There has never been a better time to be a logger.
Over the past few years, we've met with hundreds of logging professionals from around the world – many 3rd and 4th generation in family-run businesses. In each of these conversations, we've seen several common themes arise. They are skilled at their trade, passionate about their work, experts in logging best practices, stewards of the land and forward thinking toward the collective success of the entire industry.
We are inspired and excited for the future of the logging industry as the opportunities are endless and yours for the taking. But with this opportunity comes a need to adapt to a constantly changing business environment. We often hear that there is a shortage of loggers. The truth is that there are plenty of loggers but few that are willing for work for free. In today's logging world, you have to be both technically smart but also an astute businessperson to be successful and to grow your business.
While practical technical skills and logging expertise are necessary for success, simply being good at your job is no longer good enough. In today's highly competitive field, the reality is that loggers need to streamline their business (family-owned or not) as much as possible to increase their margins, and it starts by having greater business acumen.
Where is this need coming from, and why is better business management so important?
For starters, today's forestry equipment has taken a quantum leap in sophistication. We now have more capabilities than ever before to enable higher levels of production at lower costs. That said, operating these machines, or operating them effectively, requires much more than simply knowing how to cut down a tree.
There is also increased pressure for logging businesses to squeeze more production at lower cost. This high-demand, high-pressure environment forces loggers to run a tight ship and effectively manage their business to be competitive in the industry. For loggers who fail to stay nimble and adapt to change, the probability to succeed in the long-term is slim. As this competitive environment and squeeze between timber owners and mills becomes more intense, better business management becomes even more important. If you don't continually work to manage the business side of your operation more effectively, you won't survive.
Loggers can no longer survive by simply managing their business on a cash flow basis alone. They need to think in terms of sustainable growth and investment in their business -- people and machines as well as the tools and processes that make both more efficient. This shift in mindset means managing your business for returns, asset growth and expansion of your people. Some examples include:
- Taking into account the depreciation of their equipment and the replacement costs of those assets
- Squeezing more margin and more volumes, so you can pay for things to make your business more sustainable over the long term
- Understanding that if you're going to attract and retain people in your business, you must be able to pay a competing wage with benefits on top of that
The obvious next question is: So where do I go from here to become a better businessperson? While it won't happen overnight, I’ll start with some simple advice – learn from your peers and competitors.
When we see loggers who have very sophisticated operations, good business models and a clear plan for the future on how they are going to improve or expand their operations, we learn from them, share what we see and encourage others to do the same. One example worth sharing is Log Creek Timber Company of Edgefield, South Carolina, a company that has done nothing but grow over the past 15 years.
Log Creek is a family business run by Tim and Reg Williams, along with their sister, Martha Sanders. It started from their parents' family farm, evolved to a small logging company and transitioned to a contractor to Federal Paperboard, Georgia Pacific and International Paper. Today, the company continues to supply wood to International Paper, Resolute Forest Products, Georgia Pacific Corporation, Norbord Company, West Fraser Inc. and several specialty mills.
As Log Creek has grown over the years, the company formed subsidiary groups to separate the operations, including Log Creek Thinning Co., Inc., a harvesting company, Log Creek Logging Co., the trucking component and Log Creek Timber Co., the timber procurement arm.
For Tim Williams, applying wisdom learned from others has been key to Log Creek's success. "Our philosophy is, we don't know everything, but everywhere we go and everything my brother and sister and I do, we ask questions and try to glean as much information from the people who are knowledgeable about it," said Williams. At Log Creek, we have not re-invented the wheel, but have tried to gather good ideas from anybody and everybody with whom we have come in contact. We then take those ideas and tweak them to make our logging company run even more efficiently."
Tim, Reg and Martha are active and successful in their business, but also understand the importance of being active in the industry and community. For instance, Reg is the current Chair-Elect of the South Carolina Forestry Association. They also participate in ongoing training to improve their business skills. Like the Williams', these are simple ways any logger can improve their business management skill set.
Get connected, get involved in trade associations, share best practices, talk on a business-to-business level and invest in yourself and your business by taking advantage of the many different courses available at your fingertips.
As previously mentioned, loggers are skilled at their trade, passionate about their work, experts in logging best practices, stewards of the land and forward thinking toward the collective success of the entire industry, but that's just the beginning. Loggers who are willing to learn and adapt to the changing business climate can add savvy businesspeople, entrepreneurs, merchandisers and more to their long list of attributes.