipment or adding new sawmill technologies can help you meet the growing demands of your customers and improve overall productivity.

Increasing Production Capacity : If the demand for your lumber products is consistently high, expanding your sawmill’s production capacity can be a smart move. This can involve adding more shifts, hiring additional staff, or even considering a larger facility to accommodate the increased workload.

Entering New Markets : Exploring new markets can open up opportunities for growth. Consider expanding your customer base by targeting new regions or industries that have a demand for your lumber products. Conduct thorough market research to identify potential markets and develop effective marketing strategies to reach these customers.

Vertical Integration : Another expansion strategy is to vertically integrate your sawmill business. This involves expanding into other areas of the timber industry, such as logging or processing finished wood products. By controlling more stages of the supply chain, you can potentially increase your profit margins and reduce reliance on external suppliers.

Diversification Opportunities

Diversifying your sawmill business can help mitigate risks and create additional revenue streams. Here are a few diversification opportunities to consider:

Value-Added Products : Explore the production of value-added wood products, such as furniture components, custom moldings, or specialty wood products. These higher-value products can help increase your profit margins and differentiate your business from competitors.

Timber by-Products : Utilize timber by-products, such as wood chips or sawdust, to create alternative revenue streams. These by-products can be sold as biomass fuel, animal bedding, or even used in the production of wood-based panels like particleboard or fiberboard.

Sawmill Services : Consider offering additional services to complement your primary sawmill operations. This may include custom sawing, wood drying services, or even providing sawmill equipment maintenance and repair for other businesses in the industry. These services can generate additional income while leveraging your existing expertise and infrastructure.

Online Sales and E-Commerce : Embrace the digital landscape by establishing an online presence and offering your lumber products for sale through an e-commerce platform. This can help you reach a wider audience and tap into the growing demand for online purchasing in the construction and woodworking industries.

By implementing expansion strategies and exploring diversification opportunities, you can take your sawmill business to new heights. Remember to conduct thorough market research, assess the feasibility of each opportunity, and develop a solid business plan to guide your growth efforts. Continuously monitor industry trends, stay updated on sawmill business opportunities , and adapt your strategies to ensure sustainable growth and profitability.

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How to Start a Sawmill Business: Step-by-Step Guide for Beginners

Are you looking to turn your passion for woodworking into a profitable business venture? Starting a sawmill could be just the opportunity you’ve been looking for. But where do you begin? The sawmill industry can seem daunting, with many factors to consider before diving in. Fortunately, by following a few key tips and tricks, you can set yourself up for success and avoid common pitfalls.

In this blog, we’ll explore everything you need to know to start a sawmill business, from choosing the right equipment to marketing your products effectively. So grab your hard hat and let’s get started!

Planning and Research

Starting a sawmill business requires careful planning and extensive research. Before investing money and time, aspiring entrepreneurs must first determine the feasibility of their idea. Factors such as location, market demand, competition, and cost analysis must be taken into account.

Developing a comprehensive business plan can help in identifying potential challenges and opportunities and setting realistic goals. It is also crucial to research and comply with state and local regulations and obtain all necessary permits and licenses. Additionally, understanding the equipment needed, such as saws, kilns, and drying sheds, and investing in high-quality machinery can ensure the success and growth of the business.

Overall, starting a sawmill business requires a lot of investment, both financially and time-wise, but with proper planning and research, it can be a profitable venture in the long run.

Market Analysis

When starting a business, planning and research are crucial to success. Understanding the market and its trends can help determine the demand for your product or service. Market analysis involves studying the industry, competition, and target audience to identify opportunities and potential challenges.

By conducting thorough research, you can gather data on consumer behavior and preferences, industry regulations, and current market conditions. This information can be used to develop a strategic business plan and make informed decisions that position your brand for growth. Without proper planning and research, businesses risk wasting resources and missing out on potential opportunities.

In short, market analysis is the foundation for any successful business venture. By understanding the market and utilizing the insights gathered, businesses can gain an edge over their competition and thrive in their respective industries.

Creating a Business Plan

When planning to start a business, it’s essential to have a well-structured business plan. Thorough research and planning are crucial in creating a business plan that outlines the mission, goals, strategies, and financial projections of the business. The first step in planning is conducting market research to determine the target market, competitors, and industry conditions.

This information helps identify potential customers and trends within the industry that can be leveraged to achieve success. Furthermore, creating a SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats) helps outline the competitive landscape and gives insight into how to position the business to stand out in the market. With the research conducted, it’s time to strategize and plan out how to implement a cohesive business plan that incorporates branding, marketing, operations, and financials.

A detailed plan helps ensure that the business stays on track and can be adjusted as needed to achieve success. Overall, research and planning are critical steps in creating a well-structured business plan that lays the foundation for a successful business venture.

Location and Equipment

When it comes to planning and researching for a location and equipment for your business, there are a few things that you should take into consideration to ensure the success of your venture. Firstly, think about the target market and what their needs are. Do they require a location that is easily accessible, or are they looking for a unique experience that is off the beaten path? Secondly, consider the logistics of the location, such as parking, transportation, and nearby amenities.

You want your customers to feel comfortable and have everything they need within reach. Finally, when it comes to equipment, it’s essential to research the best of the best. Invest in items that will last long and deliver the best possible experience for your customers.

By taking the time to plan and research, you can ensure that your business gets off to a great start, and you’re able to provide exceptional service to your customers, which will keep them coming back for more.

Legal and Financial Considerations

Starting a sawmill business requires a lot of legal and financial considerations. First and foremost, it’s important to choose the right business structure that suits your needs and goals. You can select from various options like sole proprietorship, partnership, LLC, S-corp or C-corp.

Secondly, you need to obtain all the necessary licenses and permits required by your state or local government. This may include environmental permits, zoning permits, and business licenses. It’s also crucial to register for taxes and get an EIN from the IRS.

Another important aspect of starting a sawmill business is securing financing. This involves finding investors or lenders who can provide the necessary capital. You may also need to prepare a detailed business plan showcasing your financial projections, market analysis, and marketing strategies.

Moreover, it’s advisable to consult with an attorney or business expert to ensure you cover all legal and financial requirements. With diligent planning and expert guidance, you can start a profitable sawmill business and thrive in the industry.

Business Registration and Licenses

When starting a business, it’s essential to consider the legal and financial aspects of the process. One of the most critical steps is registering your business and obtaining the correct licenses. It can be confusing to navigate the various requirements and regulations, but it’s crucial to do so correctly to avoid penalties or legal issues down the line.

Depending on the nature of your business, you may need to register with state or local authorities, obtain specific permits, or apply for a tax identification number. Failing to take the proper steps could result in fines, legal action, or even the closure of your business. Think of it as laying a strong foundation for your business to operate on in the long run.

Taking these legal and financial considerations seriously will help ensure your business’s success.

Insurance Needs

When it comes to legal and financial considerations, insurance needs are something that can’t be overlooked. Whether you’re running a business or simply concerned about your personal liability, there are a variety of insurance options to consider. For example, many businesses will need general liability insurance to protect against lawsuits and property damage, while individuals may want to invest in auto or home insurance to safeguard their assets.

Additionally, there are specialized insurance options for specific industries or professions, such as malpractice insurance for doctors or errors and omissions insurance for insurance agents. No matter what type of insurance coverage you need, it’s important to research your options and choose a policy that is tailored to your unique circumstances. By doing so, you can rest assured that you’re protected in the event of unexpected legal or financial challenges that may arise.

So, don’t neglect your insurance needs – invest in the right coverage and enjoy greater peace of mind.

Financing Options

When considering startup financing options, it’s essential to keep legal and financial considerations in mind. One of the most common financing options is taking out a loan from a bank or other financial institution. However, it’s crucial to understand the terms and repayment schedule before signing on the dotted line.

You should also consider options such as crowdfunding or angel investors, which can provide funding without the need for a loan. It’s also critical to understand legal obligations such as setting up a business entity and obtaining any necessary licenses or permits. Failing to do so can result in legal troubles down the road.

Furthermore, be sure to keep detailed financial records to monitor cash flow and expenses. Understanding and staying on top of these legal and financial considerations from the start can set you up for success in the long run.

Cost Analysis

When starting a business, legal and financial considerations should always be accounted for. Expenses associated with legal and financial requirements can add up quickly and unexpectedly. When determining the cost analysis of starting a business, it is important to factor in the costs of legal fees, accounting fees, taxes, and licenses.

These expenses can vary greatly depending on the type of business and the location, so it is necessary to research the specific requirements for your business. It is also important to consider the long-term costs of not properly handling legal and financial matters, as it can potentially lead to lawsuits or penalties. In the long-run, investing in a qualified lawyer and accountant can save you money and protect your business.

It’s important to prioritize these legal and financial considerations as essential parts of the initial planning and budgeting stages of your new business.

Operations and Marketing

Starting a sawmill business can be a challenging task, but with the right approach, it can lead to great reward. Generally, the first step towards starting your own sawmill business is to develop a detailed business plan that incorporates aspects such as market analysis, demand growth, financial projections, operating requirements, and the cost of starting the business. While developing your business plan, you should also consider operational aspects such as equipment requirements, space, and personnel.

Once you have developed your business plan, the next step is to market your sawmill business. This involves developing a marketing strategy that includes identifying your target market, conducting market research, devising a pricing strategy, and creating an online presence. With the right operational and marketing approach, you can start and grow a successful sawmill business that can offer employment opportunities and add value to your local community.

Hiring and Training Personnel

When it comes to hiring and training personnel for your business, you need to strike a balance between operations and marketing. On the one hand, you want to ensure that your employees are equipped with the necessary skills to effectively handle your day-to-day operations. On the other hand, you also want to make sure that they understand the importance of marketing and how it impacts your overall success.

