Own business: forest sale

* The calculations use average data for the World 10 000 000 ₽

Minimum starting capital

₽ 127, 500

Net profit

25%

Profitability

A business selling wood is considered to be a very profitable business, the demand for wood is almost never reduced, and therefore the seller always has the opportunity to earn considerable money. A huge number of enterprises need wood; the simplest examples are construction organizations and furniture manufacturing enterprises. Of course, there may be seasonal fluctuations, but an entrepreneur whose business is developed and has regular customers rarely turns out to be unprofitable.

However, you need to understand that a considerable number of people want to do this, which means it can be difficult to get a piece of forest for use, because the vast majority of forest plantations belong to the state, and only the authorities can decide who to give this or that piece of land to use. There are some other problems in the implementation of this business idea, for example, there is a stereotype according to which this business is criminalized, and even in our time, which increases the risks of the entrepreneur.

Organization of a business selling wood

The first step is to register as a business entity. However, only if the timber trade will take place not only in Russia, then you need to contact the Ministry of Industry and Trade, where a license will be issued for customs clearance of goods, which include lumber, wood and the like.

In general, international trade in this direction is a rather complicated direction, since a license is issued only for certain types of wood, for specific volumes, as well as for a limited period of time, and it should be understood that local legislation is more applicable here, but local, therefore it makes sense to immediately seek help from a lawyer. However, when working only in Russia, too, there are conditions. Namely, at the moment, an entrepreneur does not have the right to acquire a forest plot into ownership to use it as a source of wood production, today all enterprises engaged in this field rent land from the state, however, the term of this lease can reach 49 years.

This is precisely the first and, perhaps, the main difficulty in organizing this business - in obtaining a site for work. True, it is worth noting that recently the government is considering the possibility of selling forest land to entrepreneurs for deforestation, but if such a law is adopted, then it is still unknown on what conditions. On the other hand, even taking a plot for rent, you can count on normal profits.

Registration of a forest sales company

Let us dwell on this in a little more detail. So, an entrepreneur after registration has the right to participate in auctions, which, as a rule, are held by local forestry departments (for example, the Ministry of Forestry of the required region). The entrepreneur himself can find a suitable place for him and submit a request for a site, but it’s far from the fact that the authorities will be interested in his offer; and even if the plot is really ready to be leased, an auction for it will still be scheduled.

At the very first stage, the first difficulty arises - not only entrepreneurs who are going to deal with felling, but also those who are going to use it for other purposes, have the right to get part of the forest. For example, the authorities are especially supportive of those businessmen who intend to use the forest as a recreation zone. Moreover, special requirements are imposed on bidders - the user must not only exploit the land provided to him, but also take care and take care of the forest. In our case, this obligation after felling trees to restore the integrity of the forest with new plantations, which, even after they have grown, can be used as a source of wood; it’s a sort of uninterrupted cycle, and the authorities are interested in it being uninterrupted, and not so that after the entrepreneur there will be bare terrain.

Moreover, the entrepreneur still needs to choose a plot depending on his own capabilities and simple convenience - for obvious reasons, those sections of the forest that are not in more often are most valued. Also, an important factor of choice is the availability of valuable species of wood, although, of course, almost all trees have a demand (for some because of qualities, for others because of cheapness).

The cost of the plot just depends on all these factors, as well as on the density of plantings - for example, a rare forest will cost several times cheaper than dense, which, in general, is natural. There are also local peculiarities - in a certain region it may be lucky to get a plot for rent on relatively favorable terms, but somewhere you will have to give a lot of money annually. The bureaucratic red tape here is also very serious - auctions are held by state enterprises, they can take out and last a very long time, so you need to have several months in reserve. Moreover, it is not always possible to immediately win one or another auction, there are always enough willing ones, and the authorities themselves can make very serious demands - that is, they will most likely refuse all bidders at all than give permission to at least someone. In different regions, depending on the climate policy and characteristics, the price can change several times, however, most often it is determined not by the size of the plot, but by the density of plantings.

And tree species. But if you try to bring everything to averaged figures, then we get about 15-20 thousand rubles per hectare per year. We repeat - this is a very, very rough calculation, since it is quite possible to find offers for 5 thousand rubles and 50 thousand (and sometimes even more). In general, here, each entrepreneur tentatively assesses the potential of the leased plot (the density of trees and their quality are checked). There are proposals for relatively small areas (up to one hectare), and for areas of considerable size where you can work for a very long time (more than 10 hectares).

When a place is found and the entrepreneur successfully won the auction, you can start organizing your enterprise. Within the framework of this article, only wood trade will be considered, but not the production of lumber or other products; in other words, this business includes tree felling and subsequent sale of the materials received, but not their processing. In order to be able to fully carry out the work process, the entrepreneur needs to have a territory for the placement of equipment and work complexes. Usually, on a rental site, there is free space suitable for the construction of buildings.

