The timber business is one of the most profitable businesses in Kenya you are sure to make good returns. Timber is in high demand and it is used to make furniture, construct and roof houses. You only good business location, reliable timber supply and a marketing strategy. This is what you need to know to run a successful timber business in Kenya.
Do a Market Research
It is crucial to conduct thorough market research before launching a timber business in Kenya. This research will help you draft a comprehensive business plan. It will also help you identify quality timber variety that is in demand, whether the business is viable in your locality and also determine the startup capital.
Write a Timber Yard Business Plan
You need a business plan before you can start a timber yard business. It should focus on startup costs, business location, market segmentation, business strengths and risks. A business plan helps a startup to maneuver through the business competition. If you don't know how to write a business plan, you can hire an expert.
Read more: How to write a business plan.
Find a Suitable Timber Business Location
The success of your timber business depends on the location you choose to set up your business. Your target market will also help you know where to locate your business. If most of your customers are construction sites, then it is convenient to locate the business near the construction site.
On the other hand, if you are into the furniture business, then most of your customers will be residential homes. As such, it is best to locate the business in a safe location easily accessible to your customers or near a busy road to facilitate easy transportation. Additionally, locating your business in an area with few direct competitors will give you the upper hand.
Acquire Business Licenses
To run a timber sales business, you need to first register the business. You can acquire business licenses from the County Government offices or the County Council offices. The license goes for at least Ksh 6,000 and it is valid for one year. You will also need to get an authorization letter from Kenya Forest Services to allow you to cut down trees for timber.
Find a Reliable Timber Supplier
To run a successful timber business, you need to sell quality timber to your customers. Research on the best tree varieties that are in high demand in your locality. Once you are sure of the best timber variety that is in demand, then look for a reliable supplier. You will also need to look for a saw-mill, and plan how to transport the timber to your premises.
As a rule of thumb, it is cheaper if you buy trees and cut them by yourself instead of ready timber. You will get more benefits since you can also sell firewood and sawdust. You will also get the opportunity to cut the timber in your preferred sizes. You can choose to source your timber from rural areas at more affordable prices.
Cost of Starting a Timber Business
The first question every entrepreneur asks before starting a business is startup capital. Factors that affect the startup costs for a timber sales business include the cost of timber, business licensing, transport, rent, business location, level of competition in the market and size of the business. The following is the projected cost of starting a timber business.
- Small size timber business – Between Ksh 30, 000 and Ksh 100, 000
- Medium size - Between Ksh 100, 000 and Ksh 300, 000
- Large size – Ksh 300, 000 and above
You will also need logging equipment like power saws, sharpening tools and measuring tape.
Is Timber Business Profitable in Kenya?
Yes. With a reliable supply, the timber business is a profitable venture. Timber is in high demand and is used to make furniture, roof houses and also construct houses made of timber. If you cut trees on your behalf instead of buying already cut timber, you will have a higher profit margin. Besides, you can also sell firewood and sawdust, increasing your business revenues.
How Do You Market Timber?
For a business to be profitable, it needs to have many customers. As such, you need to find an excellent marketing strategy. Advertising it will increase its competitiveness. You can advertise it through posters, pamphlets, social media, billboards and customer referrals.
The other marketing strategy is to offer excellent customer service by providing quality timber. Doing this will keep your customers coming back and spread the word about your business.