timber production business plan

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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Timber Company Business Plan Template

Document description.

This timber company business plan template has 38 pages and is a MS Word file type listed under our business plan kit documents.

Sample of our timber company business plan template:

[COMPANY NAME] [NAME] [ADDRESS] [CITY, STATE ZIP] [EMAIL] Ph: (XXX) XXX-XXXX

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How To Write a Business Plan for Forestry And Timber Harvesting business in 9 Steps: Checklist

By henry sheykin, resources on forestry and timber harvesting.

• Financial Model
• Business Plan
• Value Proposition
• One-Page Business Plan

Welcome to our blog post on how to write a business plan for a forestry and timber harvesting business! In today's world, with growing concerns about sustainability and environmental responsibility, the demand for sustainable forestry practices and timber harvesting is on the rise. According to recent statistics, the forestry and timber harvesting industry is experiencing significant growth, with a projected annual growth rate of X% over the next few years.

Conduct Market Research

Before diving into the world of forestry and timber harvesting, it is crucial to gain a comprehensive understanding of the market and industry. This step will lay the foundation for your business plan and decision-making processes. Gathering pertinent information will enable you to make informed choices and develop strategies that align with market trends.

When conducting market research, focus on the following key areas:

• Market Demand: Understand the current demand for timber and forestry products in your local area. Research the specific needs of industries that rely on timber, such as construction, furniture manufacturing, and paper production. This will help you gauge the potential demand for your business.
• Competitor Analysis: Identify and analyze your competitors operating in the forestry and timber harvesting industry. Study their offerings, pricing strategies, target markets, and positioning. Look for opportunities to differentiate your business by offering unique services or focusing on sustainable practices.
• Industry Trends: Stay up-to-date with the latest industry trends, technological advancements, and regulations related to sustainable forestry and timber harvesting. Stay informed about new practices, certifications, and tools that enhance efficiency and environmental responsibility.
• Customer Needs: Survey potential customers in your target market to understand their specific requirements and preferences. This will help you tailor your offerings and marketing approach to meet their needs effectively.

Tips for Conducting Market Research:

• Utilize online resources, industry publications, and trade shows to gather market intelligence.
• Engage with local forestry associations, industry experts, and potential customers to gain insights.
• Consider seeking professional assistance from market research firms or consultants to ensure comprehensive analysis.
• Keep your research updated and revisit it regularly to adapt to evolving market conditions.

Define Your Target Market

Defining your target market is a crucial step in creating a successful business plan for your forestry and timber harvesting business. Understanding your target market will help you tailor your products and services to meet their specific needs and preferences. Here are some key considerations to help you define your target market:

• Research the local demand: Start by analyzing the local demand for timber and forestry products. Identify the industries and individuals who regularly require timber for their projects, such as construction companies, furniture manufacturers, and other businesses in need of wood materials.
• Identify specific customer segments: Once you have identified the overall market, narrow down your focus to specific customer segments. For example, you may choose to target eco-conscious customers who prioritize sustainability or timber buyers who prioritize quality and reliability.
• Consider geographical factors: Take into account the geographical location of your business and determine if there are specific areas that have a higher demand for timber. Consider factors such as proximity to forests, transportation infrastructure, and the availability of potential customers.
• Understand customer preferences: Gain insights into your potential customers' preferences when it comes to timber products. This includes factors such as wood species, sizes, finishes, and other specifications. Understanding these preferences will help you tailor your offerings to meet their needs.
• Conduct surveys or interviews with potential customers to gather more specific information about their needs and preferences.
• Stay updated with industry trends and innovations to anticipate changes in customer demands.
• Consider offering niche products or services that cater to a specific market segment, which could give your business a competitive edge.

By clearly defining your target market, you can create a business plan that aligns with their needs and expectations, positioning your forestry and timber harvesting business for long-term success.

Assess Your Competition

Assessing your competition is a crucial step in writing a business plan for your forestry and timber harvesting business. Understanding the strengths and weaknesses of your competitors will help you position your business effectively in the market. Here are some important factors to consider:

• Identify Your Competitors: Begin by identifying the businesses that offer similar services in your target market. This includes both local and regional competitors. Look for companies that specialize in sustainable forestry and timber harvesting practices, as well as those that provide related services such as logging and lumber production.
• Study Their Offerings: Analyze the products and services your competitors offer. Look at the range and quality of timber they provide, as well as any additional services they offer, such as custom cutting or drying services. Understanding their offerings will help you differentiate your business and identify potential gaps in the market that you can fill.
• Examine Their Pricing: Study your competitors' pricing strategies. See if they have any special offers or discounts that attract customers. This will help you determine how to price your own products and services competitively while ensuring profitability.
• Observe Their Marketing Strategies: Take note of how your competitors promote their businesses. Look at their websites, social media presence, and any other marketing platforms they utilize. Consider their messaging, branding, and target audience to help you create your own effective marketing strategy.
• Identify and assess both direct and indirect competitors in your market.
• Visit trade shows, industry conferences, and events to gather information about your competitors and stay updated on industry trends.
• Consider conducting a SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats) to gain a comprehensive understanding of your competitors.
• Regularly monitor your competitors' activities to stay informed about any major changes or developments in the industry.

By thoroughly assessing your competition, you can identify opportunities to stand out and differentiate your forestry and timber harvesting business in the market. This knowledge will also help you develop effective strategies to attract customers and maintain a competitive edge over your rivals.

Identify The Necessary Permits And Licenses

When starting a forestry and timber harvesting business, it is crucial to identify and obtain the necessary permits and licenses to ensure compliance with legal requirements. These permits and licenses will vary depending on your location and the specific activities you plan to undertake. Here are some important considerations:

• Research Local Regulations: Begin by researching the local regulations and laws related to forestry and timber harvesting in your area. Contact your local government agencies, such as the forestry department or natural resources department, to understand the specific permits and licenses required.
• Timber Harvesting License: In many jurisdictions, obtaining a timber harvesting license is a requirement for conducting commercial timber harvesting operations. This license typically ensures that the timber is being harvested sustainably and legally.
• Environmental Permits: Depending on the scale of your operations and the impact on the environment, you may need to obtain environmental permits. These permits are aimed at ensuring that your business activities comply with environmental standards and regulations.
• Transportation Permits: If you plan to transport timber from the harvesting site to your processing facility or customer locations, you may need to obtain transportation permits. These permits often specify regulations regarding weight limits, road use, and other transportation-related factors.
• Business Licenses: Apart from industry-specific permits, you may also need to obtain general business licenses and registrations as per your local regulations. These licenses typically cover aspects such as business name registration, tax compliance, and other legal requirements.
• Consult with a legal professional specializing in forestry and timber harvesting regulations to ensure you have a clear understanding of the permits and licenses required.
• Keep track of renewal dates for permits and licenses to ensure ongoing compliance with regulatory requirements.
• Consider joining industry associations or organizations that can provide guidance and support regarding permits and licenses.

By identifying and obtaining the necessary permits and licenses, you demonstrate a commitment to operating your forestry and timber harvesting business legally and responsibly. This not only ensures compliance with the law but also helps build trust with customers and stakeholders in the industry.

Determine Your Business Structure

Choosing the right business structure for your forestry and timber harvesting business is crucial to ensure legal compliance and maximize the benefits for your company. Here are a few important factors to consider:

• Legal Requirements: Research the legal requirements and regulations pertaining to the forestry and timber harvesting industry in your area. Understand the zoning and licensing regulations that may impact your business structure choice.
• Liability Protection: Evaluate the level of liability protection you desire for your business. Consider forming a legal entity, such as a limited liability company (LLC) or corporation, to protect your personal assets in case of any financial or legal issues.
• Tax Implications: Understand the tax implications associated with each business structure option. Consult with a tax professional to determine which structure could offer the most favorable tax benefits for your business.
• Ownership and Control: Determine how you want to structure the ownership and control of your business. Consider whether you want to have partners or shareholders, or if you prefer to have complete control over decision-making.
• Flexibility and Growth: Assess the potential for future growth and expansion. Choose a business structure that allows for flexibility in adding partners, securing funding, or transitioning ownership.
• Consult with a business attorney or professional advisor to get expert guidance on choosing the most suitable business structure for your forestry and timber harvesting business.
• Consider the long-term goals of your business and how the chosen business structure aligns with those goals.
• Research the advantages and disadvantages of each business structure option to make an informed decision.
• Regularly review and reassess your business structure as your company evolves and grows.

Develop A Financial Plan

Developing a robust financial plan is crucial for the success of your forestry and timber harvesting business. This plan will serve as a roadmap for managing your finances, ensuring you have a clear understanding of your revenue streams, expenses, and profitability.

1. Estimate Start-up Costs: Begin by identifying all the costs associated with starting your business. This includes equipment, permits, licenses, land or lease expenses, hiring employees, insurance, marketing, and any other expenses specific to your business.

2. Determine Funding Sources: Consider your options for funding your business. This could include personal savings, loans from banks or financial institutions, grants, partnerships, or investors. Evaluate each option and determine the most suitable funding sources for your needs.

3. Projected Revenue: Estimate your business's potential revenue based on market research and analysis of your target market. Consider factors such as market demand, pricing strategy, and competition to develop realistic revenue projections.

4. Create a Budget: Develop a comprehensive budget that outlines your anticipated income and expenses on a monthly, quarterly, and annual basis. This will help you track your cash flow and identify areas where you may need to adjust your spending or pricing strategies.

5. Cash Flow Management: Establish a system for monitoring and managing your cash flow. This involves tracking your inflows and outflows, ensuring you have enough liquidity to cover expenses, and planning for fluctuations in revenue and expenses.

6. Break-Even Analysis: Conduct a break-even analysis to determine the point at which your revenue will cover all your expenses. This analysis will help you set realistic sales targets and understand how long it will take for your business to become profitable.

• Consider consulting with a financial advisor or accountant who specializes in small businesses to guide you through the financial planning process.
• Regularly review and adjust your financial plan as your business grows and market conditions change.
• Include a contingency plan in your financial plan to account for unexpected expenses or changes in the market.

Analyze The Potential Risks And Challenges

When starting a forestry and timber harvesting business, it's crucial to have a clear understanding of the potential risks and challenges you may encounter along the way. By identifying these factors early on, you can develop strategies to mitigate them and ensure the long-term success of your venture.

• Environmental Regulations: One of the primary risks in this industry is the ever-changing landscape of environmental regulations. Stay updated on local, state, and federal regulations regarding forestry and timber harvesting practices. Failure to comply with these regulations can lead to fines and potential damage to your reputation.
• Market Volatility: The forestry and timber industry is subject to market fluctuations, which can impact pricing and demand for timber products. Conduct a thorough market analysis to assess the stability of the industry and anticipate any potential downturns. Diversify your product offerings to reduce the impact of market volatility.
• Supply Chain Management: Managing the supply chain from forest to customer can present its own set of challenges. Ensure you have reliable suppliers and contractors who adhere to sustainable forestry practices. Consider establishing long-term partnerships to secure a consistent supply of timber.
• Workforce Management: Building a skilled and reliable workforce is essential in the forestry and timber industry. However, finding experienced employees can be a challenge, especially in areas where timber harvesting is not prevalent. Develop strategies to attract and retain talented individuals, such as offering competitive wages and providing opportunities for career growth.
• Equipment Maintenance: Timber harvesting requires specialized machinery and equipment, which can be costly to maintain. Regular maintenance and repairs are crucial to prevent breakdowns and ensure the safety of your employees. Create a maintenance schedule and budget to stay on top of equipment upkeep.
• Health and Safety: Timber harvesting is a physically demanding and potentially dangerous profession. Implement strict safety protocols and provide extensive training for your employees to minimize the risk of accidents and injuries. Comply with occupational health and safety regulations to protect your workers and reduce liability.
• Stay updated on changing environmental regulations by joining industry associations and attending relevant conferences or workshops.
• Diversify your customer base to reduce reliance on a single market segment.
• Invest in ongoing training and development programs for your employees to enhance their skills and improve retention.
• Regularly inspect and maintain your equipment to extend its lifespan and prevent costly breakdowns.
• Conduct regular safety meetings and incentivize a strong safety culture within your organization.

Create A Marketing Strategy

Having a solid marketing strategy is crucial for the success of your forestry and timber harvesting business. It will help you identify your target audience, understand their needs, and effectively promote your services in a competitive market.

Here are the important steps to create a marketing strategy for your business:

• Define your target audience: Determine the specific demographics and characteristics of the customers you want to target. This will help you tailor your marketing efforts to reach the right people.
• Research your competition: Analyze your competitors' marketing strategies to understand what's working well in the industry. This will allow you to position your business uniquely and identify gaps in the market that you can capitalize on.
• Identify key marketing channels: Determine the most effective platforms to reach and engage with your target audience. Consider online channels such as social media, your website, and email marketing, as well as offline options like trade shows and local advertising.
• Create compelling branding: Develop a strong brand identity that represents your business's values and unique selling points. This includes designing a memorable logo, choosing consistent colors and fonts, and crafting a compelling brand story.
• Develop a content strategy: Create valuable and informative content that educates and engages your target audience. This can include blog posts, videos, case studies, and social media content. Aim to position your business as an authority in sustainable forestry and timber harvesting.
• Utilize social media platforms to share updates about your projects, highlight your expertise, and engage with potential customers.
• Consider partnering with local organizations or associations related to forestry and timber industry to expand your reach and establish credibility.
• Offer educational workshops or webinars to showcase your expertise and provide valuable information to potential customers.
• Implement search engine optimization (SEO) strategies to improve your website's visibility in search engine results.

Establish A Team Of Experts Or Consultants.

Building a team of experts or consultants is crucial for the success of your forestry and timber harvesting business. These professionals will provide you with the knowledge and skills necessary to navigate the industry, manage operations, and make informed decisions. When establishing your team, consider the following:

• Forestry and Timber Harvesting Experts: Look for individuals with extensive experience and expertise in sustainable forestry practices, timber harvesting techniques, and equipment operation. These experts will ensure that your business adheres to environmentally responsible practices and maximizes timber extraction efficiency.
• Arboriculture and Land Management Consultants: As your business expands, it may be beneficial to collaborate with arboriculture specialists and land management consultants. They can provide guidance on forest health, tree care, and land conservation, enabling you to offer additional services to your clients.
• Financial and Legal Advisors: Partner with financial and legal professionals who understand the nuances of the forestry industry. They can assist you in developing your financial plan, securing necessary permits and licenses, and complying with relevant laws and regulations.
• Marketing and Sales Specialists: To effectively promote your business and attract customers, consider working with marketing and sales professionals. They will help you create a compelling brand image, develop marketing strategies, and reach your target market through various channels.
• Networking and Industry Partners: Establish connections with other professionals in the forestry and timber harvesting industry. Collaborating with contractors, suppliers, and industry associations can provide valuable insights, support, and potential partnership opportunities.

Tips for Establishing Your Team of Experts or Consultants:

• Research and Vetting: Thoroughly research potential team members or consultants, reviewing their qualifications, track record, and references. Ensure they align with your business values and goals.
• Collaboration and Communication: Foster an open and collaborative working environment. Regularly communicate with your team, hold meetings, and encourage knowledge sharing to leverage their expertise effectively.
• Continuous Learning: Encourage your team to stay updated on industry trends, advancements, and regulations. Consider investing in professional development opportunities to maintain a competitive edge.
• Long-Term Relationships: Aim for long-term relationships with your team members and consultants. Their insights and support will be invaluable as your business grows and faces new challenges.

By assembling a team of experts or consultants, you will benefit from their specialized knowledge and guidance, allowing you to develop and expand your forestry and timber harvesting business successfully.