So, you will need an administrative building, not necessarily a capital building, as well as at least two warehouses for storing products. The cost of building a warehouse depends on many parameters, but in our case you do not need a high-class room, it is unprofitable to pay for any warehouse of category A +. You can get by with a simple covered room, in which the storage standards for wood (in terms of humidity in the first place) are simply maintained. In general, the cost of one square meter of the erected building will cost the entrepreneur in the amount of 5 to 10 thousand. The size of the warehouse is determined depending on the planned amount of forest received, but still it is rarely less than 500 square meters. The first warehouse is usually delivered just felled forest, the second - already somewhat processed wood (that is, "clean" tree trunks, spared from branches).

Next, you need to buy all the necessary equipment to work at the enterprise. In addition to simple devices such as chainsaws, you will also need to purchase machines for felling and transporting trees. These include the so-called skidders and trucks for transporting freshly cut wood. Although in cases where the warehouses are equipped directly at the logging site, additional transportation is not required, because the tractor can immediately put them into the warehouse. Additional equipment is bought for the tractor - namely, trailers, hydraulic manipulators, grabs, buckets and forks. Normal foreign equipment costs from 5 million rubles (this refers not only to the tractor, but also all the devices to it in total). A truck can be bought for an amount of 1 million rubles.

Features of the search for employees for the sale of forests

The next moment of organizing a business is the search for employees to perform work. An entrepreneur himself can be a leader. At the same time, you need to understand that sometimes for employees it is necessary to equip something like a village where they can be constantly located (and this is an additional considerable expense).

Here you will also need an amount of several hundred thousand rubles - depending on what conditions to provide them. But still, it is worth first of all considering the possibility of attracting employees who can attend work near their home. Such workers receive a lot - their level of wages starts from 30 thousand rubles, usually 40 thousand rubles, and can reach up to 50 thousand. I must say, the fellers of the forest receive depending on the output, that is, they will not have to pay extra money. Even at least the same amount gets the boss (if he is engaged exclusively in the control of activities) and drivers of transport.

An average company employs from 10 people, so the average amount that will need to be allocated for wages starts at 400 thousand rubles per month. At the same time, all other business processes that are not related to profit-making by the organization can be outsourced. In addition, it is worth contacting an insurance company that can insure the life and health of employees - the cost of annual insurance starts from 15 thousand rubles per person, tariffs vary depending on the conditions for insurance payment.

Sales and marketing in the forest business

The next moment in organizing your business is finding buyers for your forest. On the Internet there are many sites that allow you to post your commercial offers. Also, an entrepreneur simply can do something that will independently visit potential customers, offering them their goods. On the websites of many companies that constantly need wood, there are purchase requests, and finding partners and consumers is relatively easy.

Of course, you will have to work with companies all over the country (and those who have received a license can work with foreign companies, the Russian forest, by the way, is very appreciated). But most buyers work on a system that involves pickup, that is, the entrepreneur will not have to arrange delivery with his own transport. Only, of course, you need to understand that demand can vary depending on the type of wood, as well as on its quality, and if you are not lucky to get a site from which you can get bad material, then it is quite likely that customers refuse wood. But hiring a specialist before renting a site should solve this problem.

If you calculate the costs of opening, you get the following amount:

  • Registration of a legal entity - 20 thousand rubles.

  • Rent of 10 hectares of forest - 200 thousand rubles.

  • The construction of storage facilities with an area of ​​500 m2 - 3.75 million rubles.

  • Purchase of a skidder and a truck, equipment - 6 million rubles.

  • Salary - 400 thousand rubles.

  • Insurance - 150 thousand rubles.

  • Fuel and consumables - from 50 thousand rubles.

It turns out a little more than 10 and a half million rubles. Monthly expenses range from 450 thousand rubles. The cost of the forest varies depending on the type (deciduous and coniferous are those species that almost all entrepreneurs in Russia are engaged in), but if you take some average indicator, then one cubic meter costs about 2 thousand rubles.

There is, of course, cheap wood, which is sold for less than 1 thousand rubles for the same volume, and some good species can cost more than 5 thousand. If we take the volume of monthly sales equal to 300 cubic meters of wood at a price of 2 thousand per cubic meter, we get 600 thousand rubles of income and 150 thousand operating profit. 127.5 thousand - net profit. But still, such a business is not very profitable (about 25%), because a significant part of the income goes to cover expenses, which include payment of wages (usually the highest rate per month), the purchase of consumables, payment of rent, and the project itself is always designed for several years in advance.

Matthias Laudanum

(c) www.clogicsecure.com - a portal to business plans and guidelines for starting a small business 08/18/2019


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