How do I check where a firewood business gets its logs and how steady that supply is?
Ask for a list of every log source with what each delivered across the last several seasons. A business that depends on one cutter or one wood lot is exposed if that person stops. That dependence is the real risk to weigh.
Find out where the logs come from. Some businesses cut their own wood, others buy truckloads from loggers or mills, and some use leftover material from clearing jobs. Each source has different reliability and different risk. Ask which one is the largest and how long the seller has used it. Check the quality as well as the quantity, since mixed species, rot and awkward lengths all change how much saleable wood a load yields.
Request purchase records by supplier and season. Look for gaps, big jumps and changes in who supplied what. Ask whether supply is on paper or only a handshake, and what would happen if the main source went elsewhere.
Talk to a supplier or two, with the seller’s consent. Ask whether they intend to keep selling to the business and on what terms. Their answers show whether the relationship belongs to the seller personally. Finally, ask how the seller handled a short year. Did they find other logs, pay more or run low on stock? That story tells you how deep the supply really is. Plan to line up a second source of your own early on. Ask how far the logs travel, because long hauls add cost and break down when fuel or roads become a problem.
Key takeaways
- List every log source and how much each supplied by season.
- Find out which suppliers are on paper and which are handshakes.
- Ask the seller how a short supply year was handled.
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Due diligence
Sources
This answer is checked against primary sources. Links were last confirmed on the dates shown.
- 01Business Development Bank of CanadaGovernmentHow to diversify your supply chain
- 02Business Development Bank of CanadaGovernmentHow to conduct due diligence when buying a business
- 03Business Development Bank of CanadaGovernmentWhat are the steps to buying a business?
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