Getting into the firewood business

Boxtroll

I have an opportunity of getting free trees on a farm as the farmer wants them gone, all spruces. For a one man band to set up to process them to firewood I could see myself into retirement with the volume of trees there.
I know alot are at it but having free trees would put me at an advantage one would think. Have all the machinery for the job.

TomOnBoard

Boxtroll wrote: »

I have an opportunity of getting free trees on a farm as the farmer wants them gone, all spruces. For a one man band to set up to process them to firewood I could see myself into retirement with the volume of trees there.
I know alot are at it but having free trees would put me at an advantage one would think. Have all the machinery for the job.

Frankly, the availability of the 'free' trees needs to be considered in terms of the costs associated with harvesting/storing/drying and processing them. The actual trees themselves don't make up the largest portion of your overall costs.

If they will be easily harvested/processed and IF you will be happy with the drudgery of processing, coupled with the challenges of marketing/selling, and GETTING PAID, paying taxes etc., go for it. Working with wood is one of the most fulfilling endeavours a man can undertake. Remember, if you get the trees for free, you will have to pay income tax, PRSI and USC on ALL of your net profits (i.e. revenues after all costs are deducted). If you had grown the forest yourself, only USC would apply. Think about that also.

Regarding longevity, and such a venture seeing you to retirement, this will only happen if you adopt an honest approach with your customers. If you take a view that they are there to be screwed, you'll last 5 minutes... If you provide them with quality/value you'll be there for yonks! Mind you, its hard to deliver the quality/value element with spruce. So think about that as well. If you had such access to free ash, oak or beech, I would have a completely more positive view.

Wish you well in your endeavours..

TomOnBoard

I also meant to say that the owner will need to apply for a felling license before you start harvesting.

Reindeer

Boxtroll wrote: »

I have an opportunity of getting free trees on a farm as the farmer wants them gone, all spruces. For a one man band to set up to process them to firewood I could see myself into retirement with the volume of trees there.
I know alot are at it but having free trees would put me at an advantage one would think. Have all the machinery for the job.

Most of us in the firewood business have free trees. It's the trappings that are the key:

http://m3.i.pbase.com/g9/22/22/2/158973933.X7BNqonk.jpg

http://m0.i.pbase.com/g9/22/22/2/160042790.agUMnYqY.jpg

http://m9.i.pbase.com/g9/22/22/2/158340399.GSihbSgE.jpg

http://m1.i.pbase.com/g9/22/22/2/160194901.viS2PgLU.jpg


We value spruce at the bottom of the firewood list, especially since I have as much larch as spruce on the estate, which will burn even unseasoned, and is far better than spruce once seasoned(btu-wise. It still should be used in conjunction with other woods to keep creosote levels low). We sell spruce to the local mill directly as the need arises. I concentrate on ash, beech, and oak, and will bring in birch when I can. I also actually enjoy processing firewood, and spend much of my time doing so when not about the forestry.

enricoh

A good mate is flying buying in artic loads of spruce lengths , hiring a processor for a week or two in the summer , leaving it in the shed n bagging in ton bags.
If he's flying buying it in I can't see how you wouldn't getting it for free! 99% cash business too helps!

Reindeer

enricoh wrote: »

A good mate is flying buying in artic loads of spruce lengths , hiring a processor for a week or two in the summer , leaving it in the shed n bagging in ton bags.
If he's flying buying it in I can't see how you wouldn't getting it for free! 99% cash business too helps!

Our spruce usually goes to the local mill - they either make lumber or firewood. We keep our ash, beech, birch, and oak for firewood. We just do not have the room to season it along side the hardwoods, which earn more and is better firewood for us as well. I also bring in the blow down larch as well for firewood that doesn't go to mill.
I just cleared the road of a good sized birch the other day. Lovely smell when that burns. Like sweet butter. And it burns very well. I keep all the birch for our own use.

Siamsa Sessions

I'm doing some homework on selling a bit of timber myself too and came across bags on Alibaba:

http://www.alibaba.com/product-detail/UV-Fire-Wood-Bags_60133403377.html

I've never bought anything from this website, but "a man in the pub" told me it's the Chinese cousin of ebay and there's plenty bargains to be had.

wayoutwest

That Chinese company is selling bags for .08 cents a bag , but minimum order of 30000....which comes to 2400 dollars.I think they cost about 25 cents here(in bundles of 500).....so for a 2400 dollar investment, you could see a 7500 euro return for just selling the bags WITHOUT any logs in them!
Considering that probably every net bag ends up as a firelighter, It would be good to see a non toxic/biodegradable natural fibre being used,which could either be burnt or put on the compost.Such a product would surely complement, if not help to promote the eco/non carbon /sustainable angle of any firewood business.

Siamsa Sessions

Jaysus, I'm embarrassed now - I never did the maths for the deal on the Alibaba link (and he that was supposed to be good in school!)

