Thinking about opening a logging company? We tell you what you need to know to get started.
The U.S. Logging Industry
In the U.S., logging is a highly fragmented industry that is closely connected to the home construction industry. When new home sales rise, there is surge in logging; when construction wanes, even established loggers scramble for contracts.
All told, there are approximately 10,000 active timber operations in the U.S. with combined annual revenues of $10 billion. If you do the math, annual revenue/operation is around $10 million. However, that figure is misleading since some of these operations are multinational corporations that own thousands of forested acres for their own production.
As a startup logging contractor, you'll need to hustle to secure contracts with large commercial and even some residential logging customers. Competition for premium logging contracts is fierce, so you'll need to be prepared to demonstrate capacity, capability and value to gain a foothold.
Raising Capital for a Logging Company Startup
By now, you've realized that starting a logging company isn't cheap. The capital assets that are required to fell, skid, haul and deliver logs can be overwhelming, especially if you're working with limited startup capital resources.
But despite the challenges, it's essential to fully capitalize your startup. There are many different ways to raise capital for a startup logging operation. Investors and lenders may be willing to provide some of the resources you'll need to get off the ground. However, most startup logging contractors find friends, family and their own savings to be the best funding source.
Logging Company Safety
Logging is one of the most dangerous professions in the nation. Even so, as the business owner you are legally and ethically liable for creating a safe work environment for your employees.
The CDC offers a series of workplace health & safety resources created specifically for the logging industry. But to fully protect your logging business from legal repercussions, you'll also need to acquire a thorough understanding of OSHA requirements for small businesses.
Successful Business Plans for Logging Companies
How good is your logging company's business plan? If you aren't completely confident in the quality of your business plan, it could be because you haven't invested enough time and effort in its creation.
A shoddy business plan is a major misstep for a startup logging company. Why? Because there are a multitude of reasons why your company can't succeed without a sound business plan.
Before you do anything else, perform a reality check on your startup business plan – and if it's lacking, drop everything and head back to the drawing board.
Prior to launching a logging company in your town, it's worthwhile to find out what the competition looks like. Try our link below to find competitors nearby. Complete the form by entering your city, state and zip code to get a list of logging companies that are close by.
Is the established competition doing a good job? It's important to understand their strengths and weaknesses and think through how you'll stake up against those established businesses.
Learn from Others Who Are Already In This Space
As part of your due diligence on opening a logging company, it's essential that you learn from folks who are already in business. It's very unlikely that the local competition will talk to you. Why would they want to educate a future competitor?
On the other hand, an individual who has a logging company in another town will be much more likely to talk with you, given that you don't compete with them in their area. In fact, they are often very willing to share startup advice with you. In my experience, you may have to call ten business owners in order to find one who is willing to share his wisdom with you.
Where does one find a logging company manager that lives outside of your area?
No problem! Just use the link below and try a random city/state or zipcode. Then start dialing for advice until you are successful.
Business Brokerage for Logging Contractors Business Entrepreneurs
Business owners are decision makers. And the first decision you'll need to make is between a logging company startup and an acquisition. For logging company entrepreneurs, there are many reasons why a purchase is more logical than a startup.
If a business purchase seems like the right move, your first step should be to contact a qualified business broker. Why? Because business brokers offer several advantages to logging company entrepreneurs.
The best business brokers will ensure that you get the right business for the right price, and will help you avoid common logging company acquisition mistakes.
Don't Forget About Franchising As an Option
Your chances of achieving the entrepreneurial goal of making a success of your new business go up significantly if you go the franchising route rather than going it alone.
If your goal is to start a logging company, you would be wise to check out whether there are good franchise opportunities available that might alleviate your startup process.
The link below gives you access to our franchise directory so you can see if there's a franchise opportunity for you. You might even find something that points you in a completely different direction.
These additional resources regarding starting a business may be of interest to you.
If you sell to logging companies, you're in the wrong place. These resources are more appropriate for you:
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