One effective way to achieve this balance is by providing cross-training opportunities. By offering training in both operations and marketing, you can create well-rounded employees who are capable of handling a variety of tasks and contributing to the growth of your business. Additionally, by highlighting the importance of marketing during the hiring process, you can attract candidates who are passionate about promoting your business and understanding your target audience.

So, whether you’re looking to hire new employees or train your existing team, remember that a focus on both operations and marketing can lead to greater success for your business.

Log Procurement and Milling Operations

As a logging company, it’s crucial to keep an accurate record of all log procurement and milling operations. This involves tracking everything from the initial extraction of the logs to the final stages of milling and processing. By maintaining detailed records, logging companies can better identify any inefficiencies in their operations and make data-driven decisions to optimize their performance.

It also helps to ensure compliance with local regulations and sustainability practices, as well as giving customers peace of mind that their wood products come from a responsible source. In addition to operational benefits, proper record-keeping can also play a role in marketing efforts. Logging companies that can provide transparent and verifiable information about their operations are more likely to attract environmentally conscious consumers who prioritize sustainable practices.

By leveraging data in this way, logging companies can enhance both their operations and marketing efforts, ensuring long-term success in a competitive industry.

Product Line and Sales Strategies

When it comes to successful operations and marketing for a business, the product line and sales strategies play a crucial role. The product line refers to the products or services that a business offers to its customers, while sales strategy is the approach that a business takes to generate sales and revenue. To succeed in the market, a business needs to have a well-defined product line that meets the needs of its customers, and sales strategies that effectively communicate and promote these products to potential customers.

A business can achieve this by aligning its product line with the current market demand and continuously analyzing the sales data to refine its sales strategy accordingly. By adopting a data-driven approach, businesses can predict potential market trends and make informed decisions on product development and marketing initiatives. In summary, the success of a business relies on both the product line and sales strategies, and effective operations and marketing require a balance between the two.

Networking and Building a Customer Base

When starting a new business, networking and building a customer base are crucial steps to success. One effective way to do so is attending local events and getting involved in the community. This allows you to meet potential customers and develop relationships with other businesses in the area.

Utilize social media platforms to establish an online presence and connect with a wider audience. It’s important to have a clear message and brand identity in order to attract the right kind of customers. Once you have established a customer base, it’s important to keep them engaged and satisfied by providing excellent customer service and quality products/services.

Consider offering incentives such as referral programs or loyalty rewards to keep customers coming back. Remember, building a strong customer base takes time and effort, but with dedication and consistency, your business can thrive.

Starting a sawmill business might seem daunting, but with proper planning and execution, it can be a rewarding and profitable venture. From understanding the market demand, securing a suitable location, acquiring the right equipment, to developing a marketing strategy – success lies in meticulous attention to detail and a commitment to quality. But perhaps the most crucial ingredient to this recipe for success is a deep passion for the industry and a willingness to learn and adapt to new challenges.

So, sharpen your saw blades, embrace the wood-loving community, and saw your way to success in the lumber industry!”

What are the initial steps required to start a sawmill business? The initial steps include conducting market research, developing a business plan, obtaining necessary permits and licenses, securing financing, and purchasing equipment.

How much does it cost to start a sawmill business? The cost to start a sawmill business varies depending on the size and scale of the operation. It can range from tens of thousands to millions of dollars.

What permits and licenses are required to start a sawmill business? Required permits and licenses vary by location, but typically include a business license, environmental permits, and timber harvesting permits.

What equipment is necessary to start a sawmill business? The necessary equipment includes a sawmill, debarker, edger, and various machines for sorting, grading, and processing lumber.

How can I finance my sawmill business? Financing options include traditional bank loans, Small Business Administration (SBA) loans, private investors, and crowdfunding.

How can I find a reliable timber supplier for my sawmill business? Networking with local forestry associations, attending trade shows, and using online resources such as the Forest Products Network can help you find a reliable timber supplier.

What are some common challenges faced by sawmill businesses? Common challenges include maintaining consistent quality and quantity of raw materials, dealing with fluctuating market demand and prices, and complying with environmental regulations.

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Sawmill business is a profitable venture for those who specialize in the production and sale of timber products. It involves the cutting, preparation and selling of logs and lumber. Building a successful sawmill business requires significant investments, hard work and knowledge of the industry.

Starting a sawmill business involves the purchase of land to set up and run the sawmill. It also includes the purchase of quality sawmilling machinery, which can be expensive. You should also consider obtaining a working capital loan to help with start-up costs.

You should also carefully plan out the types of timber products you will produce. For example, will you be sawing hardwoods or softwoods? Will you need to purchase kiln-dried lumber? Knowing the types of lumber you will be producing will determine what type of sawmill equipment you need, as well as the size of the log inventory you will need.

Finding the right customers for your sawmill business is vital for long-term success. You should research nearby wood markets, such as furniture and cabinet makers, home builders and woodworking shops.

By offering high quality products, competitive pricing and excellent customer service, you will build a good reputation that will help bring in new customers. Also, expanding into selling additional products, such as unfinished and finished furniture pieces, can expand your target customer base and boost profits.

As the sawmill business grows, it’s important to keep up with changing technologies. Invest in new, more efficient sawmill equipment that can help reduce waste and improve production. Developing a business plan can help you make informed decisions and set goals for your sawmill business.

How much does it cost to start a sawmill business

The cost associated with opening a sawmill business varies depending on the size of the business, location, and equipment and services needed. An estimate of the total cost to start a sawmill business could be around $50,000 – $100,000.

One of the most important costs to consider when starting a sawmill business is your capital investment. The cost of new equipment, such as saws and accessories, can vary greatly but will typically range from $20,000 – $50,000. Used equipment that is still in good working condition is often a good consideration as well, with prices ranging from $5,000 – $20,000.

Another cost to consider is that of personnel and labor. Depending on the size, scope and number of clients that your business will serve, you may need to hire 2-3 additional employees. This should be included in your estimated costs, likely ranging from $10,000 – $20,000 per person.

Your business location is a major factor in the cost of starting a sawmill business. Rent and utility costs can range from $1,000 to $5,000 per month, depending on the size of the facility and location. Also, you may also need to purchase land for the business and construct a building to house the mill, which will increase costs significantly.

Advertising and promotion of your business may also be necessary in order to generate additional customers and revenue. This cost can vary greatly, depending on your desired methods and strategies. If you plan on using digital marketing, this cost may be a few hundred dollars per month, while traditional advertisement through radio, television, or newspaper may be thousands per month.

Additional costs to consider when starting a sawmill business include liability and property insurance, business licenses and permits, and accounting and legal services. The cost of legal and accounting services will vary based on the complexity of your business. Additionally, business permits and licenses may vary by location, so it is important to research specific requirements in the area you plan on operating your business.

The total cost to start a sawmill business may range from approximately $50,000 to $100,000. The total cost will depend on the size and scope of the business, the specific location and the required equipment, personnel and services. In most cases, a larger investment upfront can help reduce costs in the long-term and increase profitability in the future.

Steps Involved in Starting Sawmill Business

• Create a Business Plan: Before launching a sawmill business, you must create a comprehensive business plan that details your goals, vision, and strategies for success.
• Obtain Financing: Depending on the size and scope of your sawmill business, you may need to obtain financing from banks, venture capitalists, or private lenders.
• Acquire Equipment: Sawmill businesses require a variety of special equipment in order to build and craft items. You will need to purchase saws, planers, shapers, chippers, and other essential tools and machinery that are necessary to create items from logs and lumber.
• Source Lumber: In order to make products, you will need lumber to work with. You can purchase logs from lumberyards and tree farms, or you can cut down trees yourself.
• Market Your Business: You will need to advertise your sawmill business in order to make consumers aware of your services. Advertise on social media and in local newspapers.
• Establish a Customer Base: You must establish a customer base in order to make the most of your sawmill business. Develop relationships with potential customers and offer discounts for bulk orders.
• Supply Your Customers: Make sure you can meet customer demand by having ample supplies of lumber and other materials that are necessary for your sawmill business.

Profit Margin in Sawmill Business

The profit margin in a sawmill business depends on a variety of factors, including the cost of the raw materials, overhead costs, operating costs, and the final sale price of the product. The average gross profit margin for sawmills is usually between 20% and 30%, but this can vary significantly depending on the market.

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Timber Harvesting Business Plan [Sample Template]

By: Author Tony Martins Ajaero

Home » Business Plans » Agriculture Sector » Agro-Allied

Are you about starting a timber harvesting business? If YES, here is a complete sample timber harvesting business plan template & feasibility report you can use for FREE .

Okay, so we have considered all the requirements for starting a timber harvesting business. We also took it further by analyzing and drafting a sample timber harvesting marketing plan template backed up by actionable guerrilla marketing ideas for timber harvesting companies. So let’s proceed to the business planning section.

If you are thinking of starting a business with good returns on investment, then one of your best bet is to venture into the logging industry and you just want to concentrate on timber harvesting and supply.

Just like all other investment vehicles, there are potential down sides that you need to look out for if you want to start a timber harvesting and supply business. One of the major risks in the timber harvesting and supply business is deforestation which may attract unfavorable government legislation.

Part of what you need to do to make headway in this line of business is to ensure that you have the required license and permits and you have good business relationship with construction contractors, constructions companies, furniture manufacturers, paper manufacturers and key players in relevant industries.

If you are truly convinced that starting a timber harvesting and supply business is the right business for you to do, then you need to write your own business plan. Below is a sample timber harvesting and supply business plan template that will help you successfully write yours with little or no stress.

A Sample Timber Harvesting Business Plan Template

1. industry overview.

Timber harvesting companies are involved in cutting, skidding, on-site processing, and loading of trees or logs onto trucks or skeleton cars. 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 that timber harvesting business is a part of 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.