In conclusion, establishing a forestry and timber harvesting business requires careful planning and consideration. By following these 9 steps and utilizing the checklist provided, you can develop a comprehensive business plan that sets your company up for success in the industry. From conducting market research to establishing a team of experts, each step is crucial in ensuring sustainable practices and profitable outcomes. By implementing a strong marketing strategy and addressing potential risks, you can create a business that not only meets the demand for timber but also contributes to the preservation of our forests and environment.

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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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Woodworking Business Plan Template

Written by Dave Lavinsky

Woodworking Business Plan

Over the past 20+ years, we have helped over 500 entrepreneurs and business owners create business plans to start and grow their woodworking companies. 

If you’re unfamiliar with creating a woodworking business plan, you may think creating one will be a time-consuming and frustrating process. For most entrepreneurs it is, but for you, it won’t be since we’re here to help. We have the experience, resources, and knowledge to help you create a great business plan.

In this article, you will learn some background information on why business planning is important. Then, you will learn how to write a woodworking business plan step-by-step so you can create your plan today.

Download our Ultimate Business Plan Template here >

What Is a Business Plan?

A business plan provides a snapshot of your woodworking business as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategies for reaching them. It also includes market research to support your plans.

Why You Need a Business Plan

If you’re looking to start a woodworking business or grow your existing woodworking company, you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your woodworking business to improve your chances of success. Your woodworking business plan is a living document that should be updated annually as your company grows and changes.

Sources of Funding for Woodworking Businesses

With regards to funding, the main sources of funding for a woodworking business are personal savings, credit cards, bank loans, and angel investors. When it comes to bank loans, banks will want to review your business plan and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to ensure that your financials are reasonable, but they will also want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business. Personal savings and bank loans are the most common funding paths for woodworking companies.

Finish Your Business Plan Today!

How to write a business plan for a woodworking business.

If you want to start a woodworking business or expand your current one, you need a business plan. The guide below details the necessary information for how to write each essential component of your woodworking business plan.

Executive Summary

Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.

The goal of your executive summary is to quickly engage the reader. Explain to them the kind of woodworking business you are running and the status. For example, are you a startup, do you have a woodworking business that you would like to grow, or are you operating a chain of woodworking businesses?

Next, provide an overview of each of the subsequent sections of your plan. 

• Give a brief overv iew of the woodworking industry. 
• Discuss the type of woodworking business you are operating. 
• Detail your direct competitors. Give an overview of your target customers. 
• Provide a snapshot of your marketing strategy. Identify the key members of your team. 
• Offer an overview of your financial plan.

Company Overview

In your company overview, you will detail the type of woodworking business you are operating.

For example, your company might specialize in one of the following types of woodworking businesses:

• Plywood manufacturing : this type of woodworking involves manufacturing the plywood to be used for material for housing, ships, vehicles, and furniture. It is an economical, factory-produced sheet of wood with precise dimensions. 
• Wooden furniture making: this type of woodworking manufactures wood that is commonly used for beds, sofa sets, cupboards, dressing units, sitting arrangements, tables, etc.
• Wooden jewelry making: this type of woodworking uses technically upgraded machinery to produce wooden contemporary jewelry.
• Wooden interior: this type of woodworking manufactures the wood used for the interior part of a room, such as wooden flooring, wall, ceiling, etc.

In addition to explaining the type of woodworking business you will operate, the company overview needs to provide background on the business.

Include answers to questions such as:

• When and why did you start the business?
• What milestones have you achieved to date? Milestones could include the number of customers served, the number of items produced with positive reviews, reaching X number of products sold, etc.
• Your legal business structure. Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.

Industry Analysis

In your industry or market analysis, you need to provide an overview of the woodworking industry.

While this may seem unnecessary, it serves multiple purposes.

First, researching the woodworking industry educates you. It helps you understand the market in which you are operating. 

Secondly, market research can improve your marketing strategy, particularly if your analysis identifies market trends.

The third reason is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.

The following questions should be answered in the industry analysis section of your woodworking business plan:

• How big is the woodworking industry (in dollars)?
• Is the market declining or increasing?
• Who are the key competitors in the market?
• Who are the key suppliers in the market?
• What trends are affecting the industry?
• What is the industry’s growth forecast over the next 5 – 10 years?
• What is the relevant market size? That is, how big is the potential target market for your woodworking business? You can extrapolate such a figure by assessing the size of the market in the entire country and then applying that figure to your local population.

Customer Analysis

The customer analysis section of your woodworking business plan must detail the customers you serve and/or expect to serve.

The following are examples of customer segments: furniture stores, home builders, contractors, and individuals.

As you can imagine, the customer segment(s) you choose will have a great impact on the type of woodworking business you operate. Clearly, individuals would respond to different marketing promotions than home builders, for example.

Try to break out your target customers in terms of their demographic and psychographic profiles. With regards to demographics, including a discussion of the ages, genders, locations, and income levels of the potential customers you seek to serve.

Psychographic profiles explain the wants and needs of your target customers. The more you can recognize and define these needs, the better you will do in attracting and retaining your customers.

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Competitive Analysis

Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.

Direct competitors are othe r woodworking businesses. 

Indirect competitors are other options that customers have to purchase from that aren’t directly competing with your product or service. This includes large home improvement stores, tool shops, and craft or hobby stores. You need to mention such competition as well.

For each such competitor, provide an overview of their business and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as

• What types of customers do they serve?
• What type of woodworking business are they?
• What is their pricing (premium, low, etc.)?
• What are they good at?
• What are their weaknesses?

With regards to the last two questions, think about your answers from the customers’ perspective. And don’t be afraid to ask your competitors’ customers what they like most and least about them.

The final part of your competitive analysis section is to document your areas of competitive advantage. For example:

• Will you provide custom items and designs?
• Will you offer products that your competition doesn’t?
• Will you provide better customer service?
• Will you offer better pricing?

Think about ways you will outperform your competition and document them in this section of your plan.

Marketing Plan

Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For a woodworking business plan, your marketing strategy should include the following:

Product : In the product section, you should reiterate the type o f woodworking company that you documented in your company overview. Then, detail the specific products or services you will be offering. For example, will you provide plywood manufacturing, wooden interior products, wooden furniture, or wooden jewelry?

Price : Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of yo ur plan, yo u are presenting the products you offer and their prices.

Place : Place refers to the site of your woodworking company. Document where your company is situated and mention how the site will impact your success. For example, is your woodworking business located in a busy retail district, a business district or purely online? Discuss how your site might be the ideal location for your customers.

Promotions : The final part of your woodworking marketing plan is where you will document how you will drive potential customers to your location(s). The following are some promotional methods you might consider:

• Advertise in local papers, radio stations and/or magazines
• Reach out to websites 
• Distribute flyers
• Engage in email marketing
• Advertise on social media platforms
• Improve the SEO (search engine optimization) on your website for targeted keywords

Operations Plan

While the earlier sections of your business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.

Everyday short-term processes include all of the tasks involved in running your woodworking business, including ordering and sourcing wood, designing products, billing vendors and/or suppliers, etc. 

Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to sell your Xth product, or when you hope to reach $X in revenue. It could also be when you expect to expand your woodworking business to a new city.  

Management Team

To demonstrate your woodworking business’ potential to succeed, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company. 

Ideally, you and/or your team members have direct experience in managing woodworking businesses. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.

If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act as mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in managing a woodworking business or successfully running a small craft store.  

Financial Plan

Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance s heet, and cash flow statements.

Income Statement

An income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenue and then subtracts your costs to show whether you turned a profit or not.

In developing your income statement, you need to devise assumptions. For example, will you produce 5 items per day, and/or offer custom designs ? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.

Balance Sheets

Balance sheets show your assets and liabilities. While balance sheets can include much information, try to simplify them to the key items you need to know about. For instance, if you spend $50,000 on building out your woodworking business, this will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a lender writes you a check for $50,000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.

Cash Flow Statement

Your cash flow statement will help determine how much money you need to start or grow your business, and ensure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt. 

When creating your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a woodworking business:

• Cost of equipment and wooden supplies
• Payroll or salaries paid to staff
• Business insurance
• Other start-up expenses (if you’re a new business) like legal expenses, permits, computer software, and equipment

Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your factory location lease or a list of products you plan to manufacture and sell.  

Writing a business plan for your woodworking business is a worthwhile endeavor. If you follow the template above, by the time you are done, you will truly be an expert. You will understand the woodworking industry, your competition, and your customers. You will develop a marketing strategy and will understand what it takes to launch and grow a successful woodworking business.  

Woodworking Business Plan FAQs

What is the easiest way to complete my woodworking business plan.

Growthink's Ultimate Business Plan Template allows you to quickly and easily write your woodworking business plan.

How Do You Start a Woodworking Business?

Starting a woodworking business is easy with these 14 steps:

• Choose the Name for Your Woodworking Business
• Create Your Woodworking Business Plan
• Choose the Legal Structure for Your Woodworking Business
• Secure Startup Funding for Your Woodworking Business (If Needed)
• Secure a Location for Your Business
• Register Your Woodworking Business with the IRS
• Open a Business Bank Account
• Get a Business Credit Card
• Get the Required Business Licenses and Permits
• Get Business Insurance for Your Woodworking Business
• Buy or Lease the Right Woodworking Business Equipment
• Develop Your Woodworking Business Marketing Materials
• Purchase and Setup the Software Needed to Run Your Woodworking Business
• Open for Business

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Forestry And Timber Harvesting Business Plan

• Description
• Executive Summary
• Products & Services
• Market Analysis

Marketing Plan

• Management Plan

Financial Plan

What you get with forestry and timber harvesting business plan package, i.- executive summary.

The need for sustainable forestry services in Seattle and the wider Pacific Northwest region is growing rapidly. The current timber harvesting and extraction industry is lacking in terms of efficient, safe, and environmentally sound practices. National Timber Rangers provides a solution to this problem by emphasizing sustainability, economy, and a respect for the environment. The company is well-positioned to fill a unique void in the market by providing customized timber harvesting solutions that meet the needs of its clients.

National Timber Rangers provides innovative and sustainable forestry solutions for commercial and private timber harvesting operations in Seattle, Washington. Our solutions promote efficient and economic operations that are in line with local regulations and promote sustainability for long-term forest preservation. We offer a variety of services, including log harvesting and extraction, timberlot management and development, site preparation, plantation and reforestation, forest management and consultation, and environmental engineering and consulting. Our cutting-edge technology guarantees maximum efficiency and safety, while also preserving the natural environment. By working with us, customers can be confident that they are purchasing a quality product and contributing to the health and beauty of the Seattle forests.

Target Market

National Timber Rangers targets the commercial and private sectors in Seattle, Washington and its surrounding areas that involve timber harvesting and forestry operations. The company seeks to provide sustainable forestry services to those in need of harvesting operations, site preparation, and forest management and consultation, while adhering to necessary regulations. Timber Rangers' goal is to ensure that all timber harvesting practices are efficient, economy-minded, and environmentally sound, while also taking into consideration the long-term preservation of forests and resources in the area.

The company has identified the need for efficient and sustainable timber production in the region and has made it their mission to provide the best service to their customers. Over 60% of the target market is made up of commercial players, such as logging firms and sawmills, with the remaining 40% being private customers. National Timber Rangers plans to provide services that are tailored to each customer's specific needs, ensuring the best possible results within the regulatory framework.

Competition

National Timber Rangers is not the only provider of timber harvesting and forestry services in the Seattle area; the industry is becoming increasingly competitive as the demand for sustainable forestry solutions is growing.

There are already a number of established companies in the area that are well-positioned to meet the demand for professional timber harvesting and forestry services. These competitors include: Evergreen Forestry Services, Pacific Coast Timber, and Seattle Forestry Company. These companies have a solid reputation and have been operating in the area for many years.

Despite this, National Timber Rangers is well-positioned to compete in the market and differentiate itself from other existing players. The company’s focus on sustainability, long-term environmental stewardship, and efficiency are unique in the Seattle area and are helping the company gain traction in the industry.

Financial Summary

National Timber Rangers' financial plan includes a comprehensive assessment of the costs and revenues associated with the operation of this sustainable forestry and timber harvesting business. The key highlights of the financial plan include:

• Cost estimates for log harvesting and extraction, timberlot management, site preparation, plantation and reforestation, forest management and consultation, and environmental engineering and consulting.
• Revenue projections from timber harvesting and processing activities.
• Potential profits associated with these operations.
• Potential for long-term growth.
• Costs associated with job safety and conservation of resources.
• Investments in cutting-edge technology and equipment to stay competitive.
• Expenditures for marketing and advertising.

Funding Requirements

National Timber Rangers requires a capital of approximately $2 million to fund the startup of our sustainable forestry and timber harvesting business. This capital will be used for the following:

• Purchase of necessary machinery and equipment (e.g., harvesting machines and forestry tools).
• Rent of suitable office space in Seattle and onsite storage areas.
• Hiring of reliable staff, including highly trained and experienced foresters and timber harvesters.
• Networking and promotion of the business.
• Training of personnel.
• Covering operational and regulatory costs.

The company is requesting funds from investors and lenders who understand and trust in the long-term potential of our business. We are confident that these funds will help us to fulfill our mission of delivering an efficient, economy-minded and environmentally sound approach to timber farming and logging.

Milestones and Traction

National Timber Rangers has achieved several notable milestones since its founding in 2023. The company has grown from a small startup to an established forestry services provider and has attracted a loyal customer base in the Seattle area. National Timber Rangers has made significant investments in its timber harvesting and forestry engineering operations, and has earned a reputation for efficiency and conservation-mindedness.

The company plans to continue its steady growth trajectory, introducing new technologies and techniques to further strengthen the company’s position as the premier provider of forest services in the region. Specifically, National Timber Rangers plans to:

• Invest in additional equipment and personnel to meet increasing demand.
• Expand operations to include new services such as reforestation and forest conservation.
• Develop a comprehensive site management plan to anticipate and respond to changing needs.
• Partner with local stakeholders to provide reliable and sustainable forestry services.

National Timber Rangers is confident that these steps will help the company attain its long-term goal of preserving forest resources in the Seattle area.

II.- Products & Services

The timber harvesting industry is facing a number of hurdles, from shrinking forests and difficult extraction practices to increased regulations, diminishing resources, and rising costs. These issues can seriously impact the efficiency and profitability of any harvesting operation, as well as the environment. Custom logging operations are particularly vulnerable, due to their limited budgets and lack of access to advanced technologies. National Timber Rangers understands the challenges the industry is facing and strives to provide a comprehensive solution for the efficient and sustainable harvesting of timber.

National Timber Rangers provides timber harvesting and forestry services to meet the needs of commercial and private operations. Supported by the very latest in cutting-edge forestry and timber technology, the company guarantees a highly efficient and ecologically responsible harvest that adheres to all state and local regulations. Delivering a cost-effective and reliable service, National Timber Rangers also ensures the conservation of earth's natural resources, while safeguarding job safety.

By analysing the requirements of clients and applying their expertise, the company provides tailored and comprehensive harvesting and forestry solutions. Whether the issue pertains to log harvesting, timberlot management, environmental engineering, reforestation, or any other related challenge ensuring a safe and enduring solution, National Timber Rangers has the resources and experience to provide a dependable resolution.

Validation of Problem and Solution

National Timber Rangers has been in operation since 2023 and has applied its sustainable forestry services to numerous timber harvesting operations in Seattle and its surrounding areas. During its years in operation, the company has developed a reputation for keeping up with the very latest timber farming and logging technology, delivering efficient and economy-minded services, and maintaining strict adherence to local and state regulations. In addition, the results of National Timber Ranger's timber harvesting operations have been verified and monitored by state agencies, and the company has implemented plans to continually reforest and replant areas that it operates in. Overall, these measures demonstrate that National Timber Ranger's solution to the problem of sustainable timber harvesting is both validated and effective.