30,000 bags means a lot of blocks (and €2,400) - maybe the way to go would be for 6 fellas to club together and buy 5,000 each.

I'm not making an offer here by the way. I'm not in a position to club together with anyone yet

Melodeon

http://alibaba.com is kinda the wholesale side of Chinese web sales, for Chinese manufacturers to make contact with retailers/importers overseas for large quantities of goods.
http://www.aliexpress.com/ is more like eBay for Chinese stuff, for individuals to purchase small quantities.

wayoutwest

S.S -I noticed that there's someone on donedeal selling large net bags for 14 cent(1000 pcs).
Picture of bagging machine e54fc97c-3170-4a21-8a83-4a9861f6450f-1.jpegDon't know how much they are, but it would'nt be that hard to make if you had (or know someone thats got)a welder.

Siamsa Sessions

wayoutwest wrote: »

S.S -I noticed that there's someone on donedeal selling large net bags for 14 cent(1000 pcs).
Picture of bagging machine e54fc97c-3170-4a21-8a83-4a9861f6450f-1.jpegDon't know how much they are, but it would'nt be that hard to make if you had (or know someone thats got)a welder.

Thanks - it looks like a handy machine.

Are there many suppliers of net bags in Ireland, by the way? Or would you be as well to keep an eye out for them on Done Deal?

Melodeon

Siamsa Sessions wrote: »

Are there many suppliers of net bags in Ireland, by the way?

http://sacks.ie/
http://thrace.ie/

Siamsa Sessions

Melodeon wrote: »

http://sacks.ie/
http://thrace.ie/

Thanks a million

Jack180570

Hi Tom,

Are you sure you are correct regarding the tax treatment of home grow timber processed into firewood and sold by the farmer?

Is this not simply farm income and therefore liable to standard taxation?

Also is it not like the 'free' trees referred to by the OP?

Finally, why do you say that it's hard to deliver the quality/value element with spruce?



[Remember, if you get the trees for free, you will have to pay income tax, PRSI and USC on ALL of your net profits (i.e. revenues after all costs are deducted). If you had grown the forest yourself, only USC would apply. Think about that also.

If you provide them with quality/value you'll be there for yonks! Mind you, its hard to deliver the quality/value element with spruce. So think about that as well. If you had such access to free ash, oak or beech, I would have a completely more positive view.

merryberry

Jack180570 wrote: »

Remember, if you get the trees for free, you will have to pay income tax, PRSI and USC on ALL of your net profits (i.e. revenues after all costs are deducted). If you had grown the forest yourself, only USC would apply. Think about that also.

Thats interesting but how does that work. Is it because afforestation premia is tax free?

Oakleaf forestry

LC Packaging in Donegal do a good range of net bags in various sizes and with or without labels

the bagging tray mentioned earlier is the best way of filling these nets. Some shops/customers prefer to have them in clear polythene bags (easier to bag up too) but you need to have the logs well dried before bagging and store indoors as they cant let the moisture out but seem very good at letting it in for some reason!

Jack180570

Hi merry berry. .. that quote was from @tomonboard, my question to him is above it. .. basically I was querying his statement that the sale of homegrown firewood is tax ferr...

merryberry wrote: »

Thats interesting but how does that work. Is it because afforestation premia is tax free?

Siamsa Sessions

Howdy again,

I don't want to know anyone's business now but...

If a bag of logs sells for €5 in the local petrol station, how much of this might the supplier expect to get?

Would I be overly optimistic if I said €30 for 10 bags?

TomOnBoard

Siamsa Sessions wrote: »

Would I be overly optimistic if I said €30 for 10 bags?

Well, how big are the bags? What species? Is it well dried? Is it clean?

I ran a shop for years and I suspect that I'd be paying you at most €10- €15 for the 10 bags, if I could only realise €50. assuming that the timber was top quality, clean, well- dried and well- bagged, good- weight product.

Many factors are involved, not limited to:

• Huge space required to store, display, sell an extremely low-value product;
• Probable necessity to move stock from outside back to store every night and the reverse in the morning;
• Potential for customer disappointment and undermine my customers' trust in my business;
• Pressure from customer(s) for me to deliver;
• Dirt and mess emanating from the bags;
• etc.;
• etc.

Personally, I would only stock well dried hardwoods such as Ash, Oak, (White/Black)thorns etc. for my customers. I wouldn't even consider wet spruce or such like.

Hope this helps.

TomOnBoard

Jack180570 wrote: »

Hi Tom,

Are you sure you are correct regarding the tax treatment of home grow timber processed into firewood and sold by the farmer?

Is this not simply farm income and therefore liable to standard taxation?

Also is it not like the 'free' trees referred to by the OP?

Finally, why do you say that it's hard to deliver the quality/value element with spruce?



[Remember, if you get the trees for free, you will have to pay income tax, PRSI and USC on ALL of your net profits (i.e. revenues after all costs are deducted). If you had grown the forest yourself, only USC would apply. Think about that also.