Timber harvesting is indeed a big business and should not be handled with levity; little wonder there is a university degree dedicated to forestry. So, it is important that you acquire relevant training and education before launching your own timber harvesting 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 in 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 them.

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 activities have been climbing upward from recessionary low point, driving industry revenue.

The demand conditions for the industry are expected to continue improving going forward, as recovery in the residential construction market is forecast to strengthen as home improvement spending rises. On the other hand, paper manufacturing is forecast to slow due to the trend toward electronic communication, and of course reducing demand from key industrial players.

The logging industry that timber harvesting business is a subset of is indeed a large industry and pretty much active in a lot of countries.

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 the lion market share of the available market in the industry.

A recent report published by IBISWORLD shows that the logging industry has medium barriers to entry, and this is 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 factors that 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.

Some of the factors that encourage entrepreneurs to start their own timber harvesting company could be that the business is a profitable business. 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.

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 timber harvesting company must apply and obtain a license before they can legally operate in the industry.

2. Executive Summary

Bradford Lugard™ Timber Harvesting & Processing, Inc. is a registered timber harvesting and processing business that will be located in Des Moines – Iowa. We have been able to secure all the needed state and federal licenses and permits that will enable us operate the business in Des Moines – Iowa.

Bradford Lugard™ Timber Harvesting & Processing, Inc. will be involved in cutting, skidding, on-site processing, and loading of trees or logs onto trucks or skeleton cars. We are set to service a wide range of clientele in and around Des Moines – Iowa.

We are aware that there are several timber harvesting companies all around Des Moines – Iowa, which is why we spent time and resources to conduct a thorough feasibility studies and market survey so as to be well positioned to favorably compete with all our competitors.

Bradford Lugard™ Timber Harvesting & Processing, Inc. will ensure that all our customers are given first class treatment whenever they contact us or patronize our services.

We have a CRM software that will enable us manage a one on one relationship with our customers no matter how large they may grow to. We will ensure that we get our customers involved in the selection of brands that will be on our store and also when making some business decisions.

Bradford Lugard™ Timber Harvesting & Processing, Inc. will at all times demonstrate her commitment to sustainability, both individually and as a firm, by actively participating in our communities and integrating sustainable business practices wherever possible.

We will ensure that we hold ourselves accountable to the highest standards by meeting our customers’ needs precisely and completely whenever they patronize our products.

Bradford Lugard™ Timber Harvesting & Processing, Inc. is a family business that is owned by Bradford Lugard and his immediate family members. Bradford Lugard has a B.Sc. in Forestry, with over 5 years’ experience in the logging industry, working for some of the leading brands in the United States.

3. Our Products and Services

Bradford Lugard™ Timber Harvesting & Processing, Inc. is in the logging industry to service a wide range of clients and of course to make profits, which is why we will ensure that we go all the way to service a wide range of clients in the United States.

We will do all that is permitted by the law of the United States to achieve our aim and ambition of starting the business. Our product offerings are listed below;

• Cutting, skidding, on-site processing, and selling/supply of logs

4. Our Mission and Vision Statement

• Our vision is to become the leading brand in the timber harvesting industry in Des Moines – Iowa and with license to operate all across the United States of America.
• Our mission is to establish a world – class timber harvesting and processing business that will work with clients all across the United States of America via supply of processed timber.

Our Business Structure

At Bradford Lugard™ Timber Harvesting & Processing, Inc., our business structure will be designed in such a way that it can accommodate both full-time and part-time staff.

We intend starting our timber harvesting and processing company with a handful of full time employees (professional loggers and truck drivers); and some of the available timber cutting and processing machine operators and truck driving roles fill be handled by qualified contract operators. Adequate packages have been prepared for all our full-time employees.

As a means of maximizing operational cost, we will contract the maintenance of all our timber cutting and processing machines and trucks to a service provider, we don’t intend to maintain a very large overhead from the onset. But as soon as the business grows and stabilizes, we will assemble our own professional in-house maintenance team.

Below is the business structure and the roles that will be available at Bradford Lugard™ Timber Harvesting & Processing, Inc.;

• Chief Operating Officer (Owner)

Admin and HR Manager

Transport and Logistics Manager

• Business Developer

Timber Harvesting and Processing Machine Operators

• Professional Truck Drivers
• Client Service Executive/Front Desk Officer

5. Job Roles and Responsibilities

Chief Executive Officer – CEO:

• Increases management’s effectiveness by recruiting, selecting, orienting, training, coaching, counseling, and disciplining managers; communicating values, strategies, and objectives; assigning accountabilities; planning, monitoring, and appraising job results; developing incentives; developing a climate for offering information and opinions
• Creates, communicates, and implements the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
• Responsible for fixing prices and signing business deals
• Accountable for providing direction for the business
• Responsible for signing checks and documents on behalf of the company
• Evaluates the success of the organization
• Responsible for overseeing the smooth running of HR and administrative tasks for the organization
• Maintains office supplies by checking stocks; placing and expediting orders; evaluating new products.
• Ensures operation of equipment by completing preventive maintenance requirements; calling for repairs
• Defines job positions for recruitment and managing interviewing process
• Carries out induction for new team members
• Responsible for training, evaluation and assessment of employees
• Responsible for arranging travel, meetings and appointments
• Oversee the smooth running of the daily office activities.

Sales and Marketing Manager

• Manages external research and coordinate all the internal sources of information to retain the organizations’ best customers and attract new ones
• Identify, prioritize, and reach out to new partners, and business opportunities et al
• Responsible for supervising implementation, advocate for the customer’s needs, and communicate with clients
• Develops, executes and evaluates new plans for expanding sales
• Documents all customer contact and information
• Represents the company in strategic meetings
• Helps to increase sales and growth for the company
• Accountable for coordinating truck drivers, vehicles, loads and journeys
• In control of operating IT systems for the organization
• In charge of negotiating contracts for the organization
• Responsible for developing and confirming schedules
• Responsible for planning for and negotiating technical difficulties
• Responsible for implementing environmental and safety standards
• Handles the planning routes and load scheduling for multi-drop deliveries.
• Handles booking in deliveries and liaising with customers.
• In charge of allocating and recording resources and movements on the transport planning system.
• Responsible for ensuring all partners in the supply chain are working effectively and efficiently to ensure smooth operations.
• Responsible for communicating effectively with clients and responding to their requirements.
• In charge of directing all transportation activities.
• Responsible for developing transportation relationships.
• Responsible for monitoring transport costs.
• In charge of negotiating and bargaining transportation prices.
• Responsible for dealing with the effects of congestion.
• Responsible for confronting climate change issues by implementing transport strategies and monitoring an organization’s carbon footprint.
• Responsible for preparing financial reports, budgets, and financial statements for the organization
• Provides managers with financial analyses, development budgets, and accounting reports; analyzes financial feasibility for the most complex proposed projects; conducts market research to forecast trends and business conditions.
• Responsible for financial forecasting and risks analysis.
• Performs cash management, general ledger accounting, and financial reporting
• Responsible for developing and managing financial systems and policies
• Responsible for administering payrolls
• Ensures compliance with taxation legislation
• Handles all financial transactions for the company
• Serves as internal auditor for the company
• Responsible for cutting, skidding and on-site processing of logs
• Assist in loading and unloading timbers

Truck Drivers

• Responsible for transporting timbers
• Assists in loading and unloading timbers
• Maintains a logbook of their driving activities to ensure compliance with federal regulations governing the rest and work periods for operators.
• Keeps a record of vehicle inspections and make sure the truck is equipped with safety equipment, such as hazardous material placards.
• Inspects vehicles for mechanical items and safety issues and perform preventative maintenance
• Complies with truck driving rules and regulations (size, weight, route designations, parking, break periods etc.) as well as with company policies and procedures

Client Service Executive

• Welcomes/receive clients by greeting them in person or on the telephone; answering or directing inquiries.
• Ensures that all contacts with clients (e-mail, walk-In center, SMS or phone) provides the client with a personalized customer service experience of the highest level
• Through interaction with parents and students on the phone, uses every opportunity to build clients’ interest in the organizations’ products and services
• Consistently stays abreast of any new information on the organizations’ products, promotional campaigns etc. to ensure accurate and helpful information is supplied to clients when they make enquiries
• Receives parcels/documents for Bradford Lugard™ Timber Harvesting & Processing, Inc. and distribute mails in the organization
• Handles any other duties as assigned by HR and Admin Manager or Transport & Logistic Manager.

6. SWOT Analysis

Our intention of starting Bradford Lugard™ Timber Harvesting & Processing, Inc. in Des Moines – Iowa is to test run the business for a period of 2 to 4 years to know if we will invest more money and expand the business all around in the United States of America.

We are quite aware that there are several timber harvesting and processing companies scattered all over the United States of America and even in the same location where we intend starting ours, which is why we are following the due process of establishing a business.

We know that if a proper SWOT analysis is conducted for our business, we will be able to position our business to maximize our strength, leverage on the opportunities that will be available to us, mitigate our risks and be equipped to confront our threats.

Bradford Lugard™ Timber Harvesting & Processing, Inc. employed the services of an expert HR and Business Analyst with bias in startups to help us conduct a thorough SWOT analysis and to help us create a Business model that will help us achieve our business goals and objectives.

This is the summary of the SWOT analysis that was conducted for Bradford Lugard™ Timber Harvesting & Processing, Inc.;

Our core strength lies in the power of our team; our workforce. We have a team that can go all the way to give our clients value for their money; a team that are trained and equipped to pay attention to details and to deliver excellent jobs.

We are well positioned and we have standard and reliable timber harvesting and processing machines and trucks. We know we will attract loads of clients from the first day we open our doors for business.

Our weakness could be lack of finance, high debt burden, cost structure, lack of scale compared to our peers who have already gained ground in the timber harvesting cum logging industry.