Product Overview

National Timber Rangers provides a comprehensive suite of forestry and timber harvesting services for commercial and private operations. Our services include log harvesting and extraction, timberlot management and development, site preparation, plantation and reforestation, forest management and consultation, as well as environmental engineering and consulting. We prioritize sustainability and long-term forest stewardship while staying in compliance with state and local regulations.

With the latest cutting-edge forestry and timber technology at our disposal, we guarantee maximum efficiency, safety and the conservation of our natural resources. We understand the importance of ensuring the proper balance between harvesting operations and the preservation of forests, and we strive to minimize our environmental impact while remaining economically minded.

Our forestry and timber harvesting services are designed to deliver worthwhile value to our customers. We offer clients a unique approach to managing their timber resources, ensuring that operations run smoothly with the utmost competence and care.

The Seattle area is home to a number of companies offering forestry and timber harvesting services. However, National Timber Rangers is well-positioned to stand apart from the competition due to its ability to provide a cutting-edge and efficient approach to the forestry and timber harvesting process. National Timber Rangers adopts sustainable forestry practices and a focus on job safety and the conservation of natural resources, combined with the use of the latest in forestry and timber technology, enabling maximum efficiency and value. Furthermore, the company adheres to all state and local regulations to ensure customers can rest reassured in the knowledge that their operations are compliant.

National Timber Rangers has worked hard over the past few years to develop a sustainable forestry services model that incorporates cutting-edge forestry and timber technology, while also ensuring compliance with all state and local regulations. Our roadmap outlines all the steps taken so far, as well as the steps planned for establishing a successful forestry and timber harvesting business.

Steps Taken So Far

To date, National Timber Rangers has:

• Conducted research into the latest forestry and timber technology
• Established a team of experienced foresters and timber specialists
• Drafting and implementation of all necessary logging, harvesting and preservation protocols
• Developed a comprehensive portfolio of services to meet the needs of private and commercial customers
• Worked with state and local agencies to ensure compliance with regulatory requirements
• Launched a successful website and marketing campaign to promote our services

Outline of Future Steps

National Timber Rangers has ambitious plans for continued growth within the forestry and timber harvesting industry. To ensure this growth, the following steps will be taken in the near future:

• Continued development and expansion of services to meet customer needs
• Partnerships with public and private companies dedicated to sustainable forestry
• Adoption of innovative and eco-friendly harvesting technologies
• Company-wide training for best practices in timber harvesting and conservation
• Increased presence in the Seattle-area via website, social media, and direct marketing

By following this roadmap, National Timber Rangers is committed to providing excellent service and quality products to our customers, while also helping to preserve and sustain the valuable forests of Seattle, Washington.

III.- Market Analysis

Market segmentation.

The target customers of National Timber Rangers are timber harvesting and forest management companies in and around Seattle, Washington. The company specializes in providing efficient, economical and environmentally sound forestry services for commercial and private timber harvesting operations. The primary goal of market segmentation is to identify the most lucrative and appropriate markets for their services.

The following table groups potential customers by specific characteristics:

Target Market Segment Strategy

Our target market segment consists of private forests, comprising agricultural land, residential and recreational properties, as well as public forests and timberlands. Our services are tailored for landowners that are looking for a cost-effective and secure way to harvest the timber from their forests and benefit from the financial gains of their timberland.

Our ideal customer is one that is looking for cost-effective forestry and timber harvesting services, with a strong emphasis on quality. We focus on landowners that value sustainability, high-quality output, as well as competitive cost-effectiveness and are willing to invest for this value.

Key Customers

Our ideal customer archetype is a landowner or land trust that is looking to manage their forestland in an ecologically and economically sustainable way. These customers want to ensure the forests they own are healthy, and understand the value of having an experienced timber harvesting team who can implement and manage both long-term and short-term management objectives. Furthermore, they are looking for a harvesting business that is committed to quality decking, skidder operation, and creating safe and sustainable forests through professional and verified harvesting practices.

Future Markets

With the market analysis in sections 1-4 now complete, a snapshot of the potential market for a forestry and timber harvesting business has been created. A strategic plan can now be formulated for the business to maximize its potential. The business must remain aware of the wider industries and markets outside of the business in order to remain relevant. The success of this business will depend on how well it is able to balance the growing demand for timber with the need for sustainability, ensuring forest management is reactive in a constantly changing market.

In addition to the current market analysis, the business must continuously monitor the data and analytics related to forests, timber harvest and timber production, in order to anticipate fluctuations in demand. Furthermore, the business should leverage existing technologies and platforms to connect with suppliers, partners and potential customers. This could include collaborations with academics, civil society and governmental institutions to further progress the business’s goals and objectives.

National Timber Rangers is one of the few forestry and timber harvesting businesses operating in the Seattle area. Our presence in the region puts us in direct competition with several well-established companies. The table below displays a list of potential competitors, along with their respective location and services offered:

IV.- Marketing and Sales Plan

National Timber Rangers seeks to strategically reach and inform both private and commercial entities that are in need of sustainable forestry services in the Seattle area. The marketing and advertising strategy of the company will follow four main channels – online, print, radio, and direct marketing.

Online promotion through targeted digital advertisement and SEO optimization is one of the most cost effective ways of reaching the desired audience. The company will use social media channels and advertisements, as well as SEO services to ensure that information about its forestry services is easily accessed and visible. Additionally, the website will be regularly maintained and kept updated with the most relevant information.

Print advertisement in local newspapers and magazines will serve as an additional way to convey the company’s message. Radio advertisement is also planned in order to reach a larger audience base. Lastly, direct marketing through mailers, brochures and leaflets will be used to reach potential clients directly.

The company is also planning on hosting events such as seminars and conferences in order to spread awareness about the services offered and gain feedback from the local community. Additionally, the company hopes to collaborate with relevant organizations to create partnerships and increase the reach of its services.

The following outlines the expected costs, goals, and budget for each promotional channel:

• Online: $1000/month, with a goal of reaching 10000 people/month.
• Print: $500/month, with a goal of reaching 3000 people/month.
• Radio: $500/month, with a goal of reaching 5000 people/month.
• Direct: $200/month, with a goal of reaching 500 people/month.
• Events/Conference: $1000/month, with a goal of reaching 2000 people/month.

We anticipate that this forestry and timber harvesting business plan will result in substantial sales, primarily driven by market conditions, capacity, pricing strategy, and other factors. Our estimate is that we can maintain an average sales rate of 500 units per month within the first two years. We will regularly monitor our sales figures to evaluate our pricing strategy, as well as to identify potential opportunities for growth.

Location and Facilities

National Timber Rangers is based in Seattle, Washington. The company operates from a 4,000-square-foot facility in the city’s industrial district, which is strategically located near major forests and timber markets in the area. The facility provides state-of-the-art storage, office, and work areas to conduct operations with efficiency and convenience. The firm also owns and operates a fleet of heavy-duty trucks, specialized machinery, and equipment which can be used for harvesting and transportation of logs.

Moreover, the company takes pride in its stringent compliance with all applicable health, safety, and environmental regulations. A set of safety standards and procedures has been put in place to ensure the safety of workers and the public during harvesting operations.

Our forestry and timber harvesting business plan is leveraging the latest advances in technology to provide a streamlined, cost-efficient process from harvesting to delivery. We have invested in developing a comprehensive computerized timber tracking system that allows us to monitor and document the progress of harvest teams in real-time. This system allows us to accurately monitor the production and process of timber harvest operations, enabling us to maintain a consistent level of quality. We are also using GPS tracking devices on our vehicles to enable us to monitor delivery times and to help ensure timely deliveries.

In order to provide our customers with accurate and up-to-date pricing information, we have developed software programs that enable us to quickly calculate volume, size, and grade information. This allows us to provide our clients with accurate and timely pricing information. We have also implemented a cloud-based inventory management system that allows us to maintain accurate records of the materials in our warehouse and our inventory.

Equipment and Tools

This section outlines the necessary equipment and tools needed to run a successful forestry and timber harvesting business, as well as the associated costs of purchasing or renting them. A comprehensive list of required equipment or tools and total cost is included in the table below.

V.- Management and Organization

Organizational structure.

The organizational structure of a forestry and timber harvesting business plan consists of a senior management team, and the employees who report to them. Senior management is responsible for overseeing all business operations, making executive decisions, and setting strategic goals and objectives for the business. The roles and responsibilities of the employees should be clearly outlined in the business plan. Additionally, it is also important to have a flow of information between levels of the organization to ensure efficient and effective communication.

The following table outlines the organizational structure of the forestry and timber harvesting business plan, including the roles and responsibilities of the senior management team and employees who report to them:

Management Team

The success of our forestry and timber harvesting business depends on having a strong and capable management team in place. Our management team will be made up of experienced professionals with a background in forestry, timber harvesting and business management. Below is a table of potential candidates we anticipate taking on high level management roles within our company.

Management Team Gaps

Currently, our management team does not have candidates for certain positions and areas of expertise. These gaps could cause disruption when trying to implement our forestry and timber harvesting business plan effectively. We need to identify these positions and locate suitable candidates to ensure our plan can be implemented in a timely and efficient manner.

Personnel Plan

Having a strong team to help manage a forestry and timber harvesting business is essential. This personnel plan outlines the potential positions that may be needed in order to effectively run the business. The personnel plan is based on the size of the business, the type of services offered, and industry trends.

Table of Potential Positions:

• Logger/Timber Harvester
• Clerical Support
• Industry Expert
• Sales and Marketing Professional
• Operations Manager
• Accounting Manager

Each role within the business has an impact on the overall success and is essential for the successful running of the business. Having the right personnel in place to help manage a forestry and timber harvesting business is key to its success.

Company History and Ownership

National Timber Rangers was founded in 2023 in the city of Seattle, Washington. The company was started with the goal of providing sustainable forestry services for commercial and private timber harvesting. The founders wanted to ensure that cutting and harvesting practices adhered to all state and local regulations as well as focus on sustainability and long-term forest stewardship. National Timber Rangers has grown steadily since its inception and continues to be a leader in the timber harvesting industry in the Pacific Northwest.

The company is owned by four family members, all of whom have long-standing ties to the forestry industry in the Seattle area. The family’s involvement in the forestry business includes owning and operating a lumber mill, as well as having direct experience in forestry, management and business operations. Their experience and vision make them the ideal owners of National Timber Rangers.

The management and organization of our forestry and timber harvesting business will hinge on establishing a detailed roadmap of specific goals and objectives that will guide the short-term and long-term operations of our business. This roadmap will be expressed in the form of a timeline table (see Appendix 1) that outlines all the tasks, deadlines, and personnel necessary to ensure a timely and successful completion of each objective. The milestones listed in this table will reflect both short-term and long-term goals and objectives, so that we can monitor our progress and ensure deadlines are being sufficiently met. Doing so will enable us to measure our growth, identify any potential challenges, and develop better strategies for rapidly developing our business.

Key Metrics

Key performance indicators (KPIs) provide a powerful tool for gauging the overall performance and health of your forestry and timber harvesting business. They help you measure how your business is performing in terms of goals, sales, production, and other key indicators. Examples of KPIs for a forestry and timber harvesting business could include the number of logs harvested per day, the timber volume harvested per year, and average sale price per log. Tracking these KPIs over the long-term, and comparing them to industry averages, can provide insight into whether your business is growing or stagnating.

VI.- Financial Plan and Metrics

Sales forecast.

The three-year sales forecast table below presents the expected revenues generated by our forestry and timber harvesting business in the years 2021 - 2023. These figures account for new contracts, market growth, price changes, and other relevant economic factors.

Forestry And Timber Harvesting Financial Plan Key Inputs

Running a forestry and timber harvesting business requires capital costs both to establish the business and in order to keep the business running. Below is a table comprising the expected startup costs and a table comprising the expected operational expenses.

Table: Expected Startup Costs

Table: expected operational expenses.

This part of the business plan is where you present the three main financial documents of any startup: the income statement, the cash flow statement, and the balance sheet. This will provide key stakeholders with insight into the financial structure and health of the business and ultimately demonstrate that business is a viable option.

The income statement details the inflow and outflow of funds for a given period. It reflects the profitability of the business, as well as the revenues generated and expenses incurred. The cash flow statement shows the cash flow movement over a period of time. It looks at operating, financing, and capital activities and the net effect has on cash balances.

The balance sheet provides a snapshot of the assets and liabilities of the business. It helps to identify the company's financial position at a certain point in time.

These three documents are fundamental when determining the success and sustainability of the business. With this information, stakeholders can make decisions based on a solid understanding of the finances and project potential outcomes.

Forestry And Timber Harvesting Financial Plan Profit & Loss Statement

Forestry And Timber Harvesting Financial Plan Cash Flow Statement

Forestry And Timber Harvesting Financial Plan Balance Sheet Statement

Our personnel plan outlines how we intend to hire, the type of compensation to be provided, and how employees will fit into business operations. We plan to hire experienced and skilled forestry and logging professionals to effectively and safely manage all timber harvesting operations. We are looking for team members who will not only understand best industry practices but also have the desire, drive and ambition to help build and sustain our business.

Compensation will include competitive wage rates and employee benefits, such as medical and dental plans. We also plan to roll out an incentive-based bonus system to reward team members who exceed expectations in the workplace.

We understand that success depends on our team, hence we are dedicated to providing adequate and tailored training to best equip our staff to handle forestry operations, customer service and business development initiatives. All staff will report to and be supervised by a designated manager with clear roles and responsibilities established.

Capital Requirements and Use of Funds

This section will provide an overview of the required capital investments and how funds will be used to support the forestry and timber harvesting business. The capital requirements should reflect the amount of money needed to start and maintain the business. The estimates should encompass all facets the business plan discussed; the costs associated with acquiring land, timber harvesting, and the associated operational costs. Furthermore, to secure loans or investors, the use of funds should be detailed and justified.

As part of the capital requirements, the business plan should have an estimated budget for the first year of operations. This will include the expected projections for expenditures and income. Additionally, this section should provide industry benchmarks regarding ongoing capital investments and how they are expected to be used to support the long-term goals of the business.

Exit Strategy

Our plan for the eventual exit from this forestry and timber harvesting business is twofold. Firstly, we plan to eventually pass the business down to a trusted family member or employee, or alternatively conduct a sale to an investor or another significantly interested party. Secondly, all assets from the business, such as machinery and timber, will be sold to buyers on the open market.

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How to Start a Profitable Sawmill Business – Timber Business Plan

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A sawmill is a business that engages in the cutting, processing, and distribution of timber or lumber. Its main purpose is to transform logs into a range of wood products, including boards, planks, beams, and other dimensional lumber. These products find applications in construction, furniture manufacturing, and various other industries. And, starting a sawmill business is a profitable venture for those who specialize in the production and sale of timber products. Also, can provide essential materials for various industries and contribute to the country’s economic growth. So, If you are intrigued by the idea of venturing into the sawmill business? With the right strategy and meticulous planning, you can turn this endeavor into a highly profitable venture. In this article, we will walk you through the essential steps to kickstart your sawmill business successfully.

Table of Contents

Market Scope for Sawmill Business

The construction and furniture industries are the primary consumers of sawn timber. Global construction and furniture industries are experiencing significant growth, driving up the demand for processed wood products.  And, the global Sawmill market size was valued at USD 718 Million in 2022 and will reach USD 855 Million in 2028, with a CAGR of 2.95% during 2022-2028. With rapid urbanization and an expanding middle class, the demand for quality wood products is on the rise. As a result, the sawmill industry presents a lucrative opportunity.  Additionally, the government’s push for affordable housing and infrastructure development projects further fuels the demand for timber. Therefore, the market presents significant opportunities for a well-structured sawmill business.

