How to Start a Profitable Logging Business

These are the critical aspects you should evaluate when launching your logging business:

1. Logging permits — Get the necessary logging permits from local, state, and federal authorities. This may include timber harvesting permits, environmental permits, and land-use permits.
2. Equipment — Invest in high-quality logging equipment, such as chainsaws, skidders, feller bunchers, log loaders, and trucks. Consider purchasing or leasing equipment based on your budget and needs.
3. Safety gear — Provide safety gear for your employees, including helmets, gloves, boots, eye protection, and high-visibility clothing.
4. Select sites — Carefully select logging sites based on timber quality, accessibility, and proximity to your market. Obtain necessary landowner permissions and contracts.
5. Register your business — A limited liability company (LLC) is the best legal structure for new businesses because it is fast and simple. Form your business immediately using ZenBusiness LLC formation service or hire one of the best LLC services on the market.
6. Legal business aspects — Register for taxes, open a business bank account, and get an EIN.
7. Training and safety — Ensure that you and your employees are properly trained in logging techniques, equipment operation, and safety protocols. Consider certification programs offered by industry organizations. Implement strict safety standards and protocols to protect your workers and comply with Occupational Safety and Health Administration (OSHA) regulations.

You May Also Wonder:

Can a logging business be profitable?

Yes, a logging company can be very profitable. You’ll just need to find good sources to get your trees, and then sell them to sawmills or construction companies.

How should I price my harvested timber?

Prices for logs will vary based on the size and quality of the log, as well as current market prices for wood. A large log could sell for $200 to $1,000.

What are the types of logging?

The types of logging can include clear-cutting, selective cutting, shelterwood cutting, and coppice logging. Clear-cutting involves removing all trees in an area, selective cutting involves selectively harvesting specific trees, shelterwood cutting is a two or three-stage process to regenerate a forest, and coppice logging involves cutting back certain trees to stimulate new growth.

What is the most common logging method?

Clear-cutting is often considered the most common logging method due to its efficiency and cost-effectiveness. It involves the removal of all trees in a designated area, allowing for quick and efficient harvesting of timber.

How can I differentiate my logging business from competitors in the market?

To differentiate your logging business from competitors, consider the following strategies: emphasize sustainable and responsible logging practices, obtain relevant certifications to demonstrate your commitment to environmental stewardship, and offer additional services such as land restoration or reforestation.

What is the cheapest logging method?

The cheapest logging method can vary depending on factors such as the specific logging project, location, terrain, and market conditions. Generally, clear-cutting tends to be the cheapest method as it allows for efficient harvesting of a large volume of timber. However, the overall cost can also be influenced by factors such as transportation, site preparation, and timber market fluctuations, which need to be considered when evaluating the cost-effectiveness of different logging methods.

Step 1: Decide if the Business Is Right for You

Pros and cons

Starting a logging business has pros and cons to consider before deciding if it’s right for you.

Logging industry trends

Industry size and growth

• Industry size and past growth – The US logging industry is worth $16.8 billion in 2022 after growing 3.2% annually the previous five years.((https://www.ibisworld.com/industry-statistics/market-size/logging-united-states/))
• Growth forecast – The US logging industry is projected to decline 2.7% in 2022.
• Number of businesses – In 2021, 49,395 logging businesses were operating in the US.((https://www.ibisworld.com/united-states/market-research-reports/logging-industry/))
• Number of people employed – In 2021, the US logging industry employed 94,570 people.

Trends and challenges

Trends in the logging industry include:

• Advances in log loading equipment have increased efficiency for logging businesses.
• Logging businesses that work with the forestry service are now often planting new trees in place of the old in order to prevent deforestation. 

Challenges in the logging industry include;

• Climate change is hindering the growth of certain tree species that have long been grown by logging companies to harvest.
• Wood prices are volatile, making it hard for logging businesses to project income.

Demand hotspots

How much does it cost to start a logging business?

Startup costs for a logging business range from $200,000 to $400,000. The main costs are for the equipment and trucks. 

Most people learn logging from on-the-job experience. You could work for another logging company for a period of time to learn the business. You could also get a degree or certificate in forest technology from a local trade school. 