• Opportunities:

The opportunities that are available to us as a timber harvesting company operating in the United States of America are online market, new services, new technology, and of course the opening of new markets within our target locations.

Some of the threats that we are likely going to face are mature markets, bad economy (economy downturn), stiff competition, volatile costs, and rising fuel prices. Basically, just like any other business, one of the major threats that we are likely going to face is economic downturn.

It is a fact that economic downturn affects purchasing / spending power. Another threat that may likely confront us is the arrival of a timber harvesting and processing company in same location where ours is located. unfavorable government policies can also pose a major threat to businesses such as ours.

7. MARKET ANALYSIS

• Market Trends

The market trend as it involves the timber harvesting industry especially in the United States of America is indeed dynamic and at the same time highly competitive and challenging.

But one thing is certain, once a timber harvesting and processing company can gain credibility, it will be much easier for the company to secure permanent deals / contracts with big time construction companies, furniture manufacturers and paper production companies who are always carrying out construction works on a regular basis.

If you are a close observer of the trends in the timber harvesting industry, you will notice that revenue generated by players in the industry has registered a sharp increase over the last half decade. This is supported by the increase in demand from downstream construction industries.

So also, improvement in performance from the industry matched with the rapid expansion in demand for timber in the booming housing market and nonresidential building market in the United States. Going forward, industry revenue is expected to continue growing, albeit at a slower pace.

Another common trend in this industry is that once a timber harvesting and processing company has gained credibility, it is easier for them to go for brand new trucks and timber harvesting and processing machines as against making use of second hand trucks and timber harvesting and processing machines which are usually expensive to maintain.

8. Our Target Market

Our target market are basically construction companies and of course any other company that makes use of timber. We cover both short distance (inter states) and long distance (intra states). We are in business to harvest, processed and supply timbers within the United States.

In other words, our target market is the whole of the United States of America and below is a list of the people and organizations that we have plans to do business with;

• Construction companies
• Paper Pulp companies
• Furniture manufactures
• Cottage companies that make use of processed timber

Our Competitive Advantage

We are aware of the competitive nature of the timber harvesting industry and we are ready to get into the mix and favorably compete with players in the industry. Our major competitive advantage is the vast industry experience and solid reputation of our owner, Bradford Lugard and our management team.

Bradford Lugard™ Timber Harvesting & Processing, Inc. no doubt is a timber harvesting and processing company, which is why we took our time to do a thorough market research and feasibility studies before launching the business.

We were able to highlight some factors that will give us competitive advantage in the marketplace; some of the factors are trust, honesty, good network and excellent relationship management, qualified and experienced management team, robust fleet operations, direct access to forests and construction sites in the United States of America, our size and cost advantage, supply chain, customer loyalty and strong reputation amongst domestic industry players.

Another competitive advantage that we are bringing to the industry is the fact that we have designed our business in such a way that we can comfortably work with both individual clients (contractors) and big construction companies.

Lastly, our employees will be well taken care of and their welfare package will be among the best within our category in the industry meaning that they will be more than willing to build the business with us and help deliver our set goals and achieve all our business aims and objectives.

9. SALES AND MARKETING STRATEGY

• Sources of Income

Bradford Lugard™ Timber Harvesting & Processing, Inc. will ensure that we leverage on our strength and the opportunities available to us in the U.S. to generate enough income that will help us drive the business to stability. We will go all the way to explore every available source of income in the timber harvesting industry.

Below are the sources we intend exploring to generate income for Bradford Lugard™ Timber Harvesting & Processing, Inc.;

• Cutting, skidding, on-site processing, and supply of logs

10. Sales Forecast

One thing is certain; there would always be construction companies and other related businesses that would need the timbers from time to time.

We are well positioned to take on the available market in the United States of America and we are quite optimistic that we will meet our set target of generating enough profits from our first six months of operation and grow our business and our clientele base.

We have been able to critically examine the timber harvesting market in the United States of America, we have analyzed our chances in the industry and we have been able to come up with the following sales forecast. The sales projections are based on information gathered on the field and some assumptions that are peculiar to similar startups in the United States of America.

• First Fiscal Year: $350,000
• Second Fiscal Year: $750,000
• Third Fiscal Year: $1,000,000

N.B : This projection was done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown and natural disasters within the period stated above.

So also, there won’t be any major competitor (timber harvesting and processing company) offering same services as we do within the same location. Please note that the above projection might be lower and at the same time it might be higher.

• Marketing Strategy and Sales Strategy

No doubt, networking is an effective way to begin building your client base as a business man or woman and we have plans in place to leverage on all networks. In view of that, we will look out for gatherings where we can network with captain of industries, construction contractors, paper manufacturing companies and furniture manufacturing companies et al.

As a matter of fact, our first port of call will be to connect with the nearest Chamber of Commerce; we are likely going to get our first major deal from them.

At Bradford Lugard™ Timber Harvesting & Processing, Inc. all our employees will be directly or indirectly involved in sales and marketing of our products. We will create provision for our employees to earn commission when they bring in business for the organization.

We will also encourage freelancers to work with us; whenever they refer clients to us they will earn a percentage of the deal as agreed by both parties.

Lastly, we will leverage on the power of the media by advertising our services using both online and offline platforms. We will work hard to ensure that get repeated business from any business deal we execute. In summary, Bradford Lugard™ Timber Harvesting & Processing, Inc. will adopt the following sales and marketing strategies in sourcing for clients for our business;

• Introduce our business by sending introductory letters alongside our brochure to corporate organizations, businesses in the construction industry, paper manufacturers, furniture manufacturers and related industries in Des Moines – Iowa and throughout the United States
• Print handbills about our timber harvesting and processing company and its locations and drop them in public facilities.
• Advertise on the internet on blogs and forums, and also on social media like Twitter, Facebook, LinkedIn to get our message across, so that those on the social media or those who read blogs can know where to go when they need the processed timber
• Creating a basic website for our business, so as to give our business an online presence
• Directly market our business.
• Join local timber harvesting and processing company associations and chambers of commerce for industry trends and tips
• Advertise our business in community – based newspapers, local TV and radio stations
• List our business on yellow pages ads (local directories)
• Encourage the use of Word of mouth marketing (referrals)

11. Publicity and Advertising Strategy

Bradford Lugard™ Timber Harvesting & Processing, Inc. has a long – term plan of operating in various locations (major timber sites) in the United States which is why we will deliberately build our brand to be well accepted in Des Moines – Iowa before venturing out to other cities both in the United States of America.

As a matter of fact, our publicity and advertising strategy is not solely for winning customers over but to effectively communicate our brand. Here are the platforms we intend leveraging on to promote and advertise Bradford Lugard™ Timber Harvesting & Processing, Inc.;

• Place adverts on both print (community – based newspapers and magazines) and electronic media platforms
• Sponsor relevant community programs
• Leverage on the internet and social media platforms like; Instagram, Facebook, Twitter, et al to promote our brand
• Install our billboards in strategic locations all around Des Moines – Iowa
• Distribute our fliers and handbills in target areas
• Position our Flexi Banners at strategic positions in the location where our photo booths are located.
• Ensure that all our workers wear our branded shirts and all our trucks are well branded with our company’s logo

12. Our Pricing Strategy

Bradford Lugard™ Timber Harvesting & Processing, Inc. has a lease arrangement with various companies and the company’s pricing is based on miles per thousands of tons of processed timbers purchased and transported. We have perfected our plans to charge competitive rates since we have minimal overhead compared to our competition in the industry.

We will ensure that we leverage on price to win over customers; our prices will be affordable and negotiable. The fact that our business door is open to both individuals and corporation organizations means that we will have different price range for different category of clients.

We are aware that government contracts come with a bidding template, we will ensure that we abide by such bidding templates whenever we have the opportunity to bid for government contracts. As the business grows, we will continue to review our pricing system to accommodate a wide range of clientele.

• Payment Options

The payment policy adopted by Bradford Lugard™ Timber Harvesting & Processing, Inc. is all inclusive because we are quite aware that different customers prefer different payment options as it suits them but at the same time, we will ensure that we abide by the financial rules and regulation of the United States of America.

Here are the payment options that Bradford Lugard™ Timber Harvesting & Processing, Inc. will make available to her clients;

• Payment via bank transfer
• Payment via credit cards/Point of Sale Machines (POS Machines)
• Payment via online bank transfer
• Payment via check
• Payment via mobile money transfer
• Payment via bank draft

In view of the above, we have chosen banking platforms that will enable our client make payment for timbers purchased without any stress on their part. Our bank account numbers will be made available on our website and promotional materials to clients who may want to deposit cash or make online transfer for our processed timber.

13. Startup Expenditure (Budget)

In setting up any business, the amount or cost will depend on the approach and scale you want to undertake. If you intend to go big by renting a place, then you would need a good amount of capital as you would need to ensure that your employees are well taken care of, and that your facility is conducive enough for workers to be creative and productive.

This means that the start-up can either be low or high depending on your goals, vision and aspirations for your business.

The tools and equipment that will be used are nearly the same cost everywhere, and any difference in prices would be minimal and can be overlooked. As for the detailed cost analysis for starting a timber harvesting and processing company; it might differ in other countries due to the value of their money.

When it comes to starting a timber harvesting and processing company, the major areas that you look towards spending the bulk of your cash is in the purchase of standard timber harvesting and processing machines and trucks and of course renting or leasing a facility large enough to accommodate your trucks and processing plant.