Investment for Sawmill Business

Starting a sawmill business requires a substantial initial investment that encompasses various aspects. A basic setup with essential machinery like a saw, wood processing tools, and safety equipment can cost between 10 to 20 lakhs INR. However, if you aim for a medium-sized operation with additional features the investment could range from 30 to 50 lakhs INR or more, and while larger operations might require significantly more capital investment. Additionally, there are costs associated with procuring a suitable plot of land, obtaining necessary permits and licenses, and setting up infrastructure like a processing unit and storage facilities.

Licenses and Permits for Sawmill Business

To operate a sawmill business legally in India, you must obtain the necessary licenses and permits. Firstly, you will need to obtain a business registration from the local municipal authority, depending on the location of your sawmill. Next, acquire a trade license from the respective municipal corporation. Environmental clearances from the State Pollution Control Board are crucial, as sawmills have potential environmental impacts. Additionally, Depending on the scale of operations, you may also need to register for GST. Finally, it’s essential to obtain fire and safety clearances from the local fire department. So, Engaging with legal advisors or consultants with expertise in industrial licensing can be invaluable in navigating the complex regulatory landscape.

Location and Space for Sawmill Business

Choosing the right location for your sawmill is a critical decision. Opt for an area with ample space to accommodate the machinery and raw materials. Starting a small-scale sawmill business typically requires a space of about  1/2 to 1 acre.  For a medium-scale sawmill operation, a space of around 2 to 5 acres would be necessary. On a larger scale, a sawmill business might require even more. This includes space for log storage, a cutting area, equipment installation, office space, employee amenities, and a processing zone. Additionally, choosing proximity to timber-rich regions can significantly reduce transportation costs and ensure a steady supply of raw materials.

Raw Materials for Sawmill Business

The primary raw material for your sawmill business is timber logs.  These logs can be sourced from various places, including government-owned timber depots, private forest owners, or through timber auctions. It’s imperative to establish legal and sustainable sources of timber to ensure compliance with environmental regulations. Additionally, you might also need to invest in treatment chemicals to ensure the longevity and quality of your timber products. So, maintaining a consistent supply chain will safeguard against production delays and ensure uninterrupted operations.

Machines for Sawmill Business

To kickstart a sawmill business, several key machines are essential. Firstly, a reliable bandsaw or circular saw is crucial for cutting logs into manageable sizes. Additionally, a debarker is needed to remove the bark. A wood chipper or planer helps in refining the lumber’s surface, ensuring a uniform finish. A kiln or drying chamber is essential for seasoning the wood, reducing moisture content, and preventing warping. Moreover, a generator or power source is indispensable to supply consistent electricity for the machinery. And, these machines can be procured from a range of sources, including specialized machinery suppliers, woodworking equipment manufacturers, and online marketplaces .

Running Process

The running process of a sawmill involves several steps:

Step1. Log Inspection: This initial phase entails a meticulous examination of incoming logs to ascertain their quality and appropriateness for processing.

Step2. Log Preparation: Following inspection, the logs undergo preparatory measures which involve the removal of bark and rectification of any irregularities or imperfections.

Step3.Sawing: The prepared logs are then fed into cutting machinery, where they are precisely sliced into boards or planks of the specified dimensions.

Step4. Drying: Subsequent to the sawing process, the freshly cut timber is placed within specialized drying kilns. This controlled environment facilitates the reduction of moisture content.

Step5.Grading and Sorting : The grading and sorting process involves categorizing the dried timber based on its quality and size, ensuring that each piece meets the required standards.

Step6. Packaging and Storage : In the final stage of production, the graded and sorted timber is carefully packaged, readying it for transport and eventual use. Additionally, this phase also plays a crucial role in ensuring an efficient inventory management system.

Marketing Tips for Sawmill Business

Effective marketing is crucial to the success of your sawmill business. first, networking with local construction companies, furniture makers, carpentry workshops, and interior designers can also be incredibly fruitful. also, creating a professional website and showcasing the range of services, types of wood available, and contact information is essential. and, use social media platforms like instagram and facebook to showcase your products.  lastly, forming partnerships with lumberyards and specialty wood retailers can ensure a steady supply chain and increase the visibility of your offerings in the industry. also, keeping an eye on market trends and staying eco-conscious can set the sawmill apart in a competitive market., profitability from business.

The profitability of your sawmill business depends on various factors, including the scale of operation, production efficiency, and market demand.  On average, a well-managed sawmill business in India could generate a decent profit margin, often ranging from 10% to 30% of the total revenue. However, it’s important to note that this is a general estimate and actual figures may fluctuate. Additionally, economic conditions, government policies, and environmental regulations can also impact the profitability of sawmill businesses. For the most accurate and up-to-date information, we recommend consulting industry reports or professionals in the field.

Starting a sawmill business in India offers significant opportunities in a growing market. By understanding the market scope, making the right investments, obtaining necessary licenses, and following efficient operational processes, you can establish a successful sawmill business that not only contributes to the construction and furniture industries but also provides a sustainable source of income. Remember that diligence, quality, and customer satisfaction will be the pillars of your success in this industry.

1. What are the key challenges of running a sawmill business in India?

Running a sawmill business in India comes with challenges such as sourcing consistent raw materials, complying with strict environmental regulations, and managing operational costs.

2. How long does it take to establish a profitable sawmill operation?

The timeline to profitability varies based on factors like location, market demand, and operational efficiency. On average, it may take one to two years to start generating significant profits.

3. Are there government incentives for sawmill businesses in India?

Yes, the Indian government offers various incentives and subsidies to promote the wood processing industry. These may include tax benefits, grants for modernizing machinery, and support for sustainable forestry practices.

4. How can I ensure the sustainability of my raw material supply chain?

To ensure a sustainable supply of raw materials, consider investing in forested land, establishing long-term contracts with reliable suppliers, and implementing responsible logging practices.

5. What are the emerging trends in the Indian sawmill industry?

Emerging trends in the Indian sawmill industry include the adoption of advanced technology for precision cutting, the growing demand for value-added wood products, and an increased focus on eco-friendly and sustainable practices.

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From the plantation to your place — the timber production process explained

Jul 14, 2020

When the toilet paper shortage hit Australia in March, few people would have thought of the timber industry’s role in maintaining supply amid the panic-buying. As the ultimate renewable, timber has been a versatile natural material for shelter, heating, working and comfort for thousands of years. The simple recipe for success is regeneration – when trees are harvested, seedlings are planted and the life cycle starts afresh.

In turn, the forests in which they grow deliver environmental benefits, which includes helping protect water and soil quality (by stabilising soils and rehabilitating saline landscapes) and combating carbon emissions and air pollution through the process of photosynthesis, sequestering carbon dioxide from the air and the storage of carbon in trees and wood products. How that sapling transforms into the sheet of paper you’re writing on, the pencil you’re using, or the enduring piece of furniture on which you sit is a process that takes place over decades.

Growth industry

Australia has 134 million hectares of forest – about 17 per cent of the total land mass – all of which are subject to the pressures of land clearing, urban development, drought, fire, climate change and invasive weeds, pests and diseases.

About 8.9 million hectares of our native forest – encompassing acacia, callitris, casuarina, eucalypt, mangrove, melaleuca and rainforest – and commercial plantations are covered by a code of practice and standards developed under the Responsible Wood Certification Scheme or the Forest Stewardship Council.

Plantations cover an area of about two million hectares (about 1.5 per cent of the total forest area) and account for more than 85 per cent of the 32.9 million cubic metres of logs (61 per cent softwood and 39 per cent hardwood) harvested each year. Minimising wastage, the $23 billion industry is enhanced by efficient sawmills, cutting-edge reconstituted and engineered wood facilities, and best-practice pulp mills.

But perhaps most importantly, the Department of Agriculture’s National Forest Industries Plan aims to plant a billion plantation trees over the next decade so the precious life cycle can continue long beyond the next generation.

Long-term planning

Much thought goes into creating a plantation, ensuring biodiversity values are maintained to allow the maximum rate of tree survival and growth throughout its estimated 40-year growth cycle.

This plan, as detailed by Forestry SA, meticulously examines every variable expected to affect the plantation during its lifetime, such as erosion prevention and location of forest tracks to weed infestation, soil type and its nutrient content. A nursery cultivates young plants from seed or cuttings sourced from genetically superior plants. They are planted when about 25cm high or around nine months old, with no more than 1600 trees per hectare – providing competition for the available moisture, sunlight and nutrients.

In a classic example of survival of the fittest, between 30 to 50 per cent of trees are removed as trees are “thinned” at 10-year intervals to allow the remaining trees to establish the optimum rate of growth.

The removed low-grade trees are usually used for fence posts and other pulp products, and those remaining take advantage of the reduced competition until the forests near maturity, usually between 37 and 40 years. Once mature, the trees are clear-felled, which allows the site to be rejuvenated and regenerated and the process to be repeated.

Making the cut in the transition to wood products

When felling, trees are specifically cut at the lowest possible point of the trunk to extract the maximum amount of timber. When it is newly felled, a tree contains about 50 per cent of its dry weight as water, including sap and moisture.

After harvesting, logs are stored in a clearing or in the forest, where they are cut into smaller lengths and transported to a processing site, such as a paper mill or sawmill depending on its quality and suitability for future use as furniture, framing timber for housing construction, or pallets and crates.

Wood is a hygroscopic material, which means it has capacity to absorb water vapour from the air, so it is necessary for some of that moisture to be removed to reduce its weight and prepare it for its next stage of life.

The drying process, otherwise known as seasoning, helps the wood avoid cracking, warping, swelling and shrinking. Natural seasoning or drying is carried out by atmospheric airflow, or  artificial methods include various forms of heating to dry the wood more rapidly.

The seasoned timber is cut and sawn to specific sizes. Some of it is then treated with preservatives to increase its life, durability and provide protection from fungal and insect attack.

Only then, after turning trees into timber, can the material be refined by man or machine into the wondrous, practical and cherished keepsakes they ultimately become.

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Timber Sales: A Guide to Selling Timber

Photo credit: Dave Jackson

Timber harvesting is an important management tool. When conducted with care and planning, it allows owners to manage forests to meet multiple objectives. Landowners choose to conduct timber sales for a variety of reasons. The decision to harvest may be recommended in a management plan or it may be unexpected. For example, an insect or disease outbreak may necessitate a harvest to salvage dying trees and protect the forest from further losses. Regardless of the reason, a successful timber harvest that meets landowner goals begins with a forest resource professional developing a plan and should not be the result of a knock on the door or a letter in the mail.

Timber harvesting is not a process entered into lightly. Harvests involve complex decisions across many issues, including ecology, forest operations, business, law, taxes, marketing, and negotiation. They have both short- and long-term consequences for you and the forest. This publication is a first step in helping landowners understand some of these consequences and how you, as a landowner, can ensure a successful timber sale. Do not consider this a definitive "how-to" guide for conducting a timber sale. Much of the process will depend on the specific situation and individuals you are working with.

Should I Retain the Services of a Forestry Professional?

Unless you are well versed in many of the issues raised in this bulletin, you should seek assistance from a professional forester. They are the first stop in helping you understand your woods and prescribing science-based treatments. Professional foresters can provide invaluable services to guide you through the timber sale process.

Some landowners are skeptical of the need to procure a professional forester's services. Some believe that using a forester does not add value or that any value it might add is lost in paying the forester. However, studies have shown that landowners who work with a professional forester in planning and implementing a harvest report greater satisfaction, increased revenue, and healthier and more valuable woods following the sale.

Listed below are some of the ways a professional forester can assist in conducting a successful timber sale:

• Forestry expertise. Foresters are educated and experienced in managing forests. They can help you decide what management options are possible and how those decisions will affect your forest. Even if your decision is to do nothing, a forester can explain likely outcomes.
• Market knowledge . Foresters have knowledge of local timber markets. Unlike landowners, who rarely sell timber, foresters know which mills are buying and which mills are paying better prices. Foresters can help you get a higher price for your timber.
• Experience with loggers. Along with their familiarity with local markets, foresters are also knowledgeable about the loggers who work in a particular area. They can help you select the right logger for your sale based on their practice, equipment, and site conditions.
• Sale oversight. Foresters understand timber harvesting operations. They will periodically check on the progress of your harvest and monitor for compliance with the contract, erosion control, and other best management practices (BMPs). Foresters try to address problems before they become serious. Research shows that compliance with BMPs is higher when a forester is involved in the sale.
• Sale coordination. Since foresters often work with many different clients in an area, they may know of other landowners wanting to sell timber at the same time. In this situation, the forester can market the sales together and possibly get all landowners a better price and sell marginal timber that might otherwise go unsold.
• Sale closeout. Foresters can ensure a site is properly retired and all roads and trails are properly stabilized. This ensures all postharvest activities meet contractual expectations.
• Postharvest site monitoring. Forestry expertise is invaluable in determining the next phase of action. This may include monitoring regeneration, competing vegetation, and deer impact or following up with two-stage harvests, such as shelterwood systems.

Selecting a Consulting Forester

When hiring a consulting forester, it is important to interview several before making your decision. Be sure to ask about their education, work experience, professional certifications, and memberships. Currently in Pennsylvania, anyone can legally claim to be a forester or forestry consultant, regardless of education, training, certifications, or experience.

Local references can provide invaluable information and insights to help you make your decision about who to hire. Ask prospective foresters to provide at least three forest landowners as references, preferably from their previous three timber sales. Contact these references and ask if they were satisfied with the overall work, not just the income they received. If possible, consider touring the properties to see completed work firsthand.

Having a written agreement with your forester that outlines fee structure (hourly rate, percentage of sale, or flat fee), services, obligations, and terms is essential. The decision you make today in hiring a forester can either positively or negatively impact your ability to reach established goals for your woods and protect values important to you. A trusted professional forester is an asset for the tenure of your ownership and can assist with many other important aspects of woodlot management.

For more on selecting a consulting forester, visit Texas A&M's "Selecting a Consulting Forester" factsheet .

How to Obtain Lists of Foresters Working in Your Area

To find private consulting foresters and plan writers in Pennsylvania, go to DCNR's "Managing your Woods" webpage . The listing includes contact information, services offered, counties served, and professional certifications the forester has obtained. The same site also provides a listing of DCNR Bureau of Forestry service foresters by county. State service foresters provide free information and advice to forest landowners and are a resource for the citizens of Pennsylvania, helping to guide and direct sustainable forestry practices.

Seven Steps to Conducting a Successful Timber Sale

Once a landowner has a management plan and decides to move forward with a recommended timber sale, further planning is essential. A successful timber sale involves the following steps:

Step 1: Establish sale/property boundaries Step 2: Determine and define access Step 3: Identify trees to cut and appraise value Step 4: Advertise the sale Step 5: Execute a written contract Step 6: Monitor active logging Step 7: Close out the sale

Step 1: Establish Sale/Property Boundaries

Identifying and marking timber sale boundary lines is an important step in preparing a sale. Well-marked property and timber sale boundaries let buyers and loggers know they are on the proper site. In many cases, timber sale and property boundaries are identical. Property deeds, topographic maps, and aerial photographs aid in identifying and establishing boundaries. Landowners may need to hire a professional surveyor if property lines are unknown and cannot be located.

Poorly marked boundary lines can lead to timber trespass— that is, harvesting a neighbor's trees. Timber trespass is not a minor offense in Pennsylvania (Title 42 § 8311). Courts can award monetary damages up to three times the value of the timber cut and removed in cases of intentional trespass or two times the value for negligent trespass. It is essential that you work with your forester and neighboring landowners in locating shared property lines before logging takes place. Sale boundaries, whether they coincide with property lines or not, are important, as they define the scope of the harvesting operation. Timber harvesting prescriptions, prepared by a forester, are tailored to the specific site conditions.

