Starting a Timber Selling Business in Kenya
|Small size||Ksh.30, 000- 100, 000|
|Medium||Ksh. 100, 101-300, 000|
|Large size-Above||300, 0000|
Selling timber is one of the booming businesses in Kenya today due to the increased demand for timber in the construction and furniture industries. To succeed in this business, find a reliable source for your timber and ensure it is the highest quality timber. Kenya presents a good market for timber, though you need to secure customers from residential and commercial establishments
A thorough market research is necessary before venturing into this business. Write a comprehensive business plan that will form the foundation of your business. A plan of activities will also give you a clear picture of the business venture you are targeting.
When determining the size and capital requirement for your business, it is important to put into consideration the following factors:
- The cost of timber
- The size of the target market
- Financing methods and finance availability
- Business location
- The level of competition in the market
Other expenses such as rent, transport, and licenses will also accrue in the course of running the business.
Also see: Starting a Furniture Business in Kenya
Success Tips when Operating a Timber Selling Business
Although there is a ready market and a high demand for timber due to the vast growth of the construction industry, the level of competition in this business is equally high. It is, therefore, crucial to developing strategies that will facilitate the growth of the business. The entrepreneur should come up with measures to curb the competition, market the business and facilitate business expansion.
Several factors will determine the success and profitability of the business. These factors include:
Location of the Business
Timber sale business should be located in a strategic place that is accessible to customers. The business should be located near a busy road, and the area should be accessible to motorists to facilitate transportation in and out of the business premises. Good infrastructure is likely to reduce the operating cost due to ease of transportation of the timber from the suppliers.
Due to the high demand of wood for construction purposes, it is advisable to locate the business near urban centers where there is a large number of construction sites. The target market being the construction industry, this location is likely to attract many customers. Also, furniture businesses present an excellent opportunity, and you may approach the business owners and negotiate a deal with them.
It is advisable to locate the business in areas with few direct competitors. High level of competition has the effect of reducing the prices of the products, which may adversely affect the profitability of the business. Also, the presence of well-established companies around your start-up business may hinder the growth of the firm since customers are likely to prefer products sold by the competitors.
High costs of doing business are the cause of business failure especially if you are unprepared to handle such costs. The main aim of business is to make profits and cut on costs since business costs will determine its profitability. The business should invest in cheaper modes of transport for timber. For a start, you may start by hiring a lorry/ pickup to transport your timber from your supplier to your yard. In the long run, buy a truck/pickup which will drastically reduce the cost of transportation.
Management of the Business
Proper management of the business goes a long way towards increasing profitability. Good management and control ensure that the business has no loopholes for fund and asset embezzlement by the parties involved including the employees. Good management also facilitates smooth running of the firm and increases the level of sales.
Keep proper records of all purchases and sales using a computerized accounting software. The records will help you determine whether the business is making profits or losses and be able to make forecasts. Also, the business records will help to determine if the business is on track or it needs re-engineering.
It is important for the business to invest in promotion activities. Product marketing is essential for the start-up business since it informs the potential customers about the existence of the business and the timber products the business trades in. Advertisement of the business increases its competitiveness.
Depending on your target market, you can employ several marketing strategies including Facebook marketing, billboards, referrals, discounts for bulk orders, direct contact marketing, etc. For a start, focus on getting many customers to visit your premises and create a good relationship with them. Satisfied customers will likely refer other clients to your business.
To succeed in the timber sale business, you need to source good quality timber and have reliable suppliers. You should set aside enough budget to cater for the purchase of timber, saw-milling, labour, transport, etc. Do prior research to identify the best tree varieties that are on demand. Rural areas present an excellent source of timber, and you are also likely to get at favourable prices. Also, purchasing trees and cutting them will help you get the best sizes as well as get other products such as off-cuts, sawdust and timber wastes which you can sell as firewood to households.
Do you think you have what it takes to succeed in the timber selling business? Well, timber business is quite profitable and with an excellent location and good quality timber, then you will be headed to the millionaires club. Remember to create good networks with your suppliers and customers!