Aside from that, you are not expected to spend much except for paying of your employees, maintaining your trucks and fueling. These are the key areas where we will spend our startup capital;

• The total fee for incorporating the Business in the United States of America – $750.
• The budget for liability insurance, permits and license – $2,500
• The amount needed to acquire a suitable office facility with enough parking space for our trucks in Des Moines – Iowa for 6 months (Re – Construction of the facility inclusive) – $40,000.
• The amount required to finance the purchase of the first set of trucks and timber harvesting and processing machines – $200,000
• The cost for equipping the office (computers, printers, fax machines, furniture, telephones, filing cabins, safety gadgets and electronics et al) – $5,000
• The cost of accounting software, CRM software and Payroll Software – $3,000
• Other start-up expenses including stationery – $1000
• Phone and Utilities (gas, sewer, water and electric) deposits – ( $3,500 ).
• Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $40,000
• The cost of launching our official website – $600
• The amount needed to pay staff for the first 2 months – $20,000
• Additional Expenditure (Business cards, Signage, Adverts and Promotions et al) – $2,500

Going by the report from the market research and feasibility studies conducted, we will need about three hundred and fifty thousand ( 350,000 ) U.S. dollars to successfully set up a medium scale but standard timber harvesting and processing company in the United States of America.

Generating Startup Capital for Bradford Lugard™ Timber Harvesting & Processing, Inc.

Bradford Lugard™ Timber Harvesting & Processing, Inc. is a family business that will be owned and managed by Bradford Lugard and his immediate family members. They are the sole financiers of the business which is why they decided to restrict the sourcing of startup capital to just three major sources.

These are the areas we intend generating our startup capital;

• Generate part of the startup capital from personal savings and sale of stocks
• Generate part of the startup capital from friends and other extended family members
• Generate a larger chunk of the startup capital from the bank (loan facility).

N.B: We have been able to generate about $100,000 ( Personal savings $80,000 and soft loan from family members $20,000 ) and we are at the final stages of obtaining a loan facility of $200,000 from our bank. All the papers and documents have been duly signed and submitted, the loan has been approved and any moment from now our account will be credited.

14. Sustainability and Expansion Strategy

The future of any business lies in the number of loyal customers that they have, the capacity and competence of the employees, their investment strategy and the business structure. If all of these factors are missing from a business, then it won’t be too long before the business closes shop.

One of our major goals of starting Bradford Lugard™ Timber Harvesting & Processing, Inc. is to build a business that will survive off its own cash flow without the need for injecting finance from external sources once the business is officially running.

We know that one of the ways of gaining approval and winning customers over is to engage in affordable and efficient timber harvesting, processing and supply services at all times.

Bradford Lugard™ Timber Harvesting & Processing, Inc. will make sure that the right foundation and processes are put in place to ensure that our staff welfare are well taken of. Our company’s corporate culture is designed to drive our business to greater heights and training and retraining of our workforce is at the top burner.

As a matter of fact, profit-sharing arrangement will be made available to all our management staff and it will be based on their performance for a period of three years or more. We know that if that is put in place, we will be able to successfully hire and retain the best hands we can get in the industry; they will be more committed to help us build the business of our dreams.

Check List/Milestone

• Business Name Availability Check: Completed
• Business Incorporation: Completed
• Opening of Corporate Bank Accounts various banks in the United States: Completed
• Opening Online Payment Platforms: Completed
• Application and Obtaining Tax Payer’s ID: In Progress
• Application for business license and permit: Completed
• Purchase of Insurance for the Business: Completed
• Acquiring of trucks and relevant equipment: In progress
• Leasing of Office Facility in Des Moines – Iowa: Completed
• Conducting Feasibility Studies: Completed
• Startup Capital Generation: Completed
• Writing of Business Plan: Completed
• Drafting of Employee’s Handbook: Completed
• Drafting of Contract Documents: In Progress
• Design of The Company’s Logo: Completed
• Printing of Promotional Materials: Completed
• Recruitment of employees: In Progress
• Purchase of the needed furniture, office equipment, electronic appliances and facility facelift: In progress
• Creating Official Website for the Company: In Progress
• Creating Awareness for the business (Business PR): In Progress
• Health and Safety and Fire Safety Arrangement: In Progress
• Establishing business relationship with key players in the construction industry, furniture making industry and paper manufacturing industry: In Progress
• Leasing of the first set of timber harvesting and processing machines and trucks: In Progress

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Profit with a Portable Sawmill Business

Learn how to make a profit with a portable sawmill business for your homestead.

Dreaming of a new home or barn you can’t quite afford? If you cut your own lumber using a portable sawmill, you could save enough to bring the project within reach. And you can use the mill to develop a business custom-cutting lumber or producing other wood products. (Or, after you’ve cut all the lumber you need, you could sell the mill.)

This special section outlines how to choose and use a portable mill to create value-added lumber and other products. Even if you don’t have your own forest, you can salvage storm-damaged trees or harvest trees being removed when land is cleared for construction or farming (see “ Woodworkers Recycle Storm-Damaged and Bulldozed Logs “).

When it comes to making money from lumber, it’s all about value added,” says Michael Best. “The further you take wood from a tree to a finished product, the more valuable it is.”

Best is the executive director of the nonprofit Sustainable Mountain Agricultural Center near Berea, Kentucky. SMAC’s mission is to demonstrate that sustainable agriculture is possible on small farms. “Farmers can make enough profit to avoid working outside the farm if they utilize the whole farm, including woodlots.”

Initially, SMAC used its manually operated Wood-Mizer LT40 portable sawmill for on-farm use, cutting trees for tomato stakes, barn hoards and racks.

Will Johnson, president of TimberKing, a sawmill manufacturer, says about half of sawmill buyers get one for their own use. “Younger customers especially tend to buy a mill because they have one or two big projects in mind, and then get into custom cutting or into developing niche markets — which is where the real money is.” Some niche markets are particularly valuable, he says. “If you find the right niche, such as cutting beams for custom homes, you can pay for the saw with just one or two jobs..

SMAC board member Carl Kilbourne, a former tree farmer and lumber dealer, was interested in the value-added aspect of turning hardwoods, which are abundant in the mountain regions of the south, into valuable kiln-dried lumber.

He found tree farming and managing small woodlots frustrating because timber cruisers are not interested in buying small, scattered stands of trees. And, he says, even if hardwood trees were cut, commercial wood-kiln operators were only interested in processing large quantities of lumber, making it inconvenient and expensive to kiln-dry small batches.

“About a decade ago,” he says, “I suddenly realized that the development of the one-man band sawmill and the inexpensive solar kiln were the major breakthroughs farmers with woodlots needed to harvest their valuable hardwood trees.”

Kilbourne had more in mind than making small stands of hardwoods profitable. He wanted harvesting done in a manner that would improve, rather than degrade, the woodlots, turning them into self-sustaining crops. This philosophy ties right in with SMAC’s mission.

Initially, Best hauled the portable sawmill to job sites, cutting lumber on either a per-board-foot or a by-the-hour basis. But he soon went to a stationary- setup at the SMAC farm. There are several reasons, he says, why this makes sense.

To price a job you have to see it, says Best, because of on-site concerns, such as safety issues, availability of bathroom facilities and the general condition of the work area. “Don’t underplay that,” he says. “In terms of money, log handling can make or break a job.”

Often there isn’t enough work to justify the trip. “Most cutting around here is either for people who have one, two or three logs, or for people who are buying logs. Neither of these provides an economic incentive to do most on-site work.” For a full day’s cutting, he says, it pays to haul the mill to the job site. Otherwise he has customers bring the logs to him.

“Most people start out using the portability function, but then go to a stationary setup for better control, safety and cleanliness of the logs,” Johnson says.

Best designed SMAC’s setup to combine the physical benefits of a raised-bed saw with the log-handling benefits of a ground-level bed. The saw is nested in a pit-like depression. The saw bed is even with the ground. Logs are then easily rolled over the ground onto the bed.

Before moving them, the logs are cleaned with a high-pressure hose. “There’s nothing like crusted mud and imbedded forest duff to dull a blade,” says Best. “And the time and cost of changing blades can cut into your profits.”

Kilns are the next step in value added logging. Nothing adds profits to wood as dramatically as kiln-drying. “Typically,” Best says, “simple cutting of lumber brings in about 16 cents per board foot. Kiln-drying that wood can add 20 cents to $1 per board foot, depending on the species and how thick you cut it.” And because you can produce the same volume with less work, he says, the thicker the boards, the higher the profits.

SMAC used Wood-Mizer kits to build its own solar kilns, using its saw to cut all the structural members from its own woodlot. “Ironically,” Best says, “when we checked with the folks at WoodMizer, we were the first people to actually cut our own dimensional lumber for the kiln.”

SMAC built two 3,000-board-foot-ca pacify kilns. “They cost $4,300 each in materials to erect, plus labor, and take about three weeks to build with two semi-skilled builders,” Best says. “After that, they run themselves.” The only other equipment necessary, a moisture gauge, tells when to increase the fresh air ventilation and when the wood is dry enough to remove.

Although cutting is the first step in converting trees to value-added lumber, it’s also the one that produces the lowest net profit. “Niche marketing is where the money is,” Best says. Understanding the preferences and buying habits of potential buyers is essential to developing your markets. “It’s not the act of cutting that makes you money. It’s knowing how to cut it for people, and who to cut it for.”

Rod Wilcox of Minong, Wisconsin, couldn’t agree more. Unlike SMAC, which does strictly custom cutting Wilcox took another route when he started his sawmill business after 25 years as a logger. “About 90 percent of our business is cutting lumber from logs we buy.” This, he says, is how you really serve niche markets. “We buy logs, saw them into boards and raise the value by getting closer to an end result. Using a niche marketing system, every part of the wood is used.”

Before starting his business, he and his wife got phone directories from cities within 300 miles and called every company they could find that used wood products. “They were almost all real responsive, and were looking for stuff we could provide,” he remembers. Wilcox also thought he might be able to sell wood blocks to carving-supply houses. “So I bought some carving magazines and started making calls. Most of the companies already had suppliers, but that day we became the supplier to two of them.”