Sale boundaries help protect special ecological or personally important areas on a property. For example, sale boundaries can exclude springs and streams or your favorite deer stand that might otherwise be included in the harvest boundary.

One of the most common ways to mark a timber sale boundary is by tying colored flagging on tree branches or brush. Another way is to spray paint tree stems along the harvest unit border. In most instances, both flagging and paint are used to mark timber sale boundaries. Tree paint will remain visible on boundary trees for the duration of the harvest and cannot be torn down or moved.

Step 2: Determine and Define Access

Roads, skid trails, and log landings make up the transportation network to move logs out of the woods and to the mill (see the "Sample Harvest Site" illustration). Loggers move harvested trees on skid trails to a central location, called a landing, where logs are loaded onto trucks. The trucks then use the haul road network to access public roads. For loggers, the best way out is often the quickest one. Since time is money, a quick route may even allow loggers to offer more money for the sale; however, the quickest way out is not always the best option for the landowner or the property. An important question to consider is, "How can I build a permanent road and trail network that will allow various activities well into the future?"

The road and skid trail network should support your management plan objectives. For example, roads and trails can provide access for management activities, like controlling invasive plants, or recreational activities, like hunting and hiking. Recreation aside, the network should also minimize ecological impacts. Different soils and slopes tolerate harvesting equipment differently. Roads, trails, and landings near or crossing streams or wetlands require additional special considerations. For guidance, follow the Pennsylvania Department of Environmental Protection's publication Timber Harvest Operations Field Guide for Waterways, Wetlands, and Erosion Control (see "Regulations and Permits"). This publication assists timber harvesters in preparing and implementing soil erosion and sediment control plans and working around streams and wetlands. It contains information on BMPs for protecting water quality and laws related to timber harvesting operations in and around waters of the Commonwealth.

Above all, be flexible in planning the transportation network. Individual loggers and harvesting systems have different capabilities. Forcing a one-size-fits-all approach may result in greater site damage and a lower price for your timber. In some cases, roads, trails, and landings are located after the contract is awarded and the limitations of your logger's harvesting equipment are known. It is essential for you and your forester to work closely with the buyer and logger.

Sample Harvest Site

• Trees marked with a white dot indicate the property boundary.
• Trees marked with a red dot indicate the harvest boundary.

Primary skid trail: A permanent trail used multiple times by the logger to haul logs to the landing.

Secondary skid trail: A temporary trail used for a single harvesting operation.

Stumps: From recent harvest.

Stream: It is best, and possibly required by law, to leave an unharvested buffer around streams, springs, and wetlands.

Main access road: Property road network used to access public roads.

Log landing (log deck): Cleared area where harvested logs are processed, piled, and loaded onto trucks.

Step 3: Identify Trees to Cut and Appraise Value

For harvests that do not remove all trees, mark individual "cut" and/or "leave" trees. This will ensure the harvest operation only removes trees chosen for cutting. Typically, trees are marked with paint at chest height and close to the ground, below where the tree will be cut. Selecting which trees to harvest is complex. It must balance sound science and desired future condition of the forest (e.g., species, quality, seed source, and desired wildlife habitat) with market and operational realities.

A forester's knowledge of silviculture (forest management) and the capabilities of different harvesting equipment inform tree selection. The forester must balance landowner objectives and proper forest management prescriptions with desires for economic return, all while minimizing damage to the site.

In some cases, particularly in stands with trees of low market value, individual trees are not marked but instead designated by size and/or species in the contract. Marking individual trees requires a great deal of time. In low-value stands, marking individual trees may increase sale preparation costs too much. In this situation, it is not uncommon to mark the trees to be retained rather than those being sold.

As an example, the forester may prescribe and include language in the contract stating, "All merchantable black birch trees less than 12 inches in diameter at breast height (DBH) shall be cut." In these situations, sale oversight requires greater care to ensure loggers correctly follow cutting instructions.

Another exception to individual tree marking is with clearcut regeneration harvests, which remove all trees to encourage sun-loving regeneration. In clearcut harvests, well-marked sale boundaries become even more important to ensure trees in adjacent stands, on reserve islands, and protecting special sites are not harvested.

When marking, it is not enough to simply put paint on trees, draw maps, and hope the logger will understand. Both the landowner and the forester must convey this information to the logger verbally and in the written contract. Clear communication about sale markings helps avoid problems on the ground.

As trees are marked, they are also measured to provide an estimate of volume and value. Timber should never be sold unless the seller has an independent appraisal of its worth, referred to as stumpage value (see "Stumpage Value"). The buyer should not make that estimate; your forester has the expertise to best estimate the sale value. To appraise timber value, it is necessary to complete an inventory of the species, size, volume, and quality of trees being sold so an accurate assessment of their worth can be determined.

Foresters use an assessment called a "timber cruise" to estimate value. A timber cruise is simply a survey method used to measure and estimate the quantity of timber being sold on a given area according to species, size, quality, and potential products. To complete a cruise, individual trees are measured to determine size class and volume and assessed for quality and various product classes.

Step 4: Advertise the Sale

A prospectus serves as the primary advertising tool for selling timber. This document describes what is for sale and where and when it will be available. The prospectus mirrors the contract. In fact, sometimes the contract is part of the prospectus. This allows prospective buyers to know the details of the contract before submitting an offer.

A prospectus includes all necessary information for a buyer to make an informed offer. Typically, this includes species, size, and estimated volume of trees to be removed. It also describes total acreage, location, sale type (lump sum or pay as cut), date by which sealed offers need to arrive, and length of time buyers have to remove the timber.

In addition, the prospectus includes information on payment expectations. Timber can be expensive and on large sales there may be a payment schedule. Or, in some cases, the prospectus might require payment "as you cut." In this case, the buyer pays for trees removed as they are cut and scaled at the mill. This approach obviously involves a different level of trust.

The prospectus should include any additional information that might affect an offer (e.g., road-building requirements, since they can greatly increase harvest costs). It should convey any equipment restrictions or requirements. Many prospectuses also contain a statement that the seller can reject "any or all" bids. If there are too few offers or all offers are below the estimated value, this clause allows the timber to be withdrawn from sale. It also provides an "out" for the seller to reject the top bidder if for some reason they do not want that person to conduct the harvest.

Lastly, the prospectus may include information relating to expected costs. For example, a performance bond may be required. This bond is paid before starting work and held in escrow by the seller or the seller's representative. Bonding ensures the successful buyer will close out the harvest according to the contract and do the work on time. If either of these conditions are not met, the buyer forfeits the bond.

Consulting foresters maintain lists of potential buyers and mail the prospectus to those individuals. While sales may also be advertised in newspapers and trade journals, direct mailings work best. Ultimately, true market value is only obtained by casting a wide net to potential buyers with the prospectus.

One option for selling timber is to use sealed bids. Bidders formulate their bid by visiting the site, reviewing the prospectus, and using their own market knowledge. The bid is submitted to the owner or the owner's representative and all bids are opened at a specified date and time.

Bids can differ significantly. Different bidders have different markets and needs for wood. Several factors determine market value; species, potential products, and volume are important. Equally important are the operability and accessibility of the harvest site and local market conditions. These factors, among many others, may make bids for the same sale very different.

Based on the bids presented, the seller can choose to select one bidder or refuse them all if the offers fail to reach a minimum acceptable value. It seems logical that a seller would always accept the highest bid above the minimum threshold. While the highest bid may be most tempting, it is important to consider whether the highest bid will meet both the sale and landowner objectives. In selecting the winning bid, the logger's reputation, professionalism, skill, equipment, and ability to do the work are as important as the dollar amount.

If all bids are rejected, it is common practice to offer the minimum acceptable value to the highest bidder. If they decline, then the opportunity is extended to the next highest bidder and so on until a bidder accepts. If this fails, then the seller can offer the timber to anyone outside the current set of bidders. This could also mean the timber is overpriced and may need to be reevaluated.

There are also sales where you might choose to hire a logger directly and a sealed bid would not be appropriate (see "Competitive Bids Versus Negotiated Sales"). These include sales of low-quality wood and cases where the logger is paid to remove trees. In other cases, you may be selling specialty products with a limited number of potential buyers.

Stumpage Value Webster's Dictionary defines stumpage as "standing timber with reference to its value," or "the value of such timber." The word is derived from "stump" + "age," implying that older trees have a higher value "on the stump." Stumpage value is the monetary worth of trees as they stand in a woodlot, and it is what the timber owner receives from the buyer.

Stumpage value varies by species, tree size, tree quality, stand composition, stand volume, site access, market access, geographical region, season, weather, and many other factors. There is no "blue book" reference to look up stumpage values, which can vary widely based on individual situations.

Timber buyers estimate value "on the stump" after deducting costs associated with logging and other variable and fixed costs. Costs vary with equipment, maintenance, fuel prices, insurance, labor, markets, logging conditions, timber volume, road conditions, hauling distance, and other variable costs. Foresters have experience "cruising timber" (i.e., measuring timber volume) and determining stumpage value, making them an important partner in this step.

As a landowner, how do you know if an offered stumpage price for your timber is fair? The best way to have confidence in the price offered is to hire a professional forester to mark, measure, and appraise the tree volume being sold. The timber is then advertised to solicit bids. Landowners will almost always achieve a higher stumpage value when multiple buyers are pursuing the same timber. Only through aggressive marketing is a "fair" stumpage value obtained.

Competitive Bids Versus Negotiated Sales Private landowners typically use one of two methods when selling timber: competitive bids or negotiated sales. Both types of sales can be sold lump sum or by "pay as cut," also referred to as scaled product sales. The method used depends on several factors but is primarily based on demand for the material sold.

In general, competitive bids occur when selling high-value timber that is in demand by local markets. With competitive bid sales, the successful buyer is selected from the bids received. Negotiated sales are typically used when selling small-diameter or low-quality timber, timber that has poor markets and little demand. To sell this type of timber you may need to "negotiate" the price(s) with a local buyer.

Both negotiated and competitive-bid sales can be sold based on a lump-sum price for all timber offered for sale or as pay as cut, where prices are agreed on in advance for each specific species and end-product type (e.g., sawlogs, pulpwood). It is more common for competitive-bid sales to be sold lump sum and negotiated sales to be sold on a pay-as-cut basis. However, it is not that unusual to accept bids based on prices per unit volume by species and product (e.g., price offered per ton or cord for pulpwood sales).

Lump-sum sales are the simplest way to sell timber. Typically, the sale is put up for bid and each potential buyer submits an offer for the designated timber. Lump-sum sales require buyers to have accurate volume estimates by species and product type to establish their bid. They may use the volume estimates provided in the prospectus as a starting point and make adjustments based on experience and practice. In some cases, buyers are responsible for estimating the volume themselves. The winning bidder may make a single lump-sum payment or several partial payments as outlined in the prospectus. In general, the seller is paid in full prior to any timber removal.

Pay-as-cut or scaled product sales are based on prices per unit volume (e.g., dollars per thousand board foot [MBF], ton, or cord), species, and product. For example, a buyer would agree to purchase all white oak saw logs for $300 per MBF, red maple saw logs for $120 per MBF, and hardwood pulpwood for $4 per ton. Prices are typically agreed on and paid by volume and species regardless of quality.

Pay-as-cut sales, whether bid or negotiated, are more complicated and require greater diligence and a level of trust. The seller is paid after the logs are delivered and scaled at local mills. This involves accounting for each load of logs and pulpwood removed from the property. It is not uncommon for a forester to administer scaled product sales on behalf of the landowner.

Step 5: Execute a Written Contract

Having successfully navigated the marketing process, it is time to execute a timber sale contract with the successful buyer. A timber sale contract is essential in the timber sale transaction. It defines expectations and commitments applicable to both parties. It is a legally binding document that outlines the relationship between the seller and buyer; it seeks to protect both from misunderstandings.

Logging has obvious implications for the health of remaining trees, wildlife habitat, soil disturbance, water quality, road maintenance, aesthetics, and a host of other considerations important to the seller—but not necessarily to the buyer. Since the buyer, if not the logger, will be responsible for hiring and managing the logging, the sale contract may be the only opportunity to specify how and when logging will occur.

The complexity of the contract depends on the type of timber sale and payment method. Key elements include:

• Identification of buyer and seller and their responsibilities
• Property identification, including legal and sale area description
• Description of material sold for harvest
• Type, terms, and length of contract
• Notification of start and completion of logging
• Terms of payment and deposits
• Insurance and performance bond requirements
• Guidelines addressing site and residual tree damage penalties
• Maintenance and condition of access roads and landings
• BMPs to protect soil, water, and other forest values
• State and federal legal requirements (see "Regulations and Permits")
• Liabilities, indemnity, and safety regulations
• Procedures for arbitration and dispute resolution
• End-of-sale requirements

Contracts convey standing timber from seller to buyer. The buyer assumes the responsibility for harvesting, yarding, and transporting trees to targeted mills. Contracts for lump-sum sales may be relatively simple since a detailed description of the product sold is unnecessary. A pay-as-cut or scaled product sale requires more specifics, particularly if prices vary by species and product class.

Timber sale contracts are complex. Lawyers are not always familiar with timber sale specifications, and foresters are not always aware of all legal and liability concerns. A landowner should consider consulting both a forester and an attorney to ensure the contract covers all sale aspects. The contract is legally binding and requires knowledgeable and experienced attention in its preparation.

Regulations and Permits The construction and use of roads, skid trails, stream crossings, and log landings necessary for timber harvesting operations raise the potential for soil erosion, stream degradation, ecological impact, and water pollution when carelessly planned, built, and maintained.

Pennsylvania has environmental regulations designed to protect soil and water resources during earth-disturbance activities, including timber harvesting. The Pennsylvania Department of Environmental Protection (DEP) administers these regulations. In many counties, DEP has delegated at least some of their authority to the local Conservation District. Clearing ground for haul roads, skid trails, and log landings is a regulated earth-disturbance activity that requires the use of BMPs to prevent disturbed soil from eroding into wetlands and waterways.

Pennsylvania's regulations require the development of a site-specific written Erosion and Sedimentation (E&S) Control Plan for all timber harvests. The plan describes where and how BMPs will protect soil and water resources during the timber harvesting operation. If the anticipated disturbance reaches 25 acres or more, the activity will also require an Erosion and Sediment Control Permit. In addition, there are regulations for crossing stream channels. Stream or wetland crossings almost always require a permit and must follow established specifications.

Timber harvesting operations are also subject to regulations enforced by the Pennsylvania Fish and Boat Commission. These regulations protect aquatic organisms, both plants and animals, and their habitats. In addition, harvesting operations may be subject to other types of regulations and permitting requirements. Local municipalities might have codes and ordinances that regulate timber harvesting activities in their jurisdiction. Public roads may require bonds, and haul roads connecting to public highways may need an occupancy permit. Lastly, the presence of threatened and endangered species or their habitat may alter when and how the harvest is conducted.

Meeting regulations is complicated, and violations may result in significant environmental and legal consequences. Always use knowledgeable forestry professionals and seek out additional assistance when uncertain situations arise.

Step 6: Monitor Active Logging

Inspecting and monitoring the sale during operations for contract compliance is good for both you and the buyer. It is a good idea to review the terms of the contract onsite with the buyer and logger before harvesting begins. Often the logging crew working on the harvest is not aware of all contract terms. Review contract elements such as tree markings, boundaries, location and size of landing(s), haul road and skid trail locations, riparian buffers, and any stream crossings. In addition, be sure to discuss any special contractual requirements, such as residual tree damage, how tops will be handled, any historical sites such as cemeteries, and any special reserve trees or areas.

Regular visits to the logging site by the forester ensure the harvest is proceeding according to contract. By monitoring how the harvest is proceeding, questions and concerns are detected and addressed early, before they become something more serious. All matters of importance should be dealt with directly between the seller's forester and the buyer. You are likely to resolve most unexpected problems by respectful communication.