If you provide them with quality/value you'll be there for yonks! Mind you, its hard to deliver the quality/value element with spruce. So think about that as well. If you had such access to free ash, oak or beech, I would have a completely more positive view.

Hi Jack

Sorry for the delay in my reply.

My posting related to the original question. It assumed that the O.P. was someone outside the scope of tax-free timber growing as envisaged by the planting schemes of the 1990s. Because of that, the Revenue would see him/her as engaging in a firewood processing/sale business, not as a Forestry business. Therefore, usual business taxation rules would apply- Net Profit would be computed from Overall Turnover less all Gross costs (including cost of materials which would be Nil), and Overheads, wages, rents, insurances etc. That Net Profit would be taxable. The rates applied would depend on whether the person is operating as a sole trader or a company etc.

My point in relation to Spruce is that it is one of the lowest- value firewood products available in Ireland. Its value can be maximised by good drying, splitting etc., but its inherent value as a heat source is low compared to hardwood timbers for example.

If I were running a firewood processing business, I would always try to apply value to an inherently more valuable raw material than spruce. I would process Ash, Oak (even Sycamore) etc rather than Spruce, as I would be able to get a much better rate of return from my investment of effort from such higher value source materials.

Siamsa Sessions

Thanks Tom - this helps alot alright.

I'm just trying to get an idea of the % breakdowns involved.

Cheers.

wayoutwest

Hi Siamsa Sessions.
If a shopkeeper offered me a tenner for my 10 large net bags of well seasoned finest softwood ......
That I have
PAID €10 FOR (base material)
PAID €2 (bags)
+PROCESSED
+STACKED + LEFT TO DRY FOR TWO YEARS
or STACKED IN KILN
+BAGGED
+STACKED ON PALLET/VEHICLE
+DELIVERED

...................I might be inclined to inform him of where he might alternatively insert his good currency.
You should be getting about €25 for yer ten bags.Local shop I know buys in for €2.50 and sells for €4
Don't be put off by all this talk about wet spruce and how hardwoods are the only worthwhile fuel to deal with.With hardwoods, your base material is more expensive, so your large net bag will end up retailing at €6 or €8 euro.I think you will find that most people buy net bags to create a flame ontop of their coal/turf fires - which means they are not requiring a premium (and more expensive) product.
Higher quality wood is more sought after by owners of dedicated woodstoves and log gasifiers as they are soley consuming wood, so the likelyhood of them buying net bags from the garage is slim - they will be buying in bulk loose logs.
Also, another thing to consider with hardwoods like oak, beech and thorn can take forever to air dry, as they are very close grained and so don't release the moisture that fast.
P.S - Oak is a crap fire wood in a stove.....but mix it with dry spruce, and you'll have the best fire you could have.

Siamsa Sessions

wayoutwest wrote: »

Hi Siamsa Sessions.
If a shopkeeper offered me a tenner for my 10 large net bags of well seasoned finest softwood ......
That I have
PAID €10 FOR (base material)
PAID €2 (bags)
+PROCESSED
+STACKED + LEFT TO DRY FOR TWO YEARS
or STACKED IN KILN
+BAGGED
+STACKED ON PALLET/VEHICLE
+DELIVERED

...................I might be inclined to inform him of where he might alternatively insert his good currency.
You should be getting about €25 for yer ten bags.Local shop I know buys in for €2.50 and sells for €4
Don't be put off by all this talk about wet spruce and how hardwoods are the only worthwhile fuel to deal with.With hardwoods, your base material is more expensive, so your large net bag will end up retailing at €6 or €8 euro.I think you will find that most people buy net bags to create a flame ontop of their coal/turf fires - which means they are not requiring a premium (and more expensive) product.
Higher quality wood is more sought after by owners of dedicated woodstoves and log gasifiers as they are soley consuming wood, so the likelyhood of them buying net bags from the garage is slim - they will be buying in bulk loose logs.
Also, another thing to consider with hardwoods like oak, beech and thorn can take forever to air dry, as they are very close grained and so don't release the moisture that fast.
P.S - Oak is a crap fire wood in a stove.....but mix it with dry spruce, and you'll have the best fire you could have.

Thanks - I was hoping the €10-15 was on the low side of things alright.

I have seasoned softwood, smaller than average split log size, very clean, and stacked properly in the bag (rather than dumped into it).

Starting off with a few bags like this is research for me more than a fully fledged new business venture.

When I've my homework done over the next few months I should know then whether it's worth scaling up or not. Though if the weather stays like this, I might find out sooner than expected about the business!

enricoh

Yeh e1 or 1.50 delivered ? Fair play to any garage owner that can get an eejit like that.
Supplying garages takes the cream off the job, say he sells for 5 n u sell to him at 3, the last 2 euro is where the real profit is.
Selling direct 1 ton bags delivered, say 75 quid for spruce. Don't mind all the hardwood talk, make it too pricey. Just make sure its dry