Wilcox’s experience as a logger developed into another niche market: cutting staves for a barrel maker. “We used to sell them logs when I was logging,” he says. “When they shut down their own sawing operation, they called me.” Cutting staves led to the purchase of a kiln, which, in turn, opened up additional markets.

Diversification, Wilcox says, is a key to success. “We make enough products now that if the flooring or paneling market goes soft, we make it up with wood for cribbage boards or with handles for barbecue grills.”

You have to learn the markets, he says. When Wilcox first started, he bought some aspens to practice on, and learned how to use his new TimberKing B-20. Figuring there was always a market for it, he fumed the logs into tongue-and-groove paneling. But aspen is too plain: People prefer paneling with some pattern in the grain. The aspen wood just sat. Finally he ran an ad, pricing the boards to sell.

“A couple drove up and bought the whole load to use in their business making wine racks,” he says. At the time, clear aspen sold for $1.40 per board foot in lumber stores. “At our price of 75 cents, they could afford to cut off the tongues and grooves, and still be ahead of the game. If I had researched the markets first,” he says. “I could have saved the labor of cutting the tongues and grooves, and sold the boards for $1.40.

The Wilcoxs reach out several hundred miles developing niche markets, but according to SMAC’s Michael Best, most markets are generally within a hundred miles of the sawmill.

In conjunction with the University of Tennessee’s Agricultural Development Center and funded through the U.S. Department of Agriculture’s Sustainable Research and Education Program, SMAC recently conducted a survey to determine woodworkers’ preferences and buying habits. Anyone contemplating making money with portable sawmills should read the study. Copies are available from the Sustainable Mountain Agricultural Center; Berea, KY; www.heirlooms.org.

“How To Set Up and Run A Profitable Custom Sawing Business” is another great resource that covers everything from figuring profitability to how to write a contract. It’s available from TimberKing; Kansas City, MO; www.timberking.com.

Sawmill Resources

Bailey’s Laytonville, CA www.bbaileys.com (circular)

Baker Products Ellington, MO www.baker-online.com

Better Built Corp. Wilmington, MA www.ripsaw.com (hybrid)

Cook’s Sawmill Manufacturing Newton, AL www.cookssaw.com

Dave’s Welding & Fabrication Troy, MT www.timbergrizz.com

Granberg International Vallejo, CA www.granberg.com (chain)

Hud-Son Forest Equipment Barneveld, NY www.hud-son.com

Linn Lumber Mills Sweet Home, OR www.linnlumber.com

Logosol Inc. Madison, MS www.logosol.com (hybrid)

Log-Master Nacogdoches,TX www.logmaster.com

Meadows Mills N. Wilkesboro, NC www.meadowsmills.com (circular)

Mighty Mite Portland, OR www.mightymitesawmills.com (circular)

Mobile Manufacturing Co. Troutdale, OR www.mobilemfg.com (circular)

Norwood Industries Buffalo, NY www.norwoodindustries.com

Quality Manufacturing Co. Rome, NY www.bandmill.com

Select Sawmill Co. 17 Plantagenet, Ontario K0B1 LO www.selectsawmill.com

TA. Schmid Co. W. Edmeston, NY www.taschmid.com

Thomas Bandsaw Mitts Brooks, ME www.thomasbandsawmills.com

Tilton Equipment Co. Rye, NH www.tiltonequipment.com (chain)

TimberKin Kansas City, MO www.timberking.com

Turner Band Sawmills Oxford, NY www.turnermills.com

Wizard Engineering Sheep Ranch, CA

Wood-Mizer Products Indianapolis, IN www.wood-mizer.com

Except when noted, all companies listed above offer band sawmills.

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Home » Moisture Meters » Wood Division Knowledge Base » How to Start a Successful Small to Medium Sawmilling Business

How to Start a Successful Small to Medium Sawmilling Business

Evaluating the local species that will be available to you is a key aspect for deciding what kind of a mill you will be.

Whether in an urban or rural environment, people are making money starting a sawmill business.

Some fell into the sawmilling business because they started milling their wood to cut costs. Others have more personal motivations, like wanting to work outside or dedicating themselves to conservation.

Whatever your reasons might be, the milling business is like any other; you have to look before you leap if you want to set yourself up for long-term success. Otherwise, the day-in, day-out workload could overwhelm you, and your new sawmill might end up unused.

Since we want you and your business to succeed, we’ve gathered a list of things to consider when starting up a sawmilling business.

Understanding the challenges of operating a sawmill

Opening a new business, regardless of industry, is always a risk. We can’t cover all the challenges and risks of opening a sawmilling business, but here are some common ones to think about:

Managing capital and cash flow

Not having enough working capital—or poorly managing cash flow—is one of the biggest drivers in small businesses closing.

You can risk your entire operation if you don’t have enough operating capital to cover your costs while experiencing limited or no cash flow. In other words, don’t plan on immediate success to cover your equipment leasing or loan costs.

Gathering timber

If a couple of neighbors or local farms let you haul timber off their property for free, you might be tempted to open a professional sawmill. But wait just a second. That’s great that they let you take the wood, but free timber is never a sustainable source.

Buying timber will be one of your largest ongoing costs. Identify alternate sources with pricing, so you know your options and timber costs going in.

Giving up your day job

It’s very common to start running your sawmill as a part-time opportunity.

For many, this is just a smart, conservative approach. It lets you build experience and manage expenses without overextending yourself.

One of the challenges of operating a mill is the large, ongoing cost of purchasing the timber.

If you feel like you’re ready to make sawmilling your primary means of support, be sure you have a solid, realistic business plan. And it is recommended that you have at least a year’s worth of operating capital on hand.

Crunching the numbers

Sure, you’re not thinking about opening a sawmill because you love math.

Even so, you want to have a detailed accounting of your costs and a conservative projection of your revenue, and then see how things line up. A lot of your decisions will be based on how each of your choices impacts your numbers.

What sort of lumber mill do you want to be?

Think of a new restaurant.

The cook doesn’t open his doors to cook up whatever he feels like each day. No, he details precisely what he wants to offer and to whom.

It’s the same for a sawmill business—especially for a small or medium-sized mill that can’t compete with the large industrial sawmill cutting commodity boards. But if you’re in a remote area with a robust, local construction industry, maybe you can succeed. Either way, the point is to first assess your local market. What it offers and what it needs, and then drill down on your niche.

What local wood species are available? Are there species that people can use to build homes or outbuildings? Perhaps local species that are in demand with artisans and furniture makers?

More specialized work requires more specialized sawmills, blades, and skills, which will increase your initial costs. If you’re the only mill that can handle large lumber, then it is worth it to invest in a small sawmill. Having a specialty doesn’t mean you can’t mill common lumber output, like studs and support beams. However, specialties make marketing easier and often allow for higher margin work.

When you offer a niche product or service, that’ll likely be the key to early success.

What scope of services will you offer?

From a revenue perspective, a sawmill has two primary variables: yield and added-value services.

Yield is the number of saleable boards you get from the lumber you mill. The most common pricing method is charging by the board foot , which puts the burden on you to mill the wood efficiently. However, how much you charge per board foot also depends on the grade of the wood , including how far down the processing line you’ve taken it.

For example, you can sell your cut wood green, or you can dry it first. Drying takes time and space, but if you use an accurate moisture meter that provides calibrated readings of the moisture content in each slab, you can sell the wood at a higher grade—which means higher prices—when it’s dried properly.

Should you be a portable sawmill or a stationary sawmill?

Many small sawmills get started by the weekend hobbyist who is experienced working with a portable sawmill. From there, it seems a natural step to take the portable band sawmill onto other people’s properties and complete a job for them.

But, of course, trade-offs exist between acting as a portable mill or working as a stationary operation.

Pros of operating a portable sawmill:

• No log transportation costs since you’re bringing the portable sawmill to the site.
• No need for large amounts of land to manage the wood.
• Lower initial cost for portable sawmills, which allows you to also buy specialty attachments to produce more specialty cuts.
• An ideal entry point into the business for someone who already owns a portable sawmill and wants to start doing seasonal work.

Pros of operating a stationary sawmill:

• Easier to add mobile sawmill services as an additional service, than for a portable outfit to decide to add a stationary sawmill.
• You have time and space to dry the wood for higher resale value.

Equipment you need for milling wood

There are various types of sawmills: From chainsaw mills to manual portable band sawmills, or circular saws to vertical milling machines.

The sawmill you’ll need depends on the scope of operations, the volume of wood you expect to cut daily, and the types of lumber and cutting you want to do.

Having decided the type of sawmill you want, you’ll also want to consider other equipment needs based on your scope of operations.

The bare minimum for just getting started

If you want the lowest overhead to start turning trees into money, this is the bare bones list of what you’ll need:

• Single portable sawmill
• A truck or tractor that can haul both the portable sawmill and your lumber around
• Trash bin for the wood waste
• Cant hook to move logs around
• Wood storage options
• Fuel reserves for your sawmill
• Protection wear, like steel-toed boots, gloves, eye-and-ear protection, and a hard hat
• Fire extinguisher and emergency first-aid kit
• Kilns come in a range of styles and prices, including low-cost solar kilns. You can even build your own solar kiln. Learn more about kiln drying here.
• Protection from the elements

For good airflow when drying wood, it is always recommended that you sticker stack your boards.

Let’s talk about “Protection from the elements” a bit.

The cheapest option to protect your wood from rain and snow is just draping some tarps over it, but the right way to do it is this: Sticker stack the wood.

Concrete blocks and “sticker stacks” keep the wood off the ground and get airflow between boards. You will also need some sheet metal roofing— here’s a full guide on storing wood .