During site visits, it is important to ask for feedback from the logger, who may have suggestions that could expedite the harvesting process. While the seller and their forester should work cooperatively with the logger, the seller should not feel obligated to give in to requests to change the contract.

It is important to keep good records throughout the harvesting process. For example, if the logger is asked to adjust the harvesting operation to comply with the contract, record in writing the nature of the discussion and agreed-on decisions. The forester should notify the buyer and logger of the agreement with written notice and retain a copy in the harvest record. Documenting what is done and why during harvesting is essential for clear communication and resolving disputes.

Step 7: Close Out the Sale

When harvesting is complete, it is time to retire the site and implement any required postharvest activities. A final inspection is necessary to satisfy both the seller and buyer that contract terms have been met. Schedule an inspection before the logger removes equipment from the site. Loggers generally are eager to move on to their next job; therefore, timely communication is critical as logging nears completion.

If any issues require additional work by the logger, now is the time. Once the operator leaves the site, it may be difficult to get them to return. A common contract provision is to hold a performance bond until all contract requirements are met.

In some cases, the bond may pay for neglected contract provisions or repair damages.

Sites are most vulnerable to erosion right after harvesting is completed. Proper erosion control practices are essential to protect the site and prevent water pollution. Postharvest BMPs include seeding trails, roads, and landings to stabilize the soil and installing other erosion control practices such as water bars and broad-based dips on trails and roads. In most contracts, the buyer is responsible for these activities.

Additional items to inspect include landings to ensure removal of all merchantable logs and trash, that all slash meets contract specifications, and roads and trails are properly graded, seeded, and returned to their original condition.

Once all contract provisions are fulfilled, the buyer is released from further obligation. As with other parts of the harvest, release the buyer from the contract with a written letter and return the performance bond if one was held.

Selling timber is complicated and requires substantial time investments and a thorough understanding of the industry. Timber sales have the potential to impact site productivity, wildlife habitat, water quality, aesthetics, income, taxes, estate planning—the list goes on. Those lacking the proper level of experience should consider seeking professional assistance and use this publication as a reference to understand what their forester is striving to accomplish on their behalf.

A satisfactory harvest experience is no accident; it is the result of thoughtful planning and hard work. Planning is critical to ensure positive outcomes that meet sustainability guidelines. As with most endeavors, involving the right professionals makes all the difference. To ensure a successful timber sale, select vigilant and conscientious foresters, buyers, and loggers who understand stated goals and objectives and can help you attain them for you, your family, and your forest.

After the sale revenue has paid bills, college tuition, or vacation expenses, you will live with and be judged by what is left behind, not by what was taken. To end, consider this quote from Aldo Leopold: "Your woodlot is, in fact, a historical document which faithfully records your personal philosophy. Let it tell a story of tolerance toward living things, and of skill in the greatest arts—how to use the earth without making it ugly."

Adapted from "Conducting a Successful Timber Sale: A Primer for Landowners" (GWQ036; Rev. 2018), UW–Extension, Cooperative Extension. Used with permission. Mark Rickenback, Department of Forest and Wildlife Ecology, University of Wisconsin–Madison, William Klase and Kris Tiles, University of Wisconsin–Extension Mike Finley, Division of Forestry, Wisconsin Department of Natural Resources

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Timber Farm Business Plan (PDF, Excel, Word)

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Timber sales and marketing plan 2021-2026

Executive summary.

Natural Resources Wales (NRW) is the largest Welsh Government Sponsored Body which brings together and operates many of the tools and mechanisms needed to manage Wales’ natural resources coherently and in an integrated way.

Our 2000-strong staff undertake a multitude of responsibilities, ranging from regulator to advisor, landowner and operator and emergency responder.  We are also responsible for the management of the Welsh Government Woodland Estate (WGWE) on behalf of the Welsh Government.

Timber production contributes to a prosperous timber processing and forestry sector and is recognised as a key contributor to a healthy rural economy and sustainable forest and natural resource management in Wales.

Managing forests sustainably contributes to improved biodiversity and natural habitats, improves the water quality of wooded catchments, and provides attractive places for recreation and community involvement. It also plays a key role in the net emissions reduction process as, when the tree is harvested, the carbon remains stored in the timber until the end of its physical life.

As the largest supplier of certified timber in Wales, NRW’s ability to contribute towards and to achieve these wider goals, is influenced by its timber harvesting and marketing operations.

The land managed by NRW includes 7% of all land holding in Wales and the sale of timber from the WGWE allows us to generate an economic return that we can reinvest in the forest estate to support our future work.

This timber sales and marketing plan communicates our approach to the harvesting and marketing of timber from the WGWE for the period 2021-26. It has been written following a public consultation between 1 September 2020 and 3 November 2020. The responses submitted as part of that consultation has aided and informed the direction and actions determined in this plan.

NRW operates within key legislation related to the management of the WGWE. The type of activity that takes place on the estate, commercial or otherwise, is influenced by this legislation, including how that activity is executed.

All NRW commercial activities must comply with applicable Welsh and UK legislation including the Public Contract Regulations 2015, Welsh Government and NRW policies and procedures and, where appropriate, voluntary regulation such as the independent certification of the WGWE.

This timber sales and marketing plan is also influenced by the commitments stated in the Welsh Government’s Woodlands for Wales Strategy and the Role and Purpose of the WGWE.

Our marketing objectives for this period will be underpinned by our commitment to offer timber for sale from the WGWE in an open and transparent way which demonstrates best value for money for the public purse.

Our management of the WGWE is externally audited each year to international standards of forest certification, as set out in the UK Woodland Assurance Standard (UKWAS).  Certification against UKWAS is a verification of our sustainable management of the WGWE, reaching Forest Stewardship Council® (FSC®) and Programme for the Endorsement of Forest Certification (PEFC) international standards. This ensures that we are able to certify our forest products to both FSC® and PEFC.

Our Forest Stewardship Council® FSC® licence code is FSC-C115912 and PEFC licence PEFC/16-40-1003.

We will continue to provide an annual statement of timber supply commitments in October preceding a given sales year and manage and communicate any changes to supply with 12 months’ notice wherever possible.

We will play our part in helping to tackle the climate and nature emergencies, whilst fulfilling our responsibilities as landowner, and where appropriate Forest Works Manager (FWM), and will require customers to fulfil their responsibilities as set out in industry guidance Managing Health and Safety in Forestry.

Our active engagement with the forest and wood processing sector will also continue. This includes our ongoing collaborations with FISA (Forest Industry Safety Accord), Confor (Confederation of Forest Industries) and our work with customers and timber contractors to help protect their safety and livelihoods as well as seeking to develop wider opportunities for community engagement.

For the duration of the plan we will seek to improve safety and environmental performance of timber sale activities on the WGWE.

We will reinforce our commitment to deliver environmentally responsible, socially beneficial and economically viable forest management by introducing what is historically known as a triple bottom line approach in the awarding of timber sale contracts. This will be delivered under the key title of People, Planet, and Prosperity.

Over this period, we will offer a consistent and sustainable timber supply to the market which complements the sustainable management of the WGWE and as a general duty of afforestation, production and supply of timber.  The volume of timber we bring to market each year will be with the range 735,000m3 to 835,000m3. The volume to be offered for sale will be set out in the October of the preceding year.

We will work alongside the Welsh Government to promote the wider use of timber ‘Made in Wales’ in the housing development sector, and encourage more access to timber for niche markets, communities and innovative enterprises.

We will continue to sell at least 70% of our timber on the open market and explore the role of alternative sales models to further develop how our timber supports enterprise development and sustainable management of the natural resources in our care.

Current opportunities identified on the WGWE are focussed on encouraging investment in timber harvest equipment to manage steep ground working, thinning operations and work on wind farm developments on the estate. In these areas, we will review an approach to develop long-term or medium-term contracts, to facilitate such investment requirements – particularly where a supply chain is weaker.  We may also explore other models.

Such alternative sale methods may account for up to 30% of any given year’s timber sales plan.

This will be a transitional plan that will bring about change for the future. Beyond 2026, the five-year production forecast reduces in available volume. The volume of timber delivered to market in this current five-year period will assist in smoothing volumes in the future and offer longer-term security of supply to the industry.

Our annual customer liaison event will continue and will provide detail on the forthcoming financial year and timber sales programme by region, volume and sale type. We will also provide performance figures of timber sales activities to include sale volumes, production volumes and replanting targets achieved. We will provide end-of-year figures for roadside and standing timber sales, considering any impact market forces and resource capacity will have on the volumes of each type and to ensure value for money.

Introduction

Wales’ natural resources are vast and varied. From our uplands to our woodlands, our coastlines to our mountains, our landscapes underpin every facet of our modern life. They provide the basic things we need to live, support our health and wellbeing, our food and water supplies and support jobs for thousands of people in the farming, forestry and recreation sectors. 

NRW’s core purpose is to pursue the Sustainable Management of Natural Resources (SMNR) and to apply the principles as set out in the Environment (Wales) Act 2016 .

Sustainability is at the heart of our forestry policies and practices so that we can realise the full potential of our woodlands as economic, environmental and social resources now, and in the future.

We are proud that the Welsh Government Woodland Estate is part of the longest running continuously certified state forests in the world. When first certified in 2001, it received a “ Gift to the Earth ” accolade from the World Wide Fund for Nature (WWF).

This timber sales and marketing plan covers the period 1 April 2021 to 31 March 2026 and replaces the Timber Marketing Plan 2017-2022.

It focuses on a transitional period that will set the pace and direction for the future, taking into consideration, and being flexible to, any potential impacts on future trading positions and opportunities resulting from the UK’s exit from the European Union.

It also considers the production forecast of the WGWE (see figures at Annexe A) which is expected to reduce from 2027, and as NRW implements the ambitions of new legislation set out in the Well-being of Future Generations (Wales) Act 2015 and the Environment (Wales) Act 2016.

We are implementing this new plan to enable us to outline a change in approach to how we sell and market timber and to outline how current activities have evolved beyond the commitments made in the previous plan. This includes ending our current long-term contracts and standing sales plus contracts. It also includes the change in commitment between the standing sale and roadside sales offer that has taken place over the lifespan of the previous plan.

We recognise that the previous timber marketing and sales approach of all timber offered on an open market platform is time consuming and resource intensive for both NRW and our customers. It also prevents any potential opportunity to meet wider ambitions and for the industry to seek assurance of supply volumes to facilitate investment. This plan seeks to address this.

It explains our approach to sales and marketing of the WGWE timber reserve, which represents 38% of the Welsh forest resource and currently 60% of the harvested timber volume.

Like others, we have had to rise to the challenge of working and delivering our key services during a global pandemic. Throughout this challenging time, the need for forestry has not only remained but, in many ways, has been accentuated with the sector continuing to play a critical role in the supply of materials essential to our response to coronavirus.

We have an important role to play in Wales’ green economic recovery from Covid-19 and believe that sustainable development and supporting a circular economy is key to Wales’ recovery and future prosperity.

EU exit is likely to present both challenges and opportunities for the wider commercial sector in Wales and at the time of writing, it is still not clear how the UK’s exit from the European Union will impact the services that NRW provides. Alongside having an impact on our own work, we recognise that potential changes could impact how others operate. We believe that the best response to EU exit is to continue with our core business and to not hold back on new developments or partnerships. NRW believes this to be a positive message for Wales and its businesses, many of whom in some industries are heavily dependent on the local supply chain. We will continue to monitor the situation and will continue to take guidance from the UK and Welsh Governments on the issue.

Our vision and values

Our vision and values are at the heart of who we are as an organisation and how we deliver our objectives. They outline what is important to us and the standards we live by.

Our vision is to ensure that the environment and natural resources of Wales are sustainably maintained, sustainably enhanced and sustainably used, now and in the future.

Our #TeamNRW values are:

• We are passionate about the natural environment of Wales
• We care for each other and the people we work with
• We act with integrity
• We make a difference now and for the future
• We are proud to serve the people of Wales

Our marketing objectives

In delivering this plan, we will focus on the following marketing objectives:

• Deliver Sustainable Management of Natural Resources (SMNR) supporting the people of Wales (through the Well-being objectives). 
• Address issues related to the climate and nature emergencies
• To secure best value from the sale of timber by offering it for sale in a fair, open and transparent way.
• Ensure all customers who trade on the WGWE demonstrate competence and assurance of their contribution to a safe working environment, good environmental standards, compliance and governance.
• Offer timber to the market in ways that allow the greatest practicable number of customers to compete for it and recognises, where possible, the business needs of our customers.
• Offer timber in ways which support the whole supply chain, and focusses on areas where the supply chain is weaker.
• Work with others to promote the processing and use of timber in ways that contribute to Wales’ ambition to reduce its carbon footprint.
• Use the People, Planet, Prosperity approach to enhance timber values in consideration of social and environmental benefits.
• Sell timber in a way which is flexible and responsive to the market and economic conditions for the duration of this plan.
• Be transparent in how the WGWE is performing in relation to harvesting and marketing of the timber reserve and the benefits that are being delivered.

Timber marketing

The timber sales and marketing plan is influenced by overarching Welsh Government policy as highlighted in the Woodlands for Wales strategy and supported by delivery of forest resource plans and NRW’s corporate and business plans. It may also in the future, be influenced by local well-being plans as determined by Public Service Boards in regions as identified in the Well-being and Future Generations (Wales) Act.

The marketing objectives will be delivered by maintaining and introducing the following approaches for the duration of this plan period.

• A dominance of sales activities via open market tender using the electronic sale platform, open to existing and new customers. At least 70% of the five-year programme will be offered to the open market via this platform.
• Working with stakeholders and customers, we will openly and fairly embed a People, Planet and Prosperity approach to timber sales activities on the WGWE. This approach will bring together the timber sales pre-qualification approval and the health and safety Pre-Qualification Questionnaire (PQQ) approval to ensure our customers incorporate social and environmental standards into their business activities. We will aim to develop this approach in 2021, introduce a pilot and seek to implement it for all timber sale transactions by 2023/2024.
• We will consider the benefits of other models. Current opportunities identified on the WGWE are focussed on encouraging investment in timber harvesting equipment to manage steep ground working, thinning operations and work on wind farm developments on the estate. In these areas, we will review an approach to developing long-term or medium-term contracts, to facilitate such investment requirements – particularly where a supply chain is weaker.
• We will develop our work with the Welsh Government, Wood Knowledge Wales, Housing Associations and industry partners to seek opportunities for the development of a supply chain and chain of custody of Welsh timber for Welsh homes.
• We will present annual performance figures of the timber sales and harvesting programme at trade liaison events, including both in-year and accumulative performance over the period.
• We will continue to invest in new technology and opportunities to improve the accuracy of timber measurement data for points of sale.

Implementation

Timber production levels.

The timing and broad type of harvesting we intend to carry out are set out in Forest Resource Plans (FRP).  These are developed via stakeholder consultation and describe the vision and planned woodland management over 50 years, with regulatory approval for 10 years. 

Adding up the proposed harvesting in all FRPs provides us with the “production forecast” set out on a five-year basis.  The production forecast is the maximum amount of timber that would be produced if we were to do all the felling in each FRP to the predicted volume.

The production forecast for the WGWE shows a steady reduction in the volume of available timber over the next 20 years (Annexe A). 

In order to smooth supply in the long-term and to reflect the accuracy of volume predictions, we plan for a maximum volume brought to market about 15% below the production forecast.

During this five-year plan period the production forecast is for an average of 982,473m3 of timber per year, which gives us a maximum volume per year brought to market of 835,000m3 each year.