You’ll need a handful of items to successfully launch your logging business, including: 

• Delimbers
• Feller bunchers
• Stump grinders
• Mulchers
• Yarders
• Forwarders
• Log loaders
• Harvesters
• Chainsaws
• Trucks

Start-up Costs	Ballpark Range	Average
Setting up a business name and corporation	$150 - $200	$175
Business licenses and permits	$100 - $300	$200
Insurance	$100-$300	$200
Business cards and brochures	$200 - $300	$250
Website setup	$1,000 - $3,000	$2,000
Rental space deposit	$3,000 - $5,000	$4,000
Logging equipment	$100,000 - $200,000	$150,000
Trucks - down payments	$50,000 - $100,000	$75,000
Operating and labor budget	$50,000 - $100,000	$75,000
Total	$204,550 - $409,100	$306,825

How much can you earn from a logging business?

Prices for large logs vary but could range from $200 to $1,000 depending on the size and quality, for an average of $600. If you get trees from the forestry service or a farmer, you will likely pay them up to 50% of the price of the logs. After all your costs, your profit margin should be about 20%. 

In your first year or two, you might sell 10 logs a week, 40 weeks per year, bringing in $240,000 in annual revenue. This would mean $48,000 in profit, assuming that 20% margin. As your business gains traction, sales could climb to 50 logs per week, 40 weeks per year. With annual revenue of $1,200,000, you’d make an outstanding profit of $240,000.

What barriers to entry are there?

There are a few barriers to entry for a logging business. Your biggest challenges will be:

• Funding the startup costs of expensive heavy equipment
• Getting on the job training to learn logging best practices

Step 2: Hone Your Idea

Now that you know what’s involved in starting a logging business, it’s a good idea to hone your concept in preparation to enter a competitive market. 

Market research will give you the upper hand, even if you’re already positive that you have a perfect product or service. Conducting market research is important, because it can help you understand your customers better, who your competitors are, and your business landscape.

Why? Identify an opportunity

Research logging businesses in your area to examine their products and services, price points, and customer reviews. You’re looking for a market gap to fill. For instance, maybe the local market is missing a logging company that sells to pulp mills or contracts with farmers. 

This could jumpstart your word-of-mouth marketing and attract clients right away. 

What? Determine your products

Your products will be the logs that you’ll sell. You could also make products to sell with smaller logs such as firewood or mulch. 

How much should you charge for logs?

Prices for logs will vary based on the size and quality of the log, as well as current market prices for wood. A large log could sell from $200 to $1,000. After your costs of labor, rent, and overhead, you should aim for a profit margin of about 20%. 

Once you know your costs, you can use this Step By Step profit margin calculator to determine your mark-up and final price points. Remember, the prices you use at launch should be subject to change if warranted by the market.

Who? Identify your target market

You will aim for two target markets. First, you’ll need to find customers to sell you the logs, which could be the forest service or a landowner. Second, you’ll sell your logs to sawmills, paper mills, and even construction companies and furniture makers. You should spread out your marketing to include Instagram, Facebook, and LinkedIn. You should be prepared, however, to make a lot of direct calls to business owners you find on Google or Yelp. 

Where? Choose your business premises

You’ll need a space for an office, and to store your equipment and your logs. You can find commercial space to rent in your area on sites such as Craigslist, Crexi, and Instant Offices.

When choosing a commercial space, you may want to follow these rules of thumb:

• Central location accessible via public transport
• Ventilated and spacious, with good natural light
• Flexible lease that can be extended as your business grows
• Ready-to-use space with no major renovations or repairs needed

Step 3: Brainstorm a Logging Company Name

Here are some ideas for brainstorming your business name:

• Short, unique, and catchy names tend to stand out
• Names that are easy to say and spell tend to do better 
• Name should be relevant to your product or service offerings
• Ask around — family, friends, colleagues, social media — for suggestions
• Including keywords, such as “logging” or “timber harvesting”, boosts SEO
• Name should allow for expansion, for ex: “TimberWorks LLC” over “Firewood Express”
• A location-based name can help establish a strong connection with your local community and help with the SEO but might hinder future expansion

Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these. 

Finally, make your choice among the names that pass this screening and go ahead with domain registration and social media account creation. Your business name is one of the key differentiators that sets your business apart. Once you pick your company name, and start with the branding, it is hard to change the business name. Therefore, it’s important to carefully consider your choice before you start a business entity.