And finally, get yourself a high-quality moisture meter to monitor and ensure moisture quality control. There are also stack probe sensors you can use to measure moisture deep into your wood stacks.

Value-add equipment:

Once you have the basics, you might look into these tools:

• Extra blades and spare parts to avoid prolonged downtime when something goes wrong with any of your sawmills
• Any specialty blades you need for edging and trimming

Equipment to add to be a midsize sawmill:

An accurate moisture meter that provides calibrated readings of the wood’s moisture content is an important tool to ensure that the wood is dried properly.

When you start ramping up operations, everything needs to grow a bit bigger to accommodate the larger volumes of wood that you’ll be managing at various stages in the milling process. So the first thing you’ll need is land to put it on.

Here’s what comes after that:

• Forklift and other support equipment, like loaders, roller tables, and log decks, to move, sort, and store wood
• Trailer beds and winches for the trucks moving the wood around
• Chippers and bins
• In-kiln moisture meter to monitor the wood’s moisture content as it drys
• Handheld moisture meters to quickly check the dryness of the wood and find “trouble spots”
• Edgebanders
• Finishing and sanding equipment
• Shavers and grinders

Putting it all together

Running a profitable sawmill takes planning and patience. But with the right tools and the right approach, you can join the ranks of those making money in the sawmilling business.

Best of luck as you venture out.

As Sales Manager for Wagner Meters, Ron has more than 35 years of experience with instrumentation and measurement systems in different industries.  In previous positions, he has served as Regional Sales Manager, Product and Projects Manager, and Sales Manager for manufacturers involved in measurement instrumentation.

Thanks Ron. I had a lot of those same thoughts when deciding how and which direction to go with my very basic mill.

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Privacy Overview

It should be noted that there is no special software required to use these templates. All business plans come in Microsoft Word and Microsoft Excel format. Each business plan features:

• Excecutive Summary
• Company and Financing Summary
• Products and Services Overview
• Strategic Analysis with current research!
• Marketing Plan
• Personnel Plan
• 3 Year Advanced Financial Plan
• Expanded Financial Plan with Monthly Financials
• Loan Amortization and ROI Tools
• FREE PowerPoint Presentation for Banks, Investors, or Grant Companies!

1.0 Executive Summary

The purpose of this business plan is to raise $250,000 for the development of a saw milling company while showcasing the expected financials and operations over the next three years. Saw Mill, Inc. (“the Company”) is a New York based corporation that will sell large inventories lumber that are used in conjunction with manufacturing and home building. The Company was founded by John Doe.

1.1 Products and Services

As mentioned above, the business specializes in the sale of lumber to contractors, carpenters, and the general public within New York. After the launching period is complete, Mr. Doe intends to offer direct delivery services of lumber, which will significantly increase the revenues and profitability of the business while providing a value added advantage to the Company’s operations. The third section of the business plan will further describe the produces offered by the Saw Mill.

1.2 The Financing

Mr. Doe is seeking to raise $250,000 from as a bank loan. The interest rate and loan agreement are to be further discussed during negotiation. This business plan assumes that the business will receive a 10 year loan with a 9% fixed interest rate. The financing will be used for the following: • Development of the Company’s production location. • Financing for the first six months of operation. • Capital to purchase the Company’s inventory. Mr. Doe will contribute $50,000 to the venture.

1.3 Mission Statement

The Saw Mill’s mission is to become the recognized leader in its targeted market for providing lumber at a low cost.

1.4 Mangement Team

The Company was founded by John Doe. Mr. Doe has more than 10 years of experience in the lumber industry. Through his expertise, he will be able to bring the operations of the business to profitability within its first year of operations.

1.5 Sales Forecasts

Mr. Doe expects a strong rate of growth at the start of operations. Below are the expected financials over the next three years.

1.6 Expansion Plan

As time progresses, Management may seek to continually increase its manufacturing capacity by either acquiring additional production equipment or developing additional facilities while concurrently acquiring additional saw milling equipment.

2.0 Company and Financing Summary

2.1 Registered Name and Corporate Structure

Saw Mill, Inc. The Company is registered as a corporation in the State of New York.

2.2 Required Funds

At this time, the Saw Mill requires $250,000 of debt funds. Below is a breakdown of how these funds will be used:

2.3 Investor Equity

Mr. Doe is not seeking an investment from a third party at this time.

2.4 Management Equity

John Doe owns 100% of the Saw Mill, Inc.

2.5 Exit Strategy

If the business is very successful, Mr. Doe may seek to sell the business to a third party for a significant earnings multiple. Most likely, the Company will hire a qualified business broker to sell the business on behalf of the Saw Mill. Based on historical numbers, the business could fetch a sales premium of up to 4 times earnings.

3.0 Products and Services

The business, in its warehouse and milling, will maintain an extensive inventory of wood products for real estate development and carpentry purposes. The Company will provide the following types of wood to its customers: • African Mahogany • Alder • American Cherry • Ash • Black Walnut • Brazilian Cherry • Canarywood • Carribean Rosewood • Cumaru • Gonalco Alves • Honduras Mahogany • Lacewood • Maple • Padouk • Plainsawn Bubinga • Poplar • Quatersawn Bubinga • Quartersawn White Oak • Raintree • Red Oak • Santos Mahogany • Spanish Cedar • Teak • Tiete Rosewood • Wenge • White Oka • Yellowheart • Zebrawood The business will sell lumber on both a wholesale and retail basis directly to contractors and the general public. Management is currently examining the standardized cost of goods markup that Management will employ for sales to contractors and retail sales.

4.0 Strategic and Market Analysis

4.1 Economic Outlook

This section of the analysis will detail the economic climate, the saw milling industry, the customer profile, and the competition that the business will face as it progresses through its business operations. Currently, the economic market condition in the United States is moderate. The meltdown of the sub prime mortgage market coupled with increasing gas prices has led many people to believe that the US is on the cusp of a double dip economic recession. This slowdown in the economy has also greatly impacted real estate sales, which has halted to historical lows. However, Saw Mills tend to operate with great economic stability as people will continue to purchase these goods in any economic climate.

4.2 Industry Analysis

Within the United States, there are more than 3,800 companies that specialize in the production of wood products (which includes saw milling).. Aggregately, these businesses generate more than $25 billion of revenue per year while providing jobs to more than 110,000 people. Aggregate payrolls in each of the last five years have exceeded $3.5 billion. This is a mature industry, and the excepted future growth rate is expected to mirror that of the general population and economic growth. One of the strong points about this industry is that market agents operate with a strong degree of economic stability as people will continue to require lumber for a number of purposes.

4.3 Customer Profile

It is difficult to determine the average customer profile for Saw Mill, Inc. as the business will sell its lumber products directly to third party distributors and wholesalers that in turn will sell branded or bulk inventories to retail stores or directly to end users. However, based on market research, there are approximately 400 companies that specialize in the retail distribution of lumber and the Company will be able to develop a number of ongoing purchase order relationships with distributors, contractors, and specialty firms throughout the target market.

4.4 Competitive Analysis

This is one of the sections of the business plan that you must write completely on your own. The key to writing a strong competitive analysis is that you do your research on the local competition. Find out who your competitors are by searching online directories and searching in your local Yellow Pages. If there are a number of competitors in the same industry (meaning that it is not feasible to describe each one) then showcase the number of businesses that compete with you, and why your business will provide customers with service/products that are of better quality or less expensive than your competition.

5.0 Marketing Plan

The Saw Mill intends to maintain an extensive marketing campaign that will ensure maximum visibility for the business in its targeted market. Below is an overview of the marketing strategies and objectives of the Company.

5.1 Marketing Objectives

• Develop connections with lumber distributors.

• Establish connections with major national and regional retailers that may purchase bulk orders of lumber directly from the Company.

5.2 Marketing Strategies

The marketing required by the Company will be minimal as Saw Mill will not market its products directly to the general public. As stated many times in this business plan, the Company has already begun to secure purchase order relationships that will ensure that the Company can produce and immediately distribute its inventories from the onset of operations. As the business expands, the business may seek to develop relationships with additional distributors of lumber products. In these instances, Management will directly contact other distributors in the industry to discuss how the business can supply them with the raw lumber that they are seeking to distribute directly to end users and retailers. Brochures and other sales literature will be produced to showcase the facility, pricing, and operations of the business when seeking to develop new ongoing purchase order relationships.

5.3 Pricing

In this section, describe the pricing of your services and products. You should provide as much information as possible about your pricing as possible in this section. However, if you have hundreds of items, condense your product list categorically. This section of the business plan should not span more than 1 page.

6.0 Organizational Plan and Personnel Summary

6.1 Corporate Organization

6.2 Organizational Budget

6.3 Management Biographies

In this section of the business plan, you should write a two to four paragraph biography about your work experience, your education, and your skill set. For each owner or key employee, you should provide a brief biography in this section.

7.0 Financial Plan

7.1 Underlying Assumptions

• Saw Mill will have an annual revenue growth rate of 7% per year.

• The Owner will acquire $250,000 of debt funds to develop the business.

• The loan will have a 10 year term with a 9% interest rate.

7.2 Sensitivity Analysis

The Company’s revenues are modestly sensitive to changes in the general economy. The lumber products manufactured by the Company are in demand on a year round basis.

7.3 Source of Funds

7.4 General Assumptions

7.5 Profit and Loss Statements 

7.6 Cash Flow Analysis

7.7 Balance Sheet

7.8 General Assumptions

7.9 Business Ratios

Expanded Profit and Loss Statements

Expanded Cash Flow Analysis

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Woodworking Business Plan Example

Published Sep.04, 2018

Updated Apr.24, 2024

By: Noor Muhammad

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Table of Content

Do you want to start woodworking business plan?