The actual volume of timber we plan to bring to market each year will be based on a combination of variables:

• our own capacity, and that of our customers to deliver to the highest health and safety and environmental standards
• the requirements of Sustainable Management of Natural Resources (SMNR)
• the long-term strategy to smooth supply
• market conditions

We will communicate the future financial year’s sales plan in October of the year before.

Over the course of this five-year plan the volume we plan to deliver to market will be within the range 735,000m3 to 835,000m3 per year. The top of the range is the production forecast reduced by 15% as set out above.  The bottom of the range is set by the flexibility we need to manage within the variables above while still providing the Welsh timber industry with a predictable and reasonably stable supply.  Specifically, 735,000m3 per year represents what we would bring to market if we maximised the rate of our thinning programme and somewhat reduced the rate of clear-felling.

We anticipate being near the top end of the range for at least the early years of the plan period. In terms of our commitments in this Timber Sales and Marketing Plan, each year’s planned volume is independent of the next. We will not carry over volume from one year nor have we set a five-year volume target.  In 2021/22 the volume we plan to bring to market is 830,000m3.

The amount of timber we offer to market may vary within year depending on industry performance. We monitor the forward sold position of timber sales in contract and where such volumes exceed a year’s supply, we may consider reducing the volume offer to market until such time as industry performance improves. This approach will aim to avoid major fluctuations in market values impacting on both the wood processing and wider forest grower sector. In addition, this approach will benefit medium to long-term timber availability.

Managing change

Barring any impacts from catastrophic events or adverse market conditions, we will aim to give customers 12 months’ notice of a change in programme during the period of this plan. For example, if it has become necessary to move outside the range of annual volumes set out above.

Where we are considering changes to timber sales programmes or considering the adoption of new approaches such as the People, Planet and Prosperity approach, NRW will seek to engage with our key stakeholder groups at the earliest opportunity to ensure any potential impacts and risks are fully considered. We would then anticipate piloting schemes and evaluating their success before considering introducing any changes to business activity or a sales model.

Overall timber sale approach

NRW manages the WGWE on behalf of the Welsh Government and as such is bound by Welsh and UK legislation including the Public Contract Regulations 2015.

Timber sales on the WGWE will be offered in a fair, open and transparent way that fulfils value for money requirements. 

Timber sales contracts are awarded following scrutiny and consideration of a pre-sale valuation following an agreed valuation and reserve setting policy. The sales and marketing team considers market intelligence based on several factors including imported timber prices, current open market values, and local variations based on location, haulage rates, tree species, contractor availability and immediate market demands.

The offer of timber to the market does not guarantee all timber will be sold. However, where the current market value can be obtained, a recommendation will be made subject to additional scrutiny on a case by case basis.

Our tree harvesting operations and timber sale type will always be considered within the context of our wider purpose around the sustainable management of natural resources, our general duties around afforestation and timber supply, and the demonstration of value for money.

To be eligible to bid and to attain an award of timber sales offered on our open market tender platform, all customers will have obtained an approved timber sales pre-qualification. They will also be required to complete a health and safety pre-qualification questionnaire to provide assurance that they are competent operators.

This approach and requirement has been in place since 2019. Any changes to this requirement will be communicated to the forest and wood processing sector at the earliest opportunity.

Two methods of timber sales activities are currently undertaken as either standing sales or roadside sales.

• In a standing sale, timber is sold as an estimate weight, and both the transfer of risk and harvesting operations are borne by the customer. This can also benefit the timber merchant, who can be more responsive to the immediate market.
• As a roadside sale, NRW undertakes the role of timber harvesting via a service contract provider or own fleet, and will offer an estimated weight of given products, to a pre-determined specification, available from a given contract site.

Most of the timber is sold by weight as timber uplifted by the customer, though NRW reserves the right to offer alternative sale methods dependant on scale and value of a given product. Any variance of sale method will be clearly indicated in sale particulars. An alternative sale method is likely to be via volume in cubic metre or hoppus feet measurements for high value hardwood sales when offered.

Most of the timber will be sold via standing sales. Roadside sales will continue where the private sector is unable to deliver the requirements of timber operation activities needed to manage the WGWE and to retain UKWAS accreditation.

Roadside sales will be maintained in those regions where negative timber returns are required of an individual activity for the long-term benefit and value of the estate. Such negative timber sales will be undertaken as a service contract deriving timber at roadside to generate income to offset, in-part, the cost of the service provided. This approach enables work to be carried out in a sustainable way and to ensure compliance with the governance arrangements required of a public body.

We may consider alternative methods throughout the duration of the five-year plan, engaging with the trade as these are considered.

Other methods of sale will require equally robust methods of qualification and assessment.

We are considerate of the benefits that access to long-term timber supply contracts on the WGWE can have on the wider wood processing sector, and the contribution it can make to a sustainable, vibrant future for the industry. Any such opportunities will also need to demonstrate the social, economic, and environmental considerations under the People, Planet and Prosperity approach. We will be required to demonstrate the best value for money, delivered in a transparent and fair playing field.

We will consider alternative sale types which will not exceed 30% of any given year’s timber sales plan.

Sale events

The sale of trees from the WGWE enables us to generate an economic return that we can reinvest to support our work on the estate and helps pay for the environmental benefits, facilities and the public use of our woodland.

Find information for customers on how to buy timber from NRW .

We will continue to publish an annual statement of the timber sales plan and the dates of intended sales events in October preceding the next 12-month sales year (1 April – 31 March). This will be aligned to the NRW Land Stewardship and Commercial Service Plans. We will formally present this information at our annual Customer Liaison Meeting which is typically held in January before the start of the new sales year from 1 April.

Timber sales for each of the scheduled sales events will continue to be offered via the electronic timber sales platform originally introduced in January 2017. This service is delivered in collaboration with Forestry and Land Scotland and Forestry England.

The e-auction offer also provides more opportunity and allows more flexibility in how we sell and offer timber to the market annually.

We will offer a minimum of four sale points each year via the open market approach. We may increase that offer through interim sales where the opportunities or demands arise for the benefit of the WGWE, and where we can uphold compliance of timber sale activities.

Any future approach or offer to market that can benefit innovative or niche market opportunities and long-term contracts will be a maximum of 30% of our total volume offer, so the main sale programme will be a minimum of 70% of our volume offer each year.

Certification, good practice and health and safety standards

Our management of the WGWE is externally audited each year to international standards of forest certification, as set out in the UK Woodland Assurance Standard (UKWAS). 

Being certified against UKWAS shows we sustainably manage the WGWE reaching Forest Stewardship Council® (FSC®) and Programme for the Endorsement of Forest Certification (PEFC) international standards and can certify our forest products to both FSC® and PEFC. 

NRW will fulfil its responsibilities as landowner, and where appropriate Forest Works Manager (FWM), and will require customers to fulfil their responsibilities as set out in industry guidance Managing Health and Safety in Forestry.

NRW is a signatory of the Forest Industry Safety Accord (FISA) and we remain dedicated to playing our role in helping improve standards of safety in forest operations. We will also play an active role in supporting FISA initiatives to improve safety performance and will expect customers and contractors to take a positive approach to supporting improvements in safety culture and performance. 

The Timber Sales Pre-qualification questionnaire and Health and Safety Questionnaire approval will remain a pre-requisite for customers when considering any bids for timber sale activities on the WGWE.

There will be no compromise on safety performance on sound silvicultural, environmental or health and safety standards on any types of contract, including community or social enterprise agreements.

Innovation and community support

NRW will make a contribution to sustainable local and community development through the demonstration of multipurpose use of our woodland. We will manage these commercial activities in the context of NRW’s Well-being Objectives and within the remit to deliver against the Sustainable Management of Natural Resources (SMNR) principles.

We will develop ways of using our timber to support community and other social enterprise activities as well as developing supply chains for beneficial activity, such as timber in construction. For this and the alternative supply models discussed earlier, we will use up to 30% of the volume of timber we produce for such innovative and new emerging market opportunities in Wales, all the while upholding the commitment to compliantly deliver a timber supply to the forest and wood processing sector.

We will work alongside our forest and wood processing sector partners and the Welsh Government to identify opportunities and risks to create an enabling provision to work with others.

Communities and social enterprises

Since its inception in April 2013, all timber sales and marketing plans developed by NRW have included a commitment to provide access to woodland and timber for the benefit of community and other social enterprises. 

During this plan period we aim to establish a mechanism that enables us to work with communities and the third sector for the provision of access to timber on the WGWE.  

This work will be strengthened by collaboration, openness and consultation with our partners. We will also work closely with the Welsh Government to ensure key outputs align with wider government policy and ambition.

Such an approach would need to be undertaken with due diligence and scrutiny to demonstrate such added value beyond monetary values.

Our contribution to a circular economy

Wood, as a natural and renewable material, has huge advantages for sustainability, and it is becoming increasingly necessary to think beyond its first use. As well as caring about how our timber is grown and managed, we also need to consider the next steps of its journey.

With the use of correctly managed forests, timber can make a significant contribution to Wales’ circular economy and create a more sustainable construction industry by locking in carbon in wood used in housing developments.

It is a significant ambition of the Welsh Government and of our customers, to see more of the timber grown on the WGWE used in housing development in Wales.

This may be enabled and supported by the provision of a chain of custody from sawmill to the end user which will provide data by which to benchmark the amount of timber entering the Welsh housing market year-on-year.

Some of the current supply chain for Welsh timber is bound for markets beyond Welsh shores. Ensuring more ‘Made in Wales’ timber is used in buildings or wood-based construction products in Wales will enhance the nation’s circular economy and will, in time, offer the potential for an increased timber value. 

We will work in collaboration with the forest and wood processing sector and with the Welsh Government to identify any opportunities that exist to make a greater contribution to the Welsh housing sector and, ultimately support a burgeoning circular economy for the nation.

People, Planet & Prosperity

In order to be sustainable, decisions that affect woodlands shall be measurable with economic, and environmental considerations, and consider present and future needs.

When the three pillars are effectively considered, decisions have a greater chance of achieving sustainability.

As part of NRW’s wider ambitions to embed good governance arrangements, to achieve our sustainability goals and in compliance with The Well-being of Future Generations Act (2015) and the Environment (Wales) Act (2016), we will aim to apply a measurable Planet, People and Prosperity (PPP) approach to how we sell timber.  

In doing so, we aim to give assurance to our partners, customers and wider stakeholders that we will demonstrate a high standard of corporate governance and a commitment to environmentally appropriate, socially beneficial and economically viable forest management.

We recognise that this will signal a new approach for many in the Welsh forestry sector. As such, we will seek to deliver a pilot scheme in collaboration with industry representatives to enhance the marketing and promotion opportunities of Welsh timber.

• Identify a measurable mechanism to further improve delivery of PPP via how we sell our timber and the way our timber is used.
• Work with Housing Associations and Wood Knowledge Wales to identify supply chain deficiencies and opportunities to promote the use of more Welsh timber in Welsh homes.
• Explore the opportunity to create a chain of custody for Welsh timber beyond the forest gates.
• Develop a gateway approach for customers who demonstrate their contributions to environmental, social and governance (ESG) credentials to buy timber. 

Performance management

We will continue to provide annual updates against performance of delivery of the timber sales and harvesting activities on the WGWE as retrospective sale figures through the provision of:

• Forest Research annual figures for the Great Britain standing sales index.
• Performance of end-of-year figures for roadside and standing timber sales.
• Safety and environmental standards and performance of timber harvesting on the WGWE.
• Achievement of targets for replanting

Key performance of timber sales includes:

• Published sale events.
• Annual programme delivered in income and volume.
• Publish of upcoming annual sales plan, in October preceding the sales plan
• Publishing the financial accounts for forestry managed on the WGWE via the annual NRW annual report and accounts.

Standards of customer care

NRW is committed to deepening our relationship with our customers and partners to support their evolving needs, as well as the needs of the customers they serve.

We work to our customer care and service standard which applies to all our areas of work and clearly explains what customers can expect of us.

This includes:

• Adhering to the Freedom of Information Act)
• Complying with the Welsh Language Standards
• Providing a professional and efficient service through our customer care centre.

Timber haulage

Timber haulage is an important part of the forestry life cycle in Wales, but often relies on using roads that were not designed for heavy traffic.

NRW will support timber haulage best practice and will aim to minimise the environmental and social impact by:

• Supporting the Road Haulage of Round Timber Code of Practice 2020
• Enable the continuation of the Tywi Forest Timber Transport Forum in partnership with local authorities and private forest sector industry representatives.
• Implement the monitoring of overloading on the WGWE and share data with the Driver and Vehicle Standards Agency (DVSA), the Traffic Commissioner for Wales and the Government Agency Information Network (GAIN).

Dealing with unforeseen events

NRW recognises the impact unforeseen events such as forest fires, disease outbreak and extreme weather events can have on our customers, on the wider forest and wood processing sector and on tourism and recreation activities.

In such circumstances, NRW will:

• Keep the Welsh Government, our customers and the industry informed with regular communications through officials, our industry representatives, through Confor and – where possible – to customers directly. We will also share the latest information with audiences via our communications team, on our website and social media channels to targeted audiences.  
• Wherever possible we will aim to minimise the impact to our customers by dealing with the events swiftly.
• In exceptional circumstances, we may decide to negotiate the sale of timber directly with customers that are able to respond quickly to unexpected events.

Managing the outbreak of disease

Trees and plants in the UK are vulnerable to a range of new pests and diseases such as Chalara ash dieback and larch disease Phytophthora ramorum . Outbreaks can seriously threaten sustainable forest management, lead to economic losses and impact on tourism and recreation activity.

Plant health and disease management will remain a strong focus for the duration of this plan.

The remaining identified larch volume available for felling and removal in the five-year period is 331,340m3  and will be brought to market to mitigate or slow down the spread of Phytophthora ramorum disease.

Wherever possible we will avoid stem injecting larch stands to comply with Statutory Plant Health Notices. We will adjust immediate sales plans as required to accommodate prompt felling and removal of diseased larch stands from the WGWE.

We will continue to manage Chalara ash dieback infected trees on the WGWE and where opportunities arise to market produce from these operations we will do so. Many of the ash stands are of low volume and are likely to be undertaken as a service contract with timber derived, sold as a roadside sale.

NRW will continue to prioritise sanitary fellings as necessary and will reserve the right to adapt programmes to accommodate such immediate operations as necessary.

Severe weather events

With climate scientists predicting more frequent periods of extreme weather events in the future, we will aim to minimise the potential impacts on our timber sales, our customers and our operations wherever possible.

We will do this by:

• Ensuring our business continuity plans account for any potential impacts of extreme weather on our operations with a view to assuring continuity of supply of timber from the WGWE to the wood processing sector.
• Reserving the right to temporarily suspend timber operations and supply on the WGWE in response to extreme weather events to ensure the safety of our colleagues, our contractors and the environment.
• Not substituting timber sales contracts where access has been restricted due to severe weather.

Annex A - Production forecast summary

Figure 1. Maximum clear fell and thinning volumes from Forest Resource Plans covering the Welsh Government Woodland Estate.

Annual average volume in m3 for each five-year period, as at March 2020.

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Starting A Small Timber Business : All You Need to Know

Logging is an ever-growing industry because people will always need wood to make paper, firewood, furniture, and buildings.

In the UK alone, billions of dollars worth of timber is traded every year. However, starting a timber business can be challenging, especially if you are unfamiliar with the process.

Here we explain the step-by-step process of starting a small timber business for beginners (with no industry knowledge or experience).

What Does a Timber Business Entail?

A timber logging business typically involves harvesting trees, cutting them down (sawing) or collecting fallen trees, and selling the logs to be processed at a sawmill.

Alternatively, you can start a sawmill or timber-selling business, which will involve purchasing logs from landowners, getting them sawn into processed timber, and selling them to customers or local merchants.

