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A Basic Guide to Starting a Lumber Business



Did you know that wood is one of the longest-standing building materials in existence with evidence of homes built over 10,000 years ago by lumber?

Nowadays, we see lumber everywhere. From tree houses to wood floors to boat docks, there is so much we can do with timber.

If you want to be part of the self-sustaining industry that revolves around trees, consider starting a lumber business. Keep reading to learn how.

Create a Business Plan

Every business starts with a plan. Before making any major decisions, you can outline details about your lumber business to see if it can be successful.

A business plan will include a description of your company and what products and services you want to offer.

You’ll need to complete market and competitor research to include in your business plan as well. This will help you address the needs that other niche lumber industries in your area don’t offer.

Through research, you’ll also learn how much you can charge for your services. Calculate how much money you plan to make and when you believe you’ll hit the breakeven point.

Consider Financial Requirements

To get things moving, you’ll need to make an upfront investment. Starting a lumber yard might require a significant amount of cash depending on how large the business is.

Besides purchasing property, you’ll also need heavy equipment like lumber trucks and commercial saws. Consider all the supplies and equipment you’ll need to pan out your associated costs.

Along with startup expenses, you’ll want to figure out your ongoing costs of operation. These things might include equipment maintenance, payroll, and building upkeep.

Find a Location

Lumber companies need an identified location for the lumber yard. You can buy land and build it up yourself or find an already established business.

A broker can help you with your search. They will make you aware of all of your options including purchasing a lumber yard franchise that can mitigate the financial risk of starting a business.

Small lumber yards need about an acre of land. However, before buying the smallest area you can find, think about the products and quantities you want to have in stock.

Figuring this out goes back to your business plan. You should have an idea of your potential customers and their needs. More variety means higher profits but will require more space.

Register the Business

The final step before you can start selling lumber is to create a legal entity. You’ll need to select a company name, choose a business structure, and file the correct paperwork.

You can choose from a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each has its own set of pros and cons.

It’s important to know that the business structure you choose will have an effect on your taxes. Familiarize yourself with risks and tax implications before choosing.

Start a Lumber Business Today!

Although the steps of starting a lumber business seem simple, a lot of work goes into the process. If you want your new business to be successful, it’s important to follow this guide to a tee and do research on the industry.

Start with a detailed business plan, consider the financial requirements, and find a location. From there, you can register your business, open bank accounts, and get the right licenses.

Open your lumber business now and don’t forget to come back for more blog posts like this!

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