Do you want to start a woodworking business? The business has a widespread market and inclusive demand throughout the year, as there is a substantial category of people which never compromise on spending money to adorn their property with high-quality artistic wooden pieces. So, it can the most righteous and profitable business for you, if you are a creative carving master, and have good management skills too.

Before starting a custom woodworking business , you have to make a thorough business plan covering all the details about how you will start and run your business. To guide you about the startup costs, the employees and tools you will need and the competitive aspects you have to come up with, we are providing the sample business plan of a woodwork business startup named, ‘Logan Woodcraft’.

Executive Summary

2.1 the business.

Logan Woodcraft will be a woodwork company with its outlet and workshop combined, located on the Strip in Las Vegas. Company will be owned by Christopher Logan and will be licensed from the authorized wood suppliers to buy wood and the required machinery for woodwork. Logan’s serving as an interior designer for the last 4 years, have helped him in knowing even the tiniest detail about how to get into woodworking business.

2.2 Management

Logan has prior experience of working with wood, still, he has decided to organize each and everything before starting a woodworking business . The company will buy the wood from the suppliers and will hire some carpenters and artists to work on Logan ideas and the orders of interior wooden designs desired by the people.

2.3 Customers

Majority of the people decorate their property like decks, terrace, staircases, lawns, balcony and kitchens etc. with wooden adornments. Many just buy the beautiful wooden pieces and decorations for placing inside their houses. As the Strip is the center of entertainment palaces and luxury hotels, so our customers will not only be the residents of the city but also the tourists and the managers of resorts and palaces.

2.4 Target of the Company

Our business targets are as follows:

Company Summary

3.1 company owner.

Christopher Logan will be the owner of the company. Logan is a famous interior designer, crafting unique items of wood is Logan’s hobby, even some of his handmade wooden sculptures were kept in the International Woodworking Fair last year.

3.2 Why the Business is being started

Logan has been related with making designs, and artifacts since his childhood. He is called by various shows and programs to give interior designs ideas. By starting a woodwork business, Logan wants to use his experience, skill, and passion on a larger scale to earn profit.

3.3 How the Business will be started

Logan has done a great research on how to start a woodworking business , his first decision was to open the outlet in a strategically most visited area. To start the business, he’ll hire carpenters, artists, salespersons etc. and will buy the required inventory and tools. The startup requirements are as follows:

The detailed start-up requirements and liabilities as forecasted by experts is given below:

Services for customers

As the woodwork business offer a wide range of opportunities so, you must decide your service s before setting up a woodworking shop and focus on just enhancing those services in the early stages.

The products and services that Logan Woodcraft will keep at the shop are:

• Beautifully carved wooden decoration pieces and sculptures
• Designated wooden chests
• Designated wooden cradles
• Wooden toys
• Wall to wall woodworking

Logan Woodcraft’s major serving will be adorning the stage and sets with beautiful woodworks in events and programs. The company will also take orders on doing interior wood designing in the residential or commercial buildings.

Marketing Analysis of Woodworking Business

The most significant part in developing a woodworking business plan  is its accurate marketing analysis. Knowing the customers’ demand before you start your own woodworking business is really helpful in deciding your services and sales strategy for business .

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Before writing a carpentry business plan , you must go through sample woodworking business plans  available online. However, if you want to start woodworking business  on a larger scale then you must seek the services of professional marketing analyst to do accurate marketing analysis for your business.

5.1 Market Trends

The business of woodworking is in great demand and keep blooming throughout the year especially in well-established areas or in most visited places. According to IBISWorld, there are more than seven thousand woodworking businesses running in the United States, generating a revenue of $8 billion annually. The business is responsible for employing about 38 thousand people and carpenters around the country. Above all, the demand of this business is rising day by day as reported by the same source, that the business is growing at an annual rate of 4.5 percent. All these statistics are a proof that you won’t be at loss provided that you plan and market your business successfully.

5.2 Marketing Segmentation

Considering the wider audience and large market demand, Logan had hired an expert marketing analyst, who has identified the following categories as his target audience.

Business plan for investors

The detailed marketing segmentation of our target audience is as follows:

5.2.1 Individual Buyers: Logan Woodcraft will present beautiful pieces of architecture made of wood. The residents and visitors of our vicinity will surely like our wooden decoration pieces and small and large sculptures for keeping in their houses as well as for giving gifts. We expect that this category will also buy our wooden chests, cradles and our other elegantly carved wooden products and will avail our services of decorating their lawns, and galleries.

5.2.2 Institutions & Companies : To maintain a decent environment, educational institutes, offices, and companies prefer woodwork for interior designing. To let such people, know about our skills and ideas of decorating their offices, terraces, lawn’s boundaries, staircases, and doors etc. we’ll send them our brochures and offer them discounts to try our services.

5.2.3 Resort & Event Managers: A significant portion of our target customers will be comprised by the restaurants or bar managers who need modern and unique ideas to decorate their lodgings with wood. We’ll have discounts and special offers for them if they avail our services for adorning their interior and exterior and for making wood designated sets for major events.

5.2.4 Production Designers & Art Directors: Considering the fame Logan had gained after arranging some sets for T.V. shows broadcasting, our marketing analyst also identify the art directors as our target group. For shooting and designing the sets and props those directors will surely avail our services.

The detailed market analysis of our potential customers is given in the following table:

5.3 Business Target

We aim at becoming the most renowned and the most visited woodworking shop in the whole Las Vegas. Our target is to gain popularity among our customers so that they always consult our services whenever they require woodwork for their estate or for hosting events and programs. Our financial goal is to balance the costs of our startup within the three months of our launch.

5.4 Product Pricing

Setting the prices of products and services is undoubtedly the most challenging part while starting a new business, as it is difficult in the initial stages to earn a profit while keeping low prices. You can have an idea of the wooden product prices by going through any woodworking business plan example available on the web. In this woodworking business plan sample , we are providing the pricing scheme of Logan Woodcraft.

Logan has decided to offer various discounts on his servicing to the managers and art directors so that they won’t hesitate to try our servings. The prices of wooden products are also kept slightly lower than our competitors to gain more customers, as the thing that drive the customers inside a new shop is its extraordinary appeal or low pricing.

The most important part after starting a small woodworking business is to advertise your services to let your target customers know about you. In fact, there are more chances of a startup to end as a failure if its owner failed to market his products and services. After starting a woodworking shop, you must pay attention to make an effective sales strategy to increase your sales and profit.

6.1 Competitive Analysis

Our biggest competitive advantage is the reputation of our owner, known for his unique and incomparable design ideas. Logan got familiarity in Las Vegas after the wonderful sets he made for the television shows broadcasting. Secondly, we are in a location which most people visit throughout the year. Whenever the tourists or visitors see a glimpse of the display and appeal of our entrance and products, they will surely buy at least a small wooden decoration piece or sculpture from our shop. Another competitive advantage is our beautiful entrance and doorway of our outlet. We have done appealing wooden work on our exteriors to attract the customers towards our shop.

Lastly, we have displayed some of our best items on our website so that all people can get a know-how about our distinguished work.

6.2 Sales Strategy

To advertise our services and products, we’ll post the photos of our best and unique items on our website. We’ll also advertise the interior designs we had made with wood, through social networks, posters and brochures. To encourage sales company will offer discount on all servicing during the initial stages of the launch.

6.3 Sales Forecast

Considering the market demand and the beauty of our products, our sales pattern is expected to increase with years. Our experts have forecasted the following sales on yearly basis which are summarized in the column charts.

6.4 Sales Monthly

6.5 Sales Yearly

Personnel plan

Personnel plan is really the footstep for the success of a business. The success of a business varies with the dedication of its employees. If you want to know about how to start a small woodworking business and that how many persons will be required to start a woodwork business, you can take help from this sample business plan on how to start a woodworking shop  written for Logan Woodcraft.

7.1 Company Staff

Logan is all-in-all in carving wooden products and making unique designs, he needs a staff for working on his ideas, so he has decided to be in the production center and not be the manager himself. He’ll hire the following persons:

• 1 General Manager to manage the operations
• 2 Accountants to maintain financial records
• 3 Artists/Designers for presenting and drawing new designs
• 8 Carpenters for woodworking
• 4 Salespersons to operate display centers
• 3 Sales and Marketing Executives responsible for delivering products to retailers and discover new ventures
• 2 Technicians for maintaining machines
• 2 Drivers for transporting wood and other material
• 1 Front Desk Officer to act as a receptionist for receiving interior design orders
• 2 General Workers for routine tasks

7.2 Average Salary of Employees

Financial Plan

To estimate the woodworking business profit , you have to devise a comprehensive financial plan. An effective financial plan forms the base of the success of a startup and helps in evaluating the woodworking business margin and financial turnouts. Making a financial plan helps you by guiding that how you can be able to balance the startup costs, the salaries of your employees and the costs of raw material with the profits earned. The company will be financed by Logan himself since he was unaware of the statistics and trends of formulating a financial plan, so he hired an expert financial advisor to make a detailed financial plan for his business. You can also take help from this sample business plan of Logan’s Woodcraft, as we are providing it free of cost.

8.1 Important Assumptions

8.2 Brake-even Analysis

8.3 Projected Profit and Loss

8.3.1 Profit Monthly

8.3.2 Profit Yearly

8.3.3 Gross Margin Monthly

8.3.4 Gross Margin Yearly

8.4 Projected Cash Flow

8.5 Projected Balance Sheet

8.6 Business Ratios

Download Woodworking Business Plan Sample in pdf

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business plan

Started by josh, October 12, 2012, 10:25:19 AM

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Quote from: josh on October 12, 2012, 10:25:19 AM I was curious if anyone had a good overview of how to figure out what is a good hourly rate for milling or what are standard market prices for milling certian logs.

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Quote from: Ron Wenrich on October 12, 2012, 12:42:16 PM Putting them into an hourly cost would depend on how many hours you work per month. 

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