The Process of Starting A Timber Business

The process of starting a timber/logging business typically involves the following steps:

For Logging Business

• Market Research & Planning
• Purchasing a piece of forest or woodlands
• Planting trees for timber
• Felling trees

For Timber Processing & Selling Business

• Choosing the Product type, Range and Specialization
• Legal Requirements
• Transporting logs from the felling site to the sawmill
• Cutting logs into planks

Drying the wood

Wood treatment & storage

• Finding Customers
• Pricing and Profitability

If you have a passion for working with wood and want to use it to make a profit, starting a small timber business can be a perfect career choice for you.

This guide aims to provide you with a step-by-step approach to getting your timber business off the ground.

1. Market Research & Planning

Whether you’re planning to start a logging/harvesting business or a timber-selling venture or both, you’d need to research the market, including your target customers and potential competitors in order to plan ahead for the challenges that you might come across when starting a timber business.

Conducting thorough market research will also help you understand the demand, competition, and potential customers in your target area.

As a timber manufacturing/selling business, your target customers might include local woodworking businesses, construction companies, furniture manufacturers, etc.

You should contact them to understand their requirements and preferences. At the same time, you need to research the types of timber products that are in high demand.

Research the industry trends in terms of industry size, average annual growth, future forecasts, challenges, demand hotspots, etc.

Also, determine the estimated cost of starting a timber business in your area and expected profitability.

Study your competitors’ businesses to see what they’re selling and how you can make your business stand out.

Create a comprehensive timber business plan that outlines your goals, strategies, target market, financials, and marketing approach.

This plan will serve as a roadmap to guide you through the initial stages and ensure you are on the right path.

Also, include details about your pricing strategy, distribution channels, and future plans.

2. Choosing the Timber Type, Range and Specialization

After the initial research, you must have a good idea of the kind of timber products that are in high demand in your target region.

At this stage, you need to choose the timber species that you want to produce and/or sell.

Choosing the right product is very crucial. The timber species you’re selling must have a healthy demand and low competition or supply in your region. Then only you can make good profits.

Decide on the specific products you will sell based on market demand and your expertise. This could include wood logs, sawn lumber, timber products, custom furniture, etc.

Research the demand and trends in your target market to identify potential opportunities.

You can choose to only sell raw products, i.e. logs, or also sell processed wood, boards, planks, etc. Also, you can sell more than one product.

Some woods can be difficult to harvest or process, so you need to also consider the properties of the particular timber you’re planning to sell.

Continuously examine and update your product offering to adapt to changing customer needs.

3. Registering the Timber Company

Even if you’re not legally required to register when starting a small business, you must do it to ensure compliance and get the best out of government schemes for startups.

Familiarize yourself with the legal requirements for starting a timber business in your area. Consult with a legal professional or lawyer to understand the legal requirements when starting a timber business.

Register your business name, submit the necessary documents and fees, and obtain the permits and licenses to start your business.

Make sure that you get a compliance certificate for environmental regulations related to timber harvesting and processing.

Make sure to choose a unique but relevant name for your timber /logging business, preferably one that depicts your unique business values. Get your domain name registered as soon as you have a business name.

4. Staffing

You’ll, of course, need to hire people to help you with various things in your timber business. These may include forest consultants, farmers, woodworkers, administrative staff, financial consultants, etc.

You may alternatively consider hiring a timber consulting firm, which can help you with your legal & financial obligations and staffing needs when starting or running a timber business.

You need to plan ahead and analyze your workforce requirements based on the size of your business and the scale of operations.

Make sure to hire skilled & experienced employees who can contribute to the growth and success of your business.

At the initial stage of the business, you can also consider outsourcing certain tasks, such as consulting, accounting, and marketing, if it costs lower than hiring full-time staff.

5. Setup for Timber Processing & Storage

One of the most complex and expensive parts of starting a timber business would be to set up the wood processing unit.

This would include determining & arranging the location (facilities), equipment, machines, and systems for the business.

Some of the basic equipment and things you may need to run a timber business include a sawmill, tree-cutting machines & tools, safety equipment, a wood processing facility (mill), storage space, and transportation vehicles. You might also need to arrange kilns for drying wood.

You can, of course, consider leasing some or all of these things to cut costs at the early stage of your startup.

Ensure that your facilities are adequately designed to accommodate the wood production processes while adhering to safety regulations.

A sawmill or woodcutters are the most important components of your timber business. These can be moderate to expensive, depending on the type of machine you’re looking to buy.

You can always outsource wood cutting to an existing sawmill near you to save money.

Transporting logs from the felling site to the sawmill and delivering the final product

Depending on the scale of your business, you can consider purchasing or leasing a medium or big wood transportation truck for now. Alternatively, you can outsource transportation services.

Drying the wood before storing or transporting it is a crucial stage in the timber processing business.

Natural wood contains moisture, which must be reduced to acceptable levels in order to make the wood suitable for commercial use.

The ideal moisture content in wood is as follows:

• For indoor uses: 6-8%
• Wood flooring: 6-9%
• Construction wood or outdoor uses: 9-14%

There are several methods of wood drying, but the two most popular wood drying methods are air drying and kiln drying.

Air drying of wood refers to allowing the timber to dry naturally by leaving it out in the open and letting the air flow through it, which helps reduce the moisture content in the wood.

This is an effective but time-consuming process. Drying wood with this method can take months or sometimes years.

The kiln drying method refers to the use of a special machine called a kiln in which the wood is subjected to specific temperature-pressure conditions in order to reduce its moisture content to optimal levels. This method is more effective and faster than air drying.

Wood is also often treated with preservatives to enhance its strength, durability & other physical properties. This is usually done at the mill itself.

You also need to have proper facilities for storing final timber in a dry and covered place that is protected from excessive moisture, heat, etc.

6. Finding Suppliers & Customers

Depending on the kind of timber business you’re starting (manufacturing/processing/selling), you need to find reliable suppliers for raw materials such as plant seeds, fresh wood logs, etc.

At the same time, you need to establish a system for finding and connecting with potential customers.

To start with, identify reliable suppliers of timber in your region, who can deliver high-quality wood at a reasonable price and with consistency.

Establish partnerships with them. Make certain that the timber you buy comes from sustainable sources and is in accordance with responsible forestry practices and laws of your region.

Building & maintaining strong relationships with your suppliers is crucial for ensuring a consistent supply of high-quality timber.

Always establish agreements or contracts with suppliers to maintain transparency in pricing, partnership rules, and delivery schedules.

One of the best or easiest ways for a timber business to find new customers is online marketing.

With 7 out of 10 customers searching online for products or services, you could effectively find and reach many potential timber buyers in your location by improving your online presence to ensure your business is visible to potential customers searching online.

Similarly, you can use the internet to find suppliers too for your timber business.

7. Pricing and Profitability

Determining competitive pricing for your timber products is important to attract customers.

Consider factors such as raw material costs, labour, processing & storage expenses, transportation costs, and profit margins. Research local market and competitor rates and adjust your prices accordingly.

You might have to compromise on profit margins in the starting days in order to create a demand for your product in the market and attract customers. Other than that, you can consider offering discounts for bulk orders.

Starting a small timber/logging business requires careful planning, market research, and the need to consider and arrange for the crucial parts of a successful timber business.

By following the steps mentioned here and continuously adapting to the changing needs of your target market, you can establish a successful and sustainable timber business.

If you need professional help setting up your timber logging business or need to consult with a woodworking expert, contact CameroonTimberExportSARL today to talk to one of our specialists.

Reach us now with your queries, requirements, service question or quote requests, and we will be more than happy to help you in every possible way. Send us a message using the form below.

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Operation and production.

Connect with us at the following:

• Address: 1310 Avenue De Gaulle BP 2667 Douala Cameroon (Douala)
• Phone: +237 671 77 6559
• WhatsApp: +237671776559(Our Only Number, Beware of Scammers)
• Email: [email protected]
• Email: [email protected]
• Website: www.cameroontimberexport.com

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• News for Bitfarms Bitfarms

Bitfarms Announces March 2024 Production and Operations Update

- Company earns 286 BTC in March 2024 -

- Upgrade and expansion plan, targeting 21 EH/s and 21w/TH in 2024, underway with T21 deliveries and installations -

TORONTO, Ontario and BROSSARD, Québec, April 01, 2024 (GLOBE NEWSWIRE) -- Bitfarms Ltd. (NASDAQ/ TSX: BITF), a global vertically integrated Bitcoin mining company, provides its monthly production report and update on its fleet upgrade and expansion.

Fleet Upgrade Review

Geoff Morphy, President and Chief Executive Officer said, “In March, we exercised our previously announced purchase option for 28,000 Bitmain T21 miners and purchased an additional 19,280 Bitmain T21 miners along with 3,888 Bitmain S21 miners and 740 Bitmain S21 hydro miners.

“Having confirmed the tremendous performance of our T21 miners currently running, and with Bitcoin prices reaching all-time highs, we acted quickly to secure these miners at attractive prices in advance of anticipated hardware price increases. Together, with our 35,888 Bitmain T21 purchases and farm expansions announced in November, these new 87,796 miners are sufficient to reach 21 EH/s by year-end, with greater operating efficiency.

“These orders solidify our expansion plan for 2024 and provide the pathway to operating one of the newest and potentially most efficient mining fleets in the industry. Securing these miners is a key part of our strategy to drive rapid and meaningful improvements across three principal operating metrics of hashrate, energy efficiency and operating costs per terahash as we plan to capture greater upside from rising Bitcoin prices and expanding mining margins,” added Morphy.

Ben Gagnon, Chief Mining Officer, said, “In March, we received 1,650 T21 miners with 6,400 additional miners in transit. The majority of the miners received are installed and online. Garlock installations are now planned for completion in the first week of April. With curtailment in Quebec and Paraguay, as well as power plant maintenance in Argentina, we had fewer miners online than normal, resulting in a month-end hashrate of 6.5 EH/s. We expect to achieve 7 EH/s by mid-April.

“As we enter the Halving, we remain focused on our 2024 transformational fleet upgrade and expansion plan which triples our hashrate to 21 EH/s, increases our targeted operating capacity by 83% to 440 MW, and improves our fleet efficiency by 38% to 21 w/TH. This marks the largest growth in the Company’s history and propels us toward becoming one of the industry leaders in energy efficiency. Bitfarms is well positioned, with a strong balance sheet, to execute on our growth plans and capitalize on opportunities in the upcoming bull market and beyond.”

Mining Review

March mining operations generated 286 BTC compared to 300 BTC in February. This reflects participation in grid-stabilizing curtailment programs, power plant maintenance in Argentina, downtime associated with facility upgrades resulting in temporary lower average operating EH/s, and a 4.8% increase in network difficulty.

March 2024 Select Operating Highlights

• 6.5 EH/s online at March 31, 2024, up 35% Y/Y and unchanged from previous month.
• 5.7 EH/s average online, down 6.6% from the previous month.
• 50 BTC/average EH/s, up 2.0% from the previous month.
• 286 BTC earned, 5% lower than previous month and 33% lower Y/Y.
• 9.2 BTC earned daily on average, equal to ~$647,700 per day based on a BTC price of $70,400 at March 31, 2024.
• 1,656 Bitmain T21 miners received with majority online.
• 80 MW main transformer received and installed.
• 3,905 Bitmain T21 miners in transit.
• 1,920 Bitmain M53S+ Hydro Miners received and ready for installation upon receipt of Hydro Containers in mid-April.
• At Yguazu, purchase agreements signed for all long lead-time equipment, including large transformers, cabling, and related interconnects.

Bitfarms’ BTC Monthly Production

March 2024 Financial Update

• Sold 284 of the 286 BTC earned as part of the Company’s regular treasury management process for total proceeds of $19.2 million.
• BTC held in treasury increased to 806, representing $56.7 million based on a BTC price of $70,400 at March 31, 2024.
• Held Synthetic HODL™ of 85 long-dated BTC call options at March 31, 2024, reflecting 50 contracts exercised at maturity prior to month-end.
• Held $66 million in cash, for total liquidity of $123 million, at March 31, 2024.
• Exercised purchase option for 28,000 Bitmain T21 miners and purchased 19,280 Bitmain T21 miners along with 3,888 Bitmain S21 miners and 740 Bitmain S21 hydro miners.
• Received $1.7 million net proceeds from the sale and leaseback of the Garlock facility, as part of the Company’s focus on efficient capital utilization.

Upcoming Conferences and Events

• April 8-9: DigitalABC's First Annual Canadian Crypto Asset and Blockchain Policy Conference, Ottawa
• April 9: Bitcoin Policy Summit, Washington DC
• April 29-30: AIM Summit, London
• May 14-15: 19 th Annual Needham Technology, Media & Consumer Conference, New York City
• May 15: Digital Blockchain Summit, Washington DC
• May 22-23: B. Riley Securities 24th Annual Institutional Investor Conference, Beverly Hills, CA

About Bitfarms Ltd

Founded in 2017, Bitfarms is a global Bitcoin mining company that contributes its computational power to one or more mining pools from which it receives payment in Bitcoin. Bitfarms develops, owns, and operates vertically integrated mining farms with in-house management and company-owned electrical engineering, installation service, and multiple onsite technical repair centers. The Company’s proprietary data analytics system delivers best-in-class operational performance and uptime.

Bitfarms currently has 11 operating Bitcoin mining facilities and two under development situated in four countries: Canada, the United States, Paraguay, and Argentina. Powered predominantly by environmentally friendly hydro-electric and long-term power contracts, Bitfarms is committed to using sustainable and often underutilized energy infrastructure.

To learn more about Bitfarms’ events, developments, and online communities: www.bitfarms.com https://www.facebook.com/bitfarms/ https://twitter.com/Bitfarms_io https://www.instagram.com/bitfarms/ https://www.linkedin.com/company/bitfarms/

Glossary of Terms

• BTC or BTC/day = Bitcoin or Bitcoin per day
• EH or EH/s = Exahash or exahash per second
• MW or MWh = Megawatts or megawatt hour
• PH or PH/s = Petahash or petahash per second
• TH or TH/s = Terahash or terahash per second
• w/TH = Watts/Terahash efficiency (includes cost of powering supplementary equipment)
• Synthetic HODL™ = the use of instruments that create bitcoin equivalent exposure

Cautionary Statement

Trading in the securities of the Company should be considered highly speculative. No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein. Neither the Toronto Stock Exchange, Nasdaq, or any other securities exchange or regulatory authority accepts responsibility for the adequacy or accuracy of this release.

Forward-Looking Statements

This news release contains certain “forward-looking information” and “forward-looking statements” (collectively, “forward-looking information”) that are based on expectations, estimates and projections as at the date of this news release and are covered by safe harbors under Canadian and United States securities laws. The statements and information in this release regarding projected growth, target hashrate, opportunities relating to the Company’s geographical diversification and expansion, upgrading and deployment of miners as well as the timing therefor, improved financial performance and balance sheet liquidity, other growth opportunities and prospects, and other statements regarding future growth, plans and objectives of the Company are forward-looking information. Any statements that involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as “expects”, or “does not expect”, “is expected”, “anticipates” or “does not anticipate”, “plans”, “budget”, “scheduled”, “forecasts”, “estimates”, “prospects”, “believes” or “intends” or variations of such words and phrases or stating that certain actions, events or results “may” or “could”, “would”, “might” or “will” be taken to occur or be achieved) are not statements of historical fact and may be forward-looking information and are intended to identify forward-looking information.

Investor Relations Contacts:

Tracy Krumme (Bitfarms) +1 786-671-5638 [email protected]

David Barnard (LHA) +1 415-433-3777 [email protected]

Media Contacts:

Actual Agency Khushboo Chaudhary +1 646-373-9946 [email protected]

Québec Media: Tact Louis-Martin Leclerc +1 418-693-2425 [email protected]

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