Step 4: Create a Logging Business Plan

Here are the key components of a business plan:

• Executive Summary: A brief overview of the entire business plan, summarizing its key points and objectives.
• Business Overview: An introduction to the logging business, including its history, mission, and goals.
• Product and Services: Details about the types of wood products and services the logging business offers.
• Market Analysis: Information on the target market, including demographics, size, and trends in the logging industry.
• Competitive Analysis: Examination of competitors in the logging sector, their strengths, weaknesses, and market positioning.
• Sales and Marketing: Strategies for promoting the logging business and reaching potential customers.
• Management Team: Profiles of the key individuals who will be running the business, highlighting their relevant skills and experience.
• Operations Plan: An outline of how the day-to-day activities of the logging business will be conducted, including equipment, locations, and processes.
• Financial Plan: Financial projections, including revenue, expenses, and profit forecasts, as well as funding requirements.
• Appendix: Supplementary materials such as charts, graphs, legal documents, or additional information that supports the business plan.

If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist to create a top-notch business plan for you.

Step 5: Register Your Business

Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business! 

Choose where to register your company

Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you’re planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to logging businesses. 

If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state. 

Choose your business structure

Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your logging business will shape your taxes, personal liability, and business registration requirements, so choose wisely. 

Here are the main options:

• Sole Proprietorship – The most common structure for small businesses makes no legal distinction between company and owner. All income goes to the owner, who’s also liable for any debts, losses, or liabilities incurred by the business. The owner pays taxes on business income on his or her personal tax return.
• General Partnership – Similar to a sole proprietorship, but for two or more people. Again, owners keep the profits and are liable for losses. The partners pay taxes on their share of business income on their personal tax returns.
• Limited Liability Company (LLC) – Combines the characteristics of corporations with those of sole proprietorships or partnerships. Again, the owners are not personally liable for debts.
• C Corp – Under this structure, the business is a distinct legal entity and the owner or owners are not personally liable for its debts. Owners take profits through shareholder dividends, rather than directly. The corporation pays taxes, and owners pay taxes on their dividends, which is sometimes referred to as double taxation.
• S Corp – An S-Corporation refers to the tax classification of the business but is not a business entity. An S-Corp can be either a corporation or an LLC, which just need to elect to be an S-Corp for tax status. In an S-Corp, income is passed through directly to shareholders, who pay taxes on their share of business income on their personal tax returns.

We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using an online LLC formation service. They will check that your business name is available before filing, submit your articles of organization, and answer any questions you might have.

Step 6: Register for Taxes

The final step before you’re able to pay taxes is getting an Employer Identification Number, or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN. 

Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.

It is important to consult an accountant or other professional to help you with your taxes to ensure you’re completing them correctly.

Step 7: Fund your Business

Securing financing is your next step and there are plenty of ways to raise capital:

• Bank loans: This is the most common method but getting approved requires a rock-solid business plan and strong credit history.
• SBA-guaranteed loans: The Small Business Administration can act as guarantor, helping gain that elusive bank approval via an SBA-guaranteed loan.
• Government grants: A handful of financial assistance programs help fund entrepreneurs. Visit Grants.gov to learn which might work for you.
• Friends and Family: Reach out to friends and family to provide a business loan or investment in your concept. It’s a good idea to have legal advice when doing so because SEC regulations apply.
• Crowdfunding: Websites like Kickstarter and Indiegogo offer an increasingly popular low-risk option, in which donors fund your vision. Entrepreneurial crowdfunding sites like Fundable and WeFunder enable multiple investors to fund your business.
• Personal: Self-fund your business via your savings or the sale of property or other assets.

Bank and SBA loans are probably the best option, other than friends and family, for funding a logging business. Many lenders offer specific types of equipment financing.

Step 8: Apply for Licenses and Permits

Starting a logging business requires obtaining a number of licenses and permits from local, state, and federal governments. Some states may require certain licenses for logging, including those related to equipment operation. Check with your state for requirements.

Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), health licenses and permits from the Occupational Safety and Health Administration (OSHA), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits. 

You may also need state-level and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more. 

You could also check this SBA guide for your state’s requirements, but we recommend using MyCorporation’s Business License Compliance Package. They will research the exact forms you need for your business and state and provide them to ensure you’re fully compliant.

If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.

Step 9: Open a Business Bank Account

Before you start making money, you’ll need a place to keep it, and that requires opening a bank account.

Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your logging business as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.

Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account. 

Step 10: Get Business Insurance

Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.

