Firewood Business Overview
A firewood business provides processed and ready-to-burn wood for residential and commercial customers. These businesses obtain raw wood through various sources, including timber companies, land clearing operations, and tree removal services. Once obtained, the wood goes through several processing steps – cutting to length, splitting to the appropriate size, and aging or seasoning to achieve optimal moisture content for burning.
Most operations include processing equipment, storage areas for inventory management, and transportation capabilities for moving wood from source to storage and ultimately to customers. Many firewood businesses operate seasonally, with peak demand occurring during colder months, though some maintain year-round operations by diversifying their customer base to include restaurants, campsites, and outdoor entertainment venues.
The most common business models in this industry include:
- Full-Service Firewood Provider: Handles all aspects from wood sourcing to delivery, offering processed firewood directly to homes and businesses
- Wholesale Firewood Supplier: Processes large quantities of wood and sells to retailers, landscapers, and other resellers
- Retail Firewood Operation: Maintains a physical location where customers can pick up processed firewood
Related: Checklist To Start A Business
How Do Firewood Businesses Make Money?
The main revenue stream for firewood businesses is selling processed firewood in various quantities. Most businesses price their wood by the cord (128 cubic feet of stacked wood), half-cord, or face cord (4×8 foot stack). Pricing varies based on wood type, with hardwoods like oak and maple commanding higher prices than softwoods. Businesses often adjust prices based on processing level (split vs unsplit), seasoning time, and quantity purchased. Many operators collect payment upfront or upon delivery, maintaining steady cash flow throughout their operating season.
Additional revenue sources for firewood businesses include:
- Wood Processing Services: Offering splitting and processing services for customers who have their own raw wood logs
- Specialty Wood Products: Selling premium hardwoods and cooking woods like oak, hickory, and fruit woods for smoking and grilling
- Delivery Services: Providing scheduled or on-demand delivery with proper stacking at the customer’s location
- Bulk Supply Contracts: Establishing ongoing supply agreements with restaurants, hotels, and other commercial users
- By-Products: Selling wood chips, sawdust, and kindling created during the processing operation
Industry Statistics
Firewood dealers operate under NAICS code 423990, Other Miscellaneous Durable Goods Merchant Wholesalers. This classification includes businesses that process and sell firewood and other wood fuel products for heating and recreational purposes.
Here are some highlights about the firewood industry.
Firewood Industry Size & Growth: The firewood industry generates annual sales of $188 million. The industry has shown steady performance, with a 5.7% increase in revenue over the past five years. This growth pattern is expected to continue as more consumers seek sustainable heating alternatives and outdoor cooking gains popularity. (Kentley Insights)
Firewood Profit Margin: The industry maintains healthy profit margins, with average gross profit margins around 40%. These margins can fluctuate based on factors like sourcing costs, processing efficiency, and local market conditions.
States with Most Firewood Businesses: States with colder climates and abundant forest resources naturally support more firewood businesses. The Northeast and Upper Midwest regions show particularly high concentrations of firewood dealers, reflecting strong seasonal demand for heating fuel. (U.S. Census Bureau)
Startup Stories
Costs To Start a Firewood Business
Starting a firewood business typically requires between $10,000 to $30,000, assuming you already own a suitable truck for hauling wood.
Here are some of the more expensive items needed when starting this business.
Equipment and Machinery: The primary piece of equipment needed is a wood splitter, which costs between $2,000 for a basic model and $15,000 for a commercial-grade hydraulic splitter. Many operations also need a chainsaw for cutting logs to length, which can cost between $500 and $2,000 for professional models.
Processing Site Setup: Setting up a basic processing area requires proper ground preparation, including gravel or concrete pad installation for wood storage and splitting. Depending on the size and materials used, this can cost between $2,000 and $5,000.
Material Handling Equipment: A basic pallet jack or hand truck for moving processed wood costs $200 to $500. Some operations may need a small utility trailer for deliveries, ranging from $1,500 to $3,000.
Safety Equipment: Personal protective gear, including steel-toed boots, safety glasses, hearing protection, work gloves, and chainsaw chaps, is needed. These items collectively cost between $500 and $1,000.
These estimates provide a general idea of startup costs, but actual expenses will vary.
How Profitable Is a Firewood Business?
A common rule of thumb is that one cord of firewood (a stack measuring 4x4x8 feet) yields a profit between $100 and $200 when sold. This factor in the costs of wood harvesting, transportation, splitting, drying, storage, and delivery to customers.
For example, if a business sells 500 cords annually at an average cost of $150 per cord, the total annual revenue would be $75,000 (500 cords x $150 profit per cord).
Now, let’s deduct the estimated expenses from this revenue to calculate the potential profit. Expenses may include costs such as raw materials, equipment, transportation, labor, marketing, insurance, and overhead.
For the sake of simplicity, let’s assume the wood is being purchased and there are no employees. Industry averages show that the cost of sales averages about 60% of sales when purchasing from a firewood processor, while other overhead expenses (assuming no labor) are about 10% of sales. In this scenario, expenses would be 70% of the revenue ($75,000 x 0.7 = $52,500).
Subtracting expenses from revenue, this firewood business’s potential profit would be $22,500 ($75,000 – $52,500).
There are some key variables that affect net income, a few of which include:
- Wholesale log prices when purchasing source wood
- Efficiency of splitting/processing workflow
- Delivery range and associated transportation fees
- Ability to consistently meet local firewood demand
- Premiums charged for properly seasoned wood
It’s important to note that these calculations are based on rough estimates and assumptions. A firewood business’s actual profit can vary significantly depending on factors such as market demand, pricing strategy, operational efficiency, and cost management.