Business Overview

A lumber yard sells construction materials to building contractors and property owners for renovations or new building structures. As the owner of a lumber yard you will stock a wide variety of wood cut down into popular sizes. Other materials you may stock include wallboard, hardware, roofing materials, and fencing. You will likely offer services to cut wood down to required lengths for your customers and make deliveries to job sites.

Who is this business right for?

An individual with solid business knowledge and skills will do well managing a lumber yard business. Knowledge and experience of building materials, procedures, and operations will allow you to anticipate the needs of your target customer base.

What happens during a typical day at a lumber yard?

  • Placing orders to keep all varieties/sizes and accessories for lumber stock on hand
  • Filling orders placed by customers
  • Assisting customers in selecting the right materials for their projects
  • Taking orders over the phone for clients
  • Delivering orders to large job sites as scheduled
  • Answering questions on practical applications of your different available materials
  • Maintaining and training staff to work in the lumber yard
  • Maintaining a safe working environment/ensure inspections are completed of lifting and cutting equipment per OSHA standards
  • Balancing your books
  • Completing all payroll responsibilities
  • Learning about new products
  • Maintaining active marketing campaign to attract new customers and clients

What is the target market?

Busy general contractors will be the meat and potatoes of your business, buying large quantities of materials from the yard on a consistent basis. You may offer them a wholesale discount price for their continued business. Homeowners and property managers will provide the more consistent business that helps to attract more customers, but they will not be spending as much as the contractors.

How does a lumber yard make money?

The more lumber you sell, the more money your business will bring in. For a lumber yard, numbers and volume will drive the bottom line. If you stock a greater variety of products, you will build larger sales as contractors use you as a one-stop shop for all their building supply needs.

What is the growth potential for a lumber yard?

Communities that are actively expanding offer the greatest opportunity for a new lumber yard business. This is one industry where starting small is the short line to failure. Once your yard is well-established with contractors stating that they wished you were located closer to their sites is an indication that you would profit by expanding to multiple locations. If you are looking at a small store front in an urban setting, a hardware store might work better as lumber inventory requires massive amounts of cubic footage for storage and sales.