Here are some types of insurance to consider:

• General liability: The most comprehensive type of insurance, acting as a catch-all for many business elements that require coverage. If you get just one kind of insurance, this is it. It even protects against bodily injury and property damage.
• Business Property: Provides coverage for your equipment and supplies.
• Equipment Breakdown Insurance: Covers the cost of replacing or repairing equipment that has broken due to mechanical issues.
• Worker’s compensation: Provides compensation to employees injured on the job.
• Property: Covers your physical space, whether it is a cart, storefront, or office.
• Commercial auto: Protection for your company-owned vehicle.
• Professional liability: Protects against claims from a client who says they suffered a loss due to an error or omission in your work.
• Business owner’s policy (BOP): This is an insurance plan that acts as an all-in-one insurance policy, a combination of the above insurance types.

Step 11: Prepare to Launch

As opening day nears, prepare for launch by reviewing and improving some key elements of your business. 

Essential software and tools

Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks. 

You may want to use industry-specific software, such as Jobber, TRACT, or Orbis, to manage your projects, schedule, inventory, and invoicing. 

Accounting

• Popular web-based accounting programs for smaller businesses include Quickbooks, Freshbooks, and Xero. 
• If you’re unfamiliar with basic accounting, you may want to hire a professional, especially as you begin. The consequences for filing incorrect tax documents can be harsh, so accuracy is crucial.

Develop your website

Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism.

You can create your own website using website builders. This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech-savvy, you can hire a web designer or developer to create a custom website for your business.

They are unlikely to find your website, however, unless you follow Search Engine Optimization (SEO) practices. These are steps that help pages rank higher in the results of top search engines like Google. 

Marketing

Here are some powerful marketing strategies for your future business:

• Professional Branding — Establish a brand identity that communicates professionalism, reliability, and a commitment to sustainable practices, complete with a well-designed logo and informative brochures.
• Website and SEO — Develop a website that outlines your services and showcases your commitment to sustainability, optimized for SEO to rank for terms related to logging and sustainable forestry.
• Social Media Engagement — Utilize LinkedIn for professional networking and Facebook to share business updates, industry news, and content about sustainable forestry practices.
• Content Marketing — Maintain a blog focused on sustainable logging practices and forest management, and distribute newsletters updating clients on technology and regulatory changes.
• Video Content — Produce videos demonstrating your logging operations and your technology’s role in promoting environmental stewardship.
• Experiential Marketing — Host site visits and demonstrations to showcase your sustainable methods and technologies to potential clients and educational groups.
• Industry Engagement — Participate in panels and discussions at forestry conferences to share expertise and insights into sustainable practices.
• Environmental Partnerships — Collaborate with environmental groups to work on projects that enhance your credibility and promote sustainable forestry.
• Community Engagement — Work closely with local communities on forestry-related projects, fostering goodwill and enhancing your reputation.
• Client Relationships and Loyalty — Develop long-term contracts that provide reliable service and gather regular feedback to improve and adapt your offerings.
• Targeted Advertising and Sponsorships — Engage in targeted B2B advertising in industry-specific publications and sponsor local community events or environmental initiatives to boost visibility.

Focus on USPs

Unique selling propositions, or USPs, are the characteristics of a product or service that sets it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your logging business meets their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire. 

Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your logging business could be:

• Turn your trees into cash – we’ll pay you to clear your land
• High quality logs for your new construction
• Top-quality oak for your wood products

Networking

You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running a logging business, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in logging for years and can offer invaluable insight and industry connections. 

The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in logging. You’ll probably generate new customers or find companies with which you could establish a partnership. 

Step 12: Build Your Team

If you’re starting out small from a home office, you may not need any employees. But as your business grows, you will likely need workers to fill various roles. Potential positions for a logging business include:

• Logging Workers – assist with logging and timber harvesting
• Equipment Operators – operate logging equipment
• Truck Drivers – deliver logs
• General Manager – scheduling, accounting
• Marketing Lead – SEO strategies, social media

At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need. 

Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed, Glassdoor, or ZipRecruiter. Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent. 

Step 13: Run a Logging Business – Start Making Money!

Logging is hard work, but it’s a big industry that offers serious opportunity. You may need to spend some time learning the ropes first, but it could be well worth it. You’ll be providing a product with a wide variety of uses and strong demand, which means logging has the potential to be a lucrative and rewarding career! 

You’ve finished the business education part now, so it’s time to put on those work boots and  launch